FCPO Related News (Mon, Feb 4)

Crude palm oil futures on Malaysia’s derivatives exchange rose Thursday to their highest in nearly three months, buoyed by signs of improving export demand and weather-related issues in key soy-growing areas of Argentina, market participants said Thursday.

The benchmark April contract at Bursa Malaysia Derivatives ended 1.9% at 2,557 ringgit a metric ton, after rising as much as 3.3% to MYR2,593/ton, the highest since Oct 25. Palm oil prices is up 4.8% for the month, driven by worries about floods in parts of oil-palm growing regions in Malaysia and drier weather forecast in South America. Traders expect bumper soy harvests in South America in coming months to help replenish tight global soy supplies, but drier weather in Argentina have raised concerns about the crop, lifting prices and widening soy’s premium to the cheaper palm oil.

Both soyoil and palm oil compete for similar export destinations and a wide price gap of $300/ton are driving price-sensitive buyers to buy palm oil cargoes for domestic requirements. "Exports in the second half have improved tremendously compared with the first 15 days of January. So it is likely, palm oil exports could recover in the coming weeks and help to flush out excess stockpiles (from Malaysia) next month," a trading executive at a foreign brokerage firm in Kuala Lumpur said.

Cargo surveyor Intertek Agri Services said January exports fell 7% from a month earlier to 1.46 million tons while another surveyor SGS (Malaysia) Bhd., put shipments at 1.42 million tons, a decline of 6.4%. Open interest on the BMD was 213,363 lots, versus 172,963 lots Wednesday. One lot is equivalent to 25 tons. A total of 45,100 lots of CPO were traded versus 24,129 lots Wednesday.           [Dow Jone Newswire]

Today’s Support and Resistance for benchmark April contract is located around 2,548 and 2,600 respectively.