02/06/2022 (The Edge Markets), Kuala Lumpur - The crude palm oil (CPO) futures contract on Bursa Malaysia Derivatives ended higher on Thursday in anticipation of stronger exports as well as lower-than-expected production levels which would draw down existing stock levels in the country, a dealer said.

Palm oil trader David Ng said data from Southern Peninsula Palm Oil Millers’ Association (SPPOMA), which showed that the May 1-25 production was lower by 8.65%, had boosted the local market.

“Overall low stock situation will propel prices higher. We locate support at RM6,200 a tonne and resistance at RM6,700 a tonne,” he told Bernama.

Meanwhile, Mumbai-based Sunvin Group commodity research head Anilkumar Bagani said CPO futures ended higher on Thursday following soybean oil gains on the Chicago Board of Trade.

“The Malaysian palm oil prices drawing support from the Indonesian controlled palm oil export policy mechanism and anticipation of a drawdown in Malaysian palm oil May end stocks on account of higher export and lower production,” he said.

He said Indonesia has issued 160 palm oil export permits for 18 companies but the permits issued have not covered CPO so far.

“Permits issued so far covered 87,109 tonnes of refined, bleached and deodorised (RBD) palm oil and 90,255 tonnes of RBD olein while the rest were issued for cooking oil.

“There is still no export permit allocated for CPO, which is benefiting the Malaysian palm oil futures,” he said.

He said the market focus would be now on the full month of Malaysian palm oil production.

At the close, the CPO futures contract for the spot month June 2022 rose RM102 to RM6,748 a tonne, July 2022 increased by RM113 to RM6,719 a tonne, August 2022 gained RM112 to RM6,468 a tonne, September 2022 was up by RM76 to RM6,249 a tonne, October 2022 improved RM42 to RM6,110 a tonne and November 2022 added RM23 to RM6,043 a tonne.

Total volume edged up to 63,441 lots from Wednesday’s close of 54,079 lots while open interest widened to 270,697 contracts from 259,711 contracts previously.

The physical CPO price for June South inched up RM100 to RM6,850 a tonne.

https://www.theedgemarkets.com/article/cpo-futures-end-higher-stronger-export-expectations