KUALA LUMPUR (Aug 24): The crude palm oil (CPO) futures contracts on Bursa Malaysia Derivatives extended gains to close higher on Wednesday, spurred by positive market sentiment.
Mumbai-based Sunvin Group commodity research head Anilkumar Bagani said the local market was influenced by the bullish momentum in the Chicago Board of Trade (CBOT) soybean oil futures overnight and a mid-session flurry in China’s vegetable oil futures.
He said the prolonged heatwave in the United States (US) soybean plantation areas is potentially damaging the standing soybean crops — fewer pods than last year in key areas — and lifting US soybean and product prices up.
“However, the rally in the CBOT soybean oil futures has been completely neutralised by the falling soybean oil basis in South America and the bullish sentiments did not fully convert into a follow-up buying in related vegetable oil markets today,” he told Bernama.
On the local front, the Malaysian Palm Oil Association announced that Malaysia’s CPO production for August 1-20 rose 16.18% month-on-month, with production in Peninsular Malaysia increasing by 11.87%, Sabah (33.36%), Sarawak (+4.66%), while East Malaysia (+24.81%).
Meanwhile, Indonesia Trade Minister Zulkifli Hasan told Members of Parliament on Wednesday that the country decided to extend its palm oil export levy waiver till Oct 31 to help encourage exports of palm oil and prop up prices of palm oil fruits for farmers.
The world’s largest palm oil producer started slashing its export levy for all palm oil products from mid-July.
At the close, the CPO futures contract for the spot month of September 2022 increased by RM63 to RM4,290 a tonne, October 2022 improved by RM70 to RM4,304.0, November 2022 was RM74 higher at RM4,308 and December 2022 gained RM78 to RM4,325.
Meanwhile, January 2023 advanced by RM78 to RM4,354 and February 2023 gained RM68 to RM4,379.
Total volume expanded to 88,582 lots from 74,769 lots on Tuesday, while open interest widened to 264,898 contracts from 253,122 contracts previously.
The physical CPO price for September South was RM70 higher at RM4,350 a tonne.
Source : The Edge Markets