FCPO Related News (Tues, Apr 2)

Crude palm oil futures on Malaysia’s derivatives exchange end down reflecting investor concerns that Europe’s debt crisis and slow Chinese economy could curb demand. "The dip below MYR2,350/ton saw some investors scrambling to liquidate positions and cut losses while some added short positions," a commodities broker in Kuala Lumpur says adding that bearish technical signals could drag prices to MYR2,230-MYR2,250/ton in coming sessions. Still, some analysts reckon palm oil’s hefty $330/ton discount to soyoil and likely lower end-March stocks could prevent the prices from falling further.           [Dow Jones Newswire]

SINGAPORE, April 1 (Reuters) - Malaysian palm oil futures slipped to their lowest in nearly three months on Monday as  larger-than-expected U.S. soybean stockpiles continued to weigh on markets, although losses were capped by a marginal increase in exports. Malaysia's palm oil shipments for March edged up 2.8 percent to 1.36 million tonnes compared to a month ago, driven by higher exports of refined products, cargo surveyor Intertek Testing Services said on Monday. Another cargo surveyor Societe Generale de Surveillance reported a 5.5 percent increase to 1.37 million tonnes for the month.

But the market continued to feel the weight of the larger-than-expected soybean stocks reported by the U.S. Department of Agriculture (USDA). Plentiful soybeans for crushing into oil may divert some demand away from competing palm oil. "It looks like the USDA's bearish stock level is still leading palm," said a Singapore-based trader with a global commodities house. "A marginal increase in exports is not enough to counter the bearishness ... I think we will have to see how low the production cycle is going to be in order to have some supportive news."

By market close, the benchmark June contract on the Bursa Malaysia Derivatives Exchange had lost 1.8 percent to 2,336 ringgit ($756) per tonne. Prices earlier fell to 2,335 ringgit, a level last seen on Jan. 11. Total traded volume stood at 31,364 lots of 25 tonnes each, compared to the average 35,000 lots seen so far this year. A slight increase in exports and seasonal slowdown in production could trigger a further decline in Malaysia's palm oil stockpiles in March. Official data on inventory levels will be released next week.

In other markets, Brent crude eased to under $110 a barrel on Monday after Chinese manufacturing data missed market expectations, signalling possibly slower demand growth in the world's second-largest oil consumer. In vegetable oil markets, U.S. soyoil for May delivery lost 1.3 percent in late Asian trade. The most-active September soybean oil contract on the Dalian Commodities Exchange edged 1.4 percent lower.          [Reuters]

Today’s Support and Resistance for benchmark June contract is located around 2,320 and 2,395 respectively.