FCPO Related News (Tues, Feb 26)

SINGAPORE, Feb 25 (Reuters) - Malaysian palm oil futures slid to their lowest in nearly a month on Monday, tracking steep falls in other vegetable oil markets, although better-than-expected export numbers helped rein in losses. The most active U.S. soyoil contract for May delivery  was down 0.7 percent in late Asian trade after losing almost 2 percent on Friday, weighed down by weak soybean prices due to improved prospects for South American supply.

Investors were also reacting to falls in China's most active September soyoil contract, which tumbled more than 3 percent to its lowest since mid-November, hurt by concerns over demand growth after a slip in the country's manufacturing output index. By 1011 GMT prices had slid by 3.2 percent. "The market is tracking the U.S. and Dalian soybean oil markets. All these are external factors," said a trader with a foreign commodities brokerage in Kuala Lumpur.

The benchmark May contract on the Bursa Malaysia Derivatives Exchange had eased 2.5 percent to 2,471 ringgit ($797) per tonne by Monday's close, but were off an earlier low of 2,461 ringgit, the lowest level since Jan. 29. Total traded volume stood at 37,569 lots of 25 tonnes each, higher than the usual 25,000 lots, as traders rushed to liquidate positions. Technicals showed Malaysian palm oil is expected to revisit its Dec. 13, 2012 low of 2,217 ringgit per tonne over the next four weeks, as a long-term downtrend has resumed, said Reuters market analyst Wang Tao.

Investor sentiment picked up, however, after cargo surveyor Intertek Testing Services reported a 4.6 percent increase in Malaysian palm oil exports to 1,153,852 tonnes for the Feb. 1-25 period from a month ago. Another cargo surveyor, Societe Generale de Surveillance, reported exports in the same period picked up 2.7 percent, buoyed by higher shipments to Europe and India. "The numbers were slightly better than expected and will probably stay at this pace towards the end of the month on a last-minute push to ship out tax-free crude palm oil," said a dealer with a foreign commodities brokerage in Malaysia.

Malaysia, the world's No.2 producer of the edible oil, will raise February's zero percent export tax to 4.5 percent in March after keeping it unchanged for two months. Traders are counting on improving palm oil exports and  seasonally slowing output in the world's No. 2 producer of the edible oil to help ease stockpiles that stood at 2.58 million tonnes in January. In other markets, Brent crude wiped out early losses to trade above $114 per barrel on Monday as a firmer euro supported prices, although worries that a retreat in China's manufacturing activity would dent demand from the world's top energy consumer capped gains.          [Reuters]

Market sentiment is weak because of the bleak global economic outlook, exacerbated further by bearish data from China on Monday, a Kuala Lumpur-based trading executive said. The preliminary HSBC China Manufacturing Purchasing Managers Index fell to 50.4 in February compared with a final reading of 52.3 in January. This in turn pressured prices of many commodities, including those of palm oil, traders said.

Rainfall over the past week and forecasts of continued favorable weather this week in the world's top exporter of soyoil, Argentina, weighed on prices of both soyoil and palm oil, as did forecasts of a record soybean crop and rising soybean inventories in the U.S., they said. On Friday, the U.S. Department of Agriculture forecast soybean stocks to jump to 250 million bushels at the end of the 2013-14 marketing year, compared with its projection of 125 million bushels at the end of the 2012-13 year, which ends Aug. 31.

Investors keenly await an industry conference next week in Kuala Lumpur, where eminent analysts Dorab Mistry and James Fry will likely present their outlook for palm oil for 2013. Prices could easily edge toward the MYR2,500-MYR2,600/ton band if analysts are bullish, a second Kuala Lumpur-based trading executive said. Open interest on the BMD was 201,834 lots versus 167,287 lots Friday. One lot is equivalent to 25 tons. A total of 37,569 lots of CPO were traded versus 20,589 lots Friday.           [Dow Jones Newswire]

Today’s Support and Resistance is located around 2,430 and 2,480 respectively.