Thursday 28 February 2013


FCPO Related News  (Fri, Mar 1)

Crude palm oil futures on Malaysia’s derivatives exchange ended lower Thursday, reflecting investor concern over falling export demand and the prospect of higher global vegoil stockpiles. The benchmark May contract at Bursa Malaysia Derivatives ended 0.6% lower at 2,396 ringgit a metric ton, reversing gains in early trade. The contract fell as much as 2.1% to MYR2,368/ton, the lowest since Jan. 14. "From a technical perspective, palm oil looks set to repeat a bearish pattern seen during the May-September period last year," said Chandran Sinnasamy, trading head at LT International. "Bearish traders seem to have a firm grip on the market and aren’t loosening it for now, so there is potential for further price falls" in coming months.

Also undermining palm oil futures is lower export demand in February. Cargo surveyors Intertek Agri Services and SGS (Malaysia) Bhd. estimate shipments fell 9.1% and 8.8%, respectively. Crude shipments from Malaysia have risen ahead of a 4.5% tax hike on crude grades from March 1, but not enough to offset lower demand for refined grades, data showed. Refined palm cargoes account for the bulk of Malaysian palm shipments, according to data from the Malaysian Palm Oil Board. Intertek said crude cargoes rose 16% to 402,110 tons in February, whereas SGS put the figure at 386,294 tons, up 20%.

Palm oil production in Malaysia, the world’s second-largest producer, probably eased 17% to 18% from the previous month, though market participants said that may not ease stockpiles significantly due to disappointing export demand. Inventories at the end of February are likely to be slightly lower or unchanged from January’s 2.58 million tons. The Malaysian Palm Oil Board is scheduled to issue February crop data on March 11. In the cash market, refined palm olein for March shipment was offered at $810/ton while cash CPO for prompt shipment was offered at MYR2,360/ton. Open interest on the BMD was 166,648 lots, versus 166,799 lots Wednesday. One lot is equivalent to 25 tons. A total of 54,738 lots of CPO were traded versus 34,090 lots Wednesday.           [Dow Jones Newswire]

Malaysian palm oil futures fell to a more-than-six-week low on Thursday, extending losses into a seventh straight session on bleak export data and improved weather in Latin America. Losses were curtailed as India's national budget made no immediate decision on an import tax hike. India, the world's largest vegetable oil buyer, did not raise its import tax imposed in January to cut rising purchases from Malaysia and Indonesia, a move that could have hurt palm oil demand further.

Weaker demand for Malaysian palm oil product exports during February, which fell 9.1 percent to 1.33 million tonnes from 1.46 million tonnes in January, still weighed on the market. "The market is on a bearish note after recent improvements in the South American weather, and export figures were not as good as everyone has expected," said a Singapore-based trader with a global commodities trading house. "The market was expecting for the export tax to be increased. Now it stays the same there may be some selling pressure in the local market."  India last month slapped a 2.5 percent import tax on crude palm oil and lifted a six-year-old freeze on base import prices, the benchmark to calculate import taxes on edible oils.

Technicals showed Malaysian palm oil is expected to fall to 2,361 ringgit per tonne, said Reuters market analyst Wang Tao. A break below there would lead to a further loss to 2,306 ringgit, he said.

In other markets, Brent crude oil rose above $112 a barrel on Thursday, supported by renewed confidence that major central banks would keep taking steps to support the global economy. In competing vegetable oil markets, U.S. soyoil for May delivery edged down 0.4 percent in late Asian trade.           [Reuters]

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

FKLI Related News

NEW YORK (Reuters) - Stocks ended flat on Thursday, giving up modest gains late in the session, denying the Dow a chance to inch closer to all-time highs. The S&P 500 still managed to close out February with a fourth straight month of gains. JC Penney Co Inc (JCP) was the day's biggest loser, falling 17 percent to $17.57 after the department store operator reported a steep drop in sales.  The U.S. economy grew slightly in the fourth quarter, a turnaround from an earlier estimate showing contraction, and a drop in new claims for unemployment benefits last week added to a batch of data suggesting the economy continues its sluggish improvement.

The Dow was within striking distance of its record high after a year-to-date advance of more than 7 percent. The Dow's record closing high, set on October 9, 2007, stands at 14,164.53, while the Dow's intraday record high, set on October 11, 2007, stands at 14,198.10. The Dow Jones Transportation Average (^DJT), seen as a bet on future growth, is up 12.9 percent this year, and the 20-stock index hit a record intraday high earlier on Thursday. The Dow Jones industrial average (^DJI) shed 20.88 points, or 0.15 percent, to 14,054.49 at the close. The Standard & Poor's 500 Index (^GSPC) lost 1.31 points, or 0.09 percent, to 1,514.68. The Nasdaq Composite Index (^IXIC) fell 2.07 points, or 0.07 percent, to end at 3,160.19.

Limited Brands (LTD) and Netflix (NFLX) ranked among the best-performing consumer stocks. Shares of Limited Brands, the parent of retailers Victoria's Secret and Bath & Body Works, gained 2.3 percent to $45.52. The stock of video streaming service Netflix climbed 2 percent to $$188.08. In contrast, shares of Groupon Inc (GRPN.O) fell on weak revenue, with the daily deals company's tumbling 24.3 percent to $4.53.

Investors were keeping an eye on the debate in Washington over U.S. government budget cuts that will take effect starting Friday if lawmakers fail to reach agreement on spending and taxes. President Barack Obama and Republican congressional leaders arranged last-ditch talks to prevent the cuts, but expectations were low that any deal would emerge. Volume was modest with about 6.81 billion shares traded on the New York Stock Exchange, NYSE MKT and Nasdaq, slightly above the daily average of 6.46 billion.           [Reuters]

Stocks in Asia mostly rose Wednesday as U.S economic data and comments from Federal Reserve chief Ben Bernanke helped lift the mood in global markets. According to a local dealer, KLCI is expected to move within the 1620-1640 range for now as more investors move to the sidelines due to Malaysia’s election uncertainty. FKLI spot month closed higher yesterday at 1,635.50, in line with gains in regional markets. Today’s Support and Resistance for March contract is located around 1,625 and 1,640 respectively.

Tuesday 26 February 2013


FCPO Related News (Wed, Feb 27)

KUALA LUMPUR, Feb 26 (Reuters) - Malaysian palm oil futures slipped on Tuesday to their lowest in more than five weeks, as weak overseas vegetable oil markets kept investors on edge, although upbeat export data and slowing production helped limit losses. China and U.S. soy markets, which are tracked by palm, remained weak after suffering steep falls on Monday and as better weather in the U.S. Midwest and South America improved the prospects for supply.

But stronger-than-expected exports in the first 25 days of February, buoyed by increased shipments of Malaysian palm oil products to Europe and India, kept prices from tumbling further. "The market is a little oversold at the current juncture after a slew of negative news from pundits and analysts," said a trader with a local commodities brokerage in Malaysia. "The external market 'grains' are a major contributor to the current low prices. We anticipate demand to pick up very soon, and prices to recover once the selling pressure subside."

The USDA outlook numbers, with projections of a record soybean crop at 3.4 billion bushels, are bearish, he added. "This certainly spells trouble for palm oil in the second quarter of 2013." The benchmark May contract on the Bursa Malaysia Derivatives Exchange had dipped to 2,411 ringgit per tonne, the lowest since Jan. 21, before closing at 2,417 ringgit ($779), a fall of 2.2 percent. Total traded volume stood at 35,620 lots of 25 tonnes each, higher than the average 25,000 lots.

Technicals showed Malaysian palm oil is expected to rebound into a range of 2,506 to 2,521 inggit per tonne, as a correction from the Feb. 20 high of 2,584 ringgit may have been temporarily completed, said Reuters market analyst Wang Tao.

Investors are pinning hopes on healthy exports alongside seasonally slowing production to ease the current stockpile of 2.58 million tonnes in Malaysia, the world's No.2 producer. "At the end of the month we might see an 18 percent drop in production. And with this kind of exports, we will definitely see a drawdown in the stocks," said a trader who deals with a foreign commodities brokerage.

Oil fell below $114 a barrel on Tuesday, hit by doubts over demand growth as a potential political vacuum in Italy revived concern over instability in the debt-plagued euro zone. In competing vegetable oil markets, the U.S. soyoil for May delivery fell 1.3 percent in late Asian trade. The most-active September soybean oil contract on the Dalian Commodity Exchange slipped 1.5 percent.

Today’s Support and Resistance for benchmark May contract is located around 2,394 and 2,440 respectively.


FKLI Related News

U.S. stocks rebounded from their worst decline since November on Tuesday after Federal Reserve Chairman Ben Bernanke defended the Fed's bond-buying stimulus and sales of new homes hit a 4 1/2-year high. U.S. stocks jumped on Tuesday after Federal Reserve Chairman Ben Bernanke reassured investors about the continuation of stimulus measures, bucking a downward trend in global equities and oil prices on the uncertainty created by Italy's election. Bernanke's comments helped ease investors' concerns about a stalemate in Italy after a general election failed to give any party a parliamentary majority, posing the threat of prolonged instability and financial crisis in Europe, and sending the S&P 500 to its worst decline since Nov. 7 in Monday's session.

Gains in homebuilders and other consumer stocks, following strong economic data, lifted the S&P 500, and a 5.7 percent jump in Home Depot to $67.56 boosted the Dow industrials. The PHLX housing sector index rose 3.2 percent. Economic reports that showed strength in housing and consumer confidence also supported stocks. U.S. home prices rose more than expected in December, according to the S&P/Case-Shiller index. Consumer confidence rebounded in February, jumping more than expected, and new-home sales rose to their highest in 4-1/2 years in January. However, the central bank chairman also urged lawmakers to avoid sharp spending cuts set to go into effect on Friday, which he warned could combine with earlier tax increases to create a "significant headwind" for the economic recovery.

The Dow Jones industrial average gained 115.96 points, or 0.84 percent, to 13,900.13 at the close. The Standard & Poor's 500 Index rose 9.09 points, or 0.61 percent, to 1,496.94. The Nasdaq Composite Index advanced 13.40 points, or 0.43 percent, to close at 3,129.65. Despite the bounce, the S&P 500 was unable to move back above 1,500, a closely watched level that was technical support until recently, but could now serve as a resistance point.

Gold's biggest rally in months stretched into a second day on Tuesday after the U.S. Federal Reserve chief defended the stimulus program that has stoked gold buying on inflation worries, but oil fell on concern about Italy's elections. Soybean prices declined, giving up early gains as prices failed to break through technical resistance at their 20-day moving average. Brent crude oil fell to a one-month low under $113 a barrel on Tuesday as inconclusive Italian election results revived investor concerns about instability in the euro zone and about future demand for fuel.

Taking cue from the weak performance on Wall Street overnight, the FBM KLCI closed lower Tuesday at 1,624.18. FKLI spot month opened slightly higher this morning at 1,624 but is expected to fall slightly in ranged trade as global developments continue to dictate local market direction amid a lack of fresh leads, and as investors speculate on the timing of the local general elections . Today’s Support and Resistance for  February contract is located around  1,615 and 1,635 respectively.

Monday 25 February 2013


FCPO Related News (Tues, Feb 26)

SINGAPORE, Feb 25 (Reuters) - Malaysian palm oil futures slid to their lowest in nearly a month on Monday, tracking steep falls in other vegetable oil markets, although better-than-expected export numbers helped rein in losses. The most active U.S. soyoil contract for May delivery  was down 0.7 percent in late Asian trade after losing almost 2 percent on Friday, weighed down by weak soybean prices due to improved prospects for South American supply.

Investors were also reacting to falls in China's most active September soyoil contract, which tumbled more than 3 percent to its lowest since mid-November, hurt by concerns over demand growth after a slip in the country's manufacturing output index. By 1011 GMT prices had slid by 3.2 percent. "The market is tracking the U.S. and Dalian soybean oil markets. All these are external factors," said a trader with a foreign commodities brokerage in Kuala Lumpur.

The benchmark May contract on the Bursa Malaysia Derivatives Exchange had eased 2.5 percent to 2,471 ringgit ($797) per tonne by Monday's close, but were off an earlier low of 2,461 ringgit, the lowest level since Jan. 29. Total traded volume stood at 37,569 lots of 25 tonnes each, higher than the usual 25,000 lots, as traders rushed to liquidate positions. Technicals showed Malaysian palm oil is expected to revisit its Dec. 13, 2012 low of 2,217 ringgit per tonne over the next four weeks, as a long-term downtrend has resumed, said Reuters market analyst Wang Tao.

Investor sentiment picked up, however, after cargo surveyor Intertek Testing Services reported a 4.6 percent increase in Malaysian palm oil exports to 1,153,852 tonnes for the Feb. 1-25 period from a month ago. Another cargo surveyor, Societe Generale de Surveillance, reported exports in the same period picked up 2.7 percent, buoyed by higher shipments to Europe and India. "The numbers were slightly better than expected and will probably stay at this pace towards the end of the month on a last-minute push to ship out tax-free crude palm oil," said a dealer with a foreign commodities brokerage in Malaysia.

Malaysia, the world's No.2 producer of the edible oil, will raise February's zero percent export tax to 4.5 percent in March after keeping it unchanged for two months. Traders are counting on improving palm oil exports and  seasonally slowing output in the world's No. 2 producer of the edible oil to help ease stockpiles that stood at 2.58 million tonnes in January. In other markets, Brent crude wiped out early losses to trade above $114 per barrel on Monday as a firmer euro supported prices, although worries that a retreat in China's manufacturing activity would dent demand from the world's top energy consumer capped gains.          [Reuters]

Market sentiment is weak because of the bleak global economic outlook, exacerbated further by bearish data from China on Monday, a Kuala Lumpur-based trading executive said. The preliminary HSBC China Manufacturing Purchasing Managers Index fell to 50.4 in February compared with a final reading of 52.3 in January. This in turn pressured prices of many commodities, including those of palm oil, traders said.

Rainfall over the past week and forecasts of continued favorable weather this week in the world's top exporter of soyoil, Argentina, weighed on prices of both soyoil and palm oil, as did forecasts of a record soybean crop and rising soybean inventories in the U.S., they said. On Friday, the U.S. Department of Agriculture forecast soybean stocks to jump to 250 million bushels at the end of the 2013-14 marketing year, compared with its projection of 125 million bushels at the end of the 2012-13 year, which ends Aug. 31.

Investors keenly await an industry conference next week in Kuala Lumpur, where eminent analysts Dorab Mistry and James Fry will likely present their outlook for palm oil for 2013. Prices could easily edge toward the MYR2,500-MYR2,600/ton band if analysts are bullish, a second Kuala Lumpur-based trading executive said. Open interest on the BMD was 201,834 lots versus 167,287 lots Friday. One lot is equivalent to 25 tons. A total of 37,569 lots of CPO were traded versus 20,589 lots Friday.           [Dow Jones Newswire]

Today’s Support and Resistance is located around 2,430 and 2,480 respectively.

FKLI Related News

U.S. stocks on Monday suffered their biggest drop since November after a strong showing in Italian elections by groups opposed to the country's economic reforms triggered worry that Europe's debt problems could once again destabilize the global economy. The decline marks the biggest percentage drop for the benchmark Standard & Poor's 500 Index since Nov.7, and drove the S&P down to its lowest close since Jan. 18. Selling accelerated late in the trading session after the S&P 500 fell below the 1,500 level, which has acted as a significant support point. Monday marked the S&P's first close under 1,500 since Feb. 4.
Italy's center-left coalition holds a slim lead over former Prime Minister Silvio Berlusconi's center-right bloc in the election for the lower house of parliament, three TV projections indicated. But any government must also command a majority in the Senate, a race that is decided by region. The resulting gridlock in parliament could lead to new elections and cast into doubt Italy's ability to pay down its debt.  "Europe hasn't gone away as an issue, it is going to hang around, and it is rearing its ugly head today," said Stephen Massocca, managing director of Wedbush Morgan in San Francisco. "If someone gets elected who is simply not going to play by the rules, what are they going to do? It puts them in a real quandary here because their financial support, their monetary support is all stipulated by the fact that these austerity programs are going to be in place."
In Monday's volatile session, banks and other financial stocks were among the worst performers on worries about the sector's exposure to Italy's massive debt. The KBW Bank Index fell 2.7 percent. The CBOE Volatility Index ended at 18.99, up 34.02 percent. The Dow Jones industrial average dropped 216.40 points, or 1.55 percent, to 13,784.17 at the close. The Standard & Poor's 500 Index lost 27.75 points, or 1.83 percent, to 1,487.85. The Nasdaq Composite Index fell 45.57 points, or 1.44 percent, to 3,116.25.
Political uncertainty on the home front, though, is also on Wall Street's mind. U.S. equities will face a test with the looming debate over so-called sequestration - U.S. government budget cuts that will take effect starting on Friday if lawmakers fail to reach an agreement over spending and taxes. The White House issued warnings about the harm the cuts are likely to inflict on the economy if enacted. 
Asian shares will likely take their lead from overnight plunges in global equities while currency markets remain jittery on Tuesday as the uncertainty over Italy's election results fuels fears of a resurgent euro zone debt crisis. Gold gained its most in nearly five months on Monday, with safe-haven buying lifting the precious metal in post-session electronic trade as U.S. stocks slid and as oil reversed an early rally.
[Reuters]
Stocks on Bursa Malaysia ended higher yesterday in line with regional bourses riding on the improved external sentiment. Today’s Support and Resistance for FKLI February contract is located around 1,610 and 1,630 respectively. 

Monday 18 February 2013


FCPO Related News (Tues, Feb 19)

Crude palm-oil futures on Malaysia’s derivatives exchange ended up Monday on expectations of rising exports this month ahead of higher export duties coming into effect in March. A rise in demand in February can reduce the world’s No. 2 producer’s stockpiles, market participants said.  The benchmark April contract on Bursa Malaysia Derivatives ended 1.3% higher at 2,539 ringgit a metric ton after moving in a MYR2,501-MYR2,551/ton range.

The Malaysian government said last week it will set CPO export tax at 4.5% next month after two consecutive months of no duty. This boosted crude shipments and helped to ease supplies. The Malaysian Palm Oil Board said end-January palm oil stockpiles eased from an all-time high of 2.63 million tons in December to 2.58 million tons. "We view this [CPO tax] as positive for Malaysian refiners and negative for producers," CIMB Investment Bank senior plantation analyst Ivy Ng said. "The higher export tax could provide Malaysian refiners some advantage in terms of cheaper feedstock costs by up to MYR103.80/ton resulting from lower CPO price," she adds. Ms. Ng also expects exporters to ship more CPO before the tax comes into effect Mar. 1.

Further falls in stocks could spark a rally in prices in the coming months, Jupiter Securities chief market strategist Benny Lee said adding that prices can rise to MYR2,800-MYR2,900/ton if inventories ease as much as 600,000 tons in two months. Open interest on the BMD was 167,866 lots versus 170,163 lots Friday. One lot is equivalent to 25 tons. A total of 46,985 lots of CPO were traded versus 28,733 lots Friday.           [Dow Jones Newswire]

Technicals show mixed signals for Malaysian palm oil as it is not clear how high the current rebound could go, said Reuters market analyst Wang Tao. While the higher export tax may hurt Malaysia's crude palm oil export demand, the local processing industry may benefit from a relatively cheaper feedstock, analysts said. "We are neutral on the news as it will be short-term negative for Malaysia crude palm oil demand but long-term positive for Malaysia processed palm oil demand," Alan Lim Seong Chun, research analyst with Malaysia's Kenanga Investment Bank, said in a note to clients.

Brent crude rose slightly toward $118 a barrel on Monday, underpinned by expectations of improving global growth despite some weak U.S. data dampening prices at the end of last week. Tensions in the Middle East also lent support. In competing vegetable oil markets, the most active September soybean oil contract on the Dalian Commodity Exchange inched down 1.2 percent in late Asian trade. Markets in China resumed trading on Monday after a week-long Lunar New Year break.          [Reuters]

Today’s Support and Resistance for benchmark May contract is located around 2,530 and 2,580 respectively.


FKLI Related News

NEW YORK, Feb 15 (Reuters) - The S&P 500 dipped in a late decline on Friday as Wal-Mart dropped following a report of a weak start to February sales, though the index just barely extended its streak of weekly gains to seven. Equities were little changed for much of the session, with investors finding few reasons to make big bets following an extended rally on Wall Street, but stocks turned lower in afternoon action.
Wal-Mart Stores Inc dropped 2.1 percent to $69.30 after Bloomberg News reported a weak start to February sales, citing internal company e-mails. The stock was the biggest decliner on the Dow, while the S&P retail index fell 0.5 percent. "When a retailer of this size comes out with this kind of lousy news, the whole market can fall off, especially on a Friday afternoon," said Mike Shea, trader at Direct Access Partners in New York. "However, I'm not worried that this is indicative of any larger macro issue with retail."
The Dow Jones industrial average was up 11.27 points, or 0.08 percent, at 13,984.66. The Standard & Poor's 500 Index was up 0.32 points, or 0.02 percent, at 1,521.70. The Nasdaq Composite Index was down 0.21 percent at 3,192.03. For the week, both the Dow and Nasdaq fell 0.1 percent while the S&P rose 0.1 percent in its seventh straight week of gains, a period during which the index rose 8.4 percent. The last such seven-week run was between December 2010 and January 2011.
The New York Federal Reserve said manufacturing in New York state expanded for the first time in seven months, while Thomson Reuters/University of Michigan's preliminary reading of consumer sentiment rose from the prior month and beat expectations. But U.S. manufacturing fell in January after a rise in the prior month. Wall Street's gain thus far in 2013 has largely been driven by strong corporate earnings, while data indicated some weakening in economic conditions. A surge in merger and acquisition activity, with more than $158 billion in deals announced so far in 2013, has given further support to the equity market as it points to healthy valuations and bets on the economic outlook.
The yen resumed falling on Monday after Japan signaled it would push ahead with expansionist monetary policies having escaped criticism from the world's 20 biggest economies at the weekend. Gold prices suffered their sharpest weekly loss in nine months on Friday after crashing through key support levels, and oil and copper fell after a surprise drop in U.S. industrial output sparked concerns about recovery in the world's largest economy. Brent crude oil consolidated below $118 per barrel on Monday, underpinned by expectations of improving global growth and continuing tensions in the Middle East.

FKLI closed lower yesterday at 1,615.50 as investors continue to stay defensive in the run up to the national elections which must be held by June. Today’s Support and Resistance for February contract is located around 1,600 and 1,615 respectively.

Sunday 17 February 2013

FCPO Related News (Mon, Feb 18)
Malaysian palm oil futures fell to their lowest in more than two weeks on Friday, giving up earlier gains as investors turned cautious after the government raised its crude palm oil export tax for March. The edible oil rose in the morning session after cargo surveyor Intertek Testing Services reported a 18.1 percent increase in Malaysian palm oil exports for the first half of February from a month ago. Another cargo surveyor, Societe Generale de Surveillance, also reported a 13.6 percent rise in shipments for the same period.
But selling pressure emerged after the world's No.2 palm oil producer said it will set its crude palm oil export tax for March at 4.5 percent, up from February's zero percent, making the crude grade more expensive for overseas buyers. "The export tax was more important in the traders' minds," said a dealer with a foreign commodities brokerage in Kuala Lumpur. The benchmark April contract  on the Bursa Malaysia Derivatives Exchange closed 0.4 percent lower at 2,486 ringgit ($804) per tonne. Prices dropped as low as 2,476 ringgit, the lowest level since Jan. 30. Total traded volumes stood at 27,269 lots of 25 tonnes each, slightly higher than the average of 25,000 tonnes. For the week, palm oil posted a 2.9 percent loss, snapping four straight weeks of gains.
A zero-percent duty tax structure introduced by Malaysia in January and February had provided positive sentiment for investors, but forecasts of bumper soy crops in Latin America, palm's vegetable oil competitor, has weighed on the market and kept prices rangebound. "For the past few months, high stockpiles and improving weather conditions in Brazil and Argentina have continued to weigh on prices," said Phillip Futures analyst Ker Chung Yang in Singapore. 
In other markets, Brent crude eased below $118 per barrel on Friday and was heading for its first weekly loss in five after disappointing euro zone data revived concerns about the troubled region. In competing vegetable oil markets, U.S. soyoil for March delivery inched up 0.1 percent in late Asian trade. The Dalian Commodity Exchange is closed for the Lunar New Year holidays and will resume trading on Monday.          [Reuters]
Indonesia set February CPO duties at 9% from 7.5% previously. "CPO exports in March are likely to be much lower due to the 4.5% tax rate and Indian importers have bought quite a fair bit in January. Palm oil port stocks at Indian ports are also filing up–so we expect buying to slow down soon," said Chandran Sinnasamy, head trader at Kuala Lumpur-based LT International. Palm oil’s bearish technical cues and improving crop weather in parts of Argentina and Brazil added to the weaker tone in palm oil.
Palm oil is a direct substitute of soy oil. "Palm oil values have traded in the MYR2,217-MYR2,615/ton range the past four months and bullish traders failed to take prices past MYR2,615/ton for the technical landscape to turn convincingly bullish. Therefore, I believe prices are poised to ease back to MYR2,400/ton in the short term," Mr. Sinnasamy said. Open interest on the BMD was 170,163 lots versus 174,821 lots Thursday. One lot is equivalent to 25 tons. A total of 28,733 lots of CPO were traded versus 20,263 lots Thursday.           [Dow Jones Newswire]
Today’s Support and Resistance for benchmark May contract is located around 2,483 and 2,537 respectively.
FKLI Related News
U.S. stocks could struggle to extend their seven-week winning streak as the quarterly earnings period draws to a close and the market bumps into strong technical resistance. Many analysts say the market could spend the next few weeks consolidating gains that have lifted the benchmark Standard & Poor's 500 by 6.6 percent since the start of the year. The S&P 500 ended 0.1 percent higher for the week, recovering from a late sell-off on Friday after a Bloomberg report about slow February sales at Wal-Mart triggered a slide in the retailer's shares. It was the index's seventh week of gains.
Odds of a pullback are increasing, with the market in slightly overbought territory, said Bruce Zaro, chief technical strategist at Delta Global Asset Management in Boston. On Thursday, Wal-Mart, the world's largest retailer, is due to report results, unofficially closing out the earnings period. Investors will be keen to see its quarterly numbers, especially after the Friday's news report that rattled investors. The S&P 500 has gained 4.3 percent since Alcoa kicked off the earnings season on Jan. 8.
The approaching March 1 deadline for across-the-board federal budget cuts unless Congress reaches a compromise adds another reason for caution, especially with recent economic data indicating the recovery remains bumpy. Manufacturing output fell 0.4 percent last month, the Federal Reserve said on Friday, but production in November and December was much stronger than previously thought. In the coming days, the market will focus on minutes from the latest Federal Reserve meeting, due to be released on Wednesday, which could provide support if they suggest the Fed will remain on its current course of aggressive monetary easing.
The Fed minutes released in January spooked markets a bit when they revealed that some Fed officials thought it would be appropriate to consider ending asset purchases later in 2013. U.S. Treasury yields rose on that news, though market worries about a near-term end to quantitative easing have since faded. Among other companies expected to report earnings next week are Nordstrom, Hewlett-Packard and Marriott International.           [Reuters]
Stocks on Bursa Malaysia ended lower last Friday due to the lack of buying interest and profit taking ahead of the weekend. The FBM KLCI ended 2.96 points or 0.18% lower at 1,627.93, after opening at 1,628.30, and hovered between 1,624 and 1,632.56 for the day. 

FKLI spot month contract opened at 1,618 this morning and reached a high of 1,621.5. Today’s Support and Resistance for February contract is located around 1,610 and 1,626 respectively.

Thursday 14 February 2013


FCPO Related News (Fri, Feb 15)

Crude palm-oil futures on Malaysia’s derivatives exchange edged down Thursday. They struggled for direction because of a growing surplus of vegetable oils and improving export demand for palm oil. The benchmark April contract on Bursa Malaysia Derivatives ended 0.3% lower at 2,497 ringgit a metric ton after moving in a MYR2,490-MYR2,532 range.

Forecasts for improving weather in South America and expectations for a growing surplus of soy oil in the 2012-13 marketing year driven by large increases in soybean output from Brazil could keep prices of rival palm oil in check, TA Research said in a report. Both palm oil and soyoil compete for similar export destinations. World-wide soybean production is projected to increase by 13% on year to 269.5 million tons in the 2012-13 marketing year. "While Argentina is at risk of drought at this juncture the large increase in soybeans production from Brazil will be more than sufficient to offset any crop loss in Argentina," the research company said.

Expectations for strong palm-oil production in the absence of La Nina and El Nino conditions suggest stockpiles are likely to stay at more than 2 million tons in the next few months even though export demand has risen on the back of an export-tax advantage over Indonesia, a trading executive at a foreign brokerage said. The executive tipped prices around MYR2,400-MYR2,600/ton the next few weeks. Palm-oil shipments in the first 10 days of February from Malaysia rose 18% to 440,830 tons, cargo surveyor Intertek Agri Services said Saturday. Outbound sales for the same period rose 25% to 429,070 tons, another surveyor SGS (Malaysia) Bhd. said earlier.

Malaysia maintained no export duty on CPO exports while Indonesia raised January CPO export tax to 9% from 7.5%. In the cash market refined palm olein for February shipments is offered at $850/ton while cash CPO for prompt shipment is offered at MYR2,450/ton. Open interest on the BMD was 174,821 lots versus 175,403 lots Wednesday. One lot is equivalent to 25 tons.  A total of 20,263 lots of CPO were traded versus 18,873 lots Wednesday.           [Dow Jones Newswire]

Better South American weather would contribute to an expected bumper crop in Brazil, poised to overtake the United States as the No.1 soybean grower, adding pressure to the soybean market tracked by palm oil. January's palm oil end-stocks eased off record levels and fell to 2.58 million tonnes, according to industry regulator data, but the smaller-than-expected decline triggered some selling pressure in the market. "While good export news continues to come in, nervousness about the large South American crop (and its effect on prices), as well as the U.S. soybean market facing a seasonal slowdown are pressuring the futures market," said a trader with a local commodities brokerage in Malaysia.

Technical analysis showed palm oil is expected to drop further to 2,460 ringgit per tonne, as it has fallen below support at 2,510 ringgit, said Reuters market analyst Wang Tao. Cargo surveyor data showed Malaysia's exports of palm oil products rose as much as 25 percent in the first 10 days of February on stronger demand from major buyers India, China, the United States and Europe. Traders will be looking out for Feb. 1-15 export data on Friday to further gauge demand trend of the tropical oil.

Analysts say seasonally slowing production could see stockpiles in February easing another 4 percent on the month to 2.48 million tonnes, but inventory levels are unlikely to dip below the 2-million-tonne mark in the first quarter of 2013. "This should keep crude palm oil prices below 3,000 ringgit per tonne in the first quarter of 2013," said Kenanga Research analyst Alan Lim in Kuala Lumpur. India's vegetable oil imports soared 27.4 percent from a month earlier to hit an all-time high in January on record purchases of cheap palm oil from southeast Asia, a trade body said on Thursday, despite a hike in import duties mid-month.

Oil prices rose on Thursday as fresh tensions over Iran's nuclear programme revived global supply concerns, offsetting weaker-than-expected growth data from France and Germany. In competing vegetable oil markets, U.S. soyoil for March delivery dropped 0.3 percent in late Asian trade. The Dalian Commodity Exchange is closed for the Lunar New Year holidays and will resume trading on Monday.            [Reuters]

FEB 1-15 Palm Oil Export is up 18%, according to ITS.

Today's Support and Resistance for benchmark April contract is located around 2,498 and 2,537 respectively.


FKLI Related News

Global equity markets fell and the euro slid against the dollar on Thursday after data showed the euro zone slipped deeper into recession in late 2012 than had been expected, but deal-making helped Wall Street close near break-even. Sugar and cocoa prices fell on Thursday as did prices of gold and silver, but the commodities behind some of Valentine's Day gifts have taken different paths from three years ago, with the sweets lower and the shiny items higher in price. Oil prices edged up on Thursday as fears about U.S. gasoline supply pulled the complex higher, overshadowing concerns of weakening economic output in the euro zone.           [Reuters]

NEW YORK (Reuters) - The S&P 500 eked out a small gain for a third straight session on Thursday, helped by a flurry of merger activity, though investors see no catalysts to lift the market further with major averages near multi-year highs. The market's slowed advance took the S&P 500 to its highest intraday level since November 2007 on Wednesday. While the index notched its third straight day of gains, none was more than 0.2 percent.

Shares of H.J. Heinz Co (HNZ) jumped 20 percent to $72.50 after it said Warren Buffett's Berkshire Hathaway (BRK-B) and 3G Capital will buy the food company for $72.50 a share, or $28 billion including debt. Berkshire's class B shares rose 1.3 percent to $99.21. Also supporting the market was data showing the number of Americans filing new claims for unemployment benefits fell more than expected in the latest week. The CBOE Volatility index (.VIX) fell 2.4 percent, dropping to 12.67.

Stocks fell earlier after a report the euro zone's gross domestic product contracted by the steepest amount since the first quarter of 2009. In addition, Japan's GDP shrank 0.1 percent in the fourth quarter, crushing expectations of a modest return to growth. The Dow Jones industrial average (^DJI) was down 9.52 points, or 0.07 percent, at 13,973.39. The Standard & Poor's 500 Index (^GSPC) was up 1.05 points, or 0.07 percent, at 1,521.38. The Nasdaq Composite Index (^IXIC) was up 1.78 points, or 0.06 percent, at 3,198.66.

Volume was light, with about 6.36 billion shares changing hands on the New York Stock Exchange, the Nasdaq and NYSE MKT, below the daily average so far this year of about 6.48 billion shares.

Today's Support and Resistance for FKLI February contract is located around 1,610 and 1,630 respectively


Sunday 10 February 2013





FCPO Related News (Fri, Feb 9)

SINGAPORE, Feb 8 (Reuters) - Malaysian palm oil futures ended just slightly higher in rangebound, thin trade on Friday, posting a marginal weekly gain as traders remained cautious ahead of the Lunar New Year holiday. Market participants were waiting for U.S. Department of Agriculture (USDA) monthly supply and demand reports later in the day, which may show tighter soybean stocks. Malaysian inventory and output data for January from industry regulator the Malaysian Palm Oil Board (MPOB) will give more trading clues when it is released next Wednesday as the country's markets return from the Lunar New Year break. Malaysian financial markets will be closed next Monday and Tuesday for the Lunar New Year holiday, while China's will shut for the week.

At market close, the benchmark April contract on the Bursa Malaysia Derivatives Exchange edged up 0.4 percent at 2,560 ringgit ($833) per tonne. Prices were rangebound between 2,532 and 2,562 ringgit.  Total traded volumes were thin at 16,581 lots of 25 tonnes each, compared to the usual 25,000 tonnes.  For the week, prices edged up 0.1 percent higher, the fourth straight week of gains. Technical analysis shows palm oil's bearish target at 2,510 ringgit remains intact despite its rebound to 2,567 ringgit on Thursday, said Reuters market analyst Wang Tao.

Malaysia's palm inventory levels most likely dropped 2.9 percent to 2.55 million tonnes in January from December's all-time high, the first decline since last June, a Reuters survey showed on Thursday.  The market is also keeping an eye out for Malaysian export data for the first 10 days of the month after cargo surveyors reported a stronger export demand in the last week of January. In other markets, Brent crude climbed towards $118 per barrel on Friday, heading for a fourth weekly gain as robust trade data from China bolstered the outlook for demand, while escalating tensions in the Middle East stoked concerns over supply. In competing vegetable oil markets, U.S. soyoil for March delivery lost 0.2 percent in late Asian trade. The most active September soybean oil contract on the Dalian Commodity Exchange closed 0.5 percent lower.           [Reuters]

Palm oil prices were mostly higher the past few sessions due to optimism that export demand could go up for the tropical oil used in a wide variety of consumer products ranging from biscuits to chocolates and cooking oil. The vegetable oil’s wide price discount to rival soyoil has encouraged "some substitution from expensive soy," a broker in Singapore said.

Unfavorable weather in major soybean growing regions of South America raised concerns about the soy crop and lifted prices, widening its differential to palm oil. Palm oil is currently offered $300-336/ton cheaper to soyoil, physical market data showed. Market participants will be looking forward to January crop data by industry regulator, the Malaysian Palm Oil Board, due Feb. 13. Stockpiles are tipped to ease a tad from December’s all-time high of 2.63 million tons, as export demand has recovered.

Export estimates for the first 10 days of February by cargo surveyors are also scheduled to be released Feb. 13. Inventories likely reached 2.60 million tons, a modest 1.1% drop from a month earlier, while overall palm oil output probably fell 15% to 1.51 million tons, in line with seasonally lower yields and as heavy rain slowed harvesting activities. Asian traders expect limited movements in palm oil next week, as major palm oil consumer China will be closed the whole week for Lunar New Year holidays.

In the cash market, refined palm olein for February shipment was offered at $855/ton and cash CPO for prompt shipment at MYR2440/ton. Open interest on the BMD was 177,268 lots, versus 178,596 lots Thursday. One lot is equivalent to 25 tons. A total of 18,142 lots of CPO were traded versus 30,443 lots Thursday.           [Dow Jones Newswire]



FKLI Related News

The FBM KLCI index gained 4.23 points or 0.26% on Friday. The
market traded within a range of 13.91 points between an intra-day
high of 1626.99 and a low of  1613.08  during  the  session.  Market
rose in tandem with  regional  bourses  performances  as  spurred  by
positive   China   trade   data.  However  volume  was  overall  lesser
transacted as retail investors were staying on  the  sideline,  away  for
long   lunar   New  Year  holidays.  FKLI  February  contract  closed
higher on Friday at 1616.50 after reaching the day’s low of 1600.50.

NEW YORK, Feb 8 (Reuters) - The Nasdaq composite stock index closed at a 12-year high and the S&P 500 index at a five-year high, boosted by gains in technology shares and stronger overseas trade figures. The S&P 500 also posted a sixth straight week of gains for the first time since August. The technology sector led the day's gains, with the S&P 500 technology index up 1.0 percent. Gains in professional network platform LinkedIn Corp and AOL Inc after they reported quarterly results helped the sector.

Data showed Chinese exports grew more than expected, a positive sign for the global economy. The U.S. trade deficit narrowed in December, suggesting the U.S. economy likely grew in the fourth quarter instead of contracting slightly as originally reported by the U.S. government. "That may have sent a ray of optimism," said Fred Dickson, chief market strategist at D.A. Davidson & Co in Lake Oswego, Oregon. Trading volume on Friday was below average for the week as a blizzard swept into the northeastern United States.

The U.S. stock market has posted strong gains since the start of the year, with the S&P 500 up 6.4 percent since Dec. 31. The advance has slowed in recent days, with fourth-quarter earnings winding down and few incentives to continue the rally on the horizon. The Dow Jones industrial average ended up 48.92 points, or 0.35 percent, at 13,992.97. The Standard & Poor's 500 Index was up 8.54 points, or 0.57 percent, at 1,517.93. The Nasdaq Composite Index was up 28.74 points, or 0.91 percent, at 3,193.87, its highest closing level since November 2000. For the week, the Dow was down 0.1 percent, the S&P 500 was up 0.3 percent and the Nasdaq up 0.5 percent.

Signs of economic strength overseas buoyed sentiment on Wall Street. Chinese exports grew more than expected in January, while imports climbed 28.8 percent, highlighting robust domestic demand. German data showed a 2012 surplus that was the nation's second highest in more than 60 years, an indication of the underlying strength of Europe's biggest economy.

Separately, U.S. economic data showed the trade deficit shrank in December to $38.5 billion, its narrowest in nearly three years, indicating the economy did much better in the fourth quarter than initially estimated. Earnings have mostly come in stronger than expected since the start of the reporting period. Fourth-quarter earnings for S&P 500 companies now are estimated up 5.2 percent versus a year ago, according to Thomson Reuters data. That contrasts with a 1.9 percent growth forecast at the start of the earnings season.

Volume was roughly 5.6 billion shares traded on the New York Stock Exchange, the Nasdaq and the NYSE MKT, compared with the 2012 average daily closing volume of about 6.45 billion. Advancers outpaced decliners on the NYSE by nearly 2 to 1 and on the Nasdaq by almost 5 to 3.

Wednesday 6 February 2013

FCPO Related News (Thurs, Feb 7)
SINGAPORE, Feb 6 (Reuters) - Malaysian palm oil futures inched lower on Wednesday in rangebound trading, as traders watched for further clues from upcoming industry data and avoided taking risky positions ahead of next week's Lunar New Year holidays. Concern that dry weather in South America could hurt soy crops has also eased after forecasts pointing to rains in parts of Argentina's grain belt this month. "A lot of people are evening out positions ahead of the long holiday. There's no lead in the market, it's going to be rangebound," said a trader with a foreign commodities brokerage in Malaysia.
Malaysian financial markets will be closed next Monday and Tuesday for the Lunar New Year holiday, while China's financial markets will take a week-long break. At market close, the benchmark April contract on the Bursa Malaysia Derivatives Exchange had edged down 0.2 percent to 2,542 ringgit ($821) per tonne. Prices traded in a tight range of 2,529 to 2,553 ringgit. Total traded volumes stood at 29,055 lots of 25 tonnes each, compared to the average 25,000 tonnes. Technical analysis shows a bearish target at 2,510 ringgit remains unchanged, as indicated by its wave pattern and a Fibonacci retracement analysis, said Reuters market analyst Wang Tao.
Markets will be eyeing January stocks data from industry regulator the Malaysian Palm Oil Board due on Feb. 13. Malaysia's palm stocks hit a record 2.63 million tonnes in December. "Even if January stocks go down, the drop should not be significant. Stocks are still going to be high," added the Malaysian trader. Investors are also awaiting this Friday's U.S. Department of Agriculture monthly supply and demand reports, which are expected to show tighter U.S. and global soybean stocks. Lower output of soybean and soybean oil may shift more vegetable oil demand to competing palm oil.
In other markets, Brent crude futures held above $116 per barrel on Wednesday after positive economic data from the United States and Europe bolstered the view that the global economy is on the mend. In competing vegetable oil markets, U.S. soyoil for March delivery eased 0.7 percent in late Asian trade. The most active September soybean oil contract on the Dalian Commodity Exchange also closed lower.  
Today’s Support and Resistance for benchmark April contract is located around 2,510 and 2,555 respectively.
FKLI Related News
Malaysian stocks fell to a two-month low and a gauge of price swings climbed to an 11-month high on speculation the government will dissolve parliament after the Lunar New Year for an election. The FTSE Bursa Malaysia KLCI Index lost 0.9 percent to 1,618.87 at 11:59 a.m. local time, poised for its lowest close since Dec. 7. It was the worst performer among benchmark indexes in Asia today. The KLCI’s 50-day volatility rose to 8.95, the highest level since Feb. 23. Volumes were 28 percent above the 30-day average at this time of day. Telekom Malaysia Bhd. sank 3.3 percent, leading declines in the stock gauge.
Asian shares and the euro paused on Thursday, marking time ahead of a European Central Bank policy decision and remarks from ECB President Mario Draghi on prospects for the euro zone economy. Commodities fell broadly on Wednesday, retreating from gains posted in the previous session, as a rebounding dollar and increased supplies of some raw materials weighed on prices. Brent crude oil futures posted a modest rise on Wednesday on economic optimism, while U.S. crude prices slipped after data showed an unexpected rise in U.S. crude oil inventories.
The spot month contract  for Kuala Lumpur Index Futures opened lower this morning at 1,591.5 following speculation that the general election will be held after the Lunar New Year. Today’s Support and Resistance for February contract is located around 1,580 and 1,600 respectively.