Monday, 22 October 2012

FCPO Related News
Crude palm oil futures on Malaysia’s derivatives exchange ended higher Monday as investors covered short positions due to expectations that firm export demand the rest of the month could help reduce end-month inventory levels. The benchmark January contract at Bursa Malaysia Derivatives ended 3% higher at 2,577 ringgit a metric ton after moving in a range of MYR2,497-MYR2,580/ton.
Strong Oct. 1-20 exports prompted some market participants to lower their stock projections for end-October to 2.5 million tons, down from previous estimates of 2.70-2.80 million tons, a Singapore-based trading executive said. Cargo surveyor Intertek Agri Services last week said palm oil exports during the Oct. 1-20 period rose 14% from the same period the previous month to 1.06 million tons. Another surveyor, SGS (Malaysia) Bhd., Monday put exports for the period at 1.05 million tons, an increase of 17%.
End-October stockpiles of 2.5 million tons would represent a modest 0.8% rise from the previous month, compared with a 17% jump to 2.48 million tons as of end-September. "Some speculative investors have initiated fresh long positions in BMD Crude Palm Oil (CPO) after a sharp selldown earlier this month, which helped to prop up the market today," a dealer at a Kuala Lumpur-based investment bank said.     [Dow Jones Newswire]
Palm, the world’s most-consumed cooking oil, is set to rally as much as 21 percent in the next eight months as a pickup in global demand and a decline in output reduce record stockpiles, according to Sime Darby Bhd. (SIME). Futures in Malaysia, the global benchmark, may range from 2,800 ringgit ($916) a metric ton to 3,100 ringgit in the first half of 2013, said Franki Anthony Dass, executive vice president at Sime Darby Plantations Sdn., a unit of the world’s biggest listed producer. The commodity may trade between 2,400 ringgit and 2,700 ringgit until the end of this year as demand recovers before the festival season in India, Dass said Oct. 19.
Some of the inventories may be depleted when India restocks before the Diwali festival on Nov. 13, and as biodiesel demand rises in Europe as the winter months approach, said Dass, who’s been in the industry for 30 years. Less production expected in the first quarter would also boost prices, he said. Output is typically at the lowest level in January and February. The slowdowns in Europe and China, the biggest cooking-oil consumer, have failed to cut demand for food, including palm oil-based products, and prices will lure buyers, he said.
“In China, the economy can slow down, but the Chinese don’t stop eating,” Dass said. “The demand for food will always be there and China will pick up again. The economic slowdown for China is only disrupting the pricing.” Malaysia’s move to cut export taxes will benefit producers with refineries and help them compete with supplies from Indonesia, Dass said. “The move by the government is positive to reduce the stocks, and makes the feedstock price competitive and improves our refinery margins,” he said.  
[Dow Jones Newswire]
Technically, the benchmark Jan has every reason to go up further on short term as it has breached above the immediate resistance point around 2,530 level yesterday. Volume and open interest was also recorded higher and more upside is likely if  the benchmark Jan manage to breach above psychological resistance around 2,600 level for today’s session. Today’s Support and Resistance is 2530 and 2600 respectively.

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