Asian Crude Palm Oil Ends Down; MYR2,550 Key Support Breached (26 Mar 2010)
Crude palm oil futures on Malaysia's derivatives exchange ended lower Friday, breaching a key support level as participants squared off positions ahead of the weekend, said traders.
The benchmark June contract on the Bursa Malaysia Derivatives exchange ended MYR41 lower at the intraday low of MYR2,534 a metric ton, after trading in a range of MYR2,534-MYR2,565.
Trade was thin and sluggish for most of the day, but downward momentum built up after prices breached the crucial MYR2,550 support level, said traders. "Breaching the MYR2,550 level means prices will likely trade downwards to MYR2,500, rather than aim to break the MYR2,600 resistance," said a Kuala Lumpur-based trader.
CPO prices have been constantly testing the MYR2,550 support and MYR2,600 this week, but prices barely breached either levels until today. "There is a bit of bearish sentiment that is weighing on prices. Exports are higher on month, but that's to be expected, as February was a short month compared with March. Production is rising, however, and that's prompting fears of rising stock levels," said another Kuala Lumpur-based trader.
Cash market prices for forward months like July, August and September are trading at a discount to nearer months, likely indicative that stocks are tipped to rise in the next few months, said a Singapore-based trader.
In the cash market, palm olein for July/August/September traded at $792.50/ton, said an executive from a Singapore-based commodities brokerage. Cash CPO for prompt shipment was offered MYR30 lower at MYR2,610/ton. Open interest on the BMD was 78,501 lots, up from 78,414 lots Thursday. One lot is equivalent to 25 tons. A total of 14,711 lots of CPO were traded versus 10,656 lots Thursday.
CPO futures lower on lack of strong buying (27 Mar 2010)
CRUDE palm oil (CPO) futures on Bursa Malaysia Derivatives closed lower yesterday on lack of a strong buying interest, dealers said. They said the weaker overnight soyaoil prices on the Chicago Board of Trade and the Dalian Commodity Exchange encouraged players to trim their position.
At the close, April fell RM35 to settle at RM2,599, May declined RM34 to RM2,565 per tonne, June dropped RM41 to RM2,534 and July eased RM37 to RM2,521. Turnover, however, increased to 14,711 lots from 10,656 lots on Thursday and open interests rose to 78,501 contracts from 78,414 contracts previously.
On the physical market, April South slipped to RM2,610 on Thursday. "I wouldn't say it is a bear market but players are taking out weather premium from palm prices which had caused prices to move up," said a trader.
Traders expect the market to test lower levels around RM2,500 next week on the view that supply may increase as rains would help boost production.
THE Malaysian rubber market closed higher yesterday on strong demand, dealers said. They said firmer rubber prices on the Tokyo Commodity Exchange also lifted buying sentiment in the local market.
"The market fundamentals remain firm following tight supply conditions in major producing countries,' a dealer said. At noon, the Malaysia Rubber Board’s official physical price for tyre-grade SMR 20 closed 7.5 sen higher at 1,044.5 sen per kg and latex-in-bulk rose 5 sen to 739.5 sen per kg.
The unofficial closing price for tyre-grade SMR 20 gained 8 sen to 1,048.5 sen per kg and latex-in-bulk rose 4.5 sen to 741.5 sen per kg.
THE Kuala Lumpur Tin Market (KLTM) closed higher yesterday by US$50 (US$1.00 = RM3.34) to settle at US$17,540 per tonne, despite the downtrend on the London Metal Exchange (LME), dealers said.
The tin price on the LME, which usually influences price direction for the KLTM,fell US$90 to US$17,460 per tonne. "The local tin market was firmer today with lots of bidding,especially from foreign buyers," a dealer said.
On the local front, buyers bid for 75 tonnes while sellers offered 40 tonnes. Yesterday turnover increased to 56 tonnes from 45 tonnes on Thursday. The price differential between the KLTM and the LME widened to a premium of US$435 per tonne from US$295 per tonne previously. - Bernama
CPO futures --RM2,500 is next logical target (29 Mar 2010)
OBSERVATIONS: The Kuala Lumpur CPO futures market plummeted for the third consecutive week in a row last week. The benchmark June 2010 contract closed last Friday at a 7-week low of RM2,534, down RM43 or 1.67 per cent over the week. The price slide in the past three weeks, from the recent peak of RM2,722 looks like quite a big fall. Some players think it's time for a correction, a technical rebound.
However, with no signs that this market is anywhere near its nadir in the present bear phase the road ahead still leads south, though it might be a winding one. Several factors are weighing this market down.
The recent strength in the US dollar, for one, was a depressant for all world commodities which uses the greenback as a medium of exchange for trade.
Weakness of crude oil, due to big supply buildup pressures and the black goo's inability to scale pass and stay above the US$80 (US$1 = RM3.31) a barrel level was another. But what really pushed this markets against the ropes last week was the latest and one should add, disappointing export estimates.
Export monitors Societe Generale de Surveillance (SGS) and Intertek Agri Services' (IAS) March 1-25 export estimates for the commodity amounted to an average of 1.12 million tonnes, or some 24,000 tonnes above that exported in the corresponding period in February. That's a huge comedown, compared to the earlier March 1-15 average export estimate of about 654,000 tonnes which was 67,500 tonnes or 11.75 per cent above that for first half February.
The industry expects a pickup in production in March, which does not bode well for hopes for much of a decline in end-March 2010 stocks, if any.
Conclusion: The RM2,500 a tonne psychological level is the next logical target.
BMD CPO Futures Up; Limited Upside; MYR2,518 Support (29 Mar 2010)
BMD CPO futures higher on short covering as crude oil, soyoil prices rise during Asian hours, say traders. But upside likely limited as Malaysia's CPO output in March expected to rise 7%-10% on month, says trading executive in Kuala Lumpur; adds market likely to stay in range ahead of USDA planting report Wednesday. "The current rise in CPO prices may be short-lived...a downside correction may drag prices to test support at MYR2,518/ton, then MYR2,500 today," says analyst in Singapore.
BMD Crude Palm Oil (CPO) Futures Off Highs Midday;Supply Rise Weighs
BMD Crude Palm Oil (CPO) futures off highs midday; may give up gains in afternoon session on profit-taking, traders say. "Prices couldn't break resistance at MYR2,557/ton in early trade, and this may prompt investors to liquidate their positions later in the day," says Malaysia-based trading executive; adds supply fundamentals likely to weigh as March CPO output improved. CPO market likely to remain rangebound between MYR2,520-MYR2,600/ton as investors to focus on March 1-31 palm oil exports as figures "should provide a better gauge whether (export) demand could put further pressure on palm inventories at the end of March," says analyst at Kuala Lumpur-based Kenanga Deutsche Futures. Benchmark BMD June CPO futures trading MYR6 higher midday at MYR2,540/ton, off intraday high of MYR2,557/ton. ([email protected])
BMD Crude Palm Oil (CPO) Futures Lower; Support At MYR2,510/Ton
BMD Crude Palm Oil (CPO) futures little changed in choppy trade, prices swinging between positive, negative territory on lack of fresh leads, traders say. "Some investors continue to liquidate positions to take profit and some set up long positions," says Malaysia-based broker. Market likely to remain choppy, may ease further to MYR2,510 level, says executive at global trading company. Supply fundamentals weighing on prices but rise in crude oil, soyoil supportive. Benchmark BMD June CPO futures trading MYR15 lower at MYR2,519/ton. ([email protected])
Asian Crude Palm Oil Ends Lower; March Output Likely To Have Risen (29 March 2010)
Crude palm oil futures on Malaysia's derivatives exchange ended lower in choppy trade Monday amid profit-taking and fresh buying. An expected increase in CPO output in March weighed on prices despite a rebound in crude oil and soyoil prices during Asian trading hours, trade participants said.
The benchmark June contract on the Bursa Malaysia Derivatives exchange ended MYR14 lower at MYR2,520 after falling to an intraday low at MYR2,510/ton.
Prices swung back and forth between positive and negative territory as investors liquidated positions only to buy again, a Malaysia-based exporter said. "Estimates of a 7%-10% on-month increase in Malaysia's palm oil output in March and a slight drawdown in inventories weighed on prices," said an analyst from Kuala Lumpur-based commodities brokerage.
Historically, Malaysia's CPO output usually increases in March in comparison with the shorter month of February. Output generally increases each month from March to the August-September period.
"Prices were well-supported at the MYR2,510/ton level today. But CPO futures may ease further in the coming days to below MYR2,500/ton on a (likely) bearish stocks and acreage report from the U.S.," said a Singapore-based trading executive. The US Department of Agriculture will report quarterly inventories and acreage on March 31.
Cash market prices for the forward months of July, August and September are being offered at a discount to nearer months, indicating that palm oil inventories are expected to rise in coming months. In the cash market, palm olein for April is offered at $815/ton, while July/August/September is offered at $795/ton. Cash CPO for prompt shipment was offered MYR20 lower at MYR2,590/ton. Open interest on the BMD was 79,450 lots, up from 78,501 lots Friday. One lot is equivalent to 25 tons. A total of 15,643 lots of CPO were traded versus 14,711 lots Friday.