Borneo Post Online (18/03/2018) - Malaysian palm oil futures showed improvement on gains for fourth consecutive session due to expectations of increasing demands from Muslim regions such as Middle East to stock up for upcoming Ramadan in one month time as well as underpinned by strength in rival edible oils.

The benchmark crude palm oil futures (FCPO) contract rose 1.74 per cent to RM2,418 on Friday, which is RM93 lower than RM2,376 on previous week.

The average daily trading volume during Monday to Thursday increased 39.0 per cent with a total average of 54,519 contracts traded, as compared with total average of 33,252 contracts traded during last Monday to Thursday.

Daily average open interest during Monday to Thursday fell 3.04 per cent to 236,776 contracts from 229,567 contracts during last Monday to Thursday.

AmSpec reported that export of Malaysian palm oil products for March 1 to 15 fell 2.1 per cent to 595,536 tonnes, from 608,447 tonnes shipped during February 1 to 15.

Societe Generale de Surveillance (SGS) reported that export of Malaysian palm oil products during March 1 to 15 fell 9.0 per cent to 604,034 tonnes from 635,298 tonnes shipped during February 1 to 15.

February exports showed declined 13.3 per cent to 1.31 million tonnes, its sharpest monthly decline in a year, and could further drop in March after India raised its import taxes on palm oil to the highest in over a decade.

The soon-to-be-lifted export tax on April 7 will also cause the price to decline. The market also expected to improve demand due to the upcoming Ramadan fasting month, which Muslim regions worldwide will stock up about a month ahead of Ramadan.

Spot ringgit depreciated 0.24 per cent to 3.9240 against the US dollar this week, compared to 3.9145 on last Thursday.

Most emerging Asian currencies on Friday slipped against the dollar, which firmed overnight, as many investors refrained from taking positions ahead of a Federal Reserve meeting next week that will set the tone for US fiscal policy in 2018.

Technical Analysis
According to the FCPO daily chart, FCPO rallied for four consecutive days and ended the gains on Friday. A gained about four per cent since it hit a more than one and a half year low on Monday.

On Monday, FCPO ended at 2380, 4 points higher than the previous close of 2380, with a traded volume of 18,889.

On Tuesday, FCPO ended at 2410, 30 points higher than the previous close of 2380, with a traded volume of 21,890.

On Wednesday, FCPO ended at 2440, 30 points higher than the previous close of 2410, with a traded volume of 24,673. On Thursday, FCPO ended at 2449, 9 points higher than the previous close of 2440, with a traded volume of 22,800.

On Friday, FCPO ended at 2418, 31 points lower than the previous close of 2449, with a traded volume of 16,561.

Based on the daily candlesticks chart, FCPO trend remained bearish, which supported by MACD indicator as well as Bollinger Band in 15-minutes chart.

Besides, it also faces strong rejection on first resistance points at 2,445. We expect the market will continue to face resistance from selling momentum and test the first support points on next week.

Next week, aggressive traders may initiate short positions while conservative traders or traders with no new entry are advised to hold current position until further downwards confirmation surface from next week’s market.

Resistance lines will be positioned at 2,445 and 2,565, whereas support lines will be at 2,368, and 2,350, these levels will be observed next week.

Major fundamental news this coming week
ITS & SGS reports will be released on March 20.

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.

Read more at http://www.theborneopost.com/2018/03/18/crude-palm-oil-weekly-report-march-17-2018/