CPO futures end lower on concerns over rising production
19/08/2022 (The Edge Markets) - The crude palm oil (CPO) futures contract on Bursa Malaysia Derivatives closed lower on Thursday, weighed by ongoing concerns over rising production and lower soybean oil prices, a dealer said.
Palm oil trader David Ng said those factors continued to pressure the CPO market performance on Thursday.
"The Malaysian Palm Oil Association will be releasing the CPO production data by early next week. CPO production is expected to rise due to the seasonal period," he told Bernama, adding support was spotted at RM3,800 a tonne and resistance at RM4,400 a tonne.
Meanwhile, Mumbai-based Sunvin Group commodity research head Anilkumar Bagani said the persistent weakness in soybean oil futures on the Chicago Board of Trade (CBOT) and the Crude Degummed Soybean Oil outright prices at South American free on board markets added further pressure on palm oil.
"The market however gets some support with the reduction in Malaysian palm oil export tax for September, which brought local palm oil prices neck and neck with the Indonesian palm oil offerings.
"Next crucial data would be Aug 1-20 palm oil export by cargo surveyors, followed by the Malaysian Palm Oil Board and Southern Peninsula Palm Oil Millers' Association production numbers," he told Bernama.
He also shared that Bursa Malaysia's CPO traded at discount of US$531 over CBOT soybean oils and at a discount of US$140 per tonne over gas oil.
At the close, CPO futures contract for spot month September 2022 declined RM107 to RM4,059 a tonne, October 2022 shed RM130 to RM4,046 a tonne, November 2022 was RM150 lower at RM4,043 a tonne, and December 2022 slipped RM163 to RM4,051 a tonne.
January 2023 slid RM168 to RM4,079 a tonne and February 2023 lost RM165 to RM4,128 a tonne.
Total volume improved to 58,831 lots from 47,353 lots on Wednesday, while open interest increased to 240,786 contracts from 230,089 contracts previously.
The physical CPO price for August South was RM100 lower at RM4,150 a tonne.
https://www.theedgemarkets.com/article/cpo-futures-end-lower-concerns-over-rising-production-0