FCPO Related News (Tues, Mar 12)

KUALA LUMPUR, Malaysia–Crude palm-oil futures on Malaysia’s derivatives exchange ended little changed on Monday after trading both ways as investors digested crop data from industry regulators. The benchmark May contract at Bursa Malaysia Derivatives ended 2 ringgit higher at 2,450 ringgit a metric ton after moving in a MYR2,433-MYR2,461 range.

The U.S. Department of Agriculture in a report this past Friday raised its stockpile estimate for soybeans which could also lift supplies of soyoil. "News of higher soyoil inventory should be slightly negative for CPO as both commodities are commonly used as substitutes," Kenanga Investment Bank plantation analyst Alan Lim Seong Chun said in a report. However, Mr. Lim sees limited downside in palm oil because of easing stockpiles in Malaysia. 

Industry regulator the Malaysian Palm Oil Board said end-February inventories fell 5.2% from the previous month to 2.44 million tons–the lowest in six months as output continues to dip on seasonal factors. February output fell 19% from the previous month to 1.30 million tons, according to MPOB.

Some market participants caution that activity will stay choppy this week on anemic export demand and mixed technicals cues. "Generally investors prefer to sit on sidelines in the near term and wait for prices to break out convincingly from current ranges," Kuala Lumpur-based LT International head trader Chandran Sinnasamy said. Cargo surveyor Intertek Agri Services said palm-oil export demand from Malaysia–the world’s No. 2 producer–was little changed during the March 1-10 period at 441,025 tons. SGS (Malaysia) Bhd., another surveyor, said shipments rose 2.2% only from the previous month to 438,549 tons during the period.

In the cash market refined palm olein for March was offered at $825/ton while cash CPO for prompt shipment was offered at MYR2,440/ton. Open interest on the BMD was 166,475 lots versus 167,859 lots Friday. One lot is equivalent to 25 tons. A total of 31,687 lots of CPO were traded versus 29,454 lots Friday.

Today’s Support and Resistance for benchmark May contract is located around 2,420 and 2,470 respectively.