Crude palm oil futures (FCPO) on Bursa Malaysia Derivatives ended the week higher due to the rising demand for palm oil and the weather concerns in the US currently.
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
The open interest as at Thursday increased slightly to 94,587 contracts from 94,528 contracts the previous Thursday.
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.
demand from the Muslim countries remained strong while other countries
like China and the US were seemed picking up their requirements as well.
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.
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
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.
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.
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.
benchmark September contract opened sharply higher this week due to the
weather concern in the US which pushed the corn futures limit up on
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.