KUALA LUMPUR (Sept 2): The crude palm oil (CPO) futures contract on Bursa Malaysia Derivatives closed lower with the benchmark November contract declining by RM44 to RM3,933 a tonne.

Palm oil trader David Ng attributed the decline to weakness in the Chicago Board of Trade (CBOT) soybean oil market and expectations of weaker demand in the near term.

“We expect the weaker demand to persist until the end of the month, primarily due to high inventory levels at Indian ports.

“Once these stock levels gradually decrease, CPO demand should resume,” Ng said.

He added that support is seen at RM3,800 a tonne, with resistance at RM4,000 a tonne.

Meanwhile, Fastmarkets Palm Oil Analytics senior analyst Sathia Varqa noted that CPO futures faced selling pressure throughout the day.

“Large losses in allied vegetable oils on Chinese exchanges and intense profit-taking after last week’s gains, which reached a one-month high, weighed on palm oil futures.

“The result was the largest single-day loss in 19 days,” he said.

Varqa added that while the ringgit depreciated by 0.67% against the US dollar from Friday’s close, this was insufficient to spark any recovery.

He also shared that Malaysia's palm oil exports for the Aug 1-31 period were down. Intertek Testing Services reported exports at 1.45 million tonnes, a 9.92% decrease from 1.6 million tonnes in the same period last month.

Meanwhile, AmSpec Agri Malaysia recorded exports at 1.38 million tonnes, down 11.51% from 1.56 million tonnes in the July 1-31 period.

At the close, the spot month September 2024 and January 2025 contracts decreased by RM43 to RM4,032 a tonne and RM3,881 a tonne, respectively.

The October 2024 contract fell by RM45 to RM3,970 a tonne, while the December 2024 contract slid by RM44 to RM3,901 a tonne. Meanwhile, the February 2025 contract dropped by RM39 to RM3,871 a tonne.

Total volume narrowed to 47,966 lots from Friday’s close of 63,742 lots, while open interest decreased to 226,900 contracts from 230,900 contracts previously.

The physical CPO price for September South was RM50 lower at RM4,050 per tonne.

https://www.theedgemarkets.com/node/725258