KUALA LUMPUR (April 21): Malaysia crude palm oil (CPO) prices climbed RM98 to a record high of RM4,329 a tonne on Bursa Malaysia today after prices of rival soybean futures in the US rose overnight to a level near a seven-year high as tightening supplies supported cash markets and attracted speculative buying.
On Bursa today, oil palm planters’ share prices, however, fell despite the rise in CPO prices.
At Bursa’s 12:30pm break today, CPO price for May 2021 pared gains at RM4,320 a tonne while CPO for June 2021 settled up RM102 at RM4,089. Oil palm and soybean are rival crops, hence their prices have been observed to move in tandem.
Among oil palm plantation companies, Kuala Lumpur Kepong Bhd’s share price settled down 40 sen or 1.82% at RM21.54, while IOI Corp Bhd fell six sen or 1.48% to RM4.
Sime Darby Plantation Bhd dropped six sen or 1.33% to RM4.45.
Overnight, Reuters, quoting analysts, reported that US corn futures climbed to their highest in nearly eight years on Tuesday and soybean futures neared a seven-year high as tightening supplies supported cash markets and attracted speculative buying.
It was reported that worries about dry conditions curbing corn yields in Brazil and cold weather slowing germination of the 2021 US crop added support while wheat futures followed the firm trend as freezing temperatures in the US Plains and Midwest this week threatened developing winter wheat crops.
“Chicago Board of Trade (CBOT) May corn settled up 14-1/2 cents at US$6.06-1/2 per bushel after reaching US$6.11-3/4, the highest price on a continuous chart of the most-active contract since June 2013. CBOT July soybeans ended up 21-1/4 cents at US$14.57-3/4 a bushel after rising to US$14.71-1/2, the highest for a most-active soybean contract since June 2014. CBOT July wheat finished up 7-1/2 cents at US$6.61-1/4 a bushel,” Reuters reported.
Terry Linn, analyst with Linn & Associates, was quoted as saying speculative buying by commodity funds was likely a factor which led to higher prices of crops including corn and soybean, noting that the CME Group, operator of the CBOT, expanded position limits in grain futures last month.
“The funds have deeper pockets than they did before,” Linn said.
