Malaysian palm oil futures closed flat week as expectations of slowing demand growth as well as tracking losses and gains from related edible oils, notably soy oil in Chicago Board of Trade (CBOT).
The benchmark crude palm oil futures (FCPO) contract rose 0.7 per cent to RM2,416 on Friday, which was RM16 higher than RM2,400 during the previous week.
The average daily trading volume during Monday to Thursday increased 13.3 per cent with a total average of 48,311 contracts traded, as compared with total average of 41,884 contracts traded during last Monday to Thursday.
Daily average open interest during Monday to Thursday increased 2.47 per cent to 233,870 contracts from 228,100 contracts during last Monday to Thursday.
AmSpec reported that exports of Malaysian palm oil products for April 1 to 20 rose two per cent to 931,758 tonnes, from 913,091 tonnes shipped during March 1 to 20.
Societe Generale de Surveillance (SGS) reported that export of Malaysian palm oil products during April 1 to 20 fell 1.8 per cent to 909,388 tonnes from 926,185 tonnes shipped during March 1 to 20.
Malaysia’s palm oil production for April is expected to rise in line with seasonal trend. It last rose 17.2 per cent on-month to 1.57 million tonnes in March, its highest March production since 2000.
Malaysia’s palm oil production for April is expected to rise in line with seasonal trend.
Spot ringgit depreciated 0.32 per cent to 3.8920 against the US dollar, compared with 3.8794 on last Friday.
US dollar was little changed against a basket of currencies yesterday as higher US bond yields and expectations of more rate increases from the US Federal Reserve offset worries about a trade war and a ballooning US budget deficit.
Technical analysis
According to the FCPO daily chart, FCPO is in a consolidation phase due to the release of exports and production data between April 1 to 15 and April 1 to 20.
On Monday, FCPO ended at 2,370, 30 points lower than the previous close of 2,400, with a traded volume of 18,220.
On Tuesday, FCPO ended at 2,408, 38 points higher than the previous close of 2,370, with a traded volume of 26,771.
On Wednesday, FCPO ended at 2,409, one point higher than the previous close of 2,408, with a traded volume of 21,254.
On Thursday, FCPO ended at 2,408, one point lower than the previous close of 2,409, with a traded volume of 12,890.
On Friday, FCPO ended at 2,416, eight point higher than the previous close of 2,408, with a traded volume of 16,810
Based on the daily candlesticks chart, FCPO went sideways and the price hovering near first resistance level at 2,421. According to the newly release of export data from AmSpec and SGS, FCPO is still in unclear market direction.
In the coming week, the price may test the first resistance level at 2,421, should the market failed to break above 2,421, it may rebound until the first support level. We advised traders may temporarily hold their current positions until stronger signal appear.
Resistance lines will be positioned at 2,422 and 2,434, whereas support lines will be at 2,393, and 2,354. These levels will be observed in the coming week.
Major fundamental news this coming week
AmSpec and SGS reports will be released 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. 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.