Crude Palm Oil Weekly Update- 9 Sept 2017

Malaysian palm oil futures jumped around two per cent, tracking a six-month high on optimism for the European Union’s (EU) anti-dumping vote and supported by gains in rival oils on the Chicago Board of Trade (CBOT) and ’s Dalian Commodity Exchange.

The benchmark crude palm oil futures (FCPO) contract increased 2.22 per cent to RM2,766 on Friday, which is RM60 lower than RM2,706 during the previous week.

The average daily trading volume during Tuesday to Thursday rose 44.84 per cent with a total of 150,012 contracts traded, in contrast with 69,049 contracts traded during last Monday to Tuesday.

Daily open interest during Tuesday to Thursday inched up 0.79 per cent to 646,880 contracts from 427,867 contracts during last Monday to Tuesday.



Intertek Testing Services (ITS) reported that export of Malaysian palm oil products for August 1 to 31 increased 0.32 per cent to 1.243 million tonnes, from 1.239 million tonnes shipped during July 1 to 31.

Societe Generale de Surveillance (SGS) reported that exports of Malaysian palm oil products during August 1 to 31 fell 0.07 per cent to 1.259 million tonnes from 1.26 million tonnes shipped during July 1 to 31.

Cargo surveyor reports were mixed. However, the divergences with the previous month were slight.

Malaysian palm oil inventories are seen rising in August, inching towards the two-million tonne mark as output remained near its strongest in two years, a Reuters poll showed.

According to the median response surveyed by Reuters, palm oil stocks at the end of August stood at 1.9 million tonnes, up 6.5 per cent from the previous month. That would track their highest level since March 2016.

The increase comes as August palm is expected to remain robust, with the survey showing it may have eased 1.4 per cent from July to 1.8 million tonnes.

Meanwhile, demand for palm oil is being underpinned ahead of major festivals in top consumer nations, India and China at the following months.

Spot ringgit appreciated 1.65 per cent to 4.1960 against the this week, compared to 4.2665 on last Wednesday.



The greenback was flat against a basket of other major currencies, pressured on Tuesday by Fed policymaker Lael Brainard saying was ‘well short’ of target and that the Fed should be cautious about raising US interest rates.

On Tuesday, Malaysian palm oil futures snapped four days of losses, tracking gains in rival edible oils on the Chicago Board of Trade (CBOT) and China’s Dalian Commodity Exchange.

On Wednesday, Malaysian palm oil futures prices slipped back as traders reacted to a stronger ringgit, reversing on gains made in the previous session.

On Thursday, Malaysian palm oil futures reversed early losses, rising more than one per cent on expectations of positive news from the EU’s decision on biodiesel anti-dumping duties.

On Friday, Malaysian palm oil futures fell, dropping back from a six-1/2-month high hit in the previous session as a strengthening ringgit dragged on the tropical oil.

Technical analysis

According to the FCPO daily chart, the market retraced slightly after it touched the 26-week high of 2,796 and failed to break through the psychological level of 2,800.

On Tuesday, Malaysian palm oil futures gapped up and advanced to one-week high on Tuesday, with the benchmark contract closed at 2,768, which is 62 points higher than the previous closing price.



On Wednesday, Malaysian palm oil futures tumbled during the afternoon, with the benchmark contract closed at 2,744, which is 24 points higher than the previous closing price.

On Thursday, Malaysian palm oil futures climbed to a five-month high, with the benchmark contract closed at 2,780, which is 36 points higher than the previous closing price.

On Friday, Malaysian palm oil futures failed to trade higher and ended the day at negative territory, with the benchmark contract closed at 2,766, which is 14 points lower than the previous closing price.

The market was traded in the consolidation phase after it gapped up at the beginning of the trading week.

Doji candlestick was formed during late trade on Friday which signals that the buyers are becoming exhausted and weakening. In the coming week, the market is anticipated to pull back slightly before continuing its long term bullish trend.

Resistance lines will be positioned at 2,800 and 2,840, whereas support lines will be positioned at 2,680 and 2,615, these levels will be observed in the coming week.

Major fundamental news this coming week

MPOB, ITS and SGS reports will be released on September 11.



Oriental Futures (OPF) is a Trading Participant and Clearing Participant of Bursa 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: Borneo Post Online





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