Tuesday, 19 March 2013

FCPO Related News (Wed, Mar 20)

[ Malaysia March 1-20 Palm Oil Export 927, 665, up 11% on month - ITS]

Malaysian palm oil futures rebounded on Tuesday on bargain-hunting a day after a radical Cyprus bailout proposal had prompted declines, although gains were capped as uncertainty remained ahead of a vote on the plan. Cyprus was set to reject a divisive tax on bank deposits in a vote on Tuesday, pushing the island closer to a debt default and banking collapse. The proposal announced over the weekend triggered declines in the global commodities and financial markets on Monday.  

Palm oil traders were also looking ahead to Malaysia's March 1-20 export data on Wednesday for better indication of export demand after nearly flat growth in shipments for the first half of the month. "Market players are hoping for higher exports to help ease stocks further," said a trader with a foreign commodities brokerage in Malaysia. The country's palm inventory level fell to 2.44 million tonnes in February from January's 2.58 million tonnes on seasonally slower production. By market close, the benchmark June contract on the Bursa Malaysia Derivatives Exchange had gained 1.3 percent to 2,417 ringgit ($777) per tonne. Prices traded in a range between 2,397 to 2,426 ringgit.

Palm oil futures also drew some support from stronger soybean and soybean oil prices, after the oilseed edged higher on supply concerns from South America. Palm oil tracks soybean oil prices closely as they are typically used as substitutes for one another. In other markets, Brent crude fell below $109 a barrel on Tuesday as uncertainty over the Cyprus bailout plan revived concerns about the euro zone debt crisis, although a rosier economic outlook in the United States capped losses.   In other vegetable oil markets, U.S. soyoil for May delivery gained 0.1 percent in late Asian trade. The most-active September soybean oil contract on the Dalian Commodities Exchange also gained 0.8 percent.

Technical analysis shows Malaysian palm oil looks neutral in a range of 2,383 to 2,460 ringgit per tonne, and an escape will point a future direction, said Reuters market analyst Wang Tao. .          [Reuters]

Palm oil demand usually falls in winter as the tropical oil tends to cloud and turns jelly-like in cold weather. While palm oil has recovered some lost ground, any gains in the tropical oil–found in a wide variety of consumer products ranging from soap to chocolate and biscuits–is limited for now, due to a widely-expected bumper soy crop from South America and ample palm oil supply in Southeast Asia. "Exports could nudge higher in March, but I doubt the numbers will be good enough to ease stockpiles [at the end of March]," a trading executive in Singapore said.
Open interest on the BMD was 165,076 lots, versus 166,353 lots Monday. One lot is equivalent to 25 tons. A total of 31,142 lots of CPO were traded versus 27,137 lots Monday.           [Dow Jones Newswire]

Today’s Support and Resistance for benchmark June contract is located around 2,397 and 2,442 respectively.

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