Technical Analysis for FCPO FCPO Daily Chart Source: OPF Charting System
Crude palm oil futures (FCPO) on Bursa Malaysia Derivatives ended the week slightly lower as most traders were squaring off their positions ahead of the annual palm oil conference which would be held in Kuala Lumpur the following week.
The benchmark FCPO May contract slipped RM17 or 0.52 per cent to close at RM3,259 per tonne on Friday from RM3,276 per tonne last Friday.
The trading range for the week was from RM3,233 to RM3,321.
Total volume traded for the week amounted to 104,113 contracts, down 11,105 contracts from the previous week. The open interest as at Thursday increased to 123,480 contracts from 123,129 contracts the previous Thursday.
The global renowned Palm and Lauric Oils Price Outlook Conference (POC), organised by Bursa Malaysia Derivatives would be held next week from March 5 to March 7 in Kuala Lumpur, Malaysia.
The conference has become one of the most important annual events in the edible oils industry and widely participated by the international players from over 40 countries globally.
Most traders would be waiting for the views from the top industry analysts such as Dorab Mistry, Thomas Mielke and Dr James Fry on the price outlook for palm oil in year 2012/13.
Cargo surveyor ITS released the palm oil export figures for the full month of February on Wednesday at 1,177,262 tonnes, a drop of 10.5 per cent while another surveyor SGS at 1,170,698 tonnes, a decrease of 9.46 per cent from the same period last month.
The export pace continued to pick up during the last few days in February but the demand was probably not enough to outpace the drop in production.
Some analysts expected the palm oil stocks in February would be likely unchanged to slightly higher.
The palm oil export to European Union and Pakistan was also slowing down as some of the orders had shifted to Indonesian suppliers due to cheaper selling price riding on the benefits of lower export tax.
Some of the top palm oil refiners in Malaysia had also planned to move their operations to Indonesia due to better refining margin compared with Malaysia after the Indonesian government halved its refined palm products export tax in August last year.
Meanwhile, the firm US soybean prices underpinned palm oil prices due to the robust soybean export demand from China in recent weeks and also technical buying interest in the market.
However, the gains in commodities were capped after the US Federal Reserve chairman hinted on Wednesday that there would be no quantitative easing in the current situation as the economic data in US was showing positive improvement.
Technical View
The benchmark May contract was choppy in two-sided trades this week with palm oil market looked toppish above RM3,300 especially the weak closing was formed after the market hit the high of RM3,321 on Tuesday.
We expect the trading range would remain in RM3,200 to RM3,350 while waiting for the new catalysts from the palm oil conference next week.
Resistance would be pegged at RM3,350 and RM3,465 while support was set at RM3,200 and RM3,085.
Major fundamental news this coming week
The news from Palm Oil Price Outlook Conference 2012 in Kuala Lumpur, Malaysia on March 5 to March 7 and USDA’s monthly supply-demand report on March 9.