Monday, 10 December 2012
FCPO Related NewsMalaysian palm oil futures inched up on Monday as slower-than-expected growth in stocks last month and firm export demand in the first ten days of December lifted sentiment.
Brent crude oil ended firmer on Monday, the first time in six days, on improving demand from China and potential for Middle East turmoil, and copper neared two month highs, but commodities still finished broadly lower as most crop prices fell. Brent crude futures held above $107 a barrel on Monday, snapping five straight days of losses, as promising data out of the world's top two oil consumers revived demand growth hopes in a well-supplied market.
In palm oil's competing markets, U.S. soyoil for January delivery fell 0.3 percent. The most active May 2013 soybean oil contract on the Dalian Commodity Exchange also rose 0.1 percent. [Reuters]
Crude palm oil futures on Malaysia’s derivatives exchange ended higher Monday, as investors covered short positions, although further gains were limited by ample palm oil stockpiles in the world’s no. 2 producer. The benchmark February contract at Bursa Malaysia Derivatives ended 0.7% higher at 2,313 ringgit a metric ton after moving in a MYR2,288-MYR2,317/ton range.
Prices see-sawed between positive and negative territory as investors digested crop figures by industry regulator the Malaysian Palm Oil Board as well as Dec. 1-10 export estimates by cargo surveyors Intertek Agri Services and SGS (Malaysia) Bhd. In monthly data from MPOB, stock levels at end-November rose to a record 2.56 million tons, a touch higher than market expectations of 2.55 million tons, due to weaker than expected exports. MPOB put November exports at 1.66 million tons, a decline of around 6% from the previous month, and CPO production at 1.89 million tons, a decline of around 3%.
"Demand should have picked up due to low palm oil prices and as importers in China stock up on palm oil, but this has not materialized," said Alan Lim Seong Chun, Kuala Lumpur-based plantation analyst at Kenanga Investment Bank. "The trend of weak demand despite low palm oil prices is extremely worrying, as this may suggest that CPO prices may stay below MYR2,500/ton when 2013 starts," Mr. Lim said. Both cargo surveyors Intertek and SGS showed mixed export data for the first 10 days of December. Intertek pegged exports at 504,032 tons, a decline of 2.8% from the same period in the previous month, while SGS put Dec. 1-10 exports at 516,841 tons, an increase of 0.4%.
Meanwhile, Malaysia’s incoming new tax rates for crude palm oil exports will be calculated each month using the domestic spot price and the price of CPO for delivery in the following month, a Commodities Ministry official who declined to be named said. The move is to help Malaysia’s domestic industry compete against Indonesia, the world’s biggest palm oil producer, which last year revamped its export tax structure, making Indonesian CPO cheaper than Malaysia’s. Jakarta’s move also helped boost refining margins and spurred a slew of investments in Indonesia’s downstream palm oil sector.
In the cash market, refined palm olein for December was offered at $770/ton, while cash CPO for prompt shipment was offered at MYR2,080/ton. Open interest on the BMD was 153,392 lots, versus 144,644 lots Friday. One lot is equivalent to 25 tons. A total of 35,330 lots of CPO were traded versus 34,916 lots Friday. [Dow Jones Newswire]
Today’s Support and Resistance for benchmark February contract is located around 2,300 and 2,350 respectively.