Crude palm oil futures (FCPO) on Bursa Malaysia Derivatives were generally moving sideways with slight pull back this week as investors were taking some profits amid the plunge in global equities.
The benchmark FCPO August contract slipped RM18 or 0.73 per cent to settle at RM2,439 per tonne on Friday from RM2,457 per tonne last Friday. The trading range for the week was from RM2,402 to RM2,470.
Total volume traded for the week amounted to 121,795 contracts, down 22,143 contracts from the previous week. The open interest as at Thursday decreased to 169,310 contracts from 171,192 contracts the previous Thursday.
The Malaysian Palm Oil Board (MPOB) released its monthly reports on Malaysian palm oil’s supply and demand for May 2013 on Monday with palm oil stocks continuing to fall to 1.816 million tonnes, a decrease of 5.12 per cent from the previous month.
However, the palm oil stocks figure came in above the average estimation of Reuter’s poll at 1.78 million tonnes prompted some investors to take profit.
According to the same report, the exports in May fell 3.03 per cent to 1.412 million tonnes while the palm oil production rose 1.3 per cent to 1.384 million tonnes.
The exports demand from China is expected to remain sluggish in June as the palm oil stocks in major ports of China were still high.
The shortfall is expected to be covered by the rising demand from India and Pakistan ahead of the Muslim festival in August. The cargo surveyor, Intertek Testing Services (ITS) released the palm oil export figures for the period of June 1 to 10 on Monday at 419,035 tonnes, a surge of 10.26 per cent while another surveyor, Societe Generale de Surveillance (SGS) at 400,075 tonnes, a rise of 6.07 per cent from the same period last month.
Meanwhile, the latest weather condition in US improved slightly with rains falling less than forecasted which has paved way for the farmers to get corn and soybean planted.
The latest crop progress released by US Department of Agriculture (USDA) showed that soybean planting as at June 9 was 71 per cent complete versus 57 per cent the previous week and was still below the five-year average of 84 per cent complete.
USDA also released its monthly report on soybean supply and demand on Wednesday with US soybean ending stocks for 2012 to 2013 were unchanged at 125 million bushels, higher than the market estimation of 121 million bushels.
The recent plunge in global equities also spooked the market sentiment in commodities.
If the global equities continued to dive in the coming weeks, this may affect the price movement in global commodities.
Technical View
The benchmark august contract consolidated this week where palm oil prices were trading in very tight range most of the time.
The rally may continue as long as the palm oil prices were supported along the uptrend channel.
Otherwise, any break below the uptrend channel will end the current rally.
The benchmark August contract will switch to September next Monday.
Resistance were pegged at RM2,476 and RM2,512 while support were set at RM2,411 and RM2,335.
Major fundamental news this coming week
Malaysian export data for June 1 to 15 by ITS on June 15 and by SGS on June 17, and the export figure for June 1 to 20 by ITS and SGS on June 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.
Source : The Borneo Post
