13/04/2015 (Borneo Post) - Malaysian palm oil futures ended higher on Friday to 2,127, rebounded from a near four and half month low touched in late trade as robust export data boosted hopes that demand was improving while weekly prices still posted their biggest loss in three weeks.

Future Crude Palm Oil (FCPO) benchmark June 2015 contract settled at 2,127 on Friday, down 65 points or 2.96 per cent from 2,192 last Friday.

Trading volume increased to 183,754 contracts from 129,194 contracts from last Monday to Thursday.

Open interest based on decreased to 703,112 contracts from 708,758 contracts from last Monday to Thursday.

Cargo surveyor, Intertek Testing Services (ITS) reported that exports of Malaysia’s palm oil products during April 1 to 10 increased 23.8 per cent to 324,545 tonnes compared with 262,168 tonnes during March 1 to 10.

Another cargo surveyor, Societe Generale de Surveillance (SGS) report showed that Malaysia’s palm oil exports during April 1 to 10 increased 29.4 per cent to 320,508 tonnes compared with 247,698 tonnes during March 1 to 10.

Overall, demand increased due to a steep rise in EU import while India continued to fall.

Spot ringgit weakened on Friday to 3.6655, as hedge funds sold the currency in the non-deliverable forwards markets and traders covered short positions in the dollar ahead of the weekend.

According Malaysian Palm Oil Association (MPOA), the group expected total palm output in March to have jumped 27.1 per cent to 1.43 million tonnes as yields in both the Peninsular and Borneo regions recovered after monsoon floods.

Investors are monitoring Indonesia’s plans to enforce levies on its exports of CPO and processed palm oil to fund its biodiesel mandates.

The levies could spur some initial demand for crude palm from neighbouring Malaysia, which may in turn force Indonesian sellers to reduce their prices to remain attractive.

According to industry regulator Malaysian Palm Oil Board data on Friday, Malaysia’s palm oil stocks at the end of March rose 7 per cent to 1,865,711 tonnes against a revised 1,743,311 tonnes at the end of February.

On Monday, the price rose on Monday for a third straight session to reach their highest in more than three weeks as lifted by rising crude oil and firm US soybean oil prices.

On Tuesday, the price fell, ending a three-day winning streak due to concerns over rising palm supplies and on anticipation of stiffer competition from top producer Indonesia.

On Wednesday and Thursday, the price fell, reaching a two and a half month low, eliminating week’s earlier gains, due to a strengthening ringgit coupled with estimates of a surge in crude palm oil production in the world’s top growers increased worries that supplies would overpower weak demand.

On Friday, the price pulling up after touched a near four and half month low as robust export data boosted hopes that demand was improving despite weekly prices still posted their biggest loss in three weeks.

Technical Analysis

According to weekly FCPO chart, the price attempting to test the lower Bollinger Band, eventually closed below the middle Bollinger Band.

According to the daily FCPO chart, the price rose on Monday, attempting to test middle Bollinger Band and psychological barrier RM2,200 on early trading session.

The price then well support by psychological level and rebounded in the later session, closed more than three weeks high at RM2,230.

On Tuesday, the price fell, testing psychological barrier at RM2,200, and closing below resistance line RM2,210 while staying within a tight range with a thin volume.

On Wednesday, the price initially fell,formed a bearish marubozu and breaking below the middle Bollinger Band, eventually closed at RM2,168.

On Thursday, the price continued to fall, formed the second bearish marubozu and attempting to test lower Bollinger Band, closed at RM2,120.

On Thursday, the price continued to fall, formed the second bearish marubozu and attempting to test lower Bollinger Band, closed at RM2,120.

On Friday, the price rose, break the psychological barrier RM2,100 in the later session, eventually well support by psychological level RM2,100 and closed 7 points higher at RM2,127.

Next week, the price has potential to range between RM2,100 and RM2,230.

Resistance lines will be placed at RM2,195 and RM2,230, while support lines will be positioned at RM2,100 and RM2,025, these levels will be observed next week.

Major fundamental news this coming week

ITS and SGS report on April 15 (Wednesday).

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.