30/11/2015 (Borneo Post) - Malaysian palm oil futures climbed higher on Friday to 2,361, due to tracking gains in other vegetable oils and supported by expectations of lower output.

Future Crude Palm Oil (FCPO) benchmark February 2015 contract settled at 2,361 on Friday, up 72 points or 3.1 per cent from 2,289 last Friday.

Trading volume decreased to 137,402 contracts from 195,739 contracts from last Monday to Thursday.

Open interest based increased to 784,399 contracts from 779,141 contracts from last Monday to Thursday.

Cargo surveyor, Intertek Testing Services (ITS) reported that exports of Malaysia’s palm oil products during November 1 to 25 increased 0.01 per cent to 1,200,107 tonnes compared with 1,200,017 tonnes during October 1 to 25.

Another cargo surveyor, Societe Generale de Surveillance’s (SGS) report showed that Malaysia’s palm oil exports during November 1 to 25 decreased 0.8 per cent to 1.216 million tonnes compared with 1.226 million tonnes during October 1 to 25.

Overall, demand strengthened from the EU, China and Pakistan, while demand weakened from the US and India.

Spot ringgit weakened on Friday to 4.255, as crude oil prices declined.

Indonesia’s export tax for crude palm oil in December will be at zero per cent, unchanged from November, Nurlaila Nur Muhammad, director for agriculture and forestry exports at the Trade Ministry, told Reuters on Thursday.

On Monday, the price declined, for the third consecutive day, as buying pressure diminished following high inventories and expectations of soft export demand.

On Tuesday, the price fell, for a fourth consecutive day, due to a strengthening ringgit.

On Wednesday, the price rose by more than 1 per cent, ending four successive days of declines, while earlier touching the lowest in nearly a month, as bargain-hunting and a report of production drop offset a stronger ringgit.

On Thursday, the price climbed, for the second consecutive day, touching the highest in more than a week, on falling output, with many palm investors awaiting for fresh direction from an industry conference this week on the resort island of Bali.

On Friday, the price rose, for the third consecutive day, by more than one per cent, touching the highest in nearly three weeks, due to tracking gains in other vegetable oils and supported by expectations of lower output.

Technical analysis

According to the weekly FCPO chart, the price opened above the middle Bollinger band and psychological barrier at 2,300. By the end of the week, the price tested the psychological barrier at 2,300, closing above.

According to the daily FCPO chart, on Monday, the price opened above the bottom Bollinger band and psychological barrier at 2,300.

An upside gap was formed from 2,290 to 2,310, which may be covered, or indicate potential to test support level 2,250. By the later session, the previous gap was able to be covered, while the price tested the psychological barrier at 2,300, closing below, while the SO entered oversold territory.

A bearish shooting star candlestick was formed, which could indicate a potential to test the psychological barrier at 2,300 in the near term, after being unable to break below the support level at 2,270.

On Tuesday, the price opened below the middle Bollinger band, and psychological barrier at 2,300. An upside gap was formed from 2,285 to 2,295, which might be covered, or indicate the potential of testing the psychological barrier at 2,300.

By the later session, the previous gap was covered, while the price tested the psychological barrier at 2,300, closing below.

On Wednesday, the price opened below the middle Bollinger band and psychological barrier at 2,300, while the SO continues to remain in oversold territory.

By the later session, the price tested the bottom Bollinger band and psychological barrier at 2,300, closing above. Daily volume was above the average daily volume amount.

On Thursday, the price opened above the middle Bollinger band and psychological barrier at 2,300, while the SO exited oversold territory.

An upside gap was formed from 2,300 to 2,325, which if unable to be covered, could indicate potential to test resistance level at 2,350.

By the later session, the previous gap was unable to be covered, while the price tested the middle Bollinger band, closing above.

A bullish hammer candlestick was formed, which could indicate a test of the resistance level at 2,350 in the near term.

On Friday, the price opened above the middle Bollinger band and below resistance level at 2,350. By the later session, the price tested resistance level at 2,350, closing above.

This coming week, the price has potential to range between 2,250 and 2,400.

Resistance lines will be placed at 2,390 and 2,450, while support lines will be positioned at 2,310 and 2,270, these levels will be observed in this coming week.

Major fundamental news this coming week

ITS and SGS report released on November 30 (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.