CPO FUTURES HIT TWO-YEAR HIGH ON WEAK PRODUCTION, LOWER STOCKS

By Nur Athirah Mohd Shaharuddin

KUALA LUMPUR, Oct 23 (Bernama) -- Crude palm oil (CPO) futures on Bursa Malaysia Derivatives rallied to a two-year high, driven by expectations of weak production and lower stock levels in both Malaysia and Indonesia, a trader said.

Palm oil trader David Ng noted that market sentiment was further supported by gains in soybean oil futures on the Chicago Board of Trade (CBOT).

“We see support at RM4,400 and resistance at RM4,580,” he told Bernama.

Meanwhile, Fastmarket Palm Oil Analytics senior analyst Sathia Varqa attributed the price rally to a combination of robust export growth and weak production.

Citing UOB KayHian’s production survey for October 1-20, he explained that production in Sabah had risen between seven per cent and 11 per cent, while Sarawak and Peninsular Malaysia experienced declines of three per cent to seven per cent and six per cent to 10 per cent, respectively.

Overall, he estimated that production during this period had dropped by one per cent to five per cent, tightening market supply.

“The bullish momentum, combined with strong export growth, weak production, and solid gains in related vegetable oils, has been enough to ignite a buying frenzy in CPO futures,” he added.

At today's close, the spot month November 2024 contract rose RM113 to RM4,563 per tonne, December 2024 gained RM103 to RM4,514, and January 2025 added RM100 to RM4,486.

The February 2025 contract increased by RM98 to RM4,443 per tonne, March 2025 surged RM93 to RM4,932, and April 2025 rose by RM87 to RM4,337.

Trading volume jumped to 102,234 lots from 75,113 on Monday, while open interest increased to 257,024 contracts from 254,456 previously.

The physical CPO price for October South was higher at RM4,590 per tonne.

-- BERNAMA