FCPO  Related News (Tuesday, Nov 20)

Crude palm oil futures on Malaysia’s derivatives exchange ended higher Monday, tracking gains in Chicago soyoil and stronger regional equities as hopes for a resolution to the U.S. fiscal cliff boosted sentiment. The benchmark February contract at Bursa Malaysia Derivatives ended 1.2% higher at 2,459 ringgit a metric ton after rising as much as 2.1% to MYR2,479/ton, the highest since Nov. 2. December soyoil on the Chicago Board of Trade was trading 1.1% higher at 47.58 cents a pound at 1121 GMT.

Market sentiment improved across asset classes following remarks by U.S. House Speaker John Boehner on Friday that discussions between policymakers to avoid the fiscal cliff of tax hikes and spending cuts were constructive, a trading executive at a Kuala Lumpur-based bank said, although he added that "palm oil’s upside was capped by weak SGS export data."

Cargo surveyor SGS (Malaysia) Bhd. said Nov. 1-15 palm oil exports eased 1.2% from the same period in the previous month to 759,452 tons, while another surveyor–Intertek Agri Services–put Nov. 1-15 exports at 769,087 tons, a decline of 0.1%. Still, market participants expect overall export demand in November to remain firm, as exporters with overseas refineries are moving crude palm oil cargoes out of the country before a tax-free CPO export quota is discontinued by the end of the year.           [Dow Jones Newswire]

Palm oil’s climb to the highest level in more than two weeks is also attributed to crude oil’s rise on concern that Middle East unrest will disrupt supplies, increasing the appeal of vegetable oils as biofuel feedstock. Oil advanced for a second day in New York after Israeli Prime Minister Benjamin Netanyahu said yesterday that the army is prepared to “significantly widen the operation,” raising concern Middle East unrest will disrupt oil supplies. Israel will continue to attack Gaza and may intensify operations, Defense Minister Ehud Barak said. “The rising tension in the Middle East is pushing up crude oil prices and palm oil is having some spillover effects from this,” Ker Chung Yang, an analyst at Phillip Futures Pte, said by phone from Singapore. “On the macro side, the sentiments have recovered quite a bit as the discussion on the deadlock of the fiscal cliff is going well.”           

Indonesia, the biggest palm oil producer, may keep its export tax on crude palm oil at 9  percent in December, while the base-export price may be cut to $760 a ton, Susanto, head of marketing at the Indonesian Palm Oil Association, said today. Soybean oil for delivery in January gained 1.2 percent to 47.92 cents a pound on the Chicago Board of Trade. Soybeans for January delivery climbed 0.9 percent to $13.9525 a bushel. Palm oil for May delivery rose 1.5 percent to end at 6,772 yuan ($1,086) a ton on the Dalian Commodity Exchange. Soybean oil for the same month gained 1 percent to close at 8,450 yuan a ton.           [Bloomberg]

Today’s Support and Resistance for benchmark February contract is 2,450 and 2485 respectively.