KUALA LUMPUR (Feb 10): The crude palm oil (CPO) futures contract on Bursa Malaysia Derivatives ended lower on concerns over weaker demand, according to a dealer.

Palm oil trader David Ng said weakness in the soybean oil market at the US Chicago Board of Trade (CBOT) and Dalian Commodity Exchange also put pressure on CPO prices.

“However, weak production is seen as supporting prices in the near term. We locate support at RM5,300 a tonne and resistance at RM5,700 a tonne,” he told Bernama.

Earlier, the Malaysian Palm Oil Board (MPOB) reported that Malaysia’s CPO stocks fell 7.7% to 786,828 tonnes in January 2022 from 852,339 tonnes in December 2021 amid lower production.

Total palm oil inventory slipped 3.9% month-on-month (m-o-m) to 1.55 million tonnes from 1.61 million tonnes, with processed palm oil inventory rising by a marginal 0.5% to 765,586 tonnes from 761,717 tonnes previously.

Meanwhile, cargo surveyor Intertek Testing Services (ITS) said exports of Malaysian palm oil products for Feb 1 to 10 fell 5% to 318,078 tonnes from 334,750 tonnes shipped during Jan 1 to 10.

Mumbai-based Sunvin Group’s commodity research head Anilkumar Bagani said the Feb 1 to 10 palm oil export performance remained lacklustre, with a 5% drop estimated by ITS.

“It would be noteworthy to see how destinations would react to palm oil with such a high price and a premium over soft oils,” he said.

At the close, the CPO futures contract for February declined RM25 to RM5,740 a tonne, March 2022 lost RM55 to RM5,649 a tonne, April 2022 slipped RM59 to RM5,535 a tonne, May 2022 fell RM70 to RM5,388 a tonne, June 2022 was RM81 lower at RM5,234 a tonne and July 2022 dropped RM81 to RM5,078 a tonne.

Total volume decreased to 74,261 lots from 115,730 lots on Wednesday, while open interest expanded to 280,440 contracts from 318,979 contracts previously.

The physical CPO price for February fell RM20 to RM5,800 a tonne.

Source : The Edge Markets