CPO futures end lower for 2nd straight day in tandem with soybean oil price
03/01/2024 (The Edge Malaysia), Kuala Lumpur - The crude palm oil (CPO) futures contract on Bursa Malaysia Derivatives ended another day lower as weaker soybean oil prices continued to weigh on market sentiment.
Palm oil trader David Ng said the prospect of a weaker export performance also put pressure on prices.
“However, the market anticipates lower production last month which is seen as a positive for prices in the near term. We locate support at RM3,550 a tonne and resistance at RM3,750 a tonne,” he told Bernama.
Mumbai-based Sunvin Group commodity research head Anilkumar Bagani said CPO futures closed lower on Wednesday following a selloff in Chinese vegetable oil futures in Asian hours and the absence of fresh buying from destination markets.
“The Malaysian palm oil export performance in December 2023 was also bad as Intertek Testing Services estimated Malaysian palm oil exports for December 2023 at 1.37 million tonnes while AmSpec estimated 1.35 million tonnes.
“The Southern Peninsular Palm Oil Millers Association put the estimate at 1.31 million tonnes down from the export estimate for November 2023.
“On the production front, the Southern Peninsular Palm Oil Millers Association data shows palm oil production decreased in December 2023 by 12.32% from November 2023,” he noted.
Additionally, he said the market is now waiting for the full-month production estimates by UOB Kay Hian and the Malaysian Palm Oil Association.
At the close, the spot month January 2024 contract gained RM18 to RM3,651 per tonne, but February 2024 edged down RM23 to RM3,621 and March 2024 lost RM39 to RM3,621.
The April 2024, May 2024 and June 2024 contracts slid RM42 each to RM3,615, RM3,597 and RM3,572 a tonne respectively.
Total volume jumped to 83,424 lots from 48,688 lots on Monday, and open interest weakened to 214,637 contracts from 215,342 previously.
The physical CPO price for January South remained unchanged at RM3,670 per tonne.