CPO futures end lower on stronger ringgit, output recovery expected in 2H17

KUALA LUMPUR: Crude palm oil (CPO) futures prices on Bursa Malaysia Derivatives ended lower today on the back of a stronger ringgit against the US dollar, coupled with the expectations of output recovery in the second half of 2017 (2H17), dealers said.
At 6pm, the ringgit closed at 4.4430 against the greenback from yesterday's 4.4600.
Phillip Futures Sdn Bhd Dealer David Ng said the strengthening of the ringgit made the local commodity less attractive to foreign buyers, hence weighed down the prices of the red tropical fruit.
"We locate support at RM3,080 per tonne and immediate resistance at RM3,180 per tonne," he told Bernama.
In a note, Kenanga Research said Malaysia's CPO production was expected to recover to between nine and 12 per cent in the second half of 2017 (2H17) after a sharp fall in production last year.
"Therefore, the commodity prices are expected to drop to RM2,200 per tonne in 2H17, down from the anticipated RM3,400 per tonne in the first quarter of 2017," it said.
At the close, February 2017 declined RM12 to RM3,243 per tonne, March 2017 dropped RM13 to RM3,183 per tonne, April 2017 eased RM9 to RM3,150 per tonne, and May 2017 was RM6 lower at RM3,102 per tonne.
Turnover, however, advanced to 44,012 lots from Tuesday's 38,068 lots, and open interest improved to 241,845 contracts from 238,340 contracts previously.
On the physical market, February South was RM10 lower at RM3,300 per tonne. — Bernama