FCPO Related News (Fri, Dec 21)

Exports in the first twenty days of the month fell  1.9  percent compared to the period in November, according to Intertek. According to another cargo surveyor Societe Generale de Surveillance December 1-20 export is up 0.5%.

KUALA LUMPUR, Dec 20 (Reuters) - Malaysian palm oil futures edged lower on Thursday as technical selling weighed on prices, although losses were curbed by investor optimism that a new export tax next year will boost shipments of the crude grade and cut stocks. Malaysia, the world's No.2 producer of the tropical oil, has faced record high stocks since September, which seen prices fall 27 percent this year -- the worst annual performance since 2008.

The low prices have enabled the Malaysian government to set the crude palm oil export tax for January at zero percent, which could see Malaysia grab more market share from top producer Indonesia. Traders are even expecting February taxes to remain at zero given the price downtrend. "Today the market is still trying to find a base. Technically, they are trying to set it down below 2,300 ringgit per tonne," said a trader with a foreign commodities brokerage. "(But) stocks will reduce very fast starting next year because now everybody can ship crude palm oil," he added.

By the midday break, the benchmark March contract on the Bursa Malaysia Derivatives Exchange inched down 0.6 percent to 2,318 ringgit ($757) per tonne. Total traded volumes stood at 16,813 lots of 25 tonnes each, higher the usual 12,500 lots as investors went for a technical sell down of the market. Technical analysis showed that a bearish target of 2,217 ringgit per tonne has been established for palm oil, said Reuters market analyst Wang Tao.

Seasonally slowing production towards the year end could give additional support to Malaysia's palm oil prices in the first quarter of 2013, analysts say. "The first quarter is always the "low production" season. With the new tax structure kicking in, it should help stimulate demand," said James Ratnam, an analyst with TA Securities in Kuala Lumpur. "I expect prices to go up in the first quarter, maybe to about 2,800-2,900 ringgit per tonne. But we have to see whether stocks can come down to a more manageable level," he added.

Brent crude slipped on Thursday to trade around $110 a barrel as investors took profits after recent gains as talks to avert a U.S. fiscal crisis stalled, stoking worries about demand in the world's biggest oil consumer. In other competing vegetable oil markets, U.S. soyoil for January delivery rose 0.5 percent early Asian trade despite declines in the wider soy complex. Soybean prices have come under pressure after China scrapped a contract for 300,000 tonnes of U.S. soy recently. The most active May 2013 soybean oil contract on the Dalian Commodity Exchange fell 1.5 percent.

Today’s Support and Resistance for benchmark March contract is located around 2,315 and 2,360 respectively.