FCPO Related News (Tues, Feb 5)

Palm oil advanced for a fourth day, trading near a three-month high, on speculation that Malaysian stockpiles will drop from a record as shipments expand after the second-largest producer set a zero export tax. The contract for delivery in April gained as much as 1.4 percent to 2,592 ringgit ($835) a metric ton on the Malaysia Derivatives Exchange, before trading at 2,577 ringgit at 12:22 p.m. in Kuala Lumpur. Prices reached 2,593 ringgit on Jan. 31, the highest level for the most-active contract since Oct. 25.

Exports from Malaysia climbed 11 percent to 1.46 million tons in January from a year earlier, according to data from Intertek on Jan. 31. Malaysia has maintained the zero-tariff policy for a second month in February, while Indonesia, the biggest producer, raised taxes on crude exports to 9 percent from 7.5 percent. Palm oil has rallied 16 percent from the close on Dec. 13, the lowest settlement since November 2009.

Investors are “speculating exports are going to be higher this next one or two months,” Benny Lee, a market strategist at Jupiter Securities Sdn., said by phone in Kuala Lumpur. India and China, the biggest users, were expected to buy, he said. Lower production will also help to draw down inventories, which were estimated at 2.5 million to 2.6 million tons last month, with steeper falls seen in February and March, Sebastian Tobing, an analyst at UBS AG in Indonesia, wrote in a report dated Jan. 31. Inventories reached a record 2.63 million tons at the end of December, according to the Malaysian Palm Oil Board. Output is typically lowest in the first two months of the year.

Refined palm oil for delivery in September gained as much as 0.7 percent to 7,252 yuan ($1,164) a ton on the Dalian Commodity Exchange, the highest price for the most active contract since Oct. 26, before trading at 7,230 yuan at 11:30 a.m. Soybean oil for delivery in the same month rose 0.7 percent to 8,914 yuan a ton. Soybeans for March delivery climbed 0.6 percent to $14.83 a bushel on the Chicago Board of Trade, while soybean oil for March delivery gained 0.7 percent to 53.35 cents a pound.          [Bloomberg]

SINGAPORE, Feb 4 (Reuters) - Malaysian palm oil futures edged up on Monday and were set for a fourth straight session of gains, tracking higher soybeans and soybean oil on persistent concerns over dry weather in Argentina. U.S. soybeans were trading near a six-week high despite scattered showers in Argentina in recent weeks that have brought some relief to thirsty 2012/13 soybean crops, as many areas are still suffering parched conditions, the Argentine agriculture ministry said.

Lower soybean and soybean oil production could shift some demand to the cheaper palm oil, which in turn may help ease record stocks for the tropical oil. "It's the South American weather that is serving as the pull factor," said a dealer with a foreign commodities brokerage in Kuala Lumpur. "Locally, with a continuous wide discount in cash crude palm oil to futures, sentiment is still cautious as traders await the expected high stocks for January."

By the midday break, the benchmark April contract on the Bursa Malaysia Derivatives Exchange had edged up 0.7 percent to 2,575 ringgit ($831) per tonne. Prices hit a 3-month high at 2,593 ringgit on Thursday. Total traded volumes stood at 12,129 lots of 25 tonnes each, thinner than the usual 12,500 tonnes. Technical analysis shows palm oil is expected to keep rising to 2,639 ringgit, as it has cleared resistance at 2,567 ringgit per tonne, said Reuters market analyst Wang Tao.

Traders are shifting their focus to Malaysia's palm oil stocks for January, hoping that slowing production and better-than-expected exports will bring down record stocks of 2.63 million tonnes recorded for December. Malaysian palm exports in January fell 7 percent from a month ago, said cargo surveyor Intertek Testing Services, while another surveyor, Societe Generale de Surveillance, reported a 6.4 percent fall. That represented an improvement from the double-digit decline seen in the first 20 days of January, as worries eased over China's stricter regulation on edible oil imports after the first cargo from Malaysia was discharged.

Brent crude steadied above $116 per barrel on Monday, holding near a more than four-month high, as data from top consumers the United States and China reinforced a view that the global economy was headed for a modest uptick this year. Other vegetable oil markets also advanced on Argentine weather concerns. U.S. soyoil for March delivery gained 0.8 percent in early Asian trade. The most active September soybean oil contract on the Dalian Commodity Exchange edged up 1 percent near a 3-month high.           [Reuters]

Today’s Support and Resistance for benchmark April contract is located around 2,534 and 2,560 respectively.