MARKET DEVELOPMENT
Crude Palm Oil Weekly Report – June 20, 2015
Crude Palm Oil Weekly Report – June 20, 2015
22/06/2015 (Borneo Post) - Malaysian palm oil futures climbed higher on Friday to 2,240, due to the weakening ringgit.
Future Crude Palm Oil (FCPO) benchmark September 2015 contract settled at 2,240 on Friday, down 37 points or 1.65 per cent from 2,277 last Friday.
Trading volume increased to 169,344 contracts from 140,130 contracts from last Monday to Thursday.
Open interest based increased to 735,865 contracts from 721,008 contracts from last Monday to Thursday.
Cargo surveyor Intertek Testing Services (ITS) reported that exports of Malaysia’s palm oil products during June 1 to 15 increased 5.8 per cent to 780,387 tonnes compared with 737,308 tonnes during May 1 to 15.
Societe Generale de Surveillance (SGS) report’s showed that Malaysia’s palm oil exports during June 1 to 15 increased 6.7 per cent to 782,854 tonnes compared with 733,613 tonnes during May 1 to 15.
Overall, demand rose from the European Union (EU), US, and Pakistan, while demand weakened from China and India.
Spot ringgit strengthened on Friday to 3.739, as traders took profits from the best-performing emerging Asian currency of the week.
Indonesia, the world’s top exporter of the edible oil, has once again delayed the implementation date for its planned levy on crude palm oil exports to July 1 from June 15 due to administrative issues, Coordinating Minister of Economic Affairs Sofyan Djalil told reporters on Monday.
Indonesia will start imposing a US$50 per tonne levy on crude palm oil exports as part of its new biodiesel regulations from June 15, Coordinating Minister of Economic Affairs Sofyan Djalil told reporters on Friday.
Malaysia, the world’s second-largest palm grower after Indonesia, will keep its crude palm oil export tax for the month of July at zero per cent, extending duty-free exports from May, a government circular showed on Wednesday.
Market players are anticipating crude palm oil production in Malaysia would weaken due to the Muslim festival of Ramadan as plantation workers go on holiday.
The market is keeping watch on cargo surveyors’ export data for overseas shipments of palm oil between June 1 to 20, due to be released on Saturday.
On Monday, the price fell for the second consecutive day, while staying within a tight range, and on a lower volume, due to tracking declines in competing soyoil markets. However, data showed an increase in shipments from Malaysia in June and a new Indonesian export levy had supported the price.
On Tuesday, the price rose, while remaining in range-bound, for the first time in three sessions, as the tropical oil tracked gains in comparative soy markets, but was pressured by doubts on the effectiveness of Indonesia’s levies to boost its biodiesel consumption. On Wednesday, the price was remained unchanged, while staying within a tight range, due to uncertainties over the implementation of Indonesian palm levies and whether they could effectively fund biodiesel subsidies in the world’s top producer.
On Thursday, the price declined the most in three months, touching the lowest in nearly three weeks, due to the strengthening ringgit, coupled with tracking weakening competing soyoil markets.
On Friday, the price rose, while attempting to recover losses during the previous day, as the ringgit eased, although steep losses earlier this week kept the tropical oil facing its second straight weekly loss.
Technical analysis
According to the weekly FCPO chart, the price opened and closed above the middle Bollinger band. The previous upside gap from 2,220 to 2,260 was covered by the end of the week.
In the near term, there is potential for the price to testthe middle Bollinger band, and if the price breaks below, it could enter the previous consolidation range at 2,140 to 2,190.
However, if it bounces, the price could retest resistance line 2,350 next week.
According to the daily FCPO chart, on Monday, the price opened above the middle Bollinger band. A downside gap was formed from 2,280 to 2,260, which could be covered in the near term.
By the later session, the earlier gap was covered, while the price closed above the middle Bollinger band. The price managed to stay above the previous day intra-day low, indicating potential rebound.
On Tuesday, the price opened and closed above the middle Bollinger band, while volume was lower than usual, while unable to test the psychological barrier at 2,300. The price remained in consolidation range at 2,250 to 2,300 since the previous week.
On Wednesday, the price opened below the psychological barrier at 2,300. By the end of the day, the price tested the psychological barrier 2,300, closing below. A long-legged doji candlestick formed, indicating that markets players are unsure of the market direction, and await further catalysts and market news.
On Thursday, the price opened above the middle Bollinger band. By the later session, the price tested the middle Bollinger band, closing below. The price has attempted to cover previous price gap of 2,220 to 2,260, at the beginning of the month.
On Friday, the price opened and closed below the middle Bollinger band, while the SO approaches oversold territory.
In the coming week, the price has the potential to range between 2,150 and 2,250. Resistance lines will be placed at 2,290 and 2,350, while support lines will be positioned at 2,190 and 2,150, these levels will be observed in the coming week.
Major fundamental news this coming week
ITS and SGS report released on June 22 and 25 (Monday and Thursday).
Future Crude Palm Oil (FCPO) benchmark September 2015 contract settled at 2,240 on Friday, down 37 points or 1.65 per cent from 2,277 last Friday.
Trading volume increased to 169,344 contracts from 140,130 contracts from last Monday to Thursday.
Open interest based increased to 735,865 contracts from 721,008 contracts from last Monday to Thursday.
Cargo surveyor Intertek Testing Services (ITS) reported that exports of Malaysia’s palm oil products during June 1 to 15 increased 5.8 per cent to 780,387 tonnes compared with 737,308 tonnes during May 1 to 15.
Societe Generale de Surveillance (SGS) report’s showed that Malaysia’s palm oil exports during June 1 to 15 increased 6.7 per cent to 782,854 tonnes compared with 733,613 tonnes during May 1 to 15.
Overall, demand rose from the European Union (EU), US, and Pakistan, while demand weakened from China and India.
Spot ringgit strengthened on Friday to 3.739, as traders took profits from the best-performing emerging Asian currency of the week.
Indonesia, the world’s top exporter of the edible oil, has once again delayed the implementation date for its planned levy on crude palm oil exports to July 1 from June 15 due to administrative issues, Coordinating Minister of Economic Affairs Sofyan Djalil told reporters on Monday.
Indonesia will start imposing a US$50 per tonne levy on crude palm oil exports as part of its new biodiesel regulations from June 15, Coordinating Minister of Economic Affairs Sofyan Djalil told reporters on Friday.
Malaysia, the world’s second-largest palm grower after Indonesia, will keep its crude palm oil export tax for the month of July at zero per cent, extending duty-free exports from May, a government circular showed on Wednesday.
Market players are anticipating crude palm oil production in Malaysia would weaken due to the Muslim festival of Ramadan as plantation workers go on holiday.
The market is keeping watch on cargo surveyors’ export data for overseas shipments of palm oil between June 1 to 20, due to be released on Saturday.
On Monday, the price fell for the second consecutive day, while staying within a tight range, and on a lower volume, due to tracking declines in competing soyoil markets. However, data showed an increase in shipments from Malaysia in June and a new Indonesian export levy had supported the price.
On Tuesday, the price rose, while remaining in range-bound, for the first time in three sessions, as the tropical oil tracked gains in comparative soy markets, but was pressured by doubts on the effectiveness of Indonesia’s levies to boost its biodiesel consumption. On Wednesday, the price was remained unchanged, while staying within a tight range, due to uncertainties over the implementation of Indonesian palm levies and whether they could effectively fund biodiesel subsidies in the world’s top producer.
On Thursday, the price declined the most in three months, touching the lowest in nearly three weeks, due to the strengthening ringgit, coupled with tracking weakening competing soyoil markets.
On Friday, the price rose, while attempting to recover losses during the previous day, as the ringgit eased, although steep losses earlier this week kept the tropical oil facing its second straight weekly loss.
Technical analysis
According to the weekly FCPO chart, the price opened and closed above the middle Bollinger band. The previous upside gap from 2,220 to 2,260 was covered by the end of the week.
In the near term, there is potential for the price to testthe middle Bollinger band, and if the price breaks below, it could enter the previous consolidation range at 2,140 to 2,190.
However, if it bounces, the price could retest resistance line 2,350 next week.
According to the daily FCPO chart, on Monday, the price opened above the middle Bollinger band. A downside gap was formed from 2,280 to 2,260, which could be covered in the near term.
By the later session, the earlier gap was covered, while the price closed above the middle Bollinger band. The price managed to stay above the previous day intra-day low, indicating potential rebound.
On Tuesday, the price opened and closed above the middle Bollinger band, while volume was lower than usual, while unable to test the psychological barrier at 2,300. The price remained in consolidation range at 2,250 to 2,300 since the previous week.
On Wednesday, the price opened below the psychological barrier at 2,300. By the end of the day, the price tested the psychological barrier 2,300, closing below. A long-legged doji candlestick formed, indicating that markets players are unsure of the market direction, and await further catalysts and market news.
On Thursday, the price opened above the middle Bollinger band. By the later session, the price tested the middle Bollinger band, closing below. The price has attempted to cover previous price gap of 2,220 to 2,260, at the beginning of the month.
On Friday, the price opened and closed below the middle Bollinger band, while the SO approaches oversold territory.
In the coming week, the price has the potential to range between 2,150 and 2,250. Resistance lines will be placed at 2,290 and 2,350, while support lines will be positioned at 2,190 and 2,150, these levels will be observed in the coming week.
Major fundamental news this coming week
ITS and SGS report released on June 22 and 25 (Monday and Thursday).