Wednesday, 12 December 2012
FCPO Related News ( Thurs, Dec 13)
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 12 (Reuters) - Malaysian palm oil futures dropped to a one-month low on Wednesday, as forecasts for a higher supply of rival soybean oil stoked concerns of a global vegetable oil surplus. The bearish view of soybean oil from the U.S. Department of Agriculture (USDA), coupled with Malaysia's record high palm oil stocks in November, have put palm oil futures on track for their steepest annual loss since 2008. "CBOT (Chicago Board of Trade) soyoil came down yesterday by about 90 points, and there were some traders who were trying to break the previous low," said a trader with a foreign commodities brokerage in Malaysia.
By the midday break, the benchmark February contract on the Bursa Malaysia Derivatives Exchange had lost 2.4 percent to 2,235 ringgit ($730) per tonne, slightly off a low at 2,233 ringgit, a level unseen since Nov. 12. Total traded volumes stood at 15,739 lots of 25 tonnes each, higher than the usual 12,500 lots. Traders are looking out for Malaysia's new crude palm oil export tax that will be formalised in a gazette on Dec. 17 under a new tax structure that aims to claw back market share from top producer Indonesia.
Despite higher supply of global vegetable oil, the steep discount between palm oil and soybean oil could stimulate high export demand for palm oil and send prices rising in early 2013, said Hamburg-based analysts Oil World. Palm oil imports by India, the world's top vegetable oil buyer, are likely to have fallen in November from October levels, which were the highest in at least three years, as demand shrank with the start of cold weather that solidifies the oil, a Reuters survey showed.
In a bullish sign for palm oil, Brent crude held above $108 a barrel on Wednesday as OPEC reduced oil supply, although rising output from the United States and uncertainty about its budget for next year limited price gains. In other vegetable oil markets, U.S. soyoil for January delivery fell 0.2 percent in early Asian trade, after falling by almost 2 percent in the previous session. The most active May 2013 soybean oil contract on the Dalian Commodity Exchange also lost 1.5 percent. Palm, soy and crude oil prices at 0536 GMT Contract Month Last Change Low High Volume.Today's Support and Resistance for benchmark February contract is located around 2,220 and 2,260 respectively.