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MARKET

CPO futures end lower on weaker soybean oil price

17/11/2022 09:40 PM

By Durratul Ain Ahmad Fuad

KUALA LUMPUR, Nov 17 (Bernama) -- Crude palm oil (CPO) futures contracts on Bursa Malaysia Derivatives ended lower today as weakness in the Chicago soybean oil market continued to push prices down, said a dealer. 

Palm oil trader David Ng said the CPO market sentiment was also weighed by the recent strength in the ringgit which may hurt export demand.  

“We locate support at RM3,700 per tonne and resistance at RM4,300 per tonne,” he told Bernama.

Anilkumar Bagani, the Mumbai-based Sunvin Group commodity research head, said CPO futures traded lower in the earlier session today following sharply lower soy oil futures on the Chicago Board of Trade (CBOT) during Asian hours. A sell-off on China's Dalian Commodity Exchange’s for refined, bleached and deodorised palm olein futures further dampened investor mood.

“The bearish sentiment was further aggravated after Russia extended the Black Sea grain deal which would normalise Ukrainian sunflower oil shipments to key destinations India and China and ease the fears of a loss of vegetable oil supplies, putting pressure on competing vegetable oil prices,” he said.

Anilkumar said Malaysia’s palm oil exports during the first half of November were seen in the range of 657,000 to 714,000 tonnes, up from the same period last month but the export pace had slowed down in the Nov 1-5 and Nov 1-10 periods.

“The Southern Peninsula Palm Oil Millers’ Association (SPPOMA) data shows that South Peninsular Mills palm oil production during the first half of November dropped nearly 5.5 per cent from the corresponding October period.

“Malaysia is expected to release its palm oil reference price and export duties for December later today,” he added. 

Singapore-based Palm Oil Analytics owner and co-founder Sathia Varqa said CPO’s heavy sell-off today mirrored the global vegetable oil complex sell-off led by soybean oil on the CBOT.

“Palm is down to a month low, weighing on cash offer prices.

“The Black Sea grain initiative extension also dissipated the risk premium, weighing on stocks and crude oil,” he said. 

Bursa Malaysia Derivatives will be closed on Friday (Nov 18) in conjunction with the general election and will resume operations on Monday (Nov 21).

At the close, contracts for December 2022 shrank RM116 to RM3,791 per tonne, January 2023 lost RM160 to RM3,828 and February 2023 eased RM172 to RM3,850.

March 2023, April 2023 and May 2023 contracts slipped RM170 each to RM3,858, RM3,835, and RM3,802 a tonne, respectively. 

Total volume increased to 88,427 lots from 50,796 lots on Wednesday while open interest improved to 209,300 contracts from 203,736 contracts previously.

Physical CPO price for November South was down by RM150 to RM3,900 a tonne.

-- BERNAMA
 


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