MARKET DEVELOPMENT
CPO futures end lower tracking weaker soybean oil prices
CPO futures end lower tracking weaker soybean oil prices
20.12.2021 (www.theedgemarkets.com) - KUALA LUMPUR (Dec 20): The crude palm oil (CPO) futures contract on Bursa Malaysia Derivatives ended lower on Monday, tracking weaker Chicago Board of Trade (CBOT) soybean oil prices, said palm oil trader David Ng.
He said the decline in crude oil prices also dragged the CPO futures market lower.
“We locate support at RM4,150 per tonne and resistance at RM4,400 per tonne,” he told Bernama.
At the time of writing, benchmark Brent crude was down 3.79% to US$70.73 per barrel.
Meanwhile, Mumbai-based Sunvin Group’s commodity research head Anilkumar Bagani said the market ended lower on Monday due to multiple reasons, including bearish momentum in CBOT soybean oil futures, the similar decline in the Dalian Commodity Exchange and a deep decline in crude oil prices.
He said the historic flooding in Peninsular Malaysia may cause more issues in transportation and ultimately the export performance in December would also get affected.
“This will result in a big drop in December palm oil export, and if production does not get affected much, the December end palm oil inventories in Malaysia will considerably rise,” he added.
Bagani said for Malaysian palm oil, Intertek Testing Services had estimated Dec 1-20 export at 1.07 million tonnes, down 5% from the Nov 1-20 period, while AmSpec had estimated an even lower number of 996,331 tonnes, a drop of 6.6%.
“The market will now look for Societe Generale de Surveillance (SGS) export data to reinforce the export performance ideas.
“However, the key data will be the Dec 1-20 palm oil production estimates from Malaysian Palm Oil Association (MPOA), UOB and Southern Peninsula Palm Oil Millers' Association (SPPOMA).
“Malaysia is also expected to announce its palm oil export tax for Jan 2022 this week,” he added.
At the close, the CPO futures contract for January 2022 dipped RM118 to RM4,757 tonne, February 2022 fell RM116 to RM4,510 a tonne, March 2022 decreased RM109 to RM4,295 a tonne, April 2022 slipped RM110 to RM4,132 per tonne, May 2022 declined RM115 to RM4,015 a tonne, and June 2022 slid RM100 to RM3,940 a tonne.
Total volume went down to 47,538 lots from 59,142 lots on Friday while open interest narrowed to 251,515 contracts from 260,897 contracts previously.
The physical CPO price for January South was RM100 lower at RM4,820 a tonne versus RM4,920 a tonne last Friday.