FCPO Related News (Tues, Dec 18)

Crude palm oil futures on Malaysia’s derivatives ended higher Monday but shed some gains since early Asian trade as investors liquidated positions on expectations of weak export data. The new benchmark March contract at Bursa Malaysia Derivatives ended 0.2% higher at 2,350 ringgit a metric ton after trading in a MYR2,332-MYR2,376/ton range.

Cargo surveyor Intertek Agri Services said Saturday that Malaysia exported around 719,817 tons of palm oil in the Dec. 1-15 period, down 6.4% from a month earlier. Another surveyor, SGS (Malaysia) Bhd., put Dec. 1-15 palm oil shipments at 734,571 tons, a decline of 3.3% from the same period a month earlier. Sentiment also turned cautious as investors turned their focus to the uncertainty surrounding the U.S. fiscal cliff, a bevy of tax increases and government spending cuts slated to begin in January.

However, market participants are optimistic that shipments of the tropical oil will surge in the coming months and support palm oil prices due to an expected recovery in demand from China because of the Lunar New Year festivities. Robust demand for soybeans and soy products from China has already boosted prices of soybeans and soyoil, a Kuala Lumpur-based trader said. January soyoil on the Chicago Board of Trade settled 2% higher Friday at 49.99 cents a pound; it was up another 0.5% when trade on the BMD ended.

Meanwhile, Malaysia has set its export tax on crude palm oil for January at zero percent for CPO market prices of less than 2,250 ringgit/ton, free on board, the Malaysian government said in a circular Monday. The reference price is MYR2,147.81/ton. A zero tax rate will boost shipments from the world’s second-largest palm oil producer and support prices, participants said. Open interest on the BMD was 186,314 lots versus 197,356 lots Friday. One lot is equivalent to 25 tons. A total of 30,886 lots of CPO were traded versus 44,840 lots Friday.           [Dow Jones Newswire]

Malaysian palm oil futures inched up on Monday, riding on rival soybean oil's gains after U.S. soy crushing data sent soybeans to a six-week peak. Chicago soybeans hit their highest since Nov. 8 after data from the National Oilseed Processors Association showed U.S. soybean processors crushed the most soybeans in almost three years and on higher demand especially from top buyer China.

Gains were limited, however, as concerns over high stockpiles remained, especially as the latest data pointed to signs of slowing exports, although traders said easing production could help bring down stock levels. "The market is up a bit on the back of Dalian and Chicago soybean oil," said a trader with a foreign commodities brokerage in Malaysia. "Malaysian palm production should come down this month, so inventory should probably go down a bit."     

In a bearish sign for palm oil, Brent crude edged below $108 a barrel on Monday, drawing support from a brighter economic outlook for top energy consumer China, although investors remained skittish as U.S. talks to avert a year-end "fiscal cliff" dragged on. In other vegetable oil markets, U.S. soyoil for January delivery had edged up 0.5 percent. The most active May 2013 soybean oil contract on the Dalian Commodity Exchange closed 1.5 percent higher.           [Reuters]

Today’s Support and Resistance for benchmark March contract is located around 2,320 and 2,400 respectively.