Sunday, 6 January 2013
FCPO Related News (Mon, Jan 7)
Crude palm oil futures on Malaysia’s derivatives exchange ended lower Friday, tracking declines in regional commodities as indications that the U.S. Federal Reserve could rein in stimulus program as early as this year dented sentiment. The benchmark March contract on Bursa Malaysia Derivatives ended 0.3% lower at 2,467 ringgit a metric ton after moving in a MYR2,462-MYR2,495/ton range.
Most commodities as well as regional equities fell minutes after the U.S. Federal Open Market Committee’s last policy meeting released Thursday showed policymakers were divided on whether or not to continue its bond-buying program. Sentiment remained cautious as investors await export estimates for Jan. 1-10 shipments to gauge whether Malaysia’s new export tax on palm oil has helped to boost demand and in turn, reduce inventories. Both cargo surveyors Intertek Agri Services and SGS (Malaysia) Bhd., issue Jan. 1-10 shipment data on Thursday. "The concern is that the positive impact from Malaysia’s export tax change could be offset by reduced shipments to China due to Beijing’s new quality control rules," a commodities broker at a foreign brokerage said.
Major palm oil importer China said it won’t accept imports of edible oils containing excessive peroxide or stearic acid from Tuesday, according to China’s Inspection and Quarantine Bureau. China’s new rule could "result in weaker CPO prices for palm oil producers due to lower demand from the country. At the same time, it could also lead to potential shortages of palm oil in Chinese markets if exporters find it hard to meet the [new] technical specifications," said Ivy Ng, an analyst at CIMB Investment Bank. "For every 5% reduction in annual palm oil exports to China, we estimate it could boost stock levels by 175,000 tons" in Malaysia, she said in an note. China consumes over six million tons of palm oil each year and sources more than half of its requirement from world’s no. 2 producer Malaysia.
Open interest on the BMD was 166,054 lots, same as Thursday. One lot is equivalent to 25 tons. A total of 32,188 lots of CPO were traded versus 36,244 lots Thursday [Dow Jones Newswire]
KUALA LUMPUR, Jan 4 (Reuters) - Malaysian palm oil futures ended lower on Friday after strong gains earlier this week and weak technical outlook although investors pinned hopes on the government's new export tax spurring demand for the edible oil. The revised crude palm oil export tax, set at zero percent in January, has made Malaysia's cargoes cheaper than top producer Indonesia.
Investors are eyeing January's shipment data which will likely reflect higher demand, especially from top buyers China, India and the United States, and boost prices that have lost 1.2 percent this week. "For the first ten days, yes, the exports might be better but don't expect any miracles," said a trader with a foreign commodities brokerage in Malaysia. "But for the first 15 and 20 days, a lot of people are worried that the export would be very good, so they are covering the market," the trader said.
Technicals showed that the bearish target of 2,452 ringgit per tonne remains unchanged for palm oil as a five-wave cycle rising from the Dec. 13 low of 2,217 ringgit has completed, said Reuters market analyst Wang Tao. Malaysia has been struggling with record high stocks which have weighed on prices, but seasonally slowing production and supply disruptions from monsoon rains could help reduce stockpiles that hit 2.56 million tonnes in November.
Oil fell below $111 a barrel on Friday after U.S. Federal Reserve policy makers indicated they may at least slow a stimulus programme this year, threatening the economic recovery in the world's biggest fuel consumer. In competing vegetable oil markets, U.S. soyoil for March delivery fell 0.5 percent in late Asian trade after China's decision to scrap another purchase of soybeans on Thursday weighed on prices. The most active May soybean oil contract on the Dalian Commodity Exchange ended up more than 1 percent.
Today's Support and Resistance for benchmark March contract is located around 2,432 and 2,487 respectively.