Sunday, 9 December 2012
FCPO Related News (Mon, Dec 10)
Crude palm oil futures on Malaysia’s derivatives exchange ended little changed Friday after moving both ways, as investors refrained from aggressive bets ahead of the weekend and a slew of industry reports due next week. The benchmark February contract at Bursa Malaysia Derivatives ended MYR1 higher at 2,296 ringgits a metric ton after moving in a MYR2,283-MYR2,342 range.
Palm oil has declined 29% so far this year, partly due to global growth concerns, and prices could be vulnerable to further declines due to rising supplies in Southeast Asia. Stockpiles probably hit another record of 2.55 million tons as of end-November, a trading executive in Kuala Lumpur said, as export demand hasn’t risen fast enough to deplete excess oil. The Malaysian Palm Oil Board’s November crop report and Dec. 1-10 shipment data from cargo surveyors Intertek Agri Services and SGS (Malaysia) Bhd. are scheduled for release Monday.
"Bearish traders remain very active in the market and many expect December exports to be unchanged, as most exporters with a duty-free CPO export allowance have used up their quota," the executive said. Malaysian exporters have been moving palm cargoes before a tax-free CPO export quota of 3.6 million tons is discontinued by the end of the year. Open interest on the BMD was 144,644 lots, versus 144,334 lots Thursday. One lot is equivalent to 25 tons. A total of 34,916 lots of CPO were traded versus 45,693 lots Thursday. [Dow Jones Newswire]
Malaysian palm oil stocks probably hit a record 2.58 million tonnes in November, a Reuters survey showed ahead of official data on Monday, helping the tropical oil widen its discount to competing Argentine soyoil to $360 per tonne. The discount remains unsustainable and will narrow as more demand shifts to palm oil in the next few months, especially with wet weather delaying soy plantings and curbing yields in the world's biggest soyoil exporter Argentina.
Traders are watching for cargo surveyor data on Malaysia's Dec. 1-10 palm oil exports on Monday to confirm strong demand as No.2 edible oil buyer China stocks up before stricter quality controls on the refined grades come into effect on Jan. 1. In addition, export data may be even stronger as Malaysian planters scramble to exhaust an annual tax-free export quota totalling 3.5 million tonnes that is set to expire at the end of December.
Malaysia's Commodities Ministry will hold a briefing for refiners on Monday to get feedback on the government's plan to cut crude palm oil export taxes and completely dismantle the tax free export quota for the grade, traders said. Some planters are asking for the quota to continue until stocks fall below 2 million tonnes.
Brent crude steadied above $107 per barrel on Friday, but prices were headed for their biggest weekly loss in more than a month on worries about the euro zone economy and a looming fiscal crisis in the U.S., the world's top oil consumer. In palm oil's competing markets, U.S. soyoil for December delivery edged up 0.2 percent in Asian trade. The most active May 2013 soybean oil contract on the Dalian Commodity Exchange ended almost flat. [Reuters]
Today’s Support and Resistance for benchmark February contract is located around 2,280 and 2,340 respectively.