FCPO Related News

KUALA LUMPUR, Oct 11 (Reuters) - Malaysia has approved a plan to cut crude palm oil (CPO) export taxes from 23 percent per tonne, a government official said on Thursday, as the world's No.2 producer tries to grab market share from top producer Indonesia. Malaysia's cabinet will discuss the size of the cut in CPO export taxes on Friday, the commodities ministry official said. Commodities Minister Bernard Dompok has proposed for duties to be cut to 8-10 percent.

"There may or may not be a decision but the government is actively working on it. It will be a key focus of discussion for tomorrow," said the official, who declined to be named because he is not authorised to speak to the media. The cut may boost Malaysia's crude palm oil exports and give short-term support to prices that have lost 22 percent so far this year as a slowdown in shipments has led to a rise in inventories.

Malaysia's palm oil stocks hit a record of nearly 2.5 million tonnes last month as output reached an all time high and export growth slowed considerably, piling pressure on the government to act to prop up prices. Slower Malaysian exports were due mostly to competing Indonesian processors offering cheaper refined palm oil cargoes after Jakarta cut its own export taxes for processed grade last year to boost margins and lure investment.

Overnight weakness in CBOT soyoil futures amid expectations the USDA will raise its soy harvest estimate may weigh on BMD CPO futures. "We think October inventory should be higher, rising to another record of 2.6 million to 2.8 million tons before declining in November," when peak production cycle tapers off, says Kenanga Investment plantation analyst Alan Lim Seong Chun; but he notes palm oil's wide price discount to rival soyoil could lend support and underpin prices.

Crude palm oil futures on Malaysia’s derivatives exchange on Wednesday continued to rally from a two-year low hit a week ago, mirroring gains in CBOT soyoil. The benchmark December contract at Bursa Malaysia Derivatives ended up 0.8% at 2,457 ringgit a metric ton after rising as much as 1.8% to MYR2,483/ton, the highest level since Oct. 1.

The benchmark has risen in five of the last six trading days after bottoming out at MYR2,230/ton last Wednesday. Palm oil plunged to a three-year low last week of MYR2,230 a metric ton, weighed by concern about contract renegotiations and cargo defaults at a time when global vegetable oil supplies are rising due to seasonally higher production in Southeast Asia and the fast pace of the harvest of the U.S. Midwest soy crop.

Last week’s decline reflected tepid export demand amid rising global vegetable oil supplies due to seasonally higher production in Southeast Asia and fast-paced harvesting of soybeans in the U.S. Midwest. The rally has been on the back of technical-driven buying interest and expectations of a revision to Malaysia’s system of export taxes on CPO. 

[ Dow Jones Newswire ]

Palm oil stock levels at the end of September rose 17% from the previous month to a record high of 2.48 million tons, the Malaysian Palm Oil Board said Wednesday in a monthly report. This was on the high end of estimates ranging from 2.43 million to 2.50 million tons by industry executives and analysts. As the forecast was "flagged well in advance," prices were relatively resiliant, a trading head at a Kuala Lumpur-based brokerage said. Benchmark December CPO started moving  up yesterday  to reach the day’s high of  2,483 after MPOB data was revealed to be within expectations. A rise in stocks higher than expectation would have added more selling pressure while a lower than expectation stock would likely push palm oil price upward. Investors await a monthly crop report from the U.S. Department of Agriculture, due Thursday.

Palm oil prices will likely edge higher next year, as inventories could be drawn down when the peak production season in Southeast Asia tapers off, analysts at Nomura equity research said. "We don’t believe a significant amount of demand destruction for palm oil will take place," said analyst Tanuj Shori, who expects Chinese and Indian refiners to switch to palm oil due to a wide price gap between palm and soyoil. Technical analysis showed palm oil is expected to end its rebound at or below 2,503 ringgit per tonne, and fall towards 2,230 thereafter, Reuters market analyst Wang Tao said.

Today’s Support and Resistance is located around 2,420 and 2,500 respectively.

FKLI Related News

U.S. stocks fell, sending the Standard & Poor’s 500 Index to the lowest level in a month, as Alcoa (AA) Inc.’s forecast fueled concern over corporate earnings and global economic growth. Alcoa, the largest U.S. aluminum producer, lost 4.6 percent after cutting its outlook for global demand for the metal. The S&P 500 slipped 0.6 percent to 1,432.56 in New York. The benchmark gauge fell 1 percent yesterday, and is down 2 percent over four days. The Dow Jones Industrial Average lost 128.56 points, or 1 percent, to 13,344.97.

Global equities slumped as China car sales unexpectedly shrank for the first time in eight months. French President Francois Hollande and Spanish Prime Minister Mariano Rajoy called on nations such as Germany to honor commitments on a banking union made at the European Council in June. The International Monetary Fund said European banks may need to shrink assets if policy makers fall short of pledges to stem the fiscal crisis. Asian stocks dropped, with the regional benchmark index heading for a fourth day of decline, after Japanese machinery orders fell and Standard & Poor’s downgraded Spain’s debt rating.

[Bloomberg]

d with a 1.2% loss on Wednesday, pressured by a weaker oil-

FKLI Spot Month Contract opened lower this morning following an extended decline on Wall Street Wednesday amid concerns over U.S. corporate earnings and a global economic slowdown. Today’s Support and Resistance is located around 1,655 and 1,665 respectively.

FCPO Related News

Benchmark December CPO opened lower this morning as some investors were still on the sidelines before the September palm oil crop report by MPOB, but started moving  up to reach the day’s high of  2,483 after MPOB data was revealed to be within expectations.  End-September palm oil stockpiles rose 5.8% from end-August to a record high of 2.48 million tons, within market expectations of 2.43 million-2.50 million tons. Malaysia's production of crude palm oil in September rose 20% from August to 2 million metric tons, the Malaysian Palm Oil Board said in a monthly report Wednesday.

Malaysia's Oct. 1-10 palm oil exports fell 8.7% from the same period a month earlier to 420,758 metric tons, cargo surveyor SGS (Malaysia) Bhd. said Wednesday. Malaysia exported 460,939 tons during the Sept. 1-10 period. Another surveyor, Intertek Agri Services, put Oct. 1-10 palm oil exports at 448,624 tons, a decline of 1% from the previous month. Investors are now looking toward another crop report by the U.S. Department of Agriculture Thursday.

Crude palm oil futures on Malaysia’s derivatives exchange ended up Tuesday, tracking gains in Chicago soyoil and as investors covered short positions after last week’s tumble. Palm oil plunged to a three-year low last week of MYR2,230 a metric ton, weighed by concern about contract renegotiations and cargo defaults at a time when global vegetable oil supplies are rising due to seasonally higher production in Southeast Asia and the fast pace of the harvest of the U.S. Midwest soy crop. The benchmark December contract at Bursa Malaysia Derivatives ended 3% higher at 2,438 ringgit a metric ton after moving in a MYR2,392-MYR2,455/ton range.

Market participants also adjusted positions to reduce risk ahead of the MPOB report and the monthly crop report by USDA. Palm oil prices will likely edge higher next year, as inventories could be drawn down when the peak production season in Southeast Asia tapers off, analysts at Nomura equity research said. "We don’t believe a significant amount of demand destruction for palm oil will take place," said analyst Tanuj Shori, who expects Chinese and Indian refiners to switch to palm oil due to a wide price gap between palm and soyoil.

In a bullish sign for palm oil, oil rose on Tuesday after two days of losses, with tensions in the Middle East and the risk of supply disruptions outweighing concerns about sluggish global demand. In other vegetable oil markets, U.S. soyoil for December delivery gained 1.3 percent in late Asian trade. CBOT December soyoil futures were last trading 1.5% higher at 51.64 cents a pound at 1053 GMT.

[Dow Jones Newswire]

Today’s Support and Resistance for Benchmark December is located around MYR2,425/ton and MYR2,480/ton.  

FKLI Related News

Stocks tumbled after a disheartening economic-growth forecast from the International Monetary Fund put investors on the defensive before the start of the corporate-earnings season. The Dow Jones Industrial Average fell 110.12 points, or 0.8%, to 13473.53. Tuesday's drop for the blue chips, the steepest in more than six weeks, coincided with the five-year anniversary of Dow's all-time high. The benchmark notched its record close, 14164.53, on Oct. 9, 2007, 4.9% above Tuesday's close. The Standard Poor's 500-stock index fell 14.40 points, or 1%, to 1441.48, as consumer discretionary and tech stocks pinned down the index most.

The technology-oriented Nasdaq Composite Index dropped 47.33, or 1.5%, to 3065.02, its sharpest single-session slide since June 25. Intel and Microsoft were the worst-performing stocks on the Dow industrials, each falling about 1.7%. Analysts at Sanford C. Bernstein cut Intel's stock-recommendation rating, noting soft demand for personal computers. Apple closed down 0.4%.   Alcoa kicked off the reporting season when the aluminum producer released its quarterly earnings in the minutes after markets closed. The company posted adjusted earnings that beat estimates, though it recorded a quarterly loss.

Aggregate profits for S&P 500 companies are expected to register declines for the first time in nearly three years and concerns about waning global growth were echoed overnight by the IMF, which cut its forecast for economic expansion to 3.3% from 3.5% in 2012. "What everyone is pondering is the significance of the global slowdown," said John De Clue, global investment strategist at U.S. Bank. "You're seeing it a bit in tech today because they have so much international exposure." In U.S. economic news, the National Federation of Independent Business small-business optimism index slipped in September from August, missing the median among estimates by economists.

European markets also fell. The Stoxx Europe 600 dropped 0.5% as German Chancellor Angela Merkel arrived in Athens to meet Greek Prime Minister Antonis Samaras. Ms. Merkel reiterated a desire for Greece to remain part of the euro zone as thousands of protesters demonstrated Ms. Merkel's first visit to Greece since that country's debt-crisis began. China's Shanghai Composite surged 2% after the People's Bank of China injected a large amount of liquidity into the banking system. Japan's Nikkei Stock Average dropped 1.1% when investors returned from a three-day weekend.

Front-month crude-oil futures climbed 3.4% to $92.39 a barrel, while October gold futures fell 0.6% to $1,763.00 a troy ounce. The dollar rose against the euro but fell against the yen. Yields on benchmark 10-year Treasury bonds fell to 1.720% as demand rose.

 [ The Wall Street Journal ]

The benchmark KLCI opened lower today at 1660.77, tracking declines on Wall Street, following the IMF's downgrade of growth forecasts. ; The FBM KLCI surged last week  to a new high at 1,668 level, marking the new historical high since the establishing of Bursa securities exchange. The impulsive rally came mostly from local fund Buying activities on various blue chips stocks last week. Today’s Support and Resistance for FKLI spot month contract is located around 1655 and 1661 respectively.

FCPO Related News

Crude palm oil futures on Malaysia’s derivatives exchange ended lower Monday, reflecting ample vegetable oil supplies and weak demand. Also weighing on palm oil prices are concerns that any contract renegotiation or cargo defaults by importers in India could add to inventories in Malaysia and Indonesia.  The benchmark December contract at Bursa Malaysia Derivatives ended 1.9% lower at 2,368 ringgit a metric ton after moving in a MYR2,361-MYR2,446 range.

Palm oil weaved between positive and negative territory in both sessions as investors weighed bullish technical signals and bearish supply-demand fundamentals, but "fundamentals won today, as demand remains lethargic," said a trading executive at a Kuala Lumpur-based foreign brokerage. The palm oil market nosedived last week amid tepid export demand at a time when global vegetable oil supplies are rising due to seasonally higher production in Southeast Asia and the fast pace of the soy harvest in the U.S. Midwest.

Analysts and market participants tipped end-September stockpiles at record levels of 2.43 million to 2.50 million tons ahead of a September crop report by industry regulator the Malaysian Palm Oil Board on Oct. 10.  "Market players are mainly positioning themselves ahead of MPOB numbers…they most certainly will be bearish and we can anticipate more selling pressure [by speculative investors and funds] ahead of Wednesday’s report" and Oct. 1-10 export estimates by cargo surveyors Intertek Agri Services and SGS (Malaysia) Bhd., said S. Paramalingam, executive director at Kuala Lumpur-based Pelindung Bestari Sdn. Bhd.

 [Dow Jones Newswire]

“The market has no specific direction to go yet after falling so much,” said a Singapore-based trader with a global commodities house, referring to prices that fell to near 3-year low and posted their third straight weekly loss last week. “We have the MPOB report for September's end-stock. The market has been expecting the worst so if it is a bit better than market expectations, that will help for a good rebound,” the trader added. Technical analysis showed palm oil is expected to end its rebound at or below 2,503 ringgit per tonne, and fall towards 2,230 thereafter, Reuters market analyst Wang Tao said.

FKLI Related News

NEW YORK, Oct 8 (Reuters) - U.S. stocks slipped in light trading on Monday, pulling back from recent five-year highs ahead of an earnings season expected to be weak. Trading volume was the lowest so far this year in a full session as the U.S. government and the bond market were closed for the Columbus Day holiday. About 4.1 billion shares changed hands on the New York Stock Exchange, the Nasdaq and NYSE MKT, compared with the year-to-date daily average of 6.54 billion to last Friday.

Analysts expect third-quarter earnings to fall for the first time in three years even though the S&P 500 gained 5.8 percent during that period. Such a grim forecast might call into question whether the rally can be sustained. The Dow Jones industrial average fell 26.50 points, or 0.19 percent, to 13,583.65 at the close. The S&P 500 lost 5.05 points, or 0.35 percent, to 1,455.88. The Nasdaq Composite dropped 23.83 points, or 0.76 percent, to end at 3,112.35.

Stocks were pressured throughout the day as the World Bank cut its growth forecasts for the East Asia and Pacific region, and warned that the slowdown in China could worsen and last longer than many analysts expect. Further weighing on sentiment, euro-zone finance ministers said Spain did not need a bailout because it was taking steps to put its finances in order. Expectations that Madrid would ask for financial aid have helped support equities and other risky assets over the past several weeks.

Analysts forecast third-quarter earnings of S&P 500 companies will fall 2.3 percent from the year-ago quarter, according to the latest Reuters data. According to Thomson Reuters data through Monday, 91 companies in the S&P 500 have issued negative outlooks versus 21 positive pre-announcements, for a ratio of 4.3, the weakest showing since the third quarter of 2001. Apple Inc shares fell 2.2 percent to $638.17, ranking as the biggest drag on both the S&P 500 and the Nasdaq 100 despite denials of a strike at one of its manufacturing plants.

Oil prices eased on Monday in choppy trading on concerns that slower economic growth in China and the debt crisis in Europe will curb demand for petroleum, while the potential for Middle East turmoil to disrupt supplies limited losses. Oil closed down for a second straight day on Monday due to dim growth prospects for the global economy and on expectations for a weak U.S. corporate earnings reporting season.

Malaysian Shares are likely to continue its uptrend despite an overnight decline on Wall Street, after it survived previous correction and we are going to see more new highs form this week. Today’s Support and Resistance is located around 1658 and 1670 respectively.

FCPO Related News

Crude palm oil futures on Malaysia’s derivatives exchange ended higher Friday, reflecting technically driven buying following a steep decline over the past two weeks. However, the upside is likely to be limited by rising palm oil stockpiles in Malaysia, the world’s No. 2 producer, trade participants said. The benchmark December contract at Bursa Malaysia Derivatives ended 2.7% higher at 2,415 ringgit a metric ton after moving in a range of MYR2,376-MYR2,448 a ton.

Palm oil stockpiles in Malaysia probably rose to a record 2.43 million-2.50 million metric tons in September, reflecting seasonally higher production and tepid export demand. The Malaysian Palm Oil Board, the industry regulator, is scheduled to issue September crop data Wednesday. The surge in stockpiles comes as global vegetable oil supplies are rising, thanks in part to a fast-paced soybean harvest in the U.S. Midwest, just as slowing economic growth in major consumer countries is cutting into demand, which could drag palm oil prices to a three-year low in coming weeks.

"Palm oil prices will likely trade with a downward bias next week, as investors are likely to liquidate positions following the Malaysian cabinet’s decision to delay a decision on the proposed crude palm oil export tax cut," a commodities trader at a Singapore-based firm said. The cabinet Friday said it needed more time to study a proposal to cut the export tax on CPO to 8%-10% from the current 23%, an aid to Commodities Minister Bernard Dompok said. The official said the government would make a decision soon.

[Dow Jones Newswire]

“The demand undertone is fairly good,” said Vijay Mehta, a director at Commodity Links Pte. in Singapore. “If the market stabilizes, buyers are willing to jump in. There is good buying interest from India and Bangladesh.” (Bloomberg)

Today’s Support and Resistance for benchmark December  is located around 2,378 and 2,485 respectively.