Technical Analysis for FCPO, FCPO Daily Chart Source: OPF Charting System
Crude palm oil futures (FCPO) on Bursa Malaysia Derivatives slipped this week due to the strengthening in ringgit and concerns over the bird flu outbreak in China.
The benchmark FCPO June contract dipped RM14 or 0.59 per cent to settle at RM2,345 per tonne on Friday from RM2,359 per tonne last Friday.
The trading range for the week was from RM2,336 to RM2,419.
Total volume traded for the week amounted to 148,548 contracts, up 4,396 contracts from the previous week.
The open interest as at Thursday increased to 149,881 contracts from 148,282 contracts the previous Thursday.
The Chinese government reported on Friday that there were new cases recorded on the number of people infected from the bird flu virus.
The latest news revealed that the death toll had increased to a total of 11 people from six people last week while another 29 people have been infected with this bird flu virus, known as H7N9 on Friday.
At the moment, the outbreak was contained at eastern China where Shanghai is the centre of the outbreak.
The fast response from the Chinese government has brought the situation under control so far by alerting the residents of the country on the bird flu prevention measures.
The bird flu outbreak in China may potentially reduce the feed demand which could also pressure the prices of the related commodities.
Meanwhile, the bullish MPOB reports and robust exports demand released on Wednesday failed to lift palm oil prices as the recent strength in ringgit had capped the market from rallying.
MPOB released its monthly reports on Malaysian palm oil’s supply and demand for March 2013 on Wednesday with palm oil stocks fall sharply to 2.173 million tonnes, a decrease of 10.87 per cent from the previous month and was far below the average estimation of Reuter’s poll at 2.35 million tonnes.
According to the report, the exports in March soared 10.04 per cent to 1.539 million tonnes while the palm oil production rose 2.18 per cent to 1.325 million tonnes.
In addition, the latest cargo surveyors’ reports showed that there was improvement in the exports demand for April.
The cargo surveyor ITS released the palm oil export figures for the period of April 1 to April 10 on Wednesday at 456,440 tonnes, a rise of 3.50 per cent while another surveyor SGS at 462,276 tonnes, an increase of 5.41 per cent from the same period last month.
Technical view
The benchmark June contract seemed to have strong resistance below EMA50.
Heavy selling pressure was noted for the past week after the bullish MPOB reports failed to lift the palm oil prices.
The palm oil prices closed below the benchmark level of RM2,360 this week showing weakness in prices and high likely the prices may break the recent low of RM2,335 next week.
Any price break below RM2,335 would attract more technical selling and long liquidation in the market which may further drive the prices down to test the previous low of RM2,217 level.
The benchmark June will switch to July contract on Tuesday. Resistance will be pegged at RM2,467 and RM2,580 while support is set at RM2,335 and RM2,217.
Major fundamental news this coming week
Malaysian export data for April 1 to April 15 by ITS and SGS on April 15 and the export figure for April 1 to April 20 by ITS on April 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
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