CPO futures close lower, influenced by CBOT soybean futures
23/08/2023 (The Edge Malaysia), Kuala Lumpur - The crude palm oil (CPO) futures contract on Bursa Malaysia Derivatives (BMD) closed lower for the second day this week, influenced by a drop in the Chicago Board of Trade (CBOT) soybean oil futures during the prior night and early Asian trading hours.
Mumbai-based Sunvin Group commodity research head Anilkumar Bagani said that BMD CPO futures started the day with a downward gap.
“However, the substantial recovery in soybean oil futures later in the day provided a degree of support for the declining palm oil prices to rebound,” he said.
He said the Malaysia Palm Oil Board's estimates indicate a 5.34% increase in production from Aug 1-20, 2023.
“While Southern Peninsular Palm Oil Millers Association (SPPOMA) production data reveals a 7% rise in palm oil production during the same period compared to the previous month,” he added.
Meanwhile, palm oil trader David Ng said that technically, he had identified support at RM3,750, signifying a level at which the price might find stability.
“Conversely, a point of resistance has been established at RM4,000, indicating a threshold that the price would need to surpass to exhibit potential for an upward movement,” he said.
At the close on Wednesday (Aug 23), September 2023 decreased by RM45 to RM3,812 per tonne, October 2023 shed RM35 to RM3,823 per tonne, and November 2023 was down by RM36 to RM3,830 per tonne.
December 2023 fell by RM35 to RM3,843 per tonne, January 2024 and February 2024 declined by RM34 each to RM3,859 and RM3,875 per tonne.
Total volume rose to 51,975 lots from 44,933 lots on Tuesday (Aug 22), while open interest also increased to 196,043 contracts from 194,779 contracts previously.
The physical CPO price for September South eased by RM60 to RM3,840 per tonne.