2013 Price Forecast by Dorab Mistry at Bali Conference (29-30 November 2012)

Palm oil may trade in a range in the next three months before

slumping into a bear market as global production peaks in the

second half of next year, according to Dorab Mistry, director at

Godrej International Ltd.

Futures on the Malaysia Derivatives Exchange will trade between 2,300 ringgit ($755) and 2,600 ringgit a metric ton until February, keeping inventories high in Indonesia and Malaysia, the top producers, Mistry told a conference in Bali, Indonesia today. Prices will drop below 2,200 ringgit in August or earlier as a pickup in output expands inventories, he said.

Palm oil, used in everything from biofuels to candy and noodles, has slumped 25 percent this year as slowdowns in China and the European Union curbed demand, pushing inventories to a record in Malaysia. Mistry’s forecast contrasts with the outlook from Rabobank International, which picked palm oil to be the best-performing agricultural commodity in 2013. Futures, which fell to a three-year low of 2,220 ringgit on Nov. 12, will drop if India, the largest buyer, raises import taxes, Mistry said.

“From March onwards, the recovery in soft oil production and the anticipation of big crops to be harvested will prevent any thoughts of a price rally,” said Mistry, who in June, correctly forecast a slump in palm oil. “I expect vegetable oil prices to remain range-bound in the first half of the year and to begin a major bear market in the second half.” Soybean, sunflower and rapeseed oils are usually referred to as soft oils.

Monthly Records

Palm oil output in Indonesia and Malaysia may reach monthly records between September to December next year, said Mistry. Malaysia may produce at least 19 million tons in 2013, while Indonesian output may reach as much as 30 million tons, he said. Production is forecast at 18.4 million tons and 27.5 million tons respectively this year, he said.

The contract for delivery in February fell 0.3 percent to 2,386 ringgit a ton in Kuala Lumpur yesterday. Futures are set to drop 4.4 percent this month. A bear market is typically defined as a decline of more than 20 percent. Most-active palm oil last traded below 2,200 ringgit in November 2009.

Palm oil may be the best-performing agricultural commodity next year as demand rebounds after this year’s price plunge, Rabobank said Nov. 28. Prices are expected to rise as inventories decline from record levels and demand increases from importers including China and India, the bank said.

Global food use of vegetable oils may grow by about 3.5 million tons as lower prices stimulate consumption, while biodiesel usage will expand 500,000 tons in the year that began on Oct. 1, said Mistry, who’s worked in the industry for 35 years. The increase in demand of 4 million tons will exceed incremental supply of 3.15 million tons, he said.

‘Heaviest Stocks’

The new season is starting with the “heaviest stocks in history” and this overhang will cushion the impact of the lower production of vegetable oils in the first half, said Mistry. Malaysia’s reserves climbed to a record of 2.51 million tons in October, according to the nation’s palm oil board. Stockpiles in Indonesia may be 3.5 million to 4 million tons, compared with the normal so-called guesstimate of 1.5 million to 2 million tons, Mistry said in September.

India, the biggest buyer of palm oil, started its new oil year with record inventories of 1.65 million tons, said Mistry. Domestic cooking oil output should expand this year due to a bigger mustard crop, he said. That may prompt the government to impose a 10 percent duty on crude palm oil imports and more than double taxes on refined oils to 20 percent, he said.

While the ratio of U.S. corn to soybeans prices is currently in favor of corn for the new crop, a switch to corn isn’t expected due to the need for a crop rotation, said Mistry.

Soya-Complex

“I am bearish on the soya complex post-May with a gradual erosion of risk premium from as early as February,” he said. “Old crop soya oil needs to control demand and will therefore remain at a big premium to palm.”

Soybean oil futures in Chicago may trade in a range of 48 cents and 53 cents a pound, while the new soybean oil crop from May onwards should see prices between $900 and $1,020 a ton on a free-on-board basis in Argentina, he said. Soybean oil for delivery in January traded at 50.05 cents today.

Production of sunflower oil may be about 1 million tons lower in 2012-2013 as crops in Russia and Ukraine decline, Mistry said. Supplies of rapeseed oil in the next few months will be tight on a smaller canola crop and the biggest effect of more expensive rapeseed oil will be felt in the U.S., where canola oil has been replacing soybean oil for food, he said.

“Some of that demand may be inelastic and some of that demand may go back to soya oil,” he said. “It will also create space for more palm oil to be imported into the U.S. in 2013.”

Global economic growth is expected to be better in 2013, compared with this year, with the U.S. avoiding or resolving the so-called fiscal cliff, leading to a stronger dollar and gains for equities in most markets, said Mistry.

“The end of the cyclical bull market in commodities leads me to believe that profitability in agriculture and in plantations will soon revert to more normal levels,” he said. “The days of super-normal profits in palm oil cultivation are coming to a close.”          [Bloomberg] 

FCPO Related News (Fri, Nov 30)

Malaysia exported around 1.66 million metric tons of palm oil in November, an increase of 3.8% from a month earlier, cargo surveyor Intertek Agri Services said Friday. The figure is a tad higher than market expectations of 1.62 million-1.65 million tons. Intertek estimated October exports at 1.60 million tons. Another surveyor, SGS (Malaysia) Bhd., is expected to issue its estimate for November later in the day.

Crude palm oil futures on Malaysia’s derivatives exchange ended mostly lower Thursday, reflecting investor concerns over palm oil stock levels. Technical-driven selling pressure and improved South American weather over key soybean growing areas also contributed to lower prices, market participants said.

The benchmark February contract at Bursa Malaysia Derivatives ended 0.3% lower at 2,386 ringgit a metric ton after falling as much as 1.1% to MYR2,367/ton, the lowest since Nov. 15.

"Palm oil recovered some lost ground on short-covering and talks that November exports are likely to be up 1%-3% on month" after several weeks of decline, which could support prices, a commodities broker in Kuala Lumpur said. Trading executives peg November exports at 1.62 million-1.65 million tons, compared with October shipments of around 1.60 million tons. Cargo surveyors SGS and Intertek are scheduled to issue November export data Friday.

Leading oilseed analyst Thomas Mielke is optimistic that palm oil prices are close to bottoming out, and will likely resume an uptrend as inventories are likely to be drawn down on tight global oilseed supplies in the second and third quarters next year. Excluding soybean crop, production of other oilseeds is expected to fall by five million tons in the 2012-13 marketing year that started on Oct. 1., Mr. Mielke said at an event organized by Singapore-based UOB Kay Hian earlier this week.

Open interest on the BMD was 167,282 lots, versus 171,428 lots Wednesday. One lot is equivalent to 25 tons. A total of 24,134 lots of CPO were traded versus 31,818 lots Wednesday.           [Dow Jones Newswire]

 Traders are looking out for Malaysia's palm products export figures for November due on Friday, with expectations of a slight decline compared with a month ago. The latest data for the first 25 days of the month showed a drop of less than 2 percent.

A lower export demand may push Malaysian inventory levels slightly higher in November despite slowing production. "The market is still under pressure. Exports should be down by more than 1.5 percent for the month," said a trader with a foreign commodities brokerage in Malaysia. "People are asking whether production can neutralize exports, and I think it's unlikely that stocks will go up sharply," he added.

Some traders remained on the sidelines ahead of top analysts presenting their price forecasts for 2013 at the Indonesian Palm Oil Association's two-day conference in Bali on Thursday and Friday. Palm oil output in the world's biggest producer Indonesia is expected to climb 7 percent next year to 27 million tonnes, a top industry association official said on the sidelines of the conference, as three years of acreage expansion efforts bear fruit.

Two trading sources also told Reuters at the conference that India's oilseed industry has submitted a proposal to the government to raise import taxes on palm oil and other edible oils, arguing demand for local output is being hurt after a sharp fall in prices. In related markets, Brent crude oil rose on Thursday on optimism that U.S. lawmakers would reach a deal on fiscal policy and as mounting tension in the Middle East intensified supply concerns. In other vegetable oil markets, U.S. soyoil for December delivery gained 0.4 percent in late Asian trade. The most-active May 2013 soybean oil contract on the Dalian Commodity Exchange closed 0.2 percent lower.

Technicals suggested palm oil is expected to test a support at 2,353 ringgit, a break below which will lead to a further drop to 2,288 ringgit.            [Reuters]

Today’s Support and Resistance for benchmark February contract is located around 2,353 and 2417

FKLI Related News (Fri, Nov 30)

NEW YORK, Nov 29 (Reuters) - U.S. stocks finished higher on Thursday as investors bought on sporadic dips in a market roiled by conflicting comments from Washington about negotiations on an agreement to avoid the "fiscal cliff."

Tech shares, including Research In Motion and Advanced Micro Devices, helped the Nasdaq outperform the broader market. Telecommunications and health-care stocks were the day's best-performing sectors.

Reflecting the uncertainty surrounding U.S. budget talks, trading was choppy. Wall Street reversed early gains and fell shortly after House Speaker John Boehner, the top Republican in Congress, dashed hopes that lawmakers were getting closer to a budget deal that would avert automatic tax increases and spending cuts set for early 2013 - the fiscal cliff - that could push the U.S. economy into a recession next year. But the market rebounded by afternoon and the three major U.S. stock indexes rebounded to near their session highs.

The Dow Jones industrial average rose 36.71 points, or 0.28 percent, to 13,021.82 at the close. The Standard & Poor's 500 Index gained 6.02 points, or 0.43 percent, to 1,415.95. The Nasdaq Composite Index advanced 20.25 points, or 0.68 percent, to close at 3,012.03.

Data showed the U.S. economy grew faster than initially thought in the third quarter as businesses restocked, but consumer and business spending were revised lower in a sobering reminder of the economic recovery's underlying weakness. Contracts to buy previously owned U.S. homes rose more than expected in October, a sign the housing market recovery advanced into the fourth quarter despite a mammoth storm and concerns over looming tax hikes. Homebuilders' shares rose. The PHLX housing index rose 0.8 percent.

About 6.15 billion shares changed hands on the New York Stock Exchange, the Nasdaq and NYSE MKT, below the daily average so far this year of about 6.48 billion shares. On both the NYSE and the Nasdaq, roughly three stocks rose for every one that fell.

FKLI spot month closed slightly lower yesterday at 1611 after trading within a range of 1609 and 1613. Today’s Support and Resistance for spot month index is located around 1608 and 1615

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.   

FKLI Related News

U.S. stocks rose, erasing early losses, and commodities pared declines as lawmakers said they are optimistic a budget agreement can be reached to avoid automatic spending cuts and tax increases.

The Standard & Poor’s 500 Index closed up 0.8 percent at 1,409.93 at 4 p.m. in New York after earlier slumping 1 percent. The S&P GSCI gauge of 24 raw materials was down 0.5 percent, trimming an earlier decline of 1.4 percent as oil pared losses following an unexpected decline in U.S. supplies. Ten-year Treasuries pared early gains, with rates down less than one basis point at 1.63 percent, and the Dollar Index reversed an earlier advance to fall 0.1 percent. The Standard & Poor’s 500 Index slipped 0.2 percent as of 11:03 a.m. in New York after earlier slumping as much as 1 percent.

Equities reversed morning declines as Republican House Speaker John Boehner told reporters he is optimistic that budget talks can “avert this crisis sooner rather than later.” President Barack Obama said more Republicans are agreeing on a “balanced approach” to cut the deficit, and he hopes a deal can be reached before Christmas. Obama urged Congress to extend tax cuts for the middle class, while Boehner said he continues to oppose the expiration of tax reductions for top earners and Democrats need to get “serious” on budget cuts. Obama is sending Treasury Secretary Timothy F. Geithner to meet with congressional leaders tomorrow as lawmakers debate ways to avoid the so-called fiscal cliff of more than $600 billion in automatic tax increases and spending cuts that will kick in next year if an agreement is not reached.

The U.S. economy expanded at a “measured pace” in recent weeks as gains in consumer demand and housing were tempered by a slowdown in manufacturing and the impact of superstorm Sandy, the Federal Reserve said. The report indicates the Fed is unlikely to curtail monthly purchases of $40 billion in housing debt and bolsters Chairman Ben S. Bernanke’s view that an agreement on reducing long-term federal budget deficits without abrupt tax increases and spending cuts would remove a barrier to growth. Equities extended losses earlier after Commerce Department data showed purchases of new U.S. homes unexpectedly declined 0.3 percent to a 368,000 annual pace in October, showing limited progress in the housing market recovery.

The Stoxx Europe 600 Index (SXXP) rose 0.1 percent, erasing an earlier loss of as much as 0.6 percent. The yen strengthened 0.3 percent against the euro and 0.3 percent per dollar. Shinzo Abe, the front-runner to become Japan’s next prime minister, and incumbent Yoshihiko Noda debate policies tomorrow before a general election next month. The euro weakened was little changed at $1.2940, trimming an earlier 0.5 percent decline. Italy’s 10-year bonds advanced, pushing the yield down 14 basis points to 4.59 percent, the lowest since May 2011. The rate on similar-maturity Spanish notes slid 19 basis points to 5.33 percent, the lowest on a closing basis since March.           [Bloomberg]

FBM KLCI rebounded yesterday to close above 1,600. while the spot month index futures managed to recover up to 1609.5 after opening at 1594. Today’s Support and Resistance for spot month index futures is located around 1600 and 1623 respectively.

FCPO Related News (Wed, Nov28)

Crude palm oil futures on Malaysia’s derivatives exchange ended lower Tuesday, as investors liquidated positions ahead of an industry outlook conference by three leading analysts later in the week. Also weighing on prices of the tropical oil was a decline in energy prices, which reduces the appeal of palm oil for use as a feedstock in biodiesel. The benchmark February contract at Bursa Malaysia Derivatives ended 0.9% lower at 2,410 ringgit a metric ton after moving in a MYR2,401-MYR2,458 range.

"The market is anticipating bearish price outlooks from leading vegoil analyst Dorab Mistry and opted to book profits on Monday’s gain," a trading executive at a Kuala Lumpur-based commodities brokerage said, tipping palm oil to trade in a choppy MYR2,380-MYR2,480/ton range for the rest of the week. The executive also said weak export numbers by cargo surveyors Intertek Agri Services and SGS (Malaysia) Bhd. raised expectations that palm oil stock levels in world no. 2 palm oil producer Malaysia could hit another record in November from 2.51 million tons in October.

Intertek said Malaysia exported around 1.28 million tons of palm oil during the Nov. 1-25 period, down 1.8% from a month earlier. SGS put the figure at 1.26 million tons, down 1.9% from the same period in October. Palm oil prices have tumbled 25% this year as demand faltered amid slowdowns in China and Europe’s economies, raising Malaysian palm oil stockpiles to an all-time high of 2.51 million tons in October.

However, the battered prices are likely to attract major buyers China and India, Sime Darby Bhd’s president and group chief executive Mohd. Bakke Salleh said at the company’s earnings briefing. "We are optimistic that palm oil prices could go higher in the coming months, as we anticipate a pickup in demand when production is seasonally lower," he added. He expects prices to trade between MYR2,500 and MYR3,000/ton in the next six months.

Cash CPO for prompt shipment was offered at MYR2,200/ton. Open interest on the BMD was 171,916 lots versus 162,356 lots Monday. One lot is equivalent to 25 tons. A total of 35,938 lots of CPO were traded versus 30,722 lots Monday.

SINGAPORE, Nov 27 (Reuters) - Malaysian palm oil futures edged down on Tuesday, as traders booked profits from a near one-week high after Greece's international lenders agreed on a financial aid deal that boosted market optimism. On the domestic front, investors are watching Malaysian palm oil output to gauge whether stocks will reach another record high, especially after the latest cargo surveyor data pointed to weaker export demand. "Demand is tepid, with rumours that India may import on domestic shortfall.

Speculators are also seen pushing up futures amid optimism that output in the fourth quarter will avert the looming 'supply cliff'," said a trader with a local commodities brokerage in Malaysia. The benchmark February contract on the Bursa Malaysia Derivatives Exchange fell 0.9 percent to close at 2,410 ringgit ($792) per tonne, but off the day's high of 2,458 ringgit, a level last seen on Nov. 21. Total traded volumes stood at 35,938 lots of 25 tonnes each, higher than the usual 25,000 lots.  

The market, however, expects weaker palm oil prices to stimulate demand for price-sensitive markets such as India and Pakistan in the next few weeks. Palm oil stocks in China could hit one million tonnes by year-end, up from 790,000 tonnes last week, fed by surging imports and stagnant domestic demand, the China National Grain and Oils Information Centre said on its website

Brent crude stayed above $111 per barrel on Tuesday as optimism coursed through financial markets after Greece's international lenders reached a deal on a new debt target, although worries about a looming U.S. fiscal crisis kept a lid on gains. In other vegetable oil markets, U.S. soyoil for December delivery inched up 0.3 percent in late Asian trade. The most-active May 2013 soybean oil contract on the Dalian.

Technicals showed palm oil would revisit its Nov. 20 high of 2,485 per tonne based on a wave analysis, said Reuters market analyst Wang Tao. Today's Support and Resistance for benchmark February contract is located around 2,380 and 2434 respectively.

FKLI Related News

U.S. stocks fell for a second day as concern about progress in Washington budget negotiations overshadowed a European agreement on Greece aid and a better- than-forecast report on durable goods.

Nine of 10 groups in the Standard & Poor’s 500 Index fell. Hewlett-Packard Co. (HPQ) lost 3 percent after Autonomy Corp.’s former chief executive officer challenged the computer maker’s board to explain allegations that the software company falsified financial statements. Seagate Technology Plc (STX) slid 5.1 percent as CLSA Asia-Pacific Markets said the magnitude of the personal- computer slowdown in emerging markets was worse than thought.

The S&P 500 fell 0.5 percent to 1,398.94 in New York. The Dow Jones Industrial Average (INDU) lost 89.24 points, or 0.7 percent, to 12,878.13. More than 5.9 billion shares traded hands on U.S. exchanges, or 2.6 percent below the three-month average at this time of day, according to data compiled by Bloomberg.

“The market remains fixated on what’s going on in Washington,” Frederic Dickson, who helps oversee about $32 billion as chief market strategist at D.A. Davidson & Co. in Lake Oswego, Oregon, said in a telephone interview. “The lack of progress in resolving major fiscal cliff issues is topic A and trumping any kind of positive news whether it’s coming out of Europe or positive economic reports.” U.S. equities extended declines after Senator Majority Leader Harry Reid said “little progress” has been made in talks to avert the so-called fiscal cliff. “We only have a couple weeks to get something done so we have to get away from the happy talk” and do “specific things,” he told reporters.

The S&P 500 has slipped 2.1 percent since Nov. 6 as President Barack Obama’s re-election set up a showdown with the Republican-controlled House of Representatives over the budget. Congress returned from the Thanksgiving recess this week, seeking a budget deal to avoid $607 billion of automatic tax increases and spending cuts from kicking in next year. While Republicans favor raising federal tax revenue by limiting deductions, Democrats have pushed for higher rates on upper-income earners. The Congressional Budget Office has said a failure to avoid the fiscal cliff could lead to a recession and a jobless rate of about 9 percent, compared with the October rate of 7.9 percent.

In Europe, finance ministers cut the rates on loans made under the first bailout of Greece in May 2010. They also suspended interest payments for a decade on lending agreed under the country’s second bailout. The ministers outlined a plan for the Mediterranean nation to buy back its debt at distressed rates. They authorized Greece to receive a 34.4 billion-euro ($44.6 billion) loan installment in December.

Another report showed consumer confidence rose in November to the highest level in more than four years. Home prices climbed in the year ended in September by the most since July 2010.

The KLCI ended down 0.6% at 1598.17 Tuesday. Today’s Support and Resistance for spot month index futures is located around 1585 and 1600 respectively.

FCPO Related News

Crude palm oil futures on Malaysia’s derivatives exchange ended mostly higher Monday, underpinned by gains in Chicago soyoil futures, although the tropical oil’s upside was limited by disappointing export data, market participants said. "Export numbers weren’t fantastic, so investors are cautious about driving prices higher," a trading executive in Kuala Lumpur said, referring to Nov. 1-25 export estimates issued by cargo surveyors Intertek Agri Services and SGS (Malaysia) Bhd.

The weak export numbers raised expectations that palm oil stock levels in world no. 2 palm oil producer Malaysia could hit another record in November from 2.51 million tons in October. "People are now pegging November stocks at 2.55 million-2.7 million tons, and this could drag palm oil to test MYR2,200/ton again very soon," a Singapore-based trading executive said. Still, some analysts reckoned that palm oil has dipped to levels that are attractive enough to lure buyers away from alternative vegetable oils.

Hamburg-based OilWorld said palm oil stocks in Malaysia may have peaked in October and expects them to decline "on account of weakening production and strong exports." The firm also said global demand for palm oil is set to rise in the coming months owing to production shortfalls of other vegetable oils. Open interest on the BMD was 162,356 lots versus 171,685 lots Friday. One lot is equivalent to 25 tons. A total of 30,722 lots of CPO were traded versus 34,920 lots Friday.           (Dow Jones Newswire)

KUALA LUMPUR, Nov 26 (Reuters) - Malaysian palm oil futures edged up on Monday on expectations stocks might grow at a slower pace, with the market also focusing on Greek financial aid deal set to be signed later in the day that may cheer markets.

Cargo surveyor data showed Malaysian exports declined at a much slower pace, easing pressure on stockbuild and supporting palm oil prices that have fallen 23 percent so far this year on roiling financial markets. "If exports maintain their two percent drop for the full month, it means that although inventory levels are poised to go higher, it may be growing at a slower rate than expected," said Kenanga Investment Bank analyst Alan Lim.

The benchmark February contract on the Bursa Malaysia Derivatives Exchange rose 1.5 percent to close at 2,432 ringgit ($796) per tonne. Total traded volumes stood at 30,722 lots of 25 tonnes each, higher than the usual 25,000 lots. Cargo surveyor Intertek Testing Services said palm oil exports in Nov. 1-25 fell 1.8 percent to 1,276,792 tonnes from a month ago, showing slight improvement from a 3.3 percent drop in the first twenty days of this month. Another cargo surveyor, Societe Generale de Surveillance, reported a similar 1.9 percent drop for the same period. The market expects weaker palm oil prices in October and November to stimulate demand from price-sensitive countries such as India and Pakistan, translating to higher exports in the weeks to come.

Financial markets across the world were generally optimistic about a euro zone finance ministers meeting on Monday which is pushing for international lenders to release emergency aid and stem the region's debt crisis. Brent crude oil steadied around $111 a barrel on Monday as violent protests in Egypt raised new worries over the stability of the Middle East, reigniting supply concerns. U.S. soyoil for December delivery inched up 0.5 percent in late Asian hours, resuming trade after Thanksgiving holidays. The most-active May 2013 soybean oil contract on the Dalian Commodity Exchange closed 1.1 percent higher.           

Technicals showed that a new bullish target of 2,485 ringgit per tonne has been established, aborting its more bearish 2,321 ringgit target previously, said Reuters market analyst Wang Tao. Today’s Support and Resistance level for benchmark February contract is located around 2,410 and 2,462 respectively.

FKLI Related News

NEW YORK (Reuters) - Wall Street slipped on Monday, pulling back from last week's gains, as retailers fell on concerns about heavy discounts at the start of the U.S. holiday shopping season and the overhang of the "fiscal cliff" kept investors wary of making big bets. The Nasdaq outperformed to close higher, led by gains in eBay and as Apple continued its bounce back.

The Standard & Poor's 500 cut most of its losses during the session and managed to stay above the psychologically important 1,400 level. It also remained above the 200-day moving average, maintaining its long-term uptrend. The S&P 500 consumer discretionary index (.GSPD) fell 0.5 percent after the start of the holiday shopping season over the four-day Thanksgiving weekend. Target (TGT), one of the largest retailers by market value, fell 2.6 percent.

Investors are hoping for advances in talks over the $600 billion in spending cuts and tax hikes scheduled to begin next year, which threaten to drag the U.S. economy back into recession. Indications of progress in talks, or just political willingness to negotiate, contributed to the market's recent rally. Major indexes last week gained 3 to 4 percent, with the Dow above 13,000 and the S&P above 1,400 for the first time since November 6.

The Dow Jones industrial average (^DJI) fell 42.31 points, or 0.33 percent, to 12,967.37. The S&P 500 (^GSPC) dropped 2.86 points, or 0.20 percent, to 1,406.29. The Nasdaq Composite (^IXIC) gained 9.93 points, or 0.33 percent, to 2,976.78. About 5.2 billion shares changed hands on the New York Stock Exchange, the Nasdaq and NYSE MKT, below the daily average so far this year of about 6.49 billion shares. On the NYSE, roughly 13 issues fell for every 10 that rose, and on Nasdaq nearly six rose for every five that fell.

In the other major worry for the market, euro zone finance ministers and the International Monetary Fund made their third attempt in as many weeks to agree on releasing emergency aid for Greece, with policymakers saying a write-down of Greek debt is off the table for now. "There's no catalyst to continue the rally we saw last week, though Greece would have been important if we weren't dealing with the fiscal cliff," Stifel Nicolaus' Mata said.

Malaysia’s stock index ended lower Monday at 1607.88 while index futures dropped to 1605. Further selldown is likely once the index breaches the 1600 psychological level. Today’s Support and Resistance for spot month index futures is located around 1595 and 1605 respectively.

FKLI Related News

NEW YORK (Reuters) - Wall Street slipped on Monday, pulling back from last week's gains, as retailers fell on concerns about heavy discounts at the start of the U.S. holiday shopping season and the overhang of the "fiscal cliff" kept investors wary of making big bets. The Nasdaq outperformed to close higher, led by gains in eBay and as Apple continued its bounce back.

The Standard & Poor's 500 cut most of its losses during the session and managed to stay above the psychologically important 1,400 level. It also remained above the 200-day moving average, maintaining its long-term uptrend. The S&P 500 consumer discretionary index (.GSPD) fell 0.5 percent after the start of the holiday shopping season over the four-day Thanksgiving weekend. Target (TGT), one of the largest retailers by market value, fell 2.6 percent.

Investors are hoping for advances in talks over the $600 billion in spending cuts and tax hikes scheduled to begin next year, which threaten to drag the U.S. economy back into recession. Indications of progress in talks, or just political willingness to negotiate, contributed to the market's recent rally. Major indexes last week gained 3 to 4 percent, with the Dow above 13,000 and the S&P above 1,400 for the first time since November 6.

The Dow Jones industrial average (^DJI) fell 42.31 points, or 0.33 percent, to 12,967.37. The S&P 500 (^GSPC) dropped 2.86 points, or 0.20 percent, to 1,406.29. The Nasdaq Composite (^IXIC) gained 9.93 points, or 0.33 percent, to 2,976.78. About 5.2 billion shares changed hands on the New York Stock Exchange, the Nasdaq and NYSE MKT, below the daily average so far this year of about 6.49 billion shares. On the NYSE, roughly 13 issues fell for every 10 that rose, and on Nasdaq nearly six rose for every five that fell.

In the other major worry for the market, euro zone finance ministers and the International Monetary Fund made their third attempt in as many weeks to agree on releasing emergency aid for Greece, with policymakers saying a write-down of Greek debt is off the table for now. "There's no catalyst to continue the rally we saw last week, though Greece would have been important if we weren't dealing with the fiscal cliff," Stifel Nicolaus' Mata said.

Malaysia’s stock index ended lower Monday at 1607.88 while index futures dropped to 1605. Further selldown is likely once the index breaches the 1600 psychological level. Today’s Support and Resistance for spot month index futures is located around 1595 and 1605 respectively.

FCPO Related News (Mon, Nov 26)

Crude palm oil futures on Malaysia’s derivatives exchange fell Friday after trading in a tight range as investors exercised caution ahead of key export data releases Monday. The benchmark February contract on Bursa Malaysia Derivatives ended 0.7% lower at 2,395 ringgits a metric ton, after moving in a MYR2,380-MYR2,411/ton range.

Expectations of rising palm oil inventories due to lackluster global demand amid seasonally high production in top producers Indonesia and Malaysia weighed on palm oil prices, a Kuala Lumpur-based trader said. Malaysia’s end-November palm oil stocks will likely rise to a new record of 2.65 million-2.70 million tons, up from October’s record high of 2.51 million tons, market participants said.

Favorable weather in Argentina and Brazil, the world’s biggest producers of soybeans after the U.S., has eased concerns about tight global vegoil supplies, the trader said, noting that this was bearish for CPO prices. In addition to fundamentals, macroeconomic factors such as European economic data Thursday, continued concerns over Greek debt and an impending U.S. fiscal impasse also pressured prices, a Singapore-based trader said.

The preliminary Markit euro-zone composite November purchasing managers index came in at 45.8 compared with 45.7 in October, but still indicated that economic activity continued to contract at a fast pace this month. Investors are awaiting a euro-zone finance ministers’ meeting on Monday to work out the bailout package for Greece, the trader said.

Malaysia’s palm oil export data for the Nov. 1-25 period from cargo surveyors Intertek Agri Services and SGS (Malaysia) Bhd., due Monday, will also impact prices, traders said. Nov. 1-20 exports fell 3.3% from a month earlier to 1.02 million tons, cargo surveyor Intertek said Tuesday. SGS Tuesday estimated exports for the same period at 1.01 million tons, down 3.8%.

CPO prices could edge lower if exports decline at a faster rate, traders said. Investors will also seek cues from a conference next week organized by the Indonesian Palm Oil Association in Bali, where eminent vegoil analysts are scheduled to speak.           [Dow Jones Newswire]

KUALA LUMPUR, Nov 26 (Reuters) - Malaysian palm oil futures edged up on Monday on expectations stocks might grow at a slower pace with the market also focusing on Greek financial aid deal set to be signed later in the day that may cheer markets.

Data from a cargo surveyor showed Malaysian exports declined at a much slower pace, putting some pressure on stocks and supporting palm oil prices that have fallen 24.2 percent so far this year on roiling financial markets. "If exports maintain its two percent drop for the full month, it means that although inventory levels are poised to go higher, it may be growing at a slower rate than expected," said Kenanga Investment Bank analyst Alan Lim.

By the midday break, the benchmark February contract on the Bursa Malaysia Derivatives Exchange rose 0.5 percent to 2,406 ringgit ($787) per tonne. Total traded volumes stood at 12,460 lots of 25 tonnes each, slightly lower than the usual 12,500 lots.

Cargo surveyor Intertek Testing Services said palm oil exports in Nov. 1-25 fell 1.8 percent to 1,276,792 tonnes from a month ago, showing slight improvement from a 3.3 percent drop in the first twenty days of this month. Another cargo surveyor, Societe Generale de Surveillance, will release export data for the same period later in the day. The market expects weaker palm oil prices in October and November to stimulate demand from price-sensitive countries like India and Pakistan, translating to higher exports in the weeks to come.

Brent crude held above $111 a barrel on Monday. U.S. soyoil for December delivery inched up 0.2 percent in early Asian hours, resuming trade after Thanksgiving holidays. The most-active May 2013 soybean oil contract on the Dalian Commodity Exchange rose 1.1 percent by the midday break.

Technicals showed that a new bullish target of 2,485 ringgit per tonne has been established, aborting its more bearish 2,321 ringgit target previously, said Reuters market analyst Wang Tao. Today’s Support and Resistance for benchmark February contract is located around 2,426 and 2,400 respectively

FKLI Related News

U.S. stocks had their biggest weekly rally since June after President Barack Obama expressed confidence on a budget agreement with Congress and data from China to Germany bolstered optimism about global growth. All 10 groups except for utilities in the Standard & Poor’s 500 Index rose during the Thanksgiving-shortened week.

An index of homebuilders climbed 5.4 percent amid better-than-estimated housing data. Bank of America Corp. (BAC) jumped 8.6 percent after an analyst said the lender may commit as much as $10 billion to dividends and share repurchases in 2013. Salesforce.com Inc. (CRM) surged 11 percent after revenue beat estimates. Apple Inc. (AAPL) gained 8.3 percent, ending a streak of eight weekly losses. The S&P 500 advanced 3.6 percent to 1,409.15 for the week, extending its 2012 gain to 12 percent. The Dow Jones Industrial Average rallied 421.37 points, or 3.4 percent, to 13,009.68. Both gauges had the best week since June 8.

The S&P 500 began the week with the biggest advance in two months after Obama met with senior Democrats and Republicans on Nov. 16 for talks to avoid a so-called fiscal cliff of $607 billion in automatic tax increases and spending cuts next year. The index continued to climb after Israel and the Palestinian militant group Hamas agreed to call a halt to more than a week of air strikes and missile attacks. Data showed the first expansion in China’s manufacturing industry in 13 months and an unexpected gain in German business confidence.

The S&P 500 rallied 1.3 percent on the last day of the week, posting the best post-Thanksgiving performance since 2007, as the American holiday shopping season began. A measure of retailers in the S&P 500 rose 4.7 percent for the week. Black Friday marked the traditional beginning of the holiday shopping season in the U.S., when retailers lure customers with deep discounts.  

Bank of America rallied 8.6 percent, the most in the Dow, to $9.90. The lender has improved capital by the most among the biggest U.S. banks and could fare comparatively well after Federal Reserve stress tests, Ed Najarian, an analyst with International Strategy & Investment Group Inc., wrote in a note. The bank, which may have the equivalent of about $30 billion in capital beyond the minimum required by regulators, may dole out $5 billion to $10 billion for dividends and stock buybacks next year, he wrote.           [Bloomberg]

Financial markets across the world were generally optimistic about a euro zone finance ministers meeting on Monday which is pushing for international lenders to release emergency aid and stem the region's debt crisis.           [Reuters]

FCPO Related News (Fri, Nov 23)

Crude palm oil futures on Malaysia’s derivatives exchange ended lower Thursday, pressured by worries over rising palm oil stocks and technicals-based selling. The benchmark February contract on Bursa Malaysia Derivatives ended 1.3% lower at 2,411 ringgits a metric ton after moving in a MYR2,399-MYR2,449 range. "Trading has been muted as most Malaysian refiners are sitting on sidelines as refinery margins have not been terrific," a physical market broker in Kuala Lumpur said. A number of independent refineries in Malaysia have been running on margins and are usually vulnerable to swings in commodity prices.

Weak export demand over the last two weeks is also weighing on sentiment. Low shipments from Malaysia have raised concerns that palm oil stockpiles in November will hit a new all-time high. Analysts and brokers tipped end-November stock levels at 2.65 million-2.70 million tons, up from October’s record high of 2.51 million tons. Still, some physical traders are optimistic demand will pick up from December. "We’re getting a number of orders for December and Chinese demand will likely improve as buyers stock up on oils ahead of the Lunar New Year in February," a broker in Singapore said.           [Dow Jones Newswire]

SINGAPORE, Nov 22 (Reuters) - Malaysian palm oil futures fell on Thursday, slipping for a third straight day, as slowing exports continued to weigh and investors stayed cautious ahead of a bailout deal for Greece that could boost sentiment. International lenders will meet again next Monday after they failed for the second week to reach a deal to release emergency aid for Greece, but major lender Germany signalled that significant divisions remain.

Cargo surveyor data showed Malaysian exports of palm products for the first 20 days of November inched lower from a month ago, and while the fall was not significant, it nonetheless fuelled concern at a time when stocks had climbed to a record 2.51 million tonnes in October. "The price outlook for crude palm oil has deteriorated. With the cargo surveyors' export data for the first 20 days of November showing a decline of about 3 percent, we see a higher possibility now of November's inventory level to register another record high," Alan Lim Seong Chun, research analyst with Malaysia's Kenanga Investment Bank, said in a note on Thursday.

Traders will be looking for clues from the meeting next Monday after European demand for palm oil showed signs of slowing. It could take a further hit if international lenders fail again to agree on how to get Greece's debt down to a sustainable level. In related markets, Brent crude was steady near $111 per barrel on Thursday as the Chinese economy showed further signs of recovery, boosting the outlook for oil demand, although the upside was limited as a ceasefire in the Gaza Strip eased concerns over supply. In other vegetable oil markets, the most active May 2013 soybean oil contract on the Dalian Commodity Exchange closed 0.2 percent higher. The U.S. financial markets were closed for the Thanksgiving holiday.

Total traded volumes stood at 36,386 lots of 25 tonnes each, higher than the usual 25,000 lots. Technicals showed palm oil is expected to drop to 2,321 ringgit as it did not break a resistance at 2,464 ringgit, said Reuters market analyst Wang Tao. Today's Support and Resistance for benchmark February contract is located around 2,370 and 2,460 respectively.

FKLI Related News

The U.S markets were closed for the Thanksgiving holiday and will close early at 1 p.m. on Friday. "Usually on patriotic holidays, which I think Thanksgiving is one, we often see a rally on a light volume. So I wouldn't be surprised if we see that on Friday, if there is no major news," said J.J. Kinahan, chief derivatives strategist at TD Ameritrade in Chicago.

World share markets extended a week-long rally on Thursday as manufacturing surveys in China and the United States boosted confidence in global growth and euro zone data at least did not worsen the already weak outlook for that region. Oil fell more than 2 percent on Tuesday, retreating from a one-month peak as investors took risk premium out of the market after a Hamas official announced that militants from the Gaza Strip and Israel had agreed to a ceasefire brokered by Egypt.          [Reuters]

Today’s Support and Resistance for FKLI spot month contract is located around 1607 and 1625 respectively.

FCPO Related News (Thurs, Nov 22)

Crude palm oil futures on Malaysia’s derivatives exchange ended lower Wednesday, reflecting investor concerns over disappointing exports at a time of ample stocks in Malaysia. The benchmark February contract on Bursa Malaysia Derivatives ended 0.6% lower at 2,443 ringgits a metric ton, after moving in a MYR2,427-MYR2,460/ton.

Lower export numbers by cargo surveyors Intertek Agri Services and SGS (Malaysia) Bhd. for the Nov. 1-20 period raised concerns that stocks are going to be much higher from October’s record high of 2.51 million tons, as crude palm oil production in the key growing state of Sabah remains strong. "Production has been quite good and I expect we will continue to see strong numbers even in December," a company executive at a major plantation firm in Sabah said.

Firm production in Sabah and expectations for demand to remain tepid for the rest of November could push end-November stocks to 2.65 million-2.70 million tons, potentially dragging prices lower in the coming weeks, a trading executive at a Kuala Lumpur-based bank said. Still, not all are bearish on the palm oil market. "Palm oil prices have dipped to a level that is low enough to encourage demand," Pawan Kumar, associate director at Food and Agribusiness Advisory unit at Rabobank International, said. Mr. Kumar also said poor prospects for global sunflower seed production in the upcoming season could steer consumer demand toward palm oil. He tipped palm oil to recover to MYR2,800/ton by the first quarter of 2013 and to MYR3,000/ton in the second quarter.

Today’s Support and Resistance for benchmark February contract is located around 2400 and 2470 respectively.