Weekly Crude Palm Oil Report April 14 2013

Crude palm oil futures (FCPO) on Bursa Ma­laysia Derivatives slipped this week due to the strengthening in ringgit and concerns over the bird flu outbreak in China.

The benchmark FCPO June contract dipped RM14 or 0.59 per cent to settle at RM2,345 per tonne on Friday from RM2,359 per tonne last Friday.

The trading range for the week was from RM2,336 to RM2,419.

Total volume traded for the week amounted to 148,548 contracts, up 4,396 contracts from the previous week.

The open interest as at Thursday increased to 149,881 contracts from 148,282 con­tracts the previous Thurs­day.

The Chinese government reported on Friday that there were new cases recorded on the number of people infected from the bird flu virus.

The latest news revealed that the death toll had in­creased to a total of 11 people from six people last week while another 29 people have been infected with this bird flu virus, known as H7N9 on Friday.

At the moment, the out­break was contained at east­ern China where Shanghai is the centre of the outbreak.

The fast response from the Chinese government has brought the situation under control so far by alerting the residents of the country on the bird flu prevention measures.

The bird flu outbreak in China may potentially reduce the feed demand which could also pressure the prices of the related commodities.

Meanwhile, the bullish MPOB reports and robust exports demand released on Wednesday failed to lift palm oil prices as the recent strength in ringgit had capped the market from rallying.

MPOB released its month­ly reports on Malaysian palm oil’s supply and de­mand for March 2013 on Wednesday with palm oil stocks fall sharply to 2.173 million tonnes, a decrease of 10.87 per cent from the previous month and was far below the average estima­tion of Reuter’s poll at 2.35 million tonnes.

According to the report, the exports in March soared 10.04 per cent to 1.539 mil­lion tonnes while the palm oil production rose 2.18 per cent to 1.325 million tonnes.

In addition, the latest cargo surveyors’ reports showed that there was im­provement in the exports demand for April.

The cargo surveyor ITS released the palm oil ex­port figures for the pe­riod of April 1 to April 10 on Wednesday at 456,440 tonnes, a rise of 3.50 per cent while another surveyor SGS at 462,276 tonnes, an increase of 5.41 per cent from the same period last month.

Technical view

The benchmark June con­tract seemed to have strong resistance below EMA50.

Heavy selling pressure was noted for the past week after the bullish MPOB re­ports failed to lift the palm oil prices.

The palm oil prices closed below the benchmark level of RM2,360 this week show­ing weakness in prices and high likely the prices may break the recent low of RM2,335 next week.

Any price break below RM2,335 would attract more technical selling and long liquidation in the market which may further drive the prices down to test the previous low of RM2,217 level.

The benchmark June will switch to July contract on Tuesday. Resistance will be pegged at RM2,467 and RM2,580 while support is set at RM2,335 and RM2,217.

Major fundamental news this coming week

Malaysian export data for April 1 to April 15 by ITS and SGS on April 15 and the export figure for April 1 to April 20 by ITS on April 20.

Oriental Pacific Futures (OPF) is a Trading Participant and Clearing Participant of Bursa Malaysia Derivatives. You may reach us at www.opf.com.my

Dis­claimer: This article is written for general information only. The writers, publishers and OPF will not be held liable for any damage or trading losses that result from the use of this article.

Source : The Borneo Post

You can share this posts:

Leave a Reply