Crude Palm Oil Weekly Report – December 1, 2017

Malaysian palm oil futures pared losses, charting a fifth consecutive week of rout, weighed down by weaker performance from rival tropical oils and strengthening ringgit which reduced the demand from oversea as palm oil became more expensive for foreign buyers.

The benchmark crude palm oil futures (FCPO) contract declined 0.84 per cent to RM2,604 on Thursday, which was RM22 lower than RM2,626 recorded during the previous week.

The average daily trading volume during Monday to Wednesday dropped 38.7 per cent with a total of 112,117 contracts traded, as compared with 243,879 contracts traded during last Monday to Thursday.

However, daily open interest during Monday to Wednesday fell 0.38 per cent to 239,740 contracts from 240,643 contracts during last Monday to Thursday.

Intertek Testing Services (ITS) reported that exports of Malaysian palm oil products for November 1 to 30 declined 5.3 per cent to 1.332 million tonnes, from 1.407 million tonnes shipped during October 1 to 31.

SocieteGenerale de Surveillance (SGS) reported that exports of Malaysian palm oil products during November 1 to 30 fell 7.5 per cent to 1.311 million tonnes from 1.417 million tonnes shipped during October 1 to 31.

Both cargo surveyor data showed decrease in exports demand on palm oil related products.

Malaysian palm rose 12.9 per cent month-on-month to two million tonnes at the end of October.

Further gains in production could add to stockpiles and weigh on prices.

Spot ringgit appreciated 0.71 per cent to 4.0875 against the , compared with 4.1168 recorded last Friday.

The ringgit, currently trading at one-year highs, eased on Thursday morning against the dollar.

The staggered progress of US tax reform legislation also overshadowed the impact of upbeat economic data on the dollar to some extent.

Technical analysis

According to the FCPO daily chart, the market was trading in a consolidated zone after hitting a four-month low at 2,560.

On Monday, Malaysian palm oil gapped-down and dipped to a four-month low, with the benchmark contract closing at 2,585.

On Tuesday, Malaysian palm oil closed slightly higher, with the benchmark contract closing at 2,587.

On Wednesday, Malaysian palm oil settled lower, with the benchmark contract closing at 2,563.

On Thursday,     Malaysian palm oil steadied, with the benchmark contract closing at 2,604.

The FCPO market continued its downtrend this week as depicted by the lower highs and lower lows on the weekly candlesticks chart.

Bollinger bands channel was heading southward which is another bearish clue that can be observed.

Resistance lines will be positioned at 2,683 and 2,710, whereas support lines will be positioned at 2,540 and 2,500. These levels will be observed in the coming week.

Major fundamental news this coming week

MPOB, ITS and SGS reports will be released on December 10.

Oriental Futures (OPF) is a Trading Participant and Clearing Participant of Bursa Derivatives. You may reach us at 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.

What do you think of this story?
  • Angry (0%)
  • Nothing (0%)
  • Interesting (0%)
  • Great (0%)

Source: Borneo Post Online

Leave a Reply

Your email address will not be published. Required fields are marked as *

Time limit is exhausted. Please reload CAPTCHA.