29/07/2022 (The Edge Markets), Kuala Lumpur - The crude palm oil (CPO) futures contract on Bursa Malaysia Derivatives rose to a three-week high on Friday as rising prices of oil and competing vegetable oils boosted demand.

Singapore-based Palm Oil Analytics owner and co-founder Dr Sathia Varqa said continued gains of soybean oil on the Chicago Board of Trade and Dalian Commodity Exchange as well as rapeseed oil on Zhengzhou Commodity Exchange (ZCE) have helped domestic palm futures to sustain an uptrend for three days.

At press time, crude Brent and West Texas Intermediate prices stood higher at US$109.20 and US$98.60 per barrel respectively.

Palm oil trader David Ng said market sentiment was also lifted by the current heat wave in the US, which had affected soybean output.

It was reported that the heat wave in the Pacific Northwest is expected to last longer than initially predicted with a higher chance for the United States Department of Agriculture to end up cutting 2022 soybean yield forecasts.

Malaysia to aid Indonesia clear palm oil inventoriesThis, in turn, may support the demand for CPO, a cheaper oil compared to soybean oil.

At the close, the CPO futures contract for spot month August 2022 added RM123 to RM4,030 a tonne, September 2022 increased RM118 to RM3,959 a tonne, October 2022 rose RM131 to RM3,957 a tonne and November 2022 went up RM147 to RM3,979 a tonne.

December 2022 was RM166 higher at RM4,028 a tonne and January 2023 was RM177 stronger at RM4,089 a tonne.

Total volume went up to 77,180 lots from 76,028 lots on Thursday while open interest climbed to 215,234 contracts from 208,603 contracts previously.

The physical CPO price for August South edged up RM300 to RM4,400 a tonne.

https://www.theedgemarkets.com/article/cpo-futures-rises-3week-high