Thursday, 12 July 2012
FCPO related news
FCPO dropped yesterday due to concern over the health of the Chinese economy ahead of the release of its second-quarter growth data Friday as China is a major importer of palm oil.
"Based on USDA overnight data [on soybean yield], FCPO should recover today but Friday's trade may be slow and rangebound as people may sit on sidelines ahead of the weekend," a trading executive in Kuala Lumpur said. The U.S. Department of Agriculture said in a report Wednesday that the country's soybean output would decline due to drought in the Midwest. The USDA cut its yield forecast for the crop to 40.5 bushels per acre from 43.9 bushes an acre.
Analysts expects the trend to reverse, because of the wide price spread of $210 a ton between soyoil and cheaper palm oil, compared with the historical average of $100/ton. Meanwhile, dry weather affecting soybean oil is expected to continue.
FKLI September opened slightly higher this morning at 3,017 and closed the first session higher at 3,030.