Tuesday, 31 July 2012

FKLI related news

NEW YORK (MarketWatch) — U.S. stocks finished a low-volume session with minor declines Monday as investors moved cautiously ahead of central-bank meetings and the monthly jobs report later in the week. The Fed begins a two-day meeting on Tuesday while ECB will meet on Thursday.
Most Asian markets advanced Monday after European leaders signaled they were prepared to take stronger action to curb the region's debt crisis, while Mainland Chinese stocks declined amid lingering worries of an economic slowdown.
Malaysian shares closed higher yesterday at 1632.5. Further gains could be limited as the index is in overbought territory. A local dealer tips the market to stay within 1620-1635 range.

FCPO related news

Malaysian crude palm oil edged to a one-week high on Monday, tracking gains in broader financial markets on  expectations  the  Federal  Reserve  and  European  Central Bank (ECB) will announce new measures to encourage  growth, boosting  commodity demand. 
U.S.  soybeans  rallied  nearly  3  percent  on  Monday on  fears  that  the  crippling  U.S.  drought  would  further  shrink  the  crop   in   the   world's   top   grains exporter. Brent oil ended down for the first time in five sessions on Monday as worries that expected stimulus from the United States and Europe may fail to lift their economies overshadowed signs of lower OPEC production. (Reuters)

Malaysian FCPO prices rose to the highest level in a week on Monday after the government said it would increase the 2012 duty-free CPO export quota by two million tons. The additional two million tons will prevent a sharp rise in palm oil inventories and also "prevent a slide in CPO prices."  This will also help planters  to cope with higher output in the next few months.

Persistent drought in the U.S. Midwest that threatened soy crop yields also supported prices, with traders expecting a crop downgrade in the weekly progress report by the U.S. Department of Agriculture (USDA), due later on Monday. Tighter soy crop supply leading to less soybean oil could shift vegetable oil demand to the cheaper palm oil. Midday weather updates indicated even drier weather than earlier forecasts in the U.S. Midwest for the next week or two which will increase stress on corn and soybean crops that already have been slashed due to the worst drought in over 50 years, an agricultural meteorologist said on Monday.
Exports of Malaysian palm oil have declined since early July, reflecting weaker demand, as major vegetable oil buyers completed purchases needed before the Muslim fasting month of Ramadan. Concerns about slowing exports and rising stockpiles at a time when CPO output in Southeast Asia typically rises led to last week's dip. Palm oil slipped to MYR2,880/ton on Thursday, the lowest level seen since June 18. Investors are also keeping a close watch on a U.S. Department of Agriculture weekly crop progress report at 2000 GMT and July export estimates from cargo surveyors Intertek Agri Services and SGS (Malaysia) Bhd., due Tuesday.
The benchmark October palm oil futures on the Bursa Malaysia Derivatives Exchange closed higher yesterday at 3,005 ringgit per tonne. Informed traders most likely abandoned their short position when the benchmark October gapped up above 2,955 level as the immediate resistance trend line has been breached. However, today FCPO October dropped below the Support level of 2,973 although it has since recovered to 2,970.
Technicals turned bullish as palm oil broke a resistance at 2,987 ringgit and could trigger a gain to 3,021 ringgit, Reuters market analyst Wang Tao said.

Average palm oil prices in Malaysia may hold their ground at 3,200-ringgit this year, a Reuters poll showed, supported by a squeeze in supplies of edible oil from the drought-hit U.S. Midwest and the brewing El Nino weather pattern.

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