CPO futures close higher on expectation of slower output growth
17/08/2023 (The Edge Malaysia), Kuala Lumpur - Crude palm oil (CPO) futures contract on Bursa Malaysia Derivatives closed higher on Thursday on expectation of lower production growth in the country, a dealer said.
Mumbai-based Sunvin Group commodity research head Anilkumar Bagani said Southern Peninsular Palm Oil Millers Association (SPPOMA) data shows that production increased by only 3.13% in the Aug 1-15 period compared with July 1-15.
“The market is now awaiting the Malaysian palm oil production estimates for Aug 1-20 by SPPOMA, UOB Kay Hian and the Malaysian Palm Oil Association,” he told Bernama.
According to Anilkumar, the current El Nino event poses a major upside risk to the average palm oil price outlook over the next 12 to 18 months.
Additionally, he pointed out that the weaker ringgit and the uncertainty prevailing in the Black Sea region have continued to support the palm oil prices.
Meanwhile, palm oil trader David Ng has located support at RM3,800 per tonne and resistance at RM4,100 per tonne.
At the close, September 2023 gained RM80 to RM3,894 per tonne, October 2023 increased RM78 to RM3,911 per tonne, and November 2023 firmed RM76 to RM3,923 per tonne.
December 2023 added RM79 to RM3,935 per tonne, January 2024 rose RM75 to RM3,950 per tonne, and February 2024 strengthened RM69 to RM3,965 per tonne.
Total volume grew to 53,127 lots from 49,479 on Wednesday, while open interest widened to 241,660 contracts versus Wednesday’s 238,724.
The physical CPO price for August South improved RM70 to RM3,920 per tonne.