KUALA LUMPUR (Oct 18): The crude palm oil (CPO) futures contract on Bursa Malaysia Derivatives closed higher on Monday on the back of solid gains in soybean oil on the Chicago Board of Trade (CBOT) and a weaker ringgit, said a dealer.
Singapore-based Palm Oil Analytics’ owner and co-founder Dr Sathia Varqa said prospect of improving exports amid lower output for the year would drive CPO futures higher and lift up cash prices.
“Higher prices on the Dalian Commodity Exchange, a weaker ringgit, and expectation of improving exports amidst below-potential output this year would sustain CPO futures higher, pulling cash prices up,” he told Bernama.
He cited cargo surveyor Intertek Testing Services’ data wherein Malaysia's exports for Oct 1-15 period was down by 18.37% month-on-month to 696,811 tonnes, from 853,625 tonnes in the same period in September.
“However, next export numbers for Oct 1-20 is expected to be better than Oct 1-15,” he added.
At 6 pm, the ringgit depreciated to 4.1690/1700 versus the US dollar from Friday (Oct 15)’s close of 4.1560/1590.
Meanwhile, palm oil trader David Ng said CPO futures ended higher as anticipation over weaker production and prospect of lower stocks continued to lift sentiment.
“We locate support at RM4,750 and resistance at RM5,050 a tonne,” he said.
At close, the CPO futures contract for November 2021 added RM76 to RM5,175 a tonne, December 2021 surged RM82 to RM5,043 a tonne, while January 2022 increased RM85 to RM4,944 a tonne, February 2022 put on RM82 to RM4,850 a tonne, and March 2022 improved RM79 to RM4,743 a tonne.
Total volume fell to 60,426 lots from 68,663 lots on Friday, while open interest edged down to 251,681 contracts from 259,341 contracts previously.
The physical CPO price for October South was RM60 higher at RM5,220 a tonne.