Crude palm oil futures (FCPO) on Bursa Malaysia Derivatives ended the week higher due to the weather concerns in the US and the continuous rising demand for palm oil ahead of the fasting month in Muslim countries.
The benchmark FCPO September contract surged RM110 or
3.64 per cent to close at RM3,130 per tonne on Friday from RM3,020 per
tonne last Friday.
The trading range for the week was from RM3,046 to RM3,183.
Total volume traded for the week amounted to 149,052 contracts, up 40,568 contracts from the previous week.
The open interest as at Thursday increased to 107,399 contracts from 94,587 contracts the previous Thursday.
persistent hot and dry weather in the US scorched crops in the key
producing regions especially the corn crop area with the expectation of
limited rainfall in the coming weeks.
The temperature in some of
the areas reached the triple digit degrees Fahrenheit with excessive
heat that persisted until Saturday.
However, there will be a break
for the hot and dry weather pattern today with the temperature is
expected to decrease about 15 to 20 degrees Fahrenheit, easing a little
bit stress on the crops.
Some weather forecasters indicated that the outlook for the 11 to 15 days period would turn even hotter with limited rains.
There would be some showers over the next five days but it would mostly hit the northwestern part of the Midwest.
US Department of Agriculture (USDA) released its weekly crop progress
report on Monday saying that 48 per cent of corn crop was in good to
excellent condition, declining from 56 per cent the previous week due to
persistent hot and dry weather condition in US while soybean crop was
45 per cent in good to excellent condition, reducing from 53 per cent
the previous week.
Cargo surveyor ITS released the palm oil export
figures for the full month of June last Saturday at 1,449,280 tonnes, a
rise of 4.86 per cent while another surveyor SGS on Monday at 1,463,864
tonnes, an increase of 9.75 per cent from the same period last month.
demand from the top importing countries like China and India coupled
with the Muslim countries like Pakistan and the Middle East was expected
to remain strong in July ahead of the coming festive seasons.
Reuters poll revealed on Friday that Malaysian palm oil stocks in June
were expected to reduce 2.2 per cent to 1.73 million tonnes.
the palm oil exports were estimated to increase 4.3 per cent to 1.46
million tonnes while the production would rise 7.7 per cent to 1.49
benchmark September contract extended its rally this week due to the
weather concern in US but vulnerable for profit taking when the price
approached the resistance of RM3,193 and EMA200 line.
prices were expected to take a break next week while waiting for the
rains development in the US before the price starts to move again.
Resistance was pegged at RM3,193 and RM3,270 while support was set at RM3,030 and RM2,970.
Major fundamental news this coming week
monthly supplydemand report on July 10, Malaysian export data for July 1
to July 10 by ITS and SGS on July 10 and USDA’s monthly supply-demand
report on July 11.
Courtesy of OPF