Kuala Lumpur: The crude palm oil (CPO) futures contract closed lower for the second consecutive day, weighed down by concerns over a rising supply outlook.

According to BERNAMA News Agency, the Malaysian Palm Oil Board (MPOB) report yesterday indicated that Malaysia produced 1.77 million tonnes of CPO in May, marking a 5.1 per cent increase from 1.69 million tonnes in the preceding month.

Fastmarkets Palm Oil Analytics senior analyst Dr. Sathia Varqa mentioned that both Malaysia and Indonesia are currently experiencing high production seasons, although Malaysia's output is anticipated to decelerate in June following increases over the past three months. The Southern Peninsular Palm Oil Millers Association reported a 17.24 per cent reduction in production during the first 10 days of June compared to the same period in May, reversing an earlier 19 per cent increase recorded in the initial five days of the month.

Meanwhile, Anilkumar Bagani, the commodity research head at Mumbai-based Sunvin Group, noted that a stronger ringgit against the US dollar and weak demand from markets other than India also dampened local market sentiment for purchasing palm oil.

At the close of trading, the spot-month June 2025 futures fell by RM30 to RM3,846 per tonne. The July 2025 contract declined by RM30 to RM3,842 per tonne, and the August 2025 futures dropped by RM25 to RM3,839 per tonne. September 2025 slipped by RM22 to RM3,839 per tonne, October 2025 slid by RM19 to RM3,840 per tonne, and November 2025 decreased by RM15 to RM3,846 per tonne.

The trading volume decreased to 54,747 lots from 68,659 lots on Tuesday, while open interest dropped to 180,901 contracts from 247,754 contracts previously. The physical CPO price for June South also fell by RM50 to RM3,890 per tonne.