FCPO Related News

Crude palm oil futures on Malaysia’s derivatives exchange ended lower Monday, reflecting ample vegetable oil supplies and weak demand. Also weighing on palm oil prices are concerns that any contract renegotiation or cargo defaults by importers in India could add to inventories in Malaysia and Indonesia.  The benchmark December contract at Bursa Malaysia Derivatives ended 1.9% lower at 2,368 ringgit a metric ton after moving in a MYR2,361-MYR2,446 range.

Palm oil weaved between positive and negative territory in both sessions as investors weighed bullish technical signals and bearish supply-demand fundamentals, but "fundamentals won today, as demand remains lethargic," said a trading executive at a Kuala Lumpur-based foreign brokerage. The palm oil market nosedived last week amid tepid export demand at a time when global vegetable oil supplies are rising due to seasonally higher production in Southeast Asia and the fast pace of the soy harvest in the U.S. Midwest.

Analysts and market participants tipped end-September stockpiles at record levels of 2.43 million to 2.50 million tons ahead of a September crop report by industry regulator the Malaysian Palm Oil Board on Oct. 10.  "Market players are mainly positioning themselves ahead of MPOB numbers…they most certainly will be bearish and we can anticipate more selling pressure [by speculative investors and funds] ahead of Wednesday’s report" and Oct. 1-10 export estimates by cargo surveyors Intertek Agri Services and SGS (Malaysia) Bhd., said S. Paramalingam, executive director at Kuala Lumpur-based Pelindung Bestari Sdn. Bhd.

 [Dow Jones Newswire]

“The market has no specific direction to go yet after falling so much,” said a Singapore-based trader with a global commodities house, referring to prices that fell to near 3-year low and posted their third straight weekly loss last week. “We have the MPOB report for September's end-stock. The market has been expecting the worst so if it is a bit better than market expectations, that will help for a good rebound,” the trader added. Technical analysis showed palm oil is expected to end its rebound at or below 2,503 ringgit per tonne, and fall towards 2,230 thereafter, Reuters market analyst Wang Tao said.