CPO futures end higher on concerns over weaker output

CPO futures end higher on concerns over weaker output

KUALA LUMPUR (Nov 2): The crude palm oil (CPO) futures contract on Bursa Malaysia Derivatives ended higher on Tuesday amid lingering concerns over weaker output, a dealer said.  

Mumbai-based Sunvin Group’s commodity research head Anilkumar Bagani said CPO futures ended higher on Tuesday as participants speculated that Malaysia palm oil production could be lower than estimated.

“Palm oil cash market prices continued to stay at a higher range but at premium over sunflower oil in free-on-board terms, while, at marginal discount under crude degummed soya bean oil.

“The destination demand has been quiet in palm oil because of such unfavourable spreads.

“Market focus will be now on full month Malaysian palm oil production estimates from the Malaysian Palm Oil Association (MPOA) and the Malaysian Palm Oil Board (MPOB) monthly supply and demand previews prior to the actual MPOB release next week,” he told Bernama.

Bagani said according to a market survey carried out by UOB KayHian, October production for Malaysian palm oil is estimated to be at a range from minus two per cent to two per cent on the month.

Meanwhile, palm oil trader David Ng said CPO futures ended higher after the market reversed earlier losses as prospect of a weaker production continued to lift market sentiment.

“We locate support at RM4,850 and resistance at RM5,100 a tonne,” he said.

At the close, the CPO futures contract for November 2021 added RM4 to RM5,400 a tonne, December 2022 gained RM10 to RM5,183 a tonne, January 2022 put on RM9 to RM4,970 a tonne, February 2022 increased RM4 to RM4,816 a tonne, March 2022 improved RM1 to RM4,677 a tonne, and April 2022 slipped RM7 to RM4,546 a tonne.

Total volume expanded to 68,100 lots from 56,219 lots on Monday, while open interest rose to 255,614 contracts from 243,667 contracts previously.

The physical CPO price for November South rose RM900 to RM5,430 a tonne.

Source : The Edge Markets

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