CPO Futures Rebound To Close Higher On El Nino Concerns

By Muhammad Fawwaz Thaqif Nor Afandi

KUALA LUMPUR, Aug 28 (Bernama) -- Crude palm oil (CPO) futures on Bursa Malaysia Derivatives rebounded to close higher on Friday, supported by expectations of weaker output in the medium term amid concerns over the El Nino weather pattern.

Iceberg X Sdn Bhd proprietary trader David Ng said concerns over El Nino, which typically brings hotter and drier conditions, have raised expectations that CPO production could weaken in the coming months.

“The stronger Chicago Board of Trade (CBOT) soybean oil prices also provided support to market sentiment.

“We see prices supported above RM4,800 and resistance at RM4,950,” he told Bernama.

Meanwhile, Mumbai-based Sunvin Group head of commodity research Anilkumar Bagani said CPO futures traded higher on bargain buying following a sharp rebound in CBOT soybean oil futures and some steadiness in energy prices.

However, weaker Malaysian palm oil export performance and higher-than-expected production in August had kept the recovery in check.

“The market is also supported by news that the Indonesian Palm Oil Producers Association (GAPKI) projected that extreme El Nino could potentially reduce CPO output by up to five million tonnes,” he said.

At the close, the September 2026 contract rose RM35 to RM4,628 per tonne, October 2026 strengthened RM72 to RM4,788, and November 2026 advanced RM78 to RM4,894 per tonne.

The December 2026 contract climbed RM81 to RM4,988 per tonne, January 2027 gained RM83 to RM5,067, and February 2027 widened RM86 to RM5,121 per tonne.

Trading volume fell to 121,872 lots from 150,594, while open interest declined to 332,943 contracts from 486,220 contracts previously.

The physical CPO price for September South added RM30 to RM4,650 per tonne.

-- BERNAMA