Technical Analysis for FCPO / FCPO Daily Chart Source: BursaStation Professional

23/09/2013 (Borneo Post) - Crude Palm Oil Futures (FCPO) fell on Friday and throughout the week due to stronger local currency appetite from overseas buyers, although strong export numbers capped gains.

For the first 15 days of September, Intertek Testing Service (ITS) reported that exports had increased 13.62 per cent to 732,412 tonnes compared with the previous first 15 days of August 2013 at 644,589 tonnes.

Société Générale de Surveillance (SGS) reported export increased 12.44 per cent to 715,642 tonnes compared with the first 15 days of August 2013 at 636,466 tonnes.

Meanwhile, for the first 20 days of September, ITS reported that export had increased 13.1 per cent to 996,377 tonnes compared with the previous first 20 days of August 2013 at 880,979 tonnes.

SGS reported that export had increased 9.2 per cent to 973,512 tonnes compared with the first 20 days of August 2013 at 891,582 tonnes.

Expectations of abundant crops from competing oilseeds seem to be increasing in the global market and may place pressure on prices in the coming months.

Palm prices have already decreased by 5.8 per cent this year but palm oil exports seem to be supportive which may prevent inventories from rising to record levels like the one in last December.

According to a leading trade expert, palm oil prices could also get support from rising Indian demand where imports are likely to rise four per cent to a record 10.7 million tonnes in 2013 to 2014 period due to rapid growth in consumption, with the entire rise met by palm oil.

Malaysian ringgit strengthened this week where the spot prices dropped below the 3.20 level and closed at 3.1640.

Ringgit strengthened due to the US Federal Reserve’s surprisingly reversal of their economic stimulus tapering scheme for the time being until they are comfortable enough with the growth in the current US economy.

Stronger local currency may curb appetite from overseas buyers.

The new benchmark FCPO December contract settled at RM2,300 per tonne on Friday which was down by 48 points from last Friday at RM2,348.

The trading range for the week was from RM2,356 to RM2,294. Total volume traded for the week amounted to 148,987 contracts which was up 5,825 contracts compared with last Friday’s 143,162 contracts.

The open interest as of Thursday totalled to 157,644 tonnes contracts from 162,479 contracts from previous Thursday, a decrease of 4,835 contracts.

Technical View

From the chart, we can see that the price still remained on the downside after it broke our blue support line the previous week.

Since it satisfied our condition that should it broke and stays below the previous blue support line, it will try to meet the consolidation range support line again which is the black horizontal line which we drew in the chart.

For the coming week we pegged our important support levels at 2,270, 2,250 and 2,220

Meanwhile, for our resistance levels, we pegged important ones at 2,360, 2,380, 2,400 and 2,450

Major fundamental news this coming week

ITS & SGS Export reports – September 25, 2013  (Wednesday)

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