FCPO Related News (Thurs, Jan 3)

SINGAPORE, Jan 2 (Reuters) - Malaysian palm oil futures rose to a 2-month high on Wednesday as the United States averted a fiscal crisis and as traders look forward to better demand for the edible oil on a lower export tax structure. Investors were relieved after U.S. lawmakers approved a deal preventing huge tax hikes and spending cuts that would have pushed the world's largest economy into recession and hurt global commodity demand.

Market players were also betting on Malaysia's zero export tax in January to spur demand and help clear record-high stocks. "The zero export tax will be long-term positive. But the short-term impact may be neutralised by tighter edible oil import rules by China," said Alan Lim Seong Chun, research analyst with Malaysia's Kenanga Investment Bank. Stricter quality measures set to be enforced by Beijing on Jan. 1 could hurt demand for palm oil. At market close, the benchmark March contract on the Bursa Malaysia Derivatives Exchange gained 2.7 percent to 2,503 ringgit ($825) per tonne, off its intraday high at 2,524 ringgit, a level last seen since Nov. 2. Total traded volumes stood at 33,431 lots of 25 tonnes each, higher than the usual 25,000 lots.

Brent crude oil hit a one-month high above $112 per barrel on Wednesday after the U.S. Congress approved a deal to avert a fiscal crisis, while promising data from top energy consumer China also supported prices. Soybean oil markets in the U.S. and China were closed for the New Year holiday.           [Reuters]

Amid a lack of fresh fundamental cues, market participants monitored external market developments. After a series of negotiations, the U.S. House of Representatives approved a tax bill that raises the tax-rate on couples with an annual income above $450,000. The bill will also extend a variety of expiring business and individual tax breaks. "News about floods in peninsular Malaysia has been well-flagged. There are no new developments, so what you can do is look at other markets," a commodities broker at a Kuala Lumpur-based bank says. "In coming sessions however, investors are likely to monitor export trends to see whether Malaysia’s new export tax change has helped to boost shipments and flush out excess stocks," the broker said.

Palm oil stockpiles at the end of November rose to an all-time high of 2.56 million tons and investors are on the lookout for a monthly crop data by the Malaysian Palm Oil Board due next week.              [Dow Jones Newswire]

Today’s Support and Resistance for benchmark March contract is located around 2,460 and 2,520 respectively.