KUALA LUMPUR (May 10): The crude palm oil (CPO) futures contract on Bursa Malaysia Derivatives closed lower on the back of higher stocks than anticipated, after Malaysian Palm Oil Board's (MPOB) April data showed production grew nearly 7%.
The MPOB also revealed that CPO stocks continued to increase in April 2021, growing 5.8% to 785,384 tonnes from 742,742 tonnes the month before, while total palm oil stocks rose 7.07% to 1.55 million tonnes, from 1.44 million tonnes previously.
Palm oil trader David Ng said weakness in the Chicago soybean oil market also contributed to dampen the Malaysian palm oil market.
"However, stronger exports are seen as lifting market sentiment. We locate support at RM4,300 per tonne and resistance at RM4,480 per tonne," he told Bernama.
Cargo surveyor Intertek Testing Services data have revealed that Malaysia's exports for the May 1-10 period was up by 29.63% to 447,225 tonnes, from 345,010 tonnes in the same period in April 2021.
Meanwhile, Singapore-based Palm Oil Analytics owner and co-founder Dr Sathia Varqa opined that CPO closed lower due to profit-taking, after building hefty gains to record high prices last week.
At the close, CPO futures contract for May 2021 decreased RM23 to RM4,860 per tonne, June 2021 down RM54 to RM4,624 per tonne, July 2021 lower RM59 to RM4,368 per tonne, and August 2021 slipped RM68 to RM4,149 per tonne.
Total volume was reduced to 63,493 lots from 74,424 lots on Friday, while open interest edged down to 263,364 contracts from 277,416 contracts previously.
The physical CPO price for May South fell RM10 to RM4,820 per tonne.