Technical Analysis for FCPO, FCPO Daily Chart Source: BursaStation Professional
Crude palm oil futures (FCPO) on Bursa Malaysia Derivatives fell this week as weak economic data from US and China increased worries about the recovering of the global economy.
The benchmark FCPO July contract dropped RM49 or 2.09 per cent to settle at RM2,296 per tonne on Friday from RM2,345 per tonne last Friday.
The trading range for the week was from RM2,265 to RM2,325.
Total volume traded for the week amounted to 177,106 contracts, up 28,558 contracts from the previous week.
The open interest as at Thursday increased to 155,723 contracts from 149,881 contracts the previous Thursday.
China released its gross domestic product (GDP) fi gure at 7.7 per cent, below the market expectations of 8.0 per cent earlier this week.
The latest Chinese economic data reflected the possibility of slowing down in its economic growth which might affect the demand for raw materials.
This GDP data sent most of the prices of raw materials to multi-month low from crude oil, copper and gold prices.
Gold prices experienced an abnormal market movement on Monday where it dived more than 10 per cent to US$1,321 an ounce, a level not seen since February 2011.
The sharp fall in gold prices was also contributed by the anticipation of Cyprus’s plan to sell its gold reserves to raise funds for their country.
This was the deepest plunge in a day for gold prices for the past 30 years.
Palm oil prices were facing continuous heavy selling pressure this week amid the weak economic growth in top global economy and the uncertainties in Europe.
In addition, the slowdown in the recent palm oil exports also contributed to the fall in palm oil prices.
The cargo surveyor ITS released the palm oil export fi gures for the period of April 1 to April 15 on Monday at 648,275 tonnes, a decrease of 3.99 per cent while another surveyor SGS at 629,990 tonnes, a fall of 7.19 per cent from the same period last month.
European Union countries slowed down more than 40 per cent in their palm oil shipments while China maintained their purchases during the first half of April.
The bird flu outbreak in China will be monitored closely from time to time as to check whether there is any possibility of getting worse.
The spot US soybean prices was strong recently as delays in soybean shipments from Brazilian suppliers boosted demand for US soybean.
This added to the already tight US soybean supply due to low carryover stocks from last crop year.
However, the forward months soybean prices were relatively weaker due to the anticipation of large soybean crop to be planted this year.
The Malaysian government announced on Monday that the crude palm oil export tax for May would be remained at 4.5 per cent.
Technical view
The benchmark July contract remained under pressure this week amid the uncertainties in the global market scenario.
Palm oil prices were expected to trade in the range of RM2,217 to RM2,335 until there was any further development in the global markets.
Resistance is pegged at RM2,335 and RM2,467 while support is set at RM2,217.
Major fundamental news this coming week
Malaysian export data for April 1 to April 20 by SGS on April 22 and the export fi gure for April 1 to April 25 by ITS and SGS on April 25.
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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