12/10/2022 (The Edge Markets), Kuala Lumpur - Crude palm oil (CPO) futures contracts on Bursa Malaysia Derivatives snapped last week’s winning streak and finished easier on Tuesday (Oct 11), after an official crop report showed that the inventory level is high, palm oil trader David Ng said.

He said the Malaysian Palm Oil Board report reflected on weak demand and rising production.

“Weaker soybean oil and crude oil prices during Asian hours also contributed to the decline. We locate support at RM3,500 and resistance at RM3,900,” he told Bernama.

Earlier, MPOB’s report revealed that Malaysia’s CPO stocks for September 2022 rose 24.76% to 1.28 million tonnes, from 1.03 million tonnes recorded in the previous month.

The processed palm oil inventory fell 3.11% month-on-month (m-o-m) to 1.04 million tonnes from 1.07 million tonnes, and overall, palm oil stocks added 10.54% to 2.32 million tonnes, from 2.09 million tonnes previously.

At the close, the contract for October 2022 and November 2022 fell RM146 each to RM3,484 per tonne and RM3,644 per tonne, December 2022 erased RM145 to RM3,692 per tonne, and January 2023 lost RM150 to RM3,726 per tonne.

February 2023 was down RM331 to RM3,578 per tonne, and March 2023 wiped RM151 to RM3,785 per tonne.

Total volume increased to 64,895 lots from 56,905 lots on Friday (Oct 7), while open interest expanded to 264,999 contracts from 203,332 contracts previously.

Physical CPO price for October South was down RM100 to RM3,650 per tonne.

The local market was closed on Monday (Oct 10), in lieu of the Maulidur Rasul public holiday.

https://www.theedgemarkets.com/article/high-inventory-weigh-down-cpo-futures-prices-oct-11