MARKET DEVELOPMENT
Crude Palm Oil Weekly Report – Feb 14, 2015
Crude Palm Oil Weekly Report – Feb 14, 2015
16/02/2015 (Borneo Post) - Malaysian palm oil futures dropped lower on Friday to 2,293 as market digested recent news of Malaysia’s plans to re-impose taxes on palm oil exports while traders prepared for the Lunar New Year long weekend.
Future Crude Palm Oil (FCPO) benchmark April 2015 contract settled at 2,293, down 54 points or 2.3 per cent from 2,347 last Friday.
Trading volume increased to 219,733 contracts from 157,315 contracts from last Monday to Thursday due to there is only three trading days in this week.
Open interest based on increased 816,750 to contracts from 370,258 contracts from last Monday to Thursday.
Cargo surveyor, Intertek Testing Services (ITS) reported that exports of Malaysia’s palm oil products during February 1 to 10 decreased 16 per cent to 298,910 tonnes compared with 355,846 tonnes during January 1 to 10.
Societe Generale de Surveillance’s (SGS) report showed that Malaysia’s palm oil exports during February 1 to 10 decreased 4.2 per cent to 307,122 tonnes compared with 320,714 tonnes during January 1 to 10.
Overall, demand from the European Union (EU) and US rose while India and China continued to decrease.
Spot ringgit strengthened on Friday to 3.578 due to a better than expectation Gross Domestic Product (GDP) data and an increase in crude prices eased concerns that weaker oil price might hurt Malaysia’s current account surplus and increase its fiscal deficit.
According to report released by the Malaysian Palm Oil Board (MPOB), Malaysia’s palm oil stocks at the end of January fell 12.2 per cent in January to 1.77 million tonnes, touching their lowest since July while the drop in output was steeper, with January palm crude oil production at only 1.16 million tonnes.
A minister said on Thursday that Malaysia will resume taxing exports of crude palm oil in March after scrapping the duty for five months to spur demand and reduce bloated stockpiles.
On Monday, the price rose in the earlier session with investors taking more bullish positions after Indonesia approved a near-three-fold rise in biodiesel subsidies that will boost use of the tropical oil by its top producer.
However, the price fell in the late session with concerns over sluggish export demand in February. On Tuesday, the price fell, giving up gains in the earlier session as traders fretted about the poor appetite for the tropical oil, although tighter stocks in the world’s No.2 grower curbed losses.
On Wednesday, the price edged down to a near one-week low as concerns over waning demand from key customers turned investors wary, although official data showed smaller stockpiles in Malaysia which provided some support.
On Thursday, the price edged up, snapping three days of decline as weakness in the ringgit and the announcement that Malaysia will resume taxing palm exports encouraged buying. On Friday, the price fell as the market digested recent news of Malaysia’s plans to re-impose taxes on palm oil exports.
Technical analysis
According to weekly FCPO chart, the price is able to stay above middle Bollinger band at 2,225 and touch the upper Bollinger band at 2,357.
According to the daily FCPO chart, on Monday, the price rose 0.2 per cent in the early session to 2,350 and briefly touched their highest since January 15 at 2,357.
However, by the late session, the price was unable to retain previous gain and closed lower at 2,317. On Tuesday, the price fell, attempting to test the psychological barrier 2,300 and closed exactly at 2,300.
On Wednesday, the price continued to fell, breaking psychological level 2,300 and approaching the middle Bollinger band, and eventually closed at 2,277. On Thursday, the price hovered between 2,271 and 2,300, continued toward to the middle Bollinger band, eventually closed at 2,290.
On Friday, the price was well support by middle Bollinger Band and closed at 2,293, 7 ticks below psychological barrier 2,300. In the coming week, the price has potential to range between 2,220 and 2,350.
Resistance lines will be placed at 2,350 and 2,430, while support lines will be positioned at 2,220 and 2,160, these levels will be observed in the coming week.
Major fundamental news this coming week
ITS and SGS reports on February 16 (Monday).
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.
Future Crude Palm Oil (FCPO) benchmark April 2015 contract settled at 2,293, down 54 points or 2.3 per cent from 2,347 last Friday.
Trading volume increased to 219,733 contracts from 157,315 contracts from last Monday to Thursday due to there is only three trading days in this week.
Open interest based on increased 816,750 to contracts from 370,258 contracts from last Monday to Thursday.
Cargo surveyor, Intertek Testing Services (ITS) reported that exports of Malaysia’s palm oil products during February 1 to 10 decreased 16 per cent to 298,910 tonnes compared with 355,846 tonnes during January 1 to 10.
Societe Generale de Surveillance’s (SGS) report showed that Malaysia’s palm oil exports during February 1 to 10 decreased 4.2 per cent to 307,122 tonnes compared with 320,714 tonnes during January 1 to 10.
Overall, demand from the European Union (EU) and US rose while India and China continued to decrease.
Spot ringgit strengthened on Friday to 3.578 due to a better than expectation Gross Domestic Product (GDP) data and an increase in crude prices eased concerns that weaker oil price might hurt Malaysia’s current account surplus and increase its fiscal deficit.
According to report released by the Malaysian Palm Oil Board (MPOB), Malaysia’s palm oil stocks at the end of January fell 12.2 per cent in January to 1.77 million tonnes, touching their lowest since July while the drop in output was steeper, with January palm crude oil production at only 1.16 million tonnes.
A minister said on Thursday that Malaysia will resume taxing exports of crude palm oil in March after scrapping the duty for five months to spur demand and reduce bloated stockpiles.
On Monday, the price rose in the earlier session with investors taking more bullish positions after Indonesia approved a near-three-fold rise in biodiesel subsidies that will boost use of the tropical oil by its top producer.
However, the price fell in the late session with concerns over sluggish export demand in February. On Tuesday, the price fell, giving up gains in the earlier session as traders fretted about the poor appetite for the tropical oil, although tighter stocks in the world’s No.2 grower curbed losses.
On Wednesday, the price edged down to a near one-week low as concerns over waning demand from key customers turned investors wary, although official data showed smaller stockpiles in Malaysia which provided some support.
On Thursday, the price edged up, snapping three days of decline as weakness in the ringgit and the announcement that Malaysia will resume taxing palm exports encouraged buying. On Friday, the price fell as the market digested recent news of Malaysia’s plans to re-impose taxes on palm oil exports.
Technical analysis
According to weekly FCPO chart, the price is able to stay above middle Bollinger band at 2,225 and touch the upper Bollinger band at 2,357.
According to the daily FCPO chart, on Monday, the price rose 0.2 per cent in the early session to 2,350 and briefly touched their highest since January 15 at 2,357.
However, by the late session, the price was unable to retain previous gain and closed lower at 2,317. On Tuesday, the price fell, attempting to test the psychological barrier 2,300 and closed exactly at 2,300.
On Wednesday, the price continued to fell, breaking psychological level 2,300 and approaching the middle Bollinger band, and eventually closed at 2,277. On Thursday, the price hovered between 2,271 and 2,300, continued toward to the middle Bollinger band, eventually closed at 2,290.
On Friday, the price was well support by middle Bollinger Band and closed at 2,293, 7 ticks below psychological barrier 2,300. In the coming week, the price has potential to range between 2,220 and 2,350.
Resistance lines will be placed at 2,350 and 2,430, while support lines will be positioned at 2,220 and 2,160, these levels will be observed in the coming week.
Major fundamental news this coming week
ITS and SGS reports on February 16 (Monday).
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.