Weekly Crude Palm Oil Report December 23 2012

by Eunice Choo. Posted on December 23, 2012, Sunday

Crude palm oil futures (FCPO) on Bursa Malaysia Derivatives ended the week sharply higher due to the optimism
of increasing demand in the coming months and short covering activities ahead of the holiday season end of the
year.
The benchmark FCPO March contract surged RM133 or 5.84 per cent to close at RM2,409 per tonne on Friday
from RM2,276 per tonne last Friday.
The trading range for the week was from RM2,296 to RM2,410.
Total volume traded for the week amounted to 157,246 contracts, down 30,991 contracts from the previous week.
The open interest as at Thursday increased to 159,084 contracts from 158,436 contracts the previous Thursday.
Palm oil market was cheered by the announcement from the Malaysian government on Monday that its crude
palm oil export tax for January would be set at zero per cent in line with the analysts expectation the week
earlier.
Such move would be able to boost demand for crude palm oil from those countries that are price-sensitive to
vegetable oils like India, China and Pakistan.
This would also open up the opportunities for other palm oil suppliers to sell crude palm oil to overseas buyers
without the restrictions of free export tax quota for crude palm oil which is only available to certain suppliers in
Malaysia.
Cargo surveyor ITS released the palm oil export figures for the period of December 1 to 20 on Thursday at
1,004,159 tonnes, a slip of 1.89 per cent while another surveyor SGS at 1,015,440 tonnes, a slight increase of
0.50 per cent from the same period last month.
On the other hand, the soybean prices were under pressure this week as China had cancelled a total of 840,000
tons of soybean shipments this week.
The Chinese soybean importers expected the soybean prices would be ease from the current level with the
anticipation of record soybean plantings from South America.
The weather in Brazil was favourable so far but the weather in Argentina was a bit wetter, slowing down the crop
planting progress in key producing areas.
The current scenario may narrow the deep discount between palm oil and soybean oil prices which is hovering at
US$350 per ton currently.
The Malaysian palm oil production may have a double digit fall in December as heavy rains disrupted the
harvesting and transportation of the tropical oil.
On the economic front, the US fiscal cliff will still be on focus as it is approaching the expiry end of this year.
Most analysts viewed that the US policy makers would be able to close the deal to avert the fiscal cliff.
The Malaysian market will be closed on Tuesday celebrating Christmas day.
Technical View
The benchmark March contract finally broke up from the consolidation phase on Friday after the market had
nicely covered most of the gap left in the chart due to change of month.
This breakout confirmed the market is ready for a rally soon. The target for this rally would be set at RM2,745 to
RM2,820 levels.
Resistance would be pegged at RM2,490 and RM2,634 while support was set at RM2,350 and RM2,220.
Major fundamental news this coming week
Malaysian export data for December 1 to 25 by ITS and SGS on December 26.
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



Weekly Crude Palm Oil Report December 16 2012
by Eunice Choo. Posted on December 16, 2012, Sunday

Crude palm oil futures (FCPO) on Bursa Malaysia Derivatives ended the week lower in tandem with the fall in
soybean oil prices and the stagnant growth in palm oil exports.
The benchmark FCPO February contract fell RM20 or 0.87 per cent to close at RM2,276 per tonne on Friday
from RM2,296 per tonne last Friday.
The trading range for the week was from RM2,217 to RM2,324. Total volume traded for the week amounted to
188,237 contracts, down 3,392 contracts from the previous week.
The open interest as at Thursday increased to 158,436 contracts from 149,844 contracts the previous Thursday.
Cargo surveyor ITS released the palm oil export figures for the period of December 1 to 10 on Monday at
504,032 tonnes, a slip of 2.83 per cent while another surveyor SGS at 516,841 tonnes, a slight increase of 0.40
per cent from the same period last month.
Malaysian Palm Oil Board (MPOB) released its firm monthly reports on Malaysian palm oils supply and demand
for November 2012 on Monday with palm oil stocks were slightly higher at 2.563 million tonnes, an increase of
2.30 per cent from the previous month and was below the average estimation of Reuters poll at 2.58 million
tonnes.
The exports in November dropped 5.67 per cent to 1.659 million tonnes while the palm oil production reduced
2.58 per cent to 1.888 million tonnes.
The build in palm oil stocks were seen slowing down and this is a good sign of the possibility for palm oil stocks
reaching its peak.
The palm oil exports were expected to pick up in the coming weeks as some exporters would like to finish up
their annual tax-free export quota by end of this year.
The Malaysian government was expected to reveal its new crude palm oil export tax for January next Monday.
The government will announce the new export tax on every 15th of the month by using the MPOBs palm oil
prices as reference.
Some analysts estimated the new export tax could be near zero per cent, as the average crude palm oil price for
the period of November 10 to December 9 was below the reference price of RM2,250 per tonne.
If the new export tax for crude palm oil is set to be near zero per cent for January, this would be able to boost the
demand for palm oil and to reduce the current burdensome stocks level.
Meanwhile, USDA released its monthly report on soybean supply and demand on Tuesday with soybean ending
stocks for 2012/13 reducing to 130 million bushels from 140 million bushels due to soybean crushings were
increased 10 million bushels to 1.57 billion bushels in the previous report.
The weather in Brazil was favourable so far and the prospects of large soybean production in South America
remained intact.
Technical View
The benchmark February contract briefly broke RM2,220 support this week due to the plunge in soybean oil
prices.
The benchmark contract will change to March next Monday with a large gap of RM70.
We opined that the consolidation phase would be end next week but be cautious of the large gap due to change
of month.
Resistance would be pegged at RM2,490 and RM2,634 while support was set at RM2,220.
Major fundamental news this coming week
Malaysian export data for December 1 to 15 by ITS on December 15 and SGS on December 17; export figure for
December 1 to 20 by ITS and SGS on December 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.


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Weekly Crude Palm Oil Report February 12 2012
by Eunice Choo. Posted on February 12, 2012, Sunday

Technical Analysis for FCPO Daily Chart Source: OPF Charting System
Crude palm oil futures (FCPO) on Bursa Malaysia Derivatives ended the week higher in tandem with the broad
gains in the global commodities, an expectation of tighter stock level in the monthly supply and demand reports
and the optimism over the debt restructuring agreement in Greece.
The benchmark FCPO April contract surged RM46 or 1.49 per cent to close at RM3,131 per tonne on Friday from
RM3,085 per tonne last Friday. The trading range for the week was from RM3,100 to RM3,162.
Total volume traded for the week amounted to 70,013 contracts, down 13,623 contracts from the previous week.
The open interest as at Thursday increased to 116,457 contracts from 111,281 contracts the previous Thursday.
The Malaysian Palm Oil Board (MPOB) released its monthly reports on Malaysian palm oils supply and demand
for January 2012 on Friday with palm oil stocks continued to decline to 2.008 million tonnes from 2.058 million
tonnes the previous month as the drop in production outpaced the fall in exports demand.
The stocks level nearly hit the Reuters poll estimation of 1.995 million tonnes. The exports in January fell 13.17
per cent to 1.381 million tonnes while the palm oil production slumped 13.86 per cent to 1.287 million tonnes.
US Department of Agriculture (USDA) released a slightly bearish monthly report on soybean supply and demand
on Thursday with soybean ending stocks remained at 275 million bushels from the previous report. The ending
stocks figure was slightly above the average market expectation of 273 million bushels.
Most traders expected the soybean supplies would be cut a little bit lower due to yield loss in South American
soybean crop caused by prolonged drought in the past few months. The USDA reports disappointed some
traders again which prompted them to take profit and pull out some weather risk premium on the grain prices.
Meanwhile, some weather forecast reported dry weather would return to Brazil this coming week and limited rains
would be seen the following week. However, widespread rains were expected in Argentina next week which
would ease the crop stress concern.
Cargo surveyor ITS released the palm oil export figures for the period of February 1 to 10 on Friday at 342,982
tonnes, a drop of 7.71 per cent while another surveyor SGS at 337,618 tonnes, a decrease of 4.3 per cent from
the same period last month.
The Malaysian government finally released the tax-free crude palm oil export quotas to the producers this week
after delaying for weeks. This move would be able to push the exports for crude palm oil higher in February.
However, the tax-free export quotas of three million tonnes in 2012 was less than the 3.6 million tonnes issued in
2011.
Technical View
The benchmark April contract rebounded this week to hit the resistance level of the downtrend channel. Palm oil
prices were seen struggling to push higher after no bullish surprise from the monthly reports released. We would
expect the price to drift lower to cover the gap of RM3,085 to RM3,100 this coming week and probably to test the
support level of the channel if there is no further news to boost the market up.
Resistance would be pegged at RM3,150 and RM3,270 while support was set at RM3,000.


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