Thursday, 13 December 2012
FCPO Related News (Fri, Dec 14)
Crude palm-oil futures on Malaysia’s derivatives exchange fell to a one-month low Wednesday on technical selling and ample vegetable-oil supplies. Lower CBOT soyoil futures during Asian hours weighed on the market as well, market participants said. The benchmark February contract at Bursa Malaysia Derivatives settled 2.2% lower at 2,241 ringgit a metric ton after tumbling as much as 2.8% to MYR2,229/ton, the lowest since Nov. 12. CBOT January soyoil eased 0.3% to 50.03 cents/lb at 1037 GMT.
"We think bearish traders now have a tight grip on the palm oil market. Given the ample palm oil supplies as well as higher supply of soyoil by the U.S. Department of Agriculture, palm-oil prices could ease to MYR2,210/ton," a trading executive at a Kuala Lumpur-based brokerage said. "Palm oil prices will trade between MYR2,210-MYR2,260/ton for the rest of the week. We also note that funds are exiting their long positions on palm oil due to weak technicals," the Kuala Lumpur-based broker said. Open interest on the BMD was 148,782 lots, versus 156,441 lots Tuesday. One lot is equivalent to 25 tons. A total of 35,105 lots of CPO were traded versus 38,386 lots Tuesday. [Dow Jones Newswire]
SINGAPORE, Dec 13 (Reuters) - Malaysian palm oil futures fell on Thursday to their lowest in more than three years, as record stocks and concerns that U.S. fiscal woes might drag on global growth spooked investors. Despite announcements of more monetary stimulus by the U.S. Federal Reserve, traders remained cautious as sharp differences on the 2013 budget persisted between Congressional Republicans and the White House, and negotiators warned the showdown could drag on past Christmas.
Record high stocks in Malaysia, the world's No.2 palm producer, also drove palm oil futures to their third straight daily loss. "The market looks exhausted at current levels, and some correction is anticipated. But any bounce will be limited with supply seen at record levels," a trader with a local commodities brokerage in Malaysia said.
Traders will be counting on Malaysian exporters to use their tax-free export quota ahead of its year-end expiration and looking to stronger Chinese demand to bolster export figures for the first half of December. India's monthly imports of cooking oil fell by a third in November, a trade body said, largely because of a drop in purchases of palm oil, as cold weather makes the commodity unusable and volatile prices deterred buyers. Malaysia's new crude palm oil export tax for January is also in focus as analysts said the tax, likely to be set at zero, could boost exports of the crude grade and ease record stock levels.
In a bearish sign for palm oil, Brent crude slipped toward $109 a barrel on rising U.S. oil stockpiles, while fears the world's largest economy might miss a deadline for next year's budget and risk a recession also kept bulls in check. In other vegetable oil markets, U.S. soyoil for January delivery lost 0.1 percent in late Asian trade. The most active May 2013 soybean oil contract on the Dalian Commodity Exchange closed 0.6 percent lower.
Today’s Support and Resistance for benchmark February contract is located around 2,210 and 2,260 respectively.