CPO futures continue upward momentum on output concerns

KUALA LUMPUR (July 15): The crude palm oil (CPO) futures contract on Bursa Malaysia Derivatives continues its upward momentum to end higher today on lingering concerns over lower output, dealers said.

A dealer said Malaysian palm oil futures rose to their highest in nearly seven weeks and the performance was in tandem with the Chicago Board of Trade (CBOT) soybean futures as dry weather and labour shortage hampered global vegetable oil production.

Meanwhile, Singapore-based Palm Oil Analytics owner and co-founder Dr Sathia Varqa said the local market was also taking its cue from the performance of Dalian Commodity Exchange’s high double digit gains of palm olein and bean oil.

“Sentiments surrounding the faster rise in exports versus lower production and a weaker ringgit also culminated to lift CPO futures prices higher today.

“Benchmark September futures racked up hefty gains rising for the third day reaching a seven weeks high,” he told Bernama.

At the close, the CPO futures contract for July 2021 added RM55 to RM4,149 a tonne, August 2021 rose RM158 to RM4,238 a tonne, September 2021 increased RM152 to RM4,173 a tonne and October 2021 gained RM148 to RM4,111 a tonne.

Total volume rose to 65,579 lots from 64,793 lots on Wednesday while open interest decreased to 250,233 contracts from 253,018 contracts yesterday.

The physical CPO price for July South increased RM130 to RM4,280 a tonne from RM4,150 a tonne on Wednesday.

Source: TheEdgeMarkets