CPO futures end higher on Nov 16 on stronger soybean oil, weaker output

CPO futures end higher on Nov 16 on stronger soybean oil, weaker output
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KUALA LUMPUR (Nov 16): The crude palm oil (CPO) futures contract on Bursa Malaysia Derivatives ended higher on Tuesday (Nov 16) on solid gains in the Chicago Board of Trade (CBOT) soybean oil and concerns over weaker output, a dealer said.

Palm oil trader David Ng said the new benchmark palm oil contract for February 2022 closed higher on Tuesday, on the back of expectations of a weaker output coupled with positive prices in the CBOT soybean oil market. 

“We locate support at RM4,750 and resistance at RM4,950," he told Bernama.

Meanwhile, Mumbai-based Sunvin Group’s commodity research head Anilkumar Bagani said the market managed to close higher on good Malaysian palm oil export performance during first half of November.

“However, palm oil narrower spread over soft oils continued to result in lack of fresh demand and hence, the initial rally was capped today,” he said. 

He said cargo surveyors estimated Malaysian palm oil export during Nov 1-15 period in a wider range of 798,000 to 912,000 tonnes, up by 10% to 29% from the corresponding October numbers.

Bagani said Societe Generale de Surveillance (SGS) has estimated the export, highest among surveyors at 911,875 tonnes, while lowest is AmSpec with 798,399 tonnes.

“This is an unusual difference and market would rather look for Nov 1-20 period data.

“While in the first half of November production front, the Southern Peninsula Palm Oil Millers' Association (SPPOMA) data shows South Peninsular mills palm oil production is going down by 6.3% for Nov 1-15 period.

“We will have some guidance on the Malaysian palm oil production from UOB and Malaysian Palm Oil Association (MPOA) later this week or may be early next week,” he added. 

At the close, the CPO futures contract for December 2021 advanced RM18 to RM5,245 a tonne, January 2022 increased RM21 to RM4,987 a tonne, February 2022 added RM22 to RM4,788 a tonne, March 2022 rose RM24 to RM4,612 a tonne, April 2022 improved by RM19 to RM4,457 a tonne, and May 2022 strengthened RM19 to RM4,336 a tonne.   

Total volume went up to 53,591 lots, from 47,264 lots on Monday (Nov 15), while open interest surged to 257,256 contracts from 252,010 contracts previously.

The physical CPO price for November South fell RM10 to RM5,350 a tonne.