CPO vs soybean oil - which is better to trade?

chethan

Both CPO (crude palm oil) and soybean oil are traded on MCX. Which one has better liquidity and easier to trade? I am interested in edible oil segment but not sure which contract to focus on.

chethan

Reply by: EdibleOils_Trader
CPO has much better liquidity on MCX compared to soybean oil. Daily volumes in CPO are 10-15 times higher. Price movements are also more logical because CPO follows Malaysian palm oil prices closely. Soybean oil volumes are very thin and sometimes you wont get buyers/sellers at desired prices. So definitely go with CPO if you want to trade edible oils.

chethan

Reply by: SouthIndia_Dealer
One thing to remember is CPO prices have strong correlation with crude oil also because palm oil is used in biodiesel. So if you are trading CPO, keep eye on crude oil prices too. When crude goes up, CPO also tends to go up and vice versa. This correlation helps in understanding price movements better.