FCPO Related News (Fri, Feb 9)

SINGAPORE, Feb 8 (Reuters) - Malaysian palm oil futures ended just slightly higher in rangebound, thin trade on Friday, posting a marginal weekly gain as traders remained cautious ahead of the Lunar New Year holiday. Market participants were waiting for U.S. Department of Agriculture (USDA) monthly supply and demand reports later in the day, which may show tighter soybean stocks. Malaysian inventory and output data for January from industry regulator the Malaysian Palm Oil Board (MPOB) will give more trading clues when it is released next Wednesday as the country's markets return from the Lunar New Year break. Malaysian financial markets will be closed next Monday and Tuesday for the Lunar New Year holiday, while China's will shut for the week.

At market close, the benchmark April contract on the Bursa Malaysia Derivatives Exchange edged up 0.4 percent at 2,560 ringgit ($833) per tonne. Prices were rangebound between 2,532 and 2,562 ringgit.  Total traded volumes were thin at 16,581 lots of 25 tonnes each, compared to the usual 25,000 tonnes.  For the week, prices edged up 0.1 percent higher, the fourth straight week of gains. Technical analysis shows palm oil's bearish target at 2,510 ringgit remains intact despite its rebound to 2,567 ringgit on Thursday, said Reuters market analyst Wang Tao.

Malaysia's palm inventory levels most likely dropped 2.9 percent to 2.55 million tonnes in January from December's all-time high, the first decline since last June, a Reuters survey showed on Thursday.  The market is also keeping an eye out for Malaysian export data for the first 10 days of the month after cargo surveyors reported a stronger export demand in the last week of January. In other markets, Brent crude climbed towards $118 per barrel on Friday, heading for a fourth weekly gain as robust trade data from China bolstered the outlook for demand, while escalating tensions in the Middle East stoked concerns over supply. In competing vegetable oil markets, U.S. soyoil for March delivery lost 0.2 percent in late Asian trade. The most active September soybean oil contract on the Dalian Commodity Exchange closed 0.5 percent lower.           [Reuters]

Palm oil prices were mostly higher the past few sessions due to optimism that export demand could go up for the tropical oil used in a wide variety of consumer products ranging from biscuits to chocolates and cooking oil. The vegetable oil’s wide price discount to rival soyoil has encouraged "some substitution from expensive soy," a broker in Singapore said.

Unfavorable weather in major soybean growing regions of South America raised concerns about the soy crop and lifted prices, widening its differential to palm oil. Palm oil is currently offered $300-336/ton cheaper to soyoil, physical market data showed. Market participants will be looking forward to January crop data by industry regulator, the Malaysian Palm Oil Board, due Feb. 13. Stockpiles are tipped to ease a tad from December’s all-time high of 2.63 million tons, as export demand has recovered.

Export estimates for the first 10 days of February by cargo surveyors are also scheduled to be released Feb. 13. Inventories likely reached 2.60 million tons, a modest 1.1% drop from a month earlier, while overall palm oil output probably fell 15% to 1.51 million tons, in line with seasonally lower yields and as heavy rain slowed harvesting activities. Asian traders expect limited movements in palm oil next week, as major palm oil consumer China will be closed the whole week for Lunar New Year holidays.

In the cash market, refined palm olein for February shipment was offered at $855/ton and cash CPO for prompt shipment at MYR2440/ton. Open interest on the BMD was 177,268 lots, versus 178,596 lots Thursday. One lot is equivalent to 25 tons. A total of 18,142 lots of CPO were traded versus 30,443 lots Thursday.           [Dow Jones Newswire]