14.06.2021 (www.theedgemarkets.com) - KUALA LUMPUR (June 14): Crude palm oil (CPO) futures contract on Bursa Malaysia Derivatives closed lower today, tracking the overnight losses in the soybean oil market on the Chicago Board of Trade.

According to palm oil trader David Ng, the concerns over higher production and stock level in the country also dragged the physical price to below RM3,500 per tonne level.

“We locate the next support level at RM3,250 and resistance at RM3,550,” he told Bernama.

Meanwhile, CGS-CIMB in a research note said the CPO price dropped to the lowest level since April 12, 2021 and posted its longest daily losing streak in almost five months as investors fretted about weaker demand from importer India.

“Malaysian shipments fell 10% to 14% in the first 10 days of June from a month earlier, while exports to India slumped 20 per cent and to Europe down by six per cent,” it said.

Singapore-based Palm Oil Analytics owner and co-founder Dr Sathia Varqa said trading volume hit record high, as the sell-off intensified and the market was on free fall from the opening with most months down 200 points. 

“The benchmark August plummeted RM285 to RM3,375 as higher production and improving stocks outlook hog market sentiments,” he said.   

At the close, the CPO futures contract for June 2021 stood at RM3,559 per tonne, July 2021 shrank RM298 at RM3,414 per tonne, August 2021 declined RM285 to RM3,375 per tonne, and September 2021 fell RM255 to RM3,370 per tonne.

Total volume widened to 124,780 lots from 73,569 lots on Friday (June 11), while open interest jumped to 304,702 contracts from 250,420 contracts previously.

The physical CPO price for June South dipped RM550 to RM3,500 per tonne.