Crude palm oil futures (FCPO) on Bursa Malaysia Derivatives ended the week slightly higher in range trading as traders were mainly closing their positions ahead of the coming long weekend break.
The benchmark FCPO March contract rose RM14 or 0.44 per cent to close at RM3,165 per tonne on Friday from RM3,151 per tonne last Friday.
The trading range for the week was from RM3,099 to RM3,183.
Total volume traded for the week amounted to 119,674 contracts, up 20,235 contracts from the previous week.
The open interest as at Thursday decreased to 111,409 contracts from 115,389 contracts the previous Thursday.
Following the credit rating downgrades by the Standard & Poor’s on nine euro countries last Friday, traders were monitoring closely on the progress of the talks between Greece and the international private creditors this week.
Some media reported that they were close to reaching a deal and the details might be revealed on Monday.
Greece must reach an agreement with private creditors in order to receive the next batch of bailout funds which are much needed for the bond repayment in March.
On the palm oil fundamentals, the crude palm oil prices were trapped in a range market with the support of heavy rains in Malaysia which would disrupt the harvesting of the raw material but meantime was offset by the slowdown in the exports demand.
Most traders remained on the sidelines due to long break next week and waiting for a new catalyst to move the market.
Cargo surveyor ITS released the palm oil export figures for the period of January 1 to 20 on Friday at 799,210 tonnes, a drop of 14.39 per cent while another surveyor SGS at 782,048 tonnes, a decrease of 15.44 per cent from the same period last month.
The fall in export demand was due to the significant drop in exports to China and the European Union countries.
In addition, China market will be closed for a week celebrating Lunar New Year next week and would further dampen the palm oil exports to the top palm oil importing country.
The Malaysian Meteorological Department issued a heavy rains warning that heavy rains were expected to fall in few areas in Sabah and Sarawak until January 21.
This condition may cause strong winds and flash floods in the areas affected.
US soybean futures were under selling pressure during the late week as wetter weather forecasts were expected in South American in the coming week coupled with a stronger US dollar which was unfavourable to the commodities market.
Malaysian market will be closed on Monday and Tuesday celebrating Chinese New Year.
Technical View
The benchmark april contract was trapped in a range trading this week after the market had covered the gap at rm3,097-rm3,112 as we had mentioned last week.
Palm oil prices would be expected to remain quiet and in a tight range of rm3,100 to rm3,200 next week due to public holidays.
Resistance would be pegged at rm3,270 while support was set at rm3,080 and rm3,000.
Major fundamental news this coming week
Malaysian export data for Jan 1 to 25 by SGS on January 25 and by ITS on January 26.