FCPO Related news

Malaysian palm oil futures ended off a 2-year low on Thursday, as investors remained cautious over high stocks and the eurozone debt crisis.  Crude palm oil futures on Malaysia’s derivatives exchange Thursday fell to a fresh two-year low, reflecting high stockpiles, seasonal increases in U.S. soy supplies and concerns about the euro-zone debt crisis. The benchmark December contract at Bursa Malaysia Derivatives fell as much as 1.8% to 2,569 ringgit a ton, a level not seen since September 2010, but recouped losses toward the end of trade on bargain-buying. The contract ended at MYR2,607/ton, a decline of 0.3% from Wednesday’s close.

Analysts said palm oil inventories for September and October in Malaysia, the world’s second-largest CPO producer, could increase from 2.12 million tons in August because demand isn’t rising fast enough. Despite ample supplies, further steep declines in palm values are unlikely, Ker Chung Yang, an investment analyst at Singapore-based Phillip Futures said. "Technical charts are flashing oversold signals. I expect prices to rebound [toward MYR2,700/ton next week] and the upward momentum will be sharp and strong," Mr. Ker said. "Prices could rally in the last quarter of 2012 and the current price dip presents good buying opportunities for investors to go long."

Palm oil futures could be headed for another vicious selldown if the benchmark contract made another new low around 2,568 level today. So far, no promising sign for medium term recovery yet as market kept on creating lower highs candle formation which signifies Bearish price action. Today’s Support and Resistance  for the benchmark Dec is located around 2,570 and 2,640 respectively.