MARKET DEVELOPMENT
Crude Palm Oil Weekly Report – May 13, 2017
Crude Palm Oil Weekly Report – May 13, 2017
15/05/2017 (Borneo Post) - Malaysian palm oil futures ended its fifth consecutive day of gains on Friday, after hitting a one-month peak, tracking weaker soyoil on the Chicago Board of Trade (CBOT) and driven by profit taking by traders ahead of the release of export data due on Monday.
The benchmark palm oil futures (FCPO) contracts for July delivery closed at RM2,655, 2.91 per cent or RM75 higher, compared with RM2,580 on last Friday.
Traded volume surged to 150,398 contracts during Monday, Tuesday and Thursday, up 49.25 per cent, compared with 100,771 contracts traded during last Tuesday to Thursday.
Open interest for the first three trading days of the week dropped 2.38 per cent to 658,871 contracts, compared with 674,916 contracts from last Tuesday to Thursday.
Intertek Testing Services (ITS) reported that exports of Malaysian palm oil products during May 1 to 10 increased 12.91 per cent to 346,920 tonnes from 307,429 tonnes shipped during April 1 to 10.
Societe Generale de Surveillance (SGS) reported that exports of Malaysian palm oil products during May 1 to 10 increased 15 per cent to 359,355 tonnes from 312,489 tonnes shipped during April 1 to 10.
Data from industry regulator, Malaysia Palm Oil Board (MPOB) showed palm oil production increasing for the second consecutive month, up 5.7 per cent to 1.55 million tonnes in April but was below market expectations of 8.8 per cent growth rate.
The end-stocks increased three per cent to 1.6 million tonnes whereas exports edged up 1.4 per cent on-month to 1.28 million tonnes.
Palm oil production in April was weaker than expected which could be due to a combination of floods impacting some areas, worker shortage and fewer working days compared to March.
As the output will usually increase from second quarter until the third quarter of the year, in line with the seasonal trend and as the effects of a crop damaging El Nino wear off.
However, productivity might be affected when entering into the Muslim fasting month which starts at the end of May.
This week, spot ringgit depreciated slightly to 4.3480 against the US dollar, weakened 0.3 per cent comparing to 4.3350 on last Friday as the dollar edged up due to expectations for further US monetary policy tightening next month.
On Monday, Malaysian palm oil futures climbed for the third consecutive session, on expectations of a solid demand ahead of Ramadan festivities.
On Tuesday, Malaysian palm oil prices rose to their highest close in over four weeks as strong demand for the commodity and talks of improving exports data supported sentiment.
On Thursday, Malaysian palm oil futures notched up, recording its biggest daily gain in over a month during the afternoon session. It also marked the fifth consecutive day of increases and a one-month peak on weaker than forecast output growth.
On Friday, Malaysian palm oil futures ended in negative territory, dragged down by weaker soyoil on the Chicago Board of Trade and traders taking profits ahead of export data due on Monday.
Technical analysis
Referring to FCPO daily chart, the market extended its rally this week to a one-month high after it broke out from the consolidation phase on Friday. However, the rally was resisted by the upper Bollinger Band during Friday’s trade.
On Monday, Malaysian palm oil futures extended its gains, with the benchmark month contract up 20 points, closing at 2,600.
On Tuesday, Malaysian palm oil futures recorded gains for the fourth consecutive trading session, as the benchmark contract rose 27 points and closed at 2,627.
On Thursday, Malaysian palm oil futures posted a fifth consecutive day of gains, with the active month contract rising 41 points and closing at 2,669, the highest level for the past one-month.
On Friday, Malaysian palm oil futures ended its five-day winning streak after hitting its one-month high. The active month contract was down 14 points and closed at 2,655.
In the coming week, the market would likely test the psychological resistance at 2,700. Breaking this level would lead the market to rise further to 2,735, and it is expected trade in the range of 2,600 to 2,740.
Resistance lines will be positioned at 2,735 and 2,775, whereas support lines would be positioned at 2,600 and 2,570. These levels would be observed in the coming week.
Major fundamental news this coming week
ITS and SGS reports will be released on May 15.
The benchmark palm oil futures (FCPO) contracts for July delivery closed at RM2,655, 2.91 per cent or RM75 higher, compared with RM2,580 on last Friday.
Traded volume surged to 150,398 contracts during Monday, Tuesday and Thursday, up 49.25 per cent, compared with 100,771 contracts traded during last Tuesday to Thursday.
Open interest for the first three trading days of the week dropped 2.38 per cent to 658,871 contracts, compared with 674,916 contracts from last Tuesday to Thursday.
Intertek Testing Services (ITS) reported that exports of Malaysian palm oil products during May 1 to 10 increased 12.91 per cent to 346,920 tonnes from 307,429 tonnes shipped during April 1 to 10.
Societe Generale de Surveillance (SGS) reported that exports of Malaysian palm oil products during May 1 to 10 increased 15 per cent to 359,355 tonnes from 312,489 tonnes shipped during April 1 to 10.
Data from industry regulator, Malaysia Palm Oil Board (MPOB) showed palm oil production increasing for the second consecutive month, up 5.7 per cent to 1.55 million tonnes in April but was below market expectations of 8.8 per cent growth rate.
The end-stocks increased three per cent to 1.6 million tonnes whereas exports edged up 1.4 per cent on-month to 1.28 million tonnes.
Palm oil production in April was weaker than expected which could be due to a combination of floods impacting some areas, worker shortage and fewer working days compared to March.
As the output will usually increase from second quarter until the third quarter of the year, in line with the seasonal trend and as the effects of a crop damaging El Nino wear off.
However, productivity might be affected when entering into the Muslim fasting month which starts at the end of May.
This week, spot ringgit depreciated slightly to 4.3480 against the US dollar, weakened 0.3 per cent comparing to 4.3350 on last Friday as the dollar edged up due to expectations for further US monetary policy tightening next month.
On Monday, Malaysian palm oil futures climbed for the third consecutive session, on expectations of a solid demand ahead of Ramadan festivities.
On Tuesday, Malaysian palm oil prices rose to their highest close in over four weeks as strong demand for the commodity and talks of improving exports data supported sentiment.
On Thursday, Malaysian palm oil futures notched up, recording its biggest daily gain in over a month during the afternoon session. It also marked the fifth consecutive day of increases and a one-month peak on weaker than forecast output growth.
On Friday, Malaysian palm oil futures ended in negative territory, dragged down by weaker soyoil on the Chicago Board of Trade and traders taking profits ahead of export data due on Monday.
Technical analysis
Referring to FCPO daily chart, the market extended its rally this week to a one-month high after it broke out from the consolidation phase on Friday. However, the rally was resisted by the upper Bollinger Band during Friday’s trade.
On Monday, Malaysian palm oil futures extended its gains, with the benchmark month contract up 20 points, closing at 2,600.
On Tuesday, Malaysian palm oil futures recorded gains for the fourth consecutive trading session, as the benchmark contract rose 27 points and closed at 2,627.
On Thursday, Malaysian palm oil futures posted a fifth consecutive day of gains, with the active month contract rising 41 points and closing at 2,669, the highest level for the past one-month.
On Friday, Malaysian palm oil futures ended its five-day winning streak after hitting its one-month high. The active month contract was down 14 points and closed at 2,655.
In the coming week, the market would likely test the psychological resistance at 2,700. Breaking this level would lead the market to rise further to 2,735, and it is expected trade in the range of 2,600 to 2,740.
Resistance lines will be positioned at 2,735 and 2,775, whereas support lines would be positioned at 2,600 and 2,570. These levels would be observed in the coming week.
Major fundamental news this coming week
ITS and SGS reports will be released on May 15.