MARKET DEVELOPMENT
CPO futures end lower, tracking weakness in CBOT, crude oil
CPO futures end lower, tracking weakness in CBOT, crude oil
12.05.2022 (www.theedgemarkets.com) - KUALA LUMPUR (May 12): The benchmark crude palm oil (CPO) futures contract on Bursa Malaysia Derivatives ended lower on Thursday, tracking weakness in the Chicago Board of Trade (CBOT) soyoil futures market as well as lower crude oil prices during Asian hours, dealers said.
Palm oil trader David Ng said soyoil prices on the CBOT were down 0.9%, prompted by the equity sell-off. He said oil prices took a breather on Thursday after rising more than 5% in the previous session following new Russian sanctions on some European gas companies.
“On Wednesday, Russia sanctioned 31 companies based in countries that imposed sanctions on Moscow after the Ukraine invasion in February. Weaker crude makes palm oil a less attractive option for biodiesel feedstock. Hence, we locate support at RM6,100 per tonne and resistance at RM6,700 per tonne,” he told Bernama.
Singapore-based Palm Oil Analytics’ owner and co-founder Sathia Varqa said palm oil gave up all of its hefty gains yesterday on a lack of buying momentum amid uncertainty over the demand outlook in China as prolonged lockdowns in multiple Chinese cities eroded edible oil usage there.
At the close, the CPO futures contract for May 2022 fell RM163 to RM6,990 a tonne, June 2022 shed RM125 to RM6,676 a tonne, July 2022 slipped RM134 to RM6,342 a tonne and August 2022 lost RM130 a tonne to RM6,131.
September 2022 was down RM122 to RM6,017 a tonne and October 2022 eased RM110 to RM5,955 a tonne.
Total volume rose to 68,461 lots from Wednesday’s close of 62,154 lots while open interest increased to 271,109 from 265,904 contracts previously.
The physical CPO price for May South shed RM200 to RM7,000 a tonne.