FCPO Related News (Fri, Apr 5)

KUALA LUMPUR, April 4 (Reuters) - Malaysian palm oil futures inched lower on Thursday, tracking weakness in competing soy markets, with many investors preferring to stay on the sidelines ahead of key industry data due next week. Industry regulator Malaysian Palm Oil Board (MPOB) will release on Wednesday official figures of March's output levels and palm inventories, an important indicator that could help gauge the direction of the world's most traded edible oil. Cargo surveyor data out earlier this week showed better exports in March than February, marking the first monthly rise in four months, boosted by higher shipments of refined products.

On Thursday, however, investors focused on soybean's fall for a second straight session. Lower soybean prices could wean away demand from palm oil. "The external implications are bearish and that is going to put a lot of influence on the market even though the local front is supportive," said a trader with a foreign commodities brokerage in Kuala Lumpur. By market close, the benchmark June contract on the Bursa Malaysia Derivatives Exchange had edged down 0.2 percent to 2,392 ringgit ($777) per tonne. Prices on Monday fell to 2,335 ringgit, the lowest in nearly three months. Total traded volume stood at 23,044 lots of 25 tonnes each, thinner than the average 35,000 lots seen so far this year. "We're waiting for next week when the MPOB figures will be announced. I'm looking at a short term range of 2,350 to 2,400 ringgit," the Kuala Lumpur trader added. Technical analysis showed palm oil is expected to drop to its Monday low of 2,335 ringgit per tonne, as indicated by its wave pattern and a Fibonacci retracement analysis, said Reuters market analyst Wang Tao.  

Stockpiles in Malaysia, the world's No.2 producer of the tropical oil, currently stand at 2.44 million tonnes. Investors are pinning hopes that the higher exports in March would ease stocks to at least 2.35 million tonnes, despite expectations that production levels could have risen as well.  In other markets, Brent crude oil steadied at around $107 per barrel on Thursday after its biggest fall in five months on signs of faltering economic growth and rising stocks of fuel. In vegetable oil markets, U.S. soyoil for May delivery gained 0.2 percent in late Asian trade. The Dalian Commodities Exchange will be closed until Monday for a public holiday in China.

Today’s Support and Resistance for benchmark June contract is located around 2,335 and 2,390 respectively.