Thursday, 19 July 2012
FCPO Related News
Malaysian crude palm oil futures slid to a near three-week low on Wednesday, as traders booked profits partly on weaker exports and better production outlook in Malaysia after a recent U.S. weather-fuelled rally. (Reuters)U.S. soybeans rallied to a record high on Wednesday on fears that the worst drought in 56 years, which has devastated the corn crop, will now turn on soybeans as forecasts called for continued hot and dry weather. Oil prices rose on Wednesday, hitting a seven-week peak as violence in Syria and tensions with Iran reinforced geopolitical fears and U.S. Federal Reserve Chairman Ben Bernanke downplayed the risk of a double-dip recession.
Crude palm oil futures on Malaysia's derivatives exchange ended lower Wednesday, succumbing to profit-taking pressure and declines on the Dalian Commodities Exchange, in addition to weak export figures and the sudden correction on soybean oil price.
Weather remains a threat to yield potential in India's oilseed-growing areas as well as in oil palm-growing areas of Malaysia and Indonesia due to a developing El Nino weather event. Should another El Nino episode occur, we can expect India's edible oil imports to spike up sharply" and boost palm oil prices, an analyst said. India is major edible oil buyer and imports about half of its needs.
Palm oil's widening discount to rival soyoil will also likely support. "Some investors anticipate the price gap to widen to $300/ton soon" and that could drive price-sensitive buyers to switch to palm oil, Chandran Sinnasamy, trading head at Kuala Lumpur-based LT International, said. Soyoil's premium to palm oil is around $230/ton now, compared with a historical average of $100/ton, physical market data showed.
FCPO October contract opened higher this morning at 3,018 and reached a high of 3,056 before closing at 3,045. Today's support is located around 2,967 while resistance is pegged around 3,044.