MARKET DEVELOPMENT
Crude Palm Oil Weekly Report – February 7, 2015
Crude Palm Oil Weekly Report – February 7, 2015
09/02/2015 (Borneo Post) - Malaysian palm oil futures climbed higher on Friday to 2,347, due to continued optimism over Indonesia’s biodiesel subsidy boost.
It ended the week with the benchmark’s biggest weekly gain in six years.
Future Crude Palm Oil (FCPO) benchmark April 2015 contracts settled at 2,347, up 200 points or 9.3 per cent from 2,147 last Friday.
Trading volume decreased to 157,315 contracts from 211,082 contracts last Monday to Thursday due to there is only three trading days last week.
Open interest based on decreased 370,258 to contracts from 672,522 contracts from last Monday to Thursday.
Cargo surveyor, Intertek Testing Services (ITS) reported that exports of Malaysia’s palm oil products during January decreased 15.1 per cent to 1.115 million tonnes compared with 1.313 million tonnes shipped during December.
Another cargo surveyor, Societe Generale de Surveillance (SGS), reported that Malaysia’s palm oil exports during January decreased 14.6 per cent to 1.109 million tonnes compared with 1.298 million tonnes during December.
Overall, demand from the European Union (EU), India, China, and the US continued to decrease.
Spot ringgit strengthened on Friday to 3.5415 as a jump in crude prices eased concerns that weaker oil price might hurt Malaysia’s current account surplus and increase its fiscal deficit.
Indonesia’s government proposed a three-fold increase in its biodiesel subsidies to 5,000 rupiah per litre from 1,500 rupiah.
Analysts are optimistic that higher subsidies will make producing and consuming biodiesel more economic.
The Bursa Malaysia Derivatives Exchange closed on Monday and Tuesday due to the public holidays in Malaysia.
On Wednesday and Thursday, the price rose as the market was buoyed by hopes a plan by the world’s top producer Indonesia to increase biodiesel subsidies would make blending profitable and thus boost the consumption of palm oil.
On Friday, there was a slightly correction in the early trading session due to some profit taking after a sharp price increase on previous trading day, however, the price rose and recovered earlier losses after the Indonesia Parliament has approved the biodiesel subsidies in the afternoon.
Technical analysis
According to weekly FCPO chart, the price was able to stay above the middle Bollinger band, 2,220 and touch the upper Bollinger band, 2,350.
According to the daily FCPO chart, on Wednesday, the price opened a gap up 41 ticks at 2,184 but failed to rise higher in the early session.
However, by the later session, the price rose and recovering early losses to close exactly at the psychological level 2,200.
On Thursday, the price continued to rise, breaking the middle Bollinger band and the psychological barrier of 2,300. It eventually closed at 2,310.
On Friday, the price fell in the early session. However, the price rose and recovered earlier losses in the afternoon session.
It eventually closed above the middle Bollinger band but below the resistance line 2,350.
In the coming week, the price has the potential to range between 2,200 and 2,430.
Resistance lines will be placed at 2,400 and 2,430, while support lines will be positioned at 2,200 and 2,160, these will be observed in the coming week.
Major fundamental news this coming week
ITS, SGS and MPOB report on February 10 (Tuesday).
Oriental Pacific Futures (OPF) is a Trading Participant and Clearing Participant of Bursa Malaysia Derivatives. You may reach us at www.opf.com.my. Disclaimer: This article is written for general information only. The writers, publishers and OPF will not be held liable for any damage or trading losses that result from the use of this article.
It ended the week with the benchmark’s biggest weekly gain in six years.
Future Crude Palm Oil (FCPO) benchmark April 2015 contracts settled at 2,347, up 200 points or 9.3 per cent from 2,147 last Friday.
Trading volume decreased to 157,315 contracts from 211,082 contracts last Monday to Thursday due to there is only three trading days last week.
Open interest based on decreased 370,258 to contracts from 672,522 contracts from last Monday to Thursday.
Cargo surveyor, Intertek Testing Services (ITS) reported that exports of Malaysia’s palm oil products during January decreased 15.1 per cent to 1.115 million tonnes compared with 1.313 million tonnes shipped during December.
Another cargo surveyor, Societe Generale de Surveillance (SGS), reported that Malaysia’s palm oil exports during January decreased 14.6 per cent to 1.109 million tonnes compared with 1.298 million tonnes during December.
Overall, demand from the European Union (EU), India, China, and the US continued to decrease.
Spot ringgit strengthened on Friday to 3.5415 as a jump in crude prices eased concerns that weaker oil price might hurt Malaysia’s current account surplus and increase its fiscal deficit.
Indonesia’s government proposed a three-fold increase in its biodiesel subsidies to 5,000 rupiah per litre from 1,500 rupiah.
Analysts are optimistic that higher subsidies will make producing and consuming biodiesel more economic.
The Bursa Malaysia Derivatives Exchange closed on Monday and Tuesday due to the public holidays in Malaysia.
On Wednesday and Thursday, the price rose as the market was buoyed by hopes a plan by the world’s top producer Indonesia to increase biodiesel subsidies would make blending profitable and thus boost the consumption of palm oil.
On Friday, there was a slightly correction in the early trading session due to some profit taking after a sharp price increase on previous trading day, however, the price rose and recovered earlier losses after the Indonesia Parliament has approved the biodiesel subsidies in the afternoon.
Technical analysis
According to weekly FCPO chart, the price was able to stay above the middle Bollinger band, 2,220 and touch the upper Bollinger band, 2,350.
According to the daily FCPO chart, on Wednesday, the price opened a gap up 41 ticks at 2,184 but failed to rise higher in the early session.
However, by the later session, the price rose and recovering early losses to close exactly at the psychological level 2,200.
On Thursday, the price continued to rise, breaking the middle Bollinger band and the psychological barrier of 2,300. It eventually closed at 2,310.
On Friday, the price fell in the early session. However, the price rose and recovered earlier losses in the afternoon session.
It eventually closed above the middle Bollinger band but below the resistance line 2,350.
In the coming week, the price has the potential to range between 2,200 and 2,430.
Resistance lines will be placed at 2,400 and 2,430, while support lines will be positioned at 2,200 and 2,160, these will be observed in the coming week.
Major fundamental news this coming week
ITS, SGS and MPOB report on February 10 (Tuesday).
Oriental Pacific Futures (OPF) is a Trading Participant and Clearing Participant of Bursa Malaysia Derivatives. You may reach us at www.opf.com.my. Disclaimer: This article is written for general information only. The writers, publishers and OPF will not be held liable for any damage or trading losses that result from the use of this article.