Technical Analysis for FCPO / FCPO Daily Chart Source: BursaStation Professional
Crude Palm Oil Futures (FCPO) ended lower on Friday as traders took some profits after price mostly gained throughout the week due to bullish fundamental reports.
Traders also focus on the news whether US lawmakers are able to reach a deal to avoid a possible sovereign default next week.
Republican lawmakers, who have not passed the budget funding, offered a plan on Thursday that would extend the US government’s borrowing authority for several weeks, staving off a default that could come as soon as October 17.
According to the Malaysian Palm Oil Board (MPOB) report, palm oil stocks had grew only 6.97 per cent to 1,784,397 tonnes compared with last August at 1,668,132 tonnes.
The stock level grew below the expectation of an increase to 1,995,586 tonnes.
Production increased 10.2 per cent to 1,912,237 tonnes compared to last August at 1,735,284 tonnes.
Production level increased slightly above the expectation of an increase to 1,912,000 tonnes.
Export increased 5.16 per cent to 1,605,209 tonnes compared with last August at 1,526,394 tonnes. Export level increased above the expectation of an increase to 1,550,000 tonnes.
For the first 10 days of October, Intertek Testing Service (ITS) reported that export had increased 17 per cent to 542,274 tonnes compared with the previous first 10 days of September 2013 at 462,671 tonnes.
Société Générale de Surveillance (SGS) reported that exports have increased 22.5 per cent to 550,877 tonnes compared with the first 10 days of September 2013 at 449,821 tonnes.
Malaysian ringgit weakened during earlier of the week before it strengthened back on Friday to close at 3.1785.
Most Asian currencies are waiting on the progress for the budget deal by US lawmakers in order to avoid the potential default crisis next week.
The new benchmark FCPO December contract settled at RM2,380 per tonne on Friday which was up by 75 points from last Friday at RM2,305.
The trading range for the week was from RM 2,303 to RM 2,395.
Total volume traded for the week amounted to 152,705 contracts which was up 22,147 contracts compared with last Friday’s 130,558 contracts.
The open interest as of Thursday totalled to 156,605 tonnes contracts from 157,322 contracts from previous Thursday, which was a decrease of 717 contracts.
Technical View
From the chart, price rebounded further from the black line we drew last week.
Price also did cover the gap behind between the September 9 and 10, 2013.
Currently, we still maintain our bullish expectation for FCPO market but we do need investors and traders to monitor the progress of the budget deal from the US where a default may shake up the financial industries worldwide which also can affect FCPO market.
For the coming week we pegged our important support levels at 2,300, 2,250 and 2,220
Meanwhile, for our resistance levels, we pegged important ones at 2,395, 2,460, and 2,500
Major fundamental news this coming week
ITS and SGS Export reports – October 15 (Wednesday, October 16)
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