CPO futures end mostly lower on expectation of higher production
06.09.2023 (The Edge Malaysia) - KUALA LUMPUR (Sept 6): Crude palm oil (CPO) futures contract on Bursa Malaysia Derivatives (BMD) closed mostly lower for the third consecutive day on Wednesday, on expectation of higher production in Malaysia, which continues to dominate market sentiment.
Mumbai-based Sunvin Group commodity research head Anilkumar Bagani said UOB Kay Hian’s 10% to 14% rise month-on-month in its August palm oil production estimates has dampened sentiment among market players for the golden crop.
“There is also a slowdown in palm oil demand, as the stocks at key destination markets, especially in India, ballooned at a historically higher range, leading to weak demand for the commodity,” he told Bernama.
Anilkumar added that Wednesday’s CPO futures were also influenced by the easier performance in soybean oil futures on the Chicago Board of Trade (CBOT).
He also said that market players are waiting for the Malaysian Palm Oil Association’s full month data to give clarity on palm oil stockpile.
At home, the September 2023 contract inched down RM40 to RM3,760 per tonne, October 2023 fell RM32 to RM3,822, November 2023 was RM20 lower at RM3,881, and December 2023 slid RM10 to RM3,930.
Meanwhile, January 2024 and February 2024 were both flat at RM3,971 per tonne and RM3,994 respectively.
Total volume rose to 69,812 lots from 54,026 on Tuesday (Sept 5), while open interest surged to 275,989 contracts from 259,626 previously.
The physical CPO price for September South fell by RM30 to RM3,850 per tonne.