21/05/2024 10:49 PM

By Durratul Ain Ahmad Fuad

KUALA LUMPUR, May 21 (Bernama) -- The crude palm oil (CPO) futures contract on Bursa Malaysia Derivatives closed lower on Tuesday after two consecutive trading days of gains, said an analyst.

Fastmarkets Palm Oil Analytics senior analyst Dr Sathia Varqa said higher production estimates against lower exports kept the rapid selling pressure on CPO futures, especially towards the close.

He said estimates by the Southern Peninsula Palm Oil Millers Association (SPPOMA) data for the May 1-20 period showed that production was up 26 per cent compared to the same period a month ago. 

Meanwhile, Cargo surveyor Societe Generale de Surveillance’s (SGS) Malaysian palm oil exports estimation for the May 1-20 period revealed that exports dwindled 13.20 per cent compared to the same period a month ago, he said. 

“The fundamentals of the palm industry are still weak, and production is expected to increase in the coming month, which could further exacerbate the situation,” he told Bernama. 

According to palm oil trader David Ng, CPO futures were traded lower today due to concerns over rising output in the next few months, which is in line with a seasonally higher production period and this may raise the overall inventory level in the country. 

“We see support at RM3,750 per tonne and resistance at RM3,950 per tonne,” he said.

At the close, the spot month June 2024 contract eased RM69 to RM3,836 a tonne, July 2024 decreased RM52 to RM3,864 a tonne, August 2024 fell RM53 to RM3,868 a tonne, the September 2024 note went down RM50 to RM3,875 a tonne, October 2024 was RM47 lower at RM3,884 a tonne and November 2024 slid RM46 to RM3,896 a tonne.

Total volume improved to 74,486 lots from Monday’s 52,100, while open interest widened to 201,632 contracts from 199,664 previously.

The physical CPO price for June South was RM50 lower to RM3,900 per tonne.

Bursa Malaysia Bhd and its subsidiaries will be closed tomorrow (May 22), in conjunction with the Wesak Day public holiday and will resume operations on Thursday (May 23).





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