Crude palm oil futures (FCPO) on Bursa Malaysia Derivatives ended the
week higher on better export demand and short covering activities ahead
of long holidays in Malaysia.
The benchmark FCPO January contract
surged RM102 or 4.08 per cent to close at RM2,603 per tonne on Thursday
from RM2,501 per tonne last Friday.
The trading range for the week was from RM2,497 to RM2,615.
Total volume traded for the week amounted to 127,826 contracts, down 71,522 contracts from the previous week.
The open interest as at Wednesday increased to 126,334 contracts from 125,799 contracts the previous Thursday.
Cargo
surveyor ITS released the palm oil export figures for the period of
October 1 to 25 on Thursday at 1,300,495 tonnes, a rise of 11.09 per
cent while another surveyor SGS at 1,280,652 tonnes, an increase of 9.45
per cent from the same period last month.
On the supply side, some traders estimated the palm oil production in October would be slightly down to about five per cent.
The production during the fourth quarter 2012 should be toppish especially approaching the monsoon season end of the year.
An
industry group in Indonesia indicated that the Indonesian government
may cut its export tax for crude palm oil from 13.5 per cent to 10.5 per
cent for November in its monthly adjustment for the export duty.
This may counter the effect by the Malaysian government to reduce its export tax for crude palm oil in its recent announcement.
The
weekly crop progress report released by US Department of Agriculture on
Monday indicated the soybean crop harvest was reported 80 per cent
complete, advancing from 71 per cent from the previous week.
On
the economic front, the manufacturing industry in China showed
improvement with the data released on Wednesday was better than the
market expectation.
This boosted the hope that the world second largest economy is recovering, and soon to demand for more commodities.
In
addition, the US economic growth was also pointing to recovery with the
latest third quarter gross domestic product data released was at two
per cent, higher than the average analysts’ estimation of 1.8 per cent.
The
coming November would be an interesting month as the world’s largest
two economies, the US would be having presidential election, while China
is in the transition of changing the country’s leader.
This may
give lots of uncertainties and volatilities to the market movement
towards the end of the year especially the measurements on the US
financial fiscal cliff by the new president and the new policies by the
new leaders to boost their country’s economy.
Technical View
The benchmark January contract continued to surge this week after the market broke the RM2,530 resistance.
Market is currently remained in the uptrend channel with strong resistance to be met in between RM2,634 and EMA50 line.
Focus
would be put at this range as to see whether the market manages to
break further up? We believe the market is going to correct soon before
forming a strong base for the next uptrend.
Resistance would be pegged at RM2,634 and RM2,755 while support was set at RM2,361 and RM2,230.
Sunday, October 28, 2012
Sunday, October 21, 2012
Weekly Crude Palm Oil Report October 21 2012
Crude palm oil futures (FCPO) on Bursa Malaysia Derivatives ended fl
at this week, digesting the impact of newly announced export tax
structure by the Malaysian government and analysing the mixed views by
the top industry analysts during an industry conference on Tuesday.
The benchmark FCPO December contract rose RM1 or 0.04 per cent to close at RM2,501 per tonne on Friday from RM2,500 per tonne last Friday.
The trading range for the week was from RM2,417 to RM2,524.
Total volume traded for the week amounted to 199,348 contracts, down 4,237 contracts from the previous week.
The open interest as at Thursday decreased to 125,799 contracts from 141,841 contracts the previous Thursday.
After the announcement on the new crude palm oil export tax structure by the Malaysian government last Friday, palm oil producers requested the government to reconsider issuing tax-free crude palm oil quota especially to those companies which have refineries overseas.
These companies were depending on the tax-free crude palm oil export quota to maintain the profits of their refineries overseas.
With the abolishment of the tax-free crude palm oil export quota, it would definitely erode some of their gains and competitiveness in other regions.
Dorab Mistry, one of the leading edible oils’ analysts, said in an industry conference on Tuesday that palm oil prices could fall to RM2,200 per tonne within the next four to six weeks due to high palm oil stocks in Malaysia which may exceed three million tonnes by end of this year.
Another renowned analyst, Thomas Mielke, maintained his view that the wide discount between palm oil and other vegetable oils’ prices was unsustainable due to shortage in other vegetable oils supplies which would increase the demand for palm oil to fill the supply gap.
He forecasted palm oil prices to recover to RM3,300 per tonne somewhere in March to May next year.
Another analyst, Dr James Fry, said the premium of palm oil prices over crude oil prices in Europe collapsed from approximately US$300 per tonne at the beginning of this year to nearly par recently could boost the appeal to use palm oil as the feedstock to produce biodiesel.
According to Fry, the narrow price difference between palm oil and crude oil currently would become more feasible to produce biodiesel and direct burning of vegetable oils without any subsidy by the local government.
Cargo surveyor ITS released the palm oil export figures for the period of October 1 to 15 on Monday at 769,534 tonnes, a jump of 13.15 per cent while another surveyor SGS at 768,550 tonnes, a surge of 16.28 per cent from the same period last month.
The Malaysian market will be closed on Friday celebrating Hari Raya Haji.
Technical view
The benchmark January contract ended fl at this week and met a strong resistance at RM2,530 level despite strong export growth for the first half of October.
In our opinion, the current rebound may end around this level and the failure to break above RM2,530 level next week will bring palm oil price down again for the last wave to form the bottom of the downtrend.
Resistance would be pegged at RM2,530 and RM2,634 while support was set at RM2,361 and RM2,230.
Major fundamental news this coming week
Malaysian export data for October 1 to October 20 by SGS on October 22 and the export data for October 1 to October 25 by ITS and SGS on October 25.
The benchmark FCPO December contract rose RM1 or 0.04 per cent to close at RM2,501 per tonne on Friday from RM2,500 per tonne last Friday.
The trading range for the week was from RM2,417 to RM2,524.
Total volume traded for the week amounted to 199,348 contracts, down 4,237 contracts from the previous week.
The open interest as at Thursday decreased to 125,799 contracts from 141,841 contracts the previous Thursday.
After the announcement on the new crude palm oil export tax structure by the Malaysian government last Friday, palm oil producers requested the government to reconsider issuing tax-free crude palm oil quota especially to those companies which have refineries overseas.
These companies were depending on the tax-free crude palm oil export quota to maintain the profits of their refineries overseas.
With the abolishment of the tax-free crude palm oil export quota, it would definitely erode some of their gains and competitiveness in other regions.
Dorab Mistry, one of the leading edible oils’ analysts, said in an industry conference on Tuesday that palm oil prices could fall to RM2,200 per tonne within the next four to six weeks due to high palm oil stocks in Malaysia which may exceed three million tonnes by end of this year.
Another renowned analyst, Thomas Mielke, maintained his view that the wide discount between palm oil and other vegetable oils’ prices was unsustainable due to shortage in other vegetable oils supplies which would increase the demand for palm oil to fill the supply gap.
He forecasted palm oil prices to recover to RM3,300 per tonne somewhere in March to May next year.
Another analyst, Dr James Fry, said the premium of palm oil prices over crude oil prices in Europe collapsed from approximately US$300 per tonne at the beginning of this year to nearly par recently could boost the appeal to use palm oil as the feedstock to produce biodiesel.
According to Fry, the narrow price difference between palm oil and crude oil currently would become more feasible to produce biodiesel and direct burning of vegetable oils without any subsidy by the local government.
Cargo surveyor ITS released the palm oil export figures for the period of October 1 to 15 on Monday at 769,534 tonnes, a jump of 13.15 per cent while another surveyor SGS at 768,550 tonnes, a surge of 16.28 per cent from the same period last month.
The Malaysian market will be closed on Friday celebrating Hari Raya Haji.
Technical view
The benchmark January contract ended fl at this week and met a strong resistance at RM2,530 level despite strong export growth for the first half of October.
In our opinion, the current rebound may end around this level and the failure to break above RM2,530 level next week will bring palm oil price down again for the last wave to form the bottom of the downtrend.
Resistance would be pegged at RM2,530 and RM2,634 while support was set at RM2,361 and RM2,230.
Major fundamental news this coming week
Malaysian export data for October 1 to October 20 by SGS on October 22 and the export data for October 1 to October 25 by ITS and SGS on October 25.
Sunday, October 14, 2012
Weekly Crude Palm Oil Report October 14 2012
Crude palm oil futures (FCPO) on Bursa Malaysia Derivatives ended the
week higher in the anticipation of palm oil export tax cut in Malaysia
which also spurred technical buying in a deeply oversold condition.
The benchmark FCPO December contract rose RM85 or 3.52 per cent to close at RM2,500 per tonne on Friday from RM2,415 per tonne last Friday.
The trading range for the week was from RM2,361 to RM2,529.
Total volume traded for the week amounted to 203,585 contracts, down 14,659 contracts from the previous week.
The open interest as at Thursday increased to 141,841 contracts from 134,362 contracts the previous Thursday.
The Malaysian government announced on Friday that they would reduce the crude palm oil export taxes and scrapped the current free tax crude palm oil export quota effective from January 1 next year.
The new export taxes would be set based on the price range of crude palm oil in that particular month and the taxes would vary on monthly basis.
The concept of the new export taxes in Malaysia was similar to the Indonesian counterparts as to position Malaysia in a more competitive level in the international palm oil trading compared with Indonesia.
Cargo surveyor ITS released the palm oil export fi gures for the period of October 1 to 10 on Wednesday at 448,624 tonnes, a slip of 1.03 per cent while another surveyor SGS at 420,758 tonnes, a drop of 8.72 per cent from the same period last month.
Malaysia Palm Oil Board (MPOB) released its bearish monthly reports on Malaysian palm oil’s supply and demand for September 2012 on Wednesday with palm oil stocks were sharply higher at 2.481 million tonnes, a jump of 17.43 per cent from the previous month and was slightly above the average estimation of the Reuters’ poll at 2.46 million tonnes.
The exports in September rose 4.49 per cent to 1.506 million tonnes while the palm oil production soared 20.43 per cent to 2.004 million tonnes.
The strong growth in production which was more than four-time faster than the increase in exports demand, pushed the palm oil stocks level to all time record high in September.
The high stocks level was pretty much factored in during the plunge of palm oil prices in the past few weeks.
USDA released its monthly report on soybean supply and demand on Thursday with soybean ending stocks for 2012/13 increase to 130 million bushels from 115 million bushels while the soybean production was forecasted at 2.86 billion bushels, up from 2.634 billion bushels in the previous report.
Even though both soybean production and stocks level were higher than the previous report, most analysts viewed it as supportive as the stock-to-use ratio remained low in 46 years.
The continuous robust soybean demand from China was also the major factor of the above view.
Technical View
The benchmark December contract rebounded this week after the fundamental reports released were very much in tandem with the market expectation.
The benchmark contract would change from December to January month next Tuesday.
We expected the market to have some more room to move upward before tumbling down again to form the bottom of the downtrend.
Resistance would be pegged at RM2,570 and RM2,634 while support was set at RM2,361 and RM2,230.
Major fundamental news this coming week
Malaysian export data for October 1-15 by ITS and SGS on October 15 and the export data for October 1-20 by ITS on October 20.
-Courtesy of OPF-
The benchmark FCPO December contract rose RM85 or 3.52 per cent to close at RM2,500 per tonne on Friday from RM2,415 per tonne last Friday.
The trading range for the week was from RM2,361 to RM2,529.
Total volume traded for the week amounted to 203,585 contracts, down 14,659 contracts from the previous week.
The open interest as at Thursday increased to 141,841 contracts from 134,362 contracts the previous Thursday.
The Malaysian government announced on Friday that they would reduce the crude palm oil export taxes and scrapped the current free tax crude palm oil export quota effective from January 1 next year.
The new export taxes would be set based on the price range of crude palm oil in that particular month and the taxes would vary on monthly basis.
The concept of the new export taxes in Malaysia was similar to the Indonesian counterparts as to position Malaysia in a more competitive level in the international palm oil trading compared with Indonesia.
Cargo surveyor ITS released the palm oil export fi gures for the period of October 1 to 10 on Wednesday at 448,624 tonnes, a slip of 1.03 per cent while another surveyor SGS at 420,758 tonnes, a drop of 8.72 per cent from the same period last month.
Malaysia Palm Oil Board (MPOB) released its bearish monthly reports on Malaysian palm oil’s supply and demand for September 2012 on Wednesday with palm oil stocks were sharply higher at 2.481 million tonnes, a jump of 17.43 per cent from the previous month and was slightly above the average estimation of the Reuters’ poll at 2.46 million tonnes.
The exports in September rose 4.49 per cent to 1.506 million tonnes while the palm oil production soared 20.43 per cent to 2.004 million tonnes.
The strong growth in production which was more than four-time faster than the increase in exports demand, pushed the palm oil stocks level to all time record high in September.
The high stocks level was pretty much factored in during the plunge of palm oil prices in the past few weeks.
USDA released its monthly report on soybean supply and demand on Thursday with soybean ending stocks for 2012/13 increase to 130 million bushels from 115 million bushels while the soybean production was forecasted at 2.86 billion bushels, up from 2.634 billion bushels in the previous report.
Even though both soybean production and stocks level were higher than the previous report, most analysts viewed it as supportive as the stock-to-use ratio remained low in 46 years.
The continuous robust soybean demand from China was also the major factor of the above view.
Technical View
The benchmark December contract rebounded this week after the fundamental reports released were very much in tandem with the market expectation.
The benchmark contract would change from December to January month next Tuesday.
We expected the market to have some more room to move upward before tumbling down again to form the bottom of the downtrend.
Resistance would be pegged at RM2,570 and RM2,634 while support was set at RM2,361 and RM2,230.
Major fundamental news this coming week
Malaysian export data for October 1-15 by ITS and SGS on October 15 and the export data for October 1-20 by ITS on October 20.
-Courtesy of OPF-
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