Wednesday, 28 November 2012

FCPO Related News (Thurs, Nov 29)
Crude palm oil futures on Malaysia’s derivatives exchange ended lower Wednesday, mirroring a retreat across commodity markets due to lingering investor concerns over the U.S. fiscal cliff and on expectations for an increase in palm oil stockpiles. The benchmark February contract at Bursa Malaysia Derivatives ended 0.7% lower at 2,394 ringgit a metric ton after moving in a MYR2,383-MYR2,417/ton range.
U.S. Senate Majority Leader Harry Reid said on Tuesday that there had been "little progress" in budget talks, damping investor appetite for riskier assets. Palm oil prices were also weighed by an expected rise in palm oil inventories in November due to lackluster global demand amid seasonally high production in top producers Indonesia and Malaysia, an analyst in Jakarta said. Palm oil is likely to trade in a choppy MYR2,350-MYR2,420/ton range, as investors seek cues from a vegetable oils conference in Bali on Thursday and Friday where leading analysts are scheduled to speak on industry and price outlooks, the analyst said.
Some traders think that analyst Dorab Mistry, who is also head trader for vegetable oils at Godrej International, will reiterate his price forecast for palm oil and say the commodity needs to drop to MYR2,200/ton for 1-2 months to attract demand. In the cash market, refined palm olein for December was offered at $795/ton while cash CPO for prompt shipment was offered at MYR2,160/ton. Open interest on the BMD was 171,428 lots, versus 171,916 lots Tuesday. One lot is equivalent to 25 tons. A total of 31,818 lots of CPO were traded versus 35,938 lots Tuesday.           [Dow Jones Newswire]
Prices touched their highest in almost a week on Tuesday as a Greek debt deal provided brief comfort for investors, but lack of progress in U.S. budget talks and speculation that Malaysian palm oil inventories could hit a record high this month kept prices in a tight range."The market looks like it's expected to just stay rangebound this week," said a Singapore-based trader with a global commodities trading house. "But for the longer term, sentiment has improved, compared to a month ago."

The European Commission has made public a decision taken last week to allow palm oil producers under the Roundtable on Sustainable Palm Oil scheme to qualify for biofuel subsidies, a move that could spur more European demand for the tropical oil. In other markets, Brent oil slipped on Wednesday as investors nervously eyed talks to head off a looming fiscal disaster in the United States, the world's top oil consumer.The U.S. budget woes also weighed on other vegetable oil markets. U.S. soyoil for December delivery fell 0.7 percent in early trade. The most-active May 2013 soybean oil contract on the Dalian Commodity Exchange closed 0.4 percent lower.

Technicals showed mixed signals for palm oil, but it is biased to drop to 2,353 ringgit per tonne, said Reuters market analyst Wang Tao.           [Reuters]

Today’s Support and Resistance for benchmark February contract is located around 2,366 and 2,420 respectively.   

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