16/08/2022 (The Edge Markets), Kuala Lumpur - Crude palm oil (CPO) futures contracts on Bursa Malaysia Derivatives rebounded to close higher on Tuesday on the back of stronger soybean oil prices during the Asian hours, a dealer said.

Mumbai-based Sunvin Group commodity research head Anilkumar Bagani said the recovery in the Chicago Board of Trade (CBOT) soybean oil futures has pushed the CPO demand further on Tuesday.

"However, further gains were capped by weaknesses in Chinese vegetables oil futures and a slowdown in Malaysian palm oil exports," Bagani told Bernama.

On Aug 1-15 export data, most cargo surveyors estimated a fall. However, Intertek Testing Services data said exports for the period was up by 2.8% to 533,050 tonnes from 518,520 tonnes in the same period last month.

According to cargo surveyors AmSpec Malaysia and Societe Generale de Surveillance, exports for the  Aug 1-15 period declined by 1.92% and 9.47%, respectively, compared with the same period in July.

The slowdown in the Chinese economy also rattled global agriculture commodities, resulting in a sell-off  and palm oil was no exception.

"The sell-off in crude oil was also a major reason behind Monday’s sharp decline in palm oil prices," he said.

Bagani said CPO was trading at a discount of US$531 over CBOT soybean oils, and at a discount of US$57 per tonne over gas oil.

Meanwhile, palm oil trader David Ng said a weaker ringgit is seen as a supporting factor for higher CPO prices in the near-term.

Hence, he locates support at RM4,000 per tonne and resistance at RM4,500 per tonne.

At the close, CPO futures contracts for new spot months September 2022 improved RM62 to RM4,156 a tonne, October 2022 increased RM45 to RM4,170 a tonne, and November 2022 was RM44 higher to RM4,182 a tonne.

December 2022, January 2023 and February 2023 added RM28 each to RM4,200 a tonne, RM4,246 a tonne and RM 4,287 a tonne, respectively.

However, total volume narrowed to 54,298 lots from 58,173 lots on Monday, while open interest decreased to 237,696 from 243,414 contracts previously.

Physical CPO price for August South was unchanged at RM4,300 a tonne.

https://www.theedgemarkets.com/article/cpo-futures-close-higher-10