The benchmark FCPO September contract rose RM67 or 2.27 per cent to close at RM3,020 per tonne on Friday from RM2,953 per tonne last Friday.
The trading range for the week was from RM2,978 to RM3,059. Total volume traded for the week amounted to 108,484 contracts, down 78,938 contracts from the previous week.
The open interest as at Thursday increased slightly to 94,587 contracts from 94,528 contracts the previous Thursday.
Cargo surveyor ITS released the palm oil export figures for the period of June 1 to 25 on Monday at 1,196,702 tonnes, a rise of 4.39 per cent while another surveyor SGS on Tuesday at 1,212,262 tonnes, an increase of 8.84 per cent from the same period last month.
The exports demand from the Muslim countries remained strong while other countries like China and the US were seemed picking up their requirements as well.
The weather forecasts in the US remained hot and dry for the next 10 days in key producing regions with some light rains in the northwest of the Midwest next week.
Some weather forecasters projected the heat would stress the crops up to two thirds of the western areas in Midwest next week which would prevent the normal development of the crops there.
Traders were concerned the change in the current weather pattern would reduce the crop yield drastically, especially for corn, which is currently entering critical pollination stage of development where the crops need to have sufficient amount of rain to achieve the desired yield potential.
The soybean crop’s critical period would be in August, it still has enough time to revive from the current condition if timely rains arrive in the coming weeks.
The US Department of Agriculture (USDA) released its weekly crop progress report on Monday saying that 56 per cent of corn crop was in good to excellent condition as of Sunday, declining from 63 per cent the previous week due to dry weather condition in US while soybean crop was 53 per cent in good to excellent condition, reducing from 56 per cent the previous week.
The two-day euro summit in Brussels also cheered the market with the commitment from the eurozone leaders to focus on economic growth and to tackle the region’s debt crisis.
The uncertainties from the eurozone countries faded and put the traders to focus back on the good fundamental support.
All the good news above overshadowed the bearish USDA crop planting reports released on Friday, indicating the soybean plantings in the US were estimated at 76.08 million acres, up from the previous forecast of 73.9 million acres in its March report and was above the market expectation of 75.5 million acres.
Technical View
The benchmark September contract opened sharply higher this week due to the weather concern in the US which pushed the corn futures limit up on Monday.
The palm oil prices would be expected to extend its rally next week due to good fundamental support and the easing tensions from the eurozone countries. Resistance would be pegged at RM3,083 and RM3,193 while support was set at RM2,970 and RM2,900.
Major fundamental news this coming week
Malaysian export data for the full month of June by SGS on July 2.
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