Crude palm oil futures (FCPO) on Bursa Malaysia Derivatives soared this week due to the outlook of lower crop production in US and the anticipation of better demand for crude palm oil in the coming weeks.
benchmark FCPO November contract jumped RM107 or 3.61 per cent to close
at RM3,069 per tonne on Friday from RM2,962 per tonne last Friday.
The trading range for the week was from RM3,010 to RM3,100.
Total volume traded for the week amounted to 111,229 contracts, down 42,668 contracts from the previous week.
The open interest as at Thursday increased to 123,958 contracts from 115,338 contracts the previous Thursday.
to the crop tour conducted by Pro Farmer this week, the US corn and
soybean production was estimated to be lower than the US Department of
Agriculture (USDA) report due to the worst drought condition hitting the
region in 56 years.
Pro Farmer pegged the US corn crop for
2012/13 at 10.478 billion bushels against 10.779 billion bushels in the
latest USDA monthly report while soybean crop at 2.6 billion bushels
versus 2.692 billion bushels in the government report.
were also monitoring on the typhoon development in China coast where
Typhoon Bolaven was expected to hit North East of China by the middle of
Typhoon Bolaven might bring heavy rains and flooding
to the country’s main producing areas of soybean and corn in which the
impact might be potentially harm up to 20 per cent of the crops.
weekly crop progress report released by USDA on Monday indicated the
soybean crop condition further improved slightly where the soybean crop
was reported 31 per cent in good to excellent condition, up from 30 per
cent the previous week.
The latest weather forecast indicated
heavy rains would fall in the Midwest over the weekend but the overall
total precipitation remained below the average.
Cargo surveyor ITS
released the palm oil export fi gures for the period of August 1 to
August 20 on Wednesday at 809,814 tonnes, an increase of 5.96 per cent
from the same period last month.
Traders need to monitor closely
on the development of the eurozone debt crisis issue from now onwards as
there would be lots of news flowing out in September.
One of the
key issues would be the Germany’s Constitutional Court rules on the
legality of the eurozone bailout fund which was scheduled on September
Other than that, the Federal Open Market Committee (FOMC)
meeting on September 12 to September 13 would also be the limelight on
the possible announcement of the implementation of the quantitative
The Malaysian market will be closed on Friday celebrating the National Day.
Technical View The benchmark november contract rose sharply this week following the broad gains in the US grain markets.
The break above RM3,000 this week has confirmed the double bottom formation.
the market has risen too fast leaving two gaps behind in the chart
where there would be a possibility of the market to cover at least one
of the gaps.
Nevertheless, the latest chart development indicated the market was set for bull run soon.
Resistance was be pegged at RM3,193 and RM3,270 while support was set at RM2,973 and RM2,820.
fundamental news this coming week Malaysian export data for August 1 to
August 20 and August 1 to August 25 by SGS on August 27.
-Courtesy of OPF-