Weekly Crude Palm Oil Report April 28 2013

Crude palm oil futures (FCPO) on Bursa Malaysia Derivatives rose this week on rising palm oil demand and the anticipation of better exports growth.

The benchmark FCPO July contract increased RM20 or 0.87 per cent to settle at RM2,316 per tonne on Friday from RM2,296 per tonne last Friday.

The trading range for the week was from RM2,250 to RM2,334.

Total volume traded for the week amounted to 126,768 contracts, down 50,338 contracts from the previous week.

The open interest as at Thursday decreased slightly to 155,488 contracts from 155,723 contracts the previous Thursday.

The palm oil prices were pressured early of the week as there were signs of slowing demand for the tropical oil due to weak economic growth and high stocks level in consumer countries.

However, India was seen actively buying in the market lately, taking advantage of cheaper palm oil prices in producing countries compared to their local prices.

The cargo surveyor, ITS, released the palm oil export figures for the period of April 1 to April 25 on Thursday at 1,123,129 tonnes, an increase of 5.25 per cent while another surveyor, SGS, at 1,083,975 tonnes, a rise of 2.66 per cent from the same period last month.

With the healthy growth in palm oil exports recently, some analysts estimated the palm oil stocks for April might be reduced to below two million tonnes.

In addition, the demand would be expected to continue improving in May and June as the Muslim countries might start restocking the tropical oil before the fasting month starts in July.

The palm oil prices were also lifted by the strong performance in soybean and soybean oil prices lately due to tight US supplies in near month.

Indonesian government announced on Friday that its export tax for crude palm oil would be cut from 10.5 per cent to nine per cent in May.

The mixed palm oil fundamental currently has capped the prices to be trading in a sideway market.

The anticipation of increase soybean supply from South America has capped the market from rallying.

On the other hand, the optimism of better palm oil demand growth and decreasing stocks in the coming months underpinned the palm oil prices.

The bird fl u outbreak in China recently spread to the southern part of China.

There was one new case reported in Jiangxi province and another new case reported in Fujian province.

This has brought more than 110 people infected with the H7N9 virus and a total of 23 deaths so far.

There was also one case reported in Taiwan this week which was suspected to be infected with the virus.

The bird flu outbreak has slowly expanded to a wider geographical area but remained under control as there was no human-to-human transmission so far.

The outbreak would continue to be monitored closely if this new bird fl u strain has the ability to mutate and becomes capable of human to  human transmission.

Technical view

The benchmark July contract was lifted this week due to improved palm oil demand.

The palm oil prices would be expected to continue trading in the range of RM2,217 to RM2,335 until there is a big change in the current fundamental.

Resistance is pegged at RM2,335 and RM2,467 while support is set at RM2,217.

Major fundamental news this coming week

Malaysian export data for the full month of April by ITS and SGS on April 30.

Oriental Pacifi c 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

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