Crude palm oil (CPO) futures contract on Bursa Malaysia Derivatives climbed higher at Wednesday’s closing on concerns over weak output.
Palm oil trader David Ng said the low stock level continued to lift sentiment higher coupled with news report that the government will implement the biodiesel programme by the end of the year, which is positive for CPO prices.
“We locate support level at RM4,800 a tonne and resistance level at RM5,200 a tonne,” he said.
Meanwhile, CGS-CIMB Securities Sdn Bhd projected CPO prices to stay firm in the RM4,500-RM5,500 a tonne range in January 2022 as palm oil supplies are likely to stay tight in the near term
“Given that the first quarter is typically the low production season for palm oil, Malaysia is currently experiencing heavier-than-usual rainfall in some of the oil palm regions and the current labour shortage issue remains unresolved,” it said.
The benchmark palm oil contract — March 2022 rallied above RM5,000 a tonne to RM5,036 a tonne, up RM122.
Meanwhile, CPO futures contract for January 2022 gained RM178 to RM5,437 a tonne, February 2022 rose RM184 to RM5,288 a tonne, April 2022 went up RM126 to RM4,836 a tonne, May 2022 gained RM123 to RM4,677 a tonne and June 2022 climbed RM123 to RM4,550 a tonne.
Total volume increased to 56,651 lots from 50,228 lots on Tuesday while open interest widened to 264,416 contracts from 258,212 contracts previously.
The physical CPO price for January South went up RM120 to RM5,450 a tonne from RM5,330 a tonne on Monday.