Cpo Futures Finish Lower On Rising Output Concerns And Cbot Weakness

By Durratul Ain Ahmad Fuad

KUALA LUMPUR, May 24 (Bernama) -- The crude palm oil (CPO) futures contract on Bursa Malaysia Derivatives ended lower on Friday as the expectation of rising output in the coming weeks put pressure on prices, said a trader. 

Palm oil trader David Ng said CPO futures also took the cue from the weakness in the Chicago Board of Trade (CBOT) soybean oil market. 

“We see support for the price at RM3,850 a tonne and resistance at RM3,950 a tonne,” he told Bernama. 

Meanwhile, Fastmarkets Palm Oil Analytics senior analyst Dr Sathia Varqa said CPO futures surrendered all of its earlier gains after estimates by the Malaysian Palm Oil Association (MPOA) showed output up by 18 per cent in the first 20 days of May 2024 versus the corresponding period in April 2024.

According to estimates by MPOA for the May 1-20 versus April 1-20 period, Malaysian palm oil production surged by 18.2 per cent while UOB Kay Hian estimated Malaysian palm oil production for the May 1-20 period to increase between seven per cent and 11 per cent. 

“The market is expecting strong production growth likely in double-digit percentage. This could fuel another month of rise in stocks and exert downward pressure on prices,” he said. 

The market is now waiting for the real production data from the Malaysian Palm Oil Board that will come out on the 10th of every month. 

At the close, the spot month June 2024 contract increased by RM19 to RM3,872 a tonne, while July 2024 and September 2024 inched down RM6 to RM3,879 a tonne and RM3,893 a tonne respectively. 

Meanwhile, August 2024 decreased RM9 to RM3,885 a tonne, while October 2024 and November 2024 edged down RM3 each to RM3,903 a tonne and RM3,918 a tonne.

Total volume declined to 58,543 lots from Thursday’s 64,859, while open interest went up to 202,898 contracts from 202,777 previously.

The physical CPO price for June South was RM30 lower at RM3,920 per tonne.

-- BERNAMA