FCPO Related News

Crude palm oil futures on Malaysia’s derivatives exchange rose Thursday, as signs of a recovery in Chinese manufacturing and firm export demand buoyed investor sentiment. The benchmark January contract at Bursa Malaysia Derivatives ended 1.6% higher at 2,537 ringgit a ton after rising as much as 1.8% to MYR2,541/ton.

The official Chinese manufacturing Purchasing Managers Index came in at 50.2 in October, up from 49.8 in September. The above-50 level indicates an expansion in activity after two straight months below 50. Market participants took this as a bullish demand signal, given that China is the world’s second-largest palm oil consumer after India.

Firm shipments of palm oil from Malaysia to major consumer markets India and the European Union helped underpin prices, as some exporters with refineries overseas are also shipping as much oil as possible over the next few months, as a duty-free CPO export quota will be discontinued at the end of the year.

Still, trade will likely be mixed on Friday, as investors may liquidate positions ahead of U.S. non-farm payrolls data and concerns that Malaysian palm oil stocks might hit another record, a vegetable oil exporter in Jakarta said. Stockpiles rose to a record 2.48 million tons in September due to seasonally higher production.

U.S. soybean futures rose for a third straight day on Thursday, led by strength in Chinese soy markets tied to encouraging economic data in that country, the world's biggest soy importer.  Brent crude prices fell on Thursday on returning North Sea supply and euro-zone concerns, while U.S. gasoline edged higher as support from supply disruptions after super storm Sandy countered any pressure from data showing rising inventories.

Today’s Support and Resistance for benchmark January contract is located around 2495 and 2550 respectively.