KUALA LUMPUR (July 25): The crude palm oil (CPO) futures contract on Bursa Malaysia Derivatives (BMD) reversed Monday’s (July 24) gains to end lower on Tuesday (July 25) on profit-taking activities following weakness in Chicago Board of Trade (CBOT) soybean oil futures, a dealer said.

Mumbai-based Sunvin Group commodity research head Anilkumar Bagani said market sentiment was also pressured by the Malaysian Palm Oil Association’s (MPOA) higher-than-expected production estimates for Malaysian palm oil for the July 1-20 period.

“The stronger ringgit also added some pressure to prices.

“However, the overall sentiment remained firm and the Russian attacks on Ukrainian ports have provided the main impetus for the bullish move, along with the strong rise in South American soybean oil free on board (FOB) prices,” he said.

Anilkumar said MPOA estimated that Malaysian palm oil production for July 1-20 was 6.49% higher than for the same period in June 2023, with strong performance seen for Peninsular Malaysia (up 12.43%) and Sarawak (up 9.8%) which compensated for the lower output in Sabah (down 6.77%).

Sabah’s weaker performance pulled down East Malaysia’s overall production by 2.76%.

“We have been kept saying that the production this month may show some good gains and our own estimates for the time being for the full-month production is 5% to 6% higher than last month’s,” he said.

Meanwhile, palm oil trader David Ng said CPO futures finished lower amid concern over rising output along with weakness in the soybean oil prices on CBOT.

“We locate support at RM3,800 and resistance at RM4,250,” he said.

At the close, August 2023 and September 2023 edged down RM92 each to RM4,000 per tonne and RM4,050 per tonne, respectively, October 2023 fell RM98 to RM4,066 per tonne, November 2023 eased RM99 to RM4,068 per tonne, December 2023 slid RM101 to RM4,070 per tonne, and January 2024 lost RM105 to RM4,076 per tonne.

Total volume dropped to 63,523 lots from 73,626 lots on Monday while open interest was slightly lower at 193,733 contracts compared with 193,810 contracts on Monday.

The physical CPO price for August South was RM100 lower at RM4,080 per tonne.