FCPO Related News

Crude palm oil futures on Malaysia’s derivatives exchange fell to a 10-month low again Tuesday, weighed by rising stockpiles and lower soyoil values as favorable weather forecasts for the soy crop raised the prospects of improving yields.

Weather forecaster Meteorlogix said in a daily report that scattered rain and lower temperatures will aid the soybean crop in the U.S. Midwest over the next five days.

The benchmark October contract at Bursa Malaysia Derivatives ended 0.5% lower at 2,858 ringgits a ton, after falling as much as 1.8% to MYR2,820/ton, the lowest since Oct. 18.

"Sentiment is weak as investors are concerned about commodity demand amid worries about the global economy and peak palm oil production [period] in Southeast Asia," a Singapore-based trading executive at a vegoil exporting firm said. He added that investors may add short positions and drag palm oil toward MYR2,800/ton this week as export demand for the first half of August is widely expected to remain weak. Cargo surveyors Intertek Agri Services and SGS (Malaysia) Bhd. are scheduled to issue Aug. 1-15 export estimates Wednesday.  

However, not all are bearish on the market. Some analysts said palm oil's sizeable price discount to rival soyoil could support palm prices in the near term, while major vegoil importer India will likely build up stocks in coming weeks on weather concerns and ahead of its September-November festival season, boosting demand. "Palm oil is showing subtle signs of bottoming out, as consumer demand is slowly creeping back into the market," S. Paramalingam, executive director at Pelindung Bestari Sdn. Bhd., said.  (Dow Jones)

The palm oil export figures report on Aug 15th will be watched as further correction is likely to occur if the export figures continue to deteriorate. For today, pivot support level for the benchmark Oct is located around 2,806 while resistance is pegged at 2,872.