CPO FUTURES PARE GAINS BUT CASH PRICES REMAIN FIRM ON FUNDAMENTALS OF SUPPLY SHORTAGE | POA Close 16 Dec

MARKET COMMENTARY – 16 December 2020

New benchmark month Mar rose to a high of 3414 or 59 points but pared gains to end at plus 13 points, ending below 3400 support level at 3368. Mar traded 3414-3359. Ringgit eased by 0.07% to a Dollar. Earlier gains from higher 1-15 Dec exports and strong performance on soybean oil on CBOT and Dalian gave way to fear of rising cash prices leading to demand rationing. Palm prices are still are multi-year high underpinned by improving Dec exports and decreasing production outlook. Mid-month SPPOMA reported production down 10.91% to the same time in Nov. Palm olein cash price rose US$2.50. Rotterdam CPO gained a staggering US$27.50 while CPKO and CCNO were unchanged to lower but Indonesian CPKO edged up US$15. Rotterdam CNO-PKO spread was unchanged at US$215. NOPA Nov crush exceeded expectation and SBO stocks was up from Oct to a 4 month high.