FCPO Related News

Crude palm oil futures on Malaysia’s derivatives exchange gave up early gains to close barely lower Wednesday, pressured by ample supplies and an increase in U.S. soybean stockpiles as farmers harvest crops in the Midwest. The benchmark December contract on Bursa Malaysia Derivatives moved between positive and negative territory in the last 30 minutes of trade, ending at 2,859 ringgit a metric ton, down 0.1% from Tuesday’s close.

"Technical selling and profit-booking weighed on the market," a commodities broker in Kuala Lumpur said. "Investors should adopt a sell-into-rallies strategy amid abundant palm oil supplies in Malaysia." Analysts and planters said palm oil output in Malaysia, the world’s largest CPO producer after Indonesia, could reach its peak during the September-October period, potentially pushing end-September inventories to 2.2 million metric tons.

A Sabah-based planter tipped Malaysia’s September CPO output to rise 10% from 1.66 million tons in August. Palm oil stockpiles reached 2.12 million tons at end-August, a level not seen since last October. Separately, traders tipped Sept. 1-20 palm oil shipments at around 924,000 tons, up around 15% from the Aug. 1-20 period. Cargo surveyors Intertek Agri Services and SGS (Malaysia) Bhd. are due to issue Sept. 1-20 shipment data Thursday.  (Dow Jones Newswire)

In a bullish sign for palm oil, Brent crude oil prices rose on Wednesday after Japan's central bank became the latest country to further open the monetary taps to help stimulate its economy. In other vegetable oil markets, U.S. soyoil for December delivery rose 0.4 percent. The most active January 2013 soyoil contract on the Dalian Commodity Exchange closed 0.3 percent higher, recovering from previous day's near 1-month low.

     

Crude palm oil was likely to find an initial support at 2,840 ringgit a tonne, said Ker Chung Yang, an analyst with Phillip Futures, but prices were likely to fall further in tandem with soybeans.  "We may see some short-covering which may extend for another day, but we need to understand that the weakness is likely to persist for crude palm oil. The export numbers are likely to continue to be impressive, but we need to understand that the sharp gain is due to the low base from the previous month," said Ker.

Technicals showed Malaysian palm oil likely to retest a support level at 2,832 ringgit per tonne, driven by a downward wave capable of travelling to 2,719 ringgit per tonne, Reuters market analyst Wang Tao said.