FCPO Related News

CPO price is expected to drop further due to weakness in the soy oil futures market, amid the ongoing US harvest activity and favourable weather in South America. Major support level for the benchmark December for today which was around 2,875~2870 has been broken, which signals further downside is likely following any Sell-off below 2,870 level. 

Palm oil exports during the first 15 days of September rose 12% from the previous month to 680,112 metric tons, cargo surveyor Intertek Agri Services said Saturday. Intertek put Aug. 1-15 shipments at 606,449 tons. However, the encouraging  export data did not manage to limit the decline in CPO price due to the weakness in soy oil market. Another surveyor, SGS (Malaysia) Bhd., issues Sept. 1-15 export data on Tuesday.

Crude palm oil futures on Malaysia’s derivatives exchange settled higher Friday, boosted by policy action announced by the U.S. Federal Reserve and expected strong first-half September palm oil exports from Malaysia, the world’s second-largest palm oil producer. The benchmark November contract at Bursa Malaysia Derivatives ended 0.8% higher at 2,936 ringgit a metric ton after trading in a MYR2,905-MYR2,945/ton range.  News of fresh economic stimulus was bullish for CPO prices, a Kuala Lumpur-based trader said, referring to the U.S. central bank’s announcement late Thursday that it will purchase $40 billion worth of mortgage-backed securities every month until the labor market improves.

Some traders had estimated that palm oil inventories could rise by a further 5% by end-September, as Malaysia is in its peak palm oil production months. End-August palm oil inventories rose 5.8% on month to 2.12 million tons, according to data from the Malaysian Palm Oil Board. However, rising demand could mean lower stocks, traders said, noting this was positive for CPO prices.

(Dow Jones Newswire)

Just last week, CPO prices were expected to be supported by tight vegetable oil markets–dwindling soybean supplies from the U.S. amid robust demand, according to a second Kuala Lumpur-based trader, noting that the U.S. already has sold 70% of the projected exports for the 2012-13 marketing year that started Sept. 1. "We believe crude palm oil prices are close to bottoming out and will regain upward trajectory once we are past the peak production in September and October," Macquarie Research said in a note Friday. CPO is priced attractively relative to soyoil, trading at a $300/ton price discount compared with the historical average of $150/ton, which should shift demand, it said.