Technical Analysis for FCPO / FCPO Daily Chart Source: BursaStation Professional
Malaysian palm oil futures ended lower in a narrow trade on Friday as investors feared that surging supplies of the tropical oil will overwhelm global demand and weigh on prices.
However, price is expected to trade in a range-bound trade for the week.
The new benchmark crude palm oil futures (FCPO) in December contract settled at RM2,640 per tonne on Friday which was up by six points from last Friday at RM2,634.
The trading range for the week was from RM2,625 to RM2,644.
Total volume traded for the week amounted to 65,996 contracts, a decrease of 13,431 contracts compared to last Friday’s 79,427 contracts.
The open interest as of Thursday totalled to 153,085 contracts from 155,326 contracts from the previous Thursday, which is a decrease of 2,241 contracts.
Cargo surveyor Intertek Testing Services (ITS) reported exports of Malaysian palm oil products from December 1 to 31 fell 1.09 per cent to 1,423,910 tonnes from 1,449,664 tonnes shipped during November 1 to 30.
Cargo surveyor Societe Generale de Surveillance (SGS) said on Tuesday that exports of Malaysian palm oil products for December 1 to 31 fell 3.33 per cent to 1,423,644 tonnes from 1,472,694 tonnes shipped during November 1 to 30.
Indonesia, which is the top producer, said that its 2013 palm oil output would likely grow to 24.4 million tonnes from 23.5 million tonnes a year ago due to expansion in plantation areas and better weather conditions.
Meanwhile, on Thursday, Malaysian palm oil futures jumped to their highest in three weeks driven by renewed concerns over demand and thin trading at the start of the New Year.
Better-than-expected export reports in December and warnings of floods over palm-growing region in Borneo pushed up palm prices by 0.2 per cent this week, which was their third straight weekly rise albeit demand worries which had capped gains.
Technical View
From the chart, price is expected to still trade within a sideway range although the level of 2,615-20 will still be monitored as one of the supports for next week.
We drew both black lines whereby if price breaks either way, then a new trend will begin.
For the coming week we pegged our important support levels at 2,620, 2,600, and 2,550.
Meanwhile, for our resistance levels, we pegged important ones at 2,660, and 2,690 to 2,700.
Major fundamental news this coming week
ITS and SGS Export reports – January 10, 2014 (Friday) MPOB report – January 10, 2014 (Friday)
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