CEO Morning Brief

CPO Futures Slips Further, Tracking Losses in Rival Edible Oils

Publish date: Fri, 24 Mar 2023, 08:42 AM
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TheEdge CEO Morning Brief

KUALA LUMPUR (March 23): The crude palm oil (CPO) futures contract on Bursa Malaysia Derivatives slipped further on Thursday, tracking the losses in rival edible oils as well as the crude oil prices, a trader said.

Palm oil trader David Ng said CPO plunged below RM3,700 since October last year given the weakness in the Chicago Board of Trade (CBOT) soybean oil futures market, which was down by 1% during Asian trading hours after Wednesday’s sell-off.

He said oil prices also dipped on Thursday, tracking weak economic signals from the Federal Reserve and the expectation that the Organisation of Petroleum Exporting Countries and allies (OPEC+) would likely keep output unchanged next month despite a recent price crash.

“Weaker crude oil prices will depress CPO prices as palm oil is being used for biofuel,” he told Bernama.

He said the market also expected export performance to taper off with global sentiment turning bearish dampened by sentiment brought about by the US banking crisis, which could be seen in weakness across some of the commodities.

“We locate support at RM3,500 and resistance at RM3,900,” he said.

At the close, the spot month of April 2023 fell RM85 to RM3,750 per tonne, May 2023 declined RM103 to RM3,645 per tonne and June 2023 slipped RM95 to RM3,569 per tonne.

The July 2023 futures decreased RM85 to RM3,535 per tonne and August 2023 and September 2023 went down by RM77 each to RM3,516 and RM3,504 per tonne respectively.

Total volume fell to 75,152 lots from 92,687 lots on Wednesday while open interest widened to 195,586 contracts from 193,860 contracts previously.

The physical CPO price for April South was lower by RM20 at RM3,980 per tonne.

Source: TheEdge - 24 Mar 2023

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