FCPO Related News (Thurs, Jan 10)

Malaysia Jan 1-10 Palm Oil exports 373,462, down 25% from a month earlier -  Intertek Agri Services, ie, within lower end of market expectations of 370,000-400,000 tons. Another surveyor, SGS (Malaysia) Bhd., is expected to issue its estimate for Jan. 1-10 exports later in the day.

SINGAPORE, Jan 9 (Reuters) - Malaysian palm oil futures rebounded from a more-than-two-week low on Wednesday, snapping four consecutive days of losses, although gains were limited by investor caution ahead of a slew of key industry data this week. Traders are uncertain whether overseas buyers will increase purchases after Malaysia set a zero percent crude palm oil export tax in January, especially as China is this month introducing stricter rules on edible oil imports.

The benchmark March contract on the Bursa Malaysia Derivatives Exchange gained 1 percent to close at 2,413 ringgit ($794) per tonne. Prices dropped to a low of 2,382 ringgit on Tuesday, a level last seen on Dec. 21. Total traded volume stood at 37,074 lots of 25 tonnes each, higher than the usual 25,000 lots. Technical analysis showed palm oil was expected to consolidate in a zone of 2,371 to 2,407 ringgit for one trading session before sliding further towards 2,334 ringgit, Reuters market analyst Wang Tao said. Market participants will also focus on Malaysia's December palm oil stocks and output data on Thursday.

In related markets, Brent futures steadied below $112 per barrel on Wednesday as investors awaited Chinese trade data. U.S. corporate earnings and the outcome of a European Central Bank policy meeting to glean insights into the health of the world's biggest economies. In competing vegetable oil markets, U.S. soyoil for March delivery edged up 0.2 percent in late Asian trade. Investors in agricultural markets are taking positions ahead of a U.S. Department of Agriculture supply-demand report due to be released on Friday.           [Reuters]

Crude palm oil futures on Malaysia’s derivatives exchange recovered Wednesday after three straight sessions of losses on the back of short covering and technical buying. Still, palm oil’s upside remains limited as export demand during the January 1-10 period is widely expected to be lower. "The line-up of vessels at Malaysian ports is weak, seeing as there are limited ships destined for China after the country imposed stricter quality control measures for imported cooking oils on Jan. 1," an executive at a Malaysia-based shipping firm said. The executive also said shipments of refined palm oil, refined palm olein and refined palm stearin were affected by the rule as these refined grades are generally used to make a wide variety of consumer products ranging from frying oil to biscuits and margarine.

China, which consumes more than 6 million tons of palm oil annually, said last year that it won’t accept imports of edible oils containing excessive peroxide or stearic acid from Jan. 1. The country usually meets its palm oil needs from major producers Indonesia and Malaysia. "At the moment, most exporters are in a wait-and-see mode. Seeing as it is a new rule, there are bound to be teething problems, so not many are keen to take on this kind of risk. The modus operandi for now is to ship cargoes when China really needs palm oil," a cargo surveyor in Penang said. However, shipments may pick up in the second half of the month as Malaysia’s zero export tax on crude palm oil may boost shipments and deplete stocks in the country, the Penang-based executive said.

Heavy rains that have caused floods in recent weeks in Indonesia and Malaysia could disrupt palm oil supplies as inclement weather likely hampered harvesting activity. Several areas in Indonesia’s Sulawesi province have been hit by continuous downpours since the beginning of the year that triggered flash floods in several areas. But the impact will likely be nominal as Indonesia’s major palm oil growing provinces, Sumatra and Kalimantan, have been spared so far, Fadhil Hasan, executive director at the Indonesian Palm Oil Association, said.

Open interest on the BMD was 169,597 lots, versus 170,094 lots Tuesday. One lot is equivalent to 25 tons. A total of 37,074 lots of CPO were traded versus 42,454 lots Tuesday.

Today’s Support and Resistance for benchmark March contract is located around 2,380 and 2,440 respectively.