The benchmark FCPO April contract rose RM34 or 1.44 per cent to settle at RM2,400 per tonne on Friday from RM2,366 per tonne last Friday.
The trading range for the week was from RM2,356 to RM2,444.
Total volume traded for the week amounted to 203,175 contracts, down 30,477 contracts from the previous week.
The open interest as at Thursday increased to 182,124 contracts from 173,776 contracts the previous Thursday.
The weather in Argentina and southern Brazil turned drier this week had caused some concerns among the market participants. Even the situation was not serious yet, it raised concerns of the on-going dryness there.
The hot and sunny weather was initially favoured after months of heavy rains and floods in Argentina. However, the crops fields were started to get too dry thereafter.
The prospects for a large soybean crop in Brazil was still intact with some analysts revised their forecast higher.
Most analysts predicted the soybean production in Brazil to be in the range of 82.5 million to 84 million tonnes.
On the other hand, palm oil prices were unable to move up much due to poor export demand and an increase in Indian import tax on crude edible oils.
Cargo surveyor ITS released the palm oil export figures for the period of January 1 to January 15 on Tuesday at 570,510 tonnes, a drop of 20.74 per cent while another surveyor SGS at 571,481 tonnes, a fall of 22.20 per cent from the same period last month.
The demand from China and European Union countries remained significantly low.
There will be a visit by the officials from China to Malaysia end of January, opening up the opportunity to get more insights on the new quality control imposed by the Chinese government.
India implemented a 2.5 per cent import duty on crude edible oils on Thursday which could dampen the demand for crude palm oil.
This move by the Indian government was to protect the interest of its local oilseed farmers.
However, the import duty imposed was less than the earlier expectation of five per cent.
The Malaysian government announced on Tuesday that its crude palm oil export tax for February would be remained at zero per cent, hoping to boost more demand for the tropical oil.
The US grain markets will be closed on Monday celebrating Martin Luther King Junior day while the Malaysian markets will be closed on Thursday for Prophet Muhammad’s Birthday.
Technical view
The benchmark April contract was basically trapped in a range market this week. The market will remain in the sideway of RM2,330 to RM2,450 levels until there is a significant break out from the current range.
Resistance would be pegged at RM2,450 and RM2,524 while support was set at RM2,330 and RM2,280.
Major fundamental news this coming week
Malaysian export data for January 1 to January 20 by ITS and SGS on January 21 and the export figures for January 1 to January 25 by ITS and SGS on January 25.
-courtesy of OPF-
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