FCPO Related News (Wed, Mar 13)

Malaysian palm oil futures edged lower on Tuesday, tracking weaker overseas soybean oil markets, although a fall in palm oil stockpiles helped keep losses in check.           [Reuters]

The benchmark May contract at Bursa Malaysia Derivatives ended 39 ringgit lower at MYR2,411 a metric ton after moving in a MYR2,413-MYR2,442 range. CBOT May soyoil is down 0.9% at 50.01 U.S. cents a pound in screen trade after data from the U.S. Department of Agriculture showed reduced demand for soybeans. Soybeans are usually crushed and processed into soymeal and soyoil–a direct substitute for palm oil. "Palm oil is down but easing stockpiles in the coming months will help to underpin prices," a trading executive at a foreign commodities brokerage.

CPO production is "expected to continue to decline as we come off the peak season," RHB Investment Bank analyst Hoe Lee Leng said in a report. Palm-oil production in Southeast Asia usually dips in November to March before rising from July. Inventory levels at the world’s No. 2 producer will ease to 2.23 million tons by June on the back of recovering export demand as winter season in the Northern Hemisphere ends, Ms. Hoe said. The oil tends to solidify and turn cloudy in cold weather reducing its appeal as a cooking oil. Vessels and loading at main ports in Malaysia is modest, a Penang-based shipping executive said indicating steady exports this month.

Over Malaysian Borneo some palm-oil exporters have diverted 

their cargo loading activities to Lahad Datu port following armed clashes with Filipino rebels in Sabah state leading to a larger vessel line up at the port. Sabah is Malaysia’s biggest oil-palm growing region. The state’s crude palm oil production last year accounted for 30% of the country’s total production, according to industry regulator the Malaysian Palm Oil Board.

In the cash market refined palm olein for March was offered at $815/ton while cash CPO for prompt shipment was offered at MYR2,370/ton. Open interest on the BMD was 164,794 lots, versus 166,475 lots Monday. One lot is equivalent to 25 tons. A total of 39,868 lots of CPO were traded versus 31,687 lots Monday.           [Dow Jones Newswire]

Today’s Support and Resistance for benchmark May contract is located around 2,360 and 2,420 respectively.