Technical Analysis for FCPO / FCPO Daily Chart Source: BursaStation Professional
Crude Palm Oil Futures (FCPO) rebounded when the market opened after the Hari Raya festivities and went above the consolidation range again as it hit its highest in more than a month on Friday.
For the week, FCPO was up 4.4 per cent which was its best performance since the week ending February 1 as rising exports boosted investor optimism.
Meanwhile, Malaysian Palm Oil Board (MPOB) reported that the stock level had increased by one per cent to 1,664,053 tonnes versus the expectation of an increase to 1,597,266 tonnes.
Production reported an increase of 18.21 per cent to 1,674,857 tonnes versus the expectation of an increase to 1,557,000 tonnes.
On the other hand, exports reported an increase of just 0.53 per cent to 1,418,678 tonnes compared with an expectation to 1,454,159 tonnes.
Moving forward to the August exports reports, for the first 10 days of August, Intertek Testing Service (ITS) reported that exports have increased 22.29 per cent to 430,934 tonnes compared with previous first 10 days of July 2013 at 352,375 tonnes.
Société Générale de Surveillance (SGS) reported exports increased 25.80 per cent to 421,337 compared with the first 10 days of July 2013 at 334,929 tonnes.
For the first 15 days of August, ITS reported export increased by 17.66 per cent to 644,589 tonnes compared with the first 15 days of July 2013 at 547,857 tonnes.
SGS reported an increase of 18.66 per cent to 636,466 tonnes compare to last month first 15 days at 536,391 tonnes.
US dollar still went stronger throughout the week with the highest spot rate as of Friday was recorded at 3.2800.
A higher greenback against the ringgit normally makes the palm cheaper for overseas buyers and refiners.
Based on the fundamental reports, even though the MPOB reports was bearish to the market but FCPO was supported by both export reports ITS and SGS, thanks to the weakness in ringgit and the low FCPO price.
Moreover, strong exports were also boosted by major buyer China stocking up ahead of the Mid-Autumn festival in September.
The new benchmark FCPO November contract settled RM2,309 per tonne on Friday which was up 102 points from last Wednesday at RM2,207.
The trading range for the week was from RM2,205 to RM2,336.
Total volume traded for the week amounted to 183,796 contracts up 122,831 contracts compare with last Wednesday’s 60,965 contracts.
The open interest as of Thursday increased 8,035 contracts to 191,520 contracts from 183,485 contracts from previous Tuesday.
Technical View
From the chart, price rebounded back above the consolidation range support line after it closed below the line as the market liquidated position to celebrate the Hari Raya Festival.
In the chart, we also drew another support line (blue) where we believed the market should maintain its mini-uptrend for the time being.
In addition, we reckoned it should be above the blue support line.
Any violation below that line, market may revisit the consolidation range support line.
For the coming week we pegged our important support levels at 2,300, 2,260 and 2,220.
Meanwhile, for our resistance levels, we pegged important ones at 2,340, 2,380 and 2,410.
Major fundamental news this coming week
Malaysian export data for August 1 to 20 by ITS and SGS on Augusts 20 (Tuesday).
Oriental Pacific Futures (OPF) is a Trading Participant and Clearing Participant of Bursa Malaysia Derivatives. You may reach us at www.opf.com.my Disclaimer: This article is written for general information only. The writers, publishers and OPF will not be held liable for any damage or trading losses that result from the use of this article.