Technical Analysis for FCPO / FCPO Daily Chart Source: BursaStation Professional
Malaysian palm oil edged up on Thursday (the last trading day for the week) and settled at 0.91 per cent, while a seasonal drop in production is likely to cut excess supplies. However, gains were capped by weak demand.
The new benchmark crude palm oil futures (FCPO) April contract settled at RM2,540 per tonne on Friday which was up by 23 points from last Friday at RM2,517 after it changed benchmark contract month.
The trading range for the week was from RM2,486 to RM2,552.
Total volume traded for the week amounted to 117,080 contracts which decreased by 85,828 contracts compare to last Friday’s 202,908 contracts as there were only 3 trading days for the week.
Open interest as of Thursday totalled 166,774 contracts from 162,832 contracts from previous Thursday, an increase of 3,942 contracts.
Cargo surveyor Intertek Testing Services (ITS) reported that exports of Malaysian palm oil products from January 1 to 15 fell 28.1 per cent to 460,248 tonnes from 640,240 tonnes shipped during December 1 to 15.
Cargo surveyor Societe Generale de Surveillance (SGS) said on Wednesday that exports of Malaysian palm oil products for January 1 to 15 fell 27.4 per cent to 467,817 tonnes from 644,556 tonnes shipped during December 1 to 15.
Palm oil market also had an additional support from US soybean futures, which rose for a sixth session as strong demand for US stocks continued to be underpinned by market sentiments. According to a trader, the market is keeping an eye on the weakening ringgit currency which could boost margins for refiners where they might start chasing crude palm oil to cover their supplies.
The Malaysian spot ringgit weakened especially on Wednesday as solid US retail data and hawkish comments by Federal Reserve officials revived expectations that the stimulus could be trimmed aggressively.
The ringgit weakest was on Thursday at 3.298 for the week before it closed at 3.296.
Technical view
From the chart, price rebounded from the 2,485 level and managed to break our previous resistance at 2,545 although FCPO close below that 2,545 resistance level.
Currently, we are monitoring whether the resistance level will be tested again in the next trading days.
If price manage to close above that level price may revisit 2,605 level again.
We also strongly believe the 2,485 will be a strong support at this moment.
For the coming week we pegged our important support levels at 2,506, 2,485 and 2,420.
Meanwhile, for our resistance levels, we pegged important ones at 2,550, 2605 and 2,690.
Major fundamental news this coming week
ITS and SGS Export reports – January 20 (Monday)
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