FCPO Related News (Thurs, Dec 20)

Crude palm oil futures on Malaysia’s derivatives exchange fell Wednesday after trading in a tight range as investors exercised caution ahead of key export data releases Thursday. The benchmark March contract on Bursa Malaysia Derivatives ended 0.5% lower at 2,331 ringgit a metric ton, after moving in a MYR2,313-MYR2,338/ton range.

Expectations of rising palm oil inventories due to lackluster global demand amid seasonally high production in top producers Indonesia and Malaysia weighed on palm oil prices, a Kuala Lumpur-based trader said. The bearish sentiment was also accentuated by fears of slowing demand for soybeans, another Kuala Lumpur-based trader said. A report by the U.S. Department of Agriculture late Tuesday said China, the world’s largest soybean importer, cancelled a previous agreement to buy 300,000 tons of U.S. soybeans. January soyoil futures on the Chicago Board of Trade settled 1.2% lower at 49.17 cents a pound Tuesday reflecting the sharp 2% slide in CBOT soybeans Tuesday.

However, losses were tempered by fears that rains in Argentina, the world’s third-largest soybeans producer, could delay soybean crop plantings further, the second trader said, noting that this was also positive for CPO prices. Macroeconomic factors –signs that U.S. lawmakers are nearing a deal to avert the fiscal cliff and an upgrade in Greece’s credit rating by Standard & Poor’s Tuesday-also supported palm oil prices, he said.

Malaysia’s palm oil export data for the Dec. 1-20 period from cargo surveyors Intertek Agri Services and SGS (Malaysia) Bhd., due Thursday, will also impact prices, traders said. Market participants project Malaysia’s Dec. 1-20 palm oil shipments at around 1 million tons, a drop of 2% from the same period a month earlier. Any significant deviation in export figures will likely prompt investors to adjust their positions accordingly. Open interest on the BMD was 181,727 lots, versus 183,945 lots Tuesday. One lot is equivalent to 25 tons. A total of 25,722 lots of CPO were traded versus 30,911 lots Tuesday.

Today’s Support and Resistance for benchmark March contract is located around 2,280 and 2,330 respectively.