FCPO Related News (Wed, Mar 27)

SINGAPORE, March 26 (Reuters) - Malaysian palm oil futures edged lower on Tuesday in rangebound trading amid concerns over lower export demand, while worries about the potential impact of a Cyprus bailout scheme also dented investor appetite for riskier assets. Cyprus's deal with international lenders to shut down the country's second largest bank in return for 10 billion euros in rescue funds removed the immediate risk of a financial meltdown, but it also stoked fears of similar tough conditions for future

bank rescues in the euro zone.

   

Palm oil came under more pressure as Malaysian exports fell by 7.5 percent for March 1 to 25 compared to a month ago due to a slowdown in crude palm oil shipments. "The market is stuck and it's looking for further direction. We are looking at 2,400 ringgit for support," said a trader with a local commodities brokerage in Malaysia. By market close, the benchmark June contract on the Bursa Malaysia Derivatives Exchange had lost 0.8 percent to 2,442 ringgit ($788) per tonne. Prices traded in a tight range from 2,426 to 2,452 ringgit.

Total traded volume stood at 22,264 lots of 25 tonnes each, thinner than the usual 25,000 lots as most investors were waiting for further trading cues. Market players are counting on seasonally slower production in Malaysia, the world's second-largest palm producer, to bring stocks down this month.     Inventory level stood at 2.44 million tonnes in February with leading analyst Dorab Mistry forecasting a drop below 2 million tonnes in June. Traders are also looking out for export data for the full month to see if demand is strong enough to offset imports and production. A surprise drop in shipments for the first 25 days of March due to lower exports to major buyers Europe and India may continue to weigh on the market.     

   

In other markets, Brent fell slightly, remaining within its range of the past two weeks, as the effect of the Cyprus bailout faded and traders saw little direction for the market. In vegetable oil markets, U.S. soyoil for May delivery lost 0.2 percent in late Asian trade. The most-active September soybean oil contract on the Dalian Commodities Exchange closed 0.4 percent lower.             [Reuters]

Today’s Support and Resistance for benchmark  June contract is located around 2,425 and 2,466 respectively.