Malaysian palm oil futures ended the week in mixed results, tracking price movements from related oil such as soybean oil and crude oil but weighed down by weak export demand.
The benchmark crude palm oil futures (FCPO) contract fell 0.65 per cent to RM2,439 on Friday, which was RM16 lower than RM2,455 during the previous week.
The average daily trading volume during Monday, Wednesday and Thursday decreased 9.81 per cent with a total average of 34,656 contracts traded, as compared with a total average of 38,425 contracts traded during last Monday to Thursday.
The daily average open interest during Monday, Wednesday and Thursday decreased 0.48 per cent to 237,144 contracts from 238,277 contracts during last Monday to Thursday.
AmSpec reported that export of Malaysian palm oil products for May fell 8.8 per cent to 1.197 million tonnes, from 1.312 million tonnes shipped during April.
Societe Generale de Surveillance (SGS) reported that export of Malaysian palm oil products during May fell 9.9 per cent to 1.2 million tonnes from 1.33 million tonnes shipped during April.
Malaysia’s palm oil exports in May were lower at around 1.2 million tonnes, down 8.8 per cent from April’s shipments, independent inspection company AmSpec Agri Malaysia said on Thursday.
Cargo surveyor SGS said the country’s May palm oil exports fell 9.9 per cent. In Indonesia, the world’s top palm oil exporter, shipments of palm and palm kernel oils fell 13.6 per cent in April, data from the Indonesia Palm Oil Association showed. Oil prices fell about two per cent on Monday on market expectations that the world’s three leading crude producers — Russia, the US and Saudi Arabia — will increase output.
Spot ringgit appreciated 0.03 per cent to 3.9835 against the US dollar, compared with 3.9845 on Friday.
The euro consolidated gains on Friday and is set to break a six-week losing streak following a drop in Italian bond yields after a revived coalition deal between Italy’s two anti-establishment parties reduced concerns of immediate elections.
Technical analysis
According to the FCPO daily chart, FCPO ended the week with mixed results as there were not much movements in the market.
On Monday, FCPO ended at 2,419, 36 points lower than the previous close of 2,455, with a traded volume of 11,355.
On Wednesday, FCPO ended at 2,437, 18 points higher than the previous close of 2,419, with a traded volume of 15,696.
On Thursday, FCPO ended at 2,424, 13 points lower than the previous close of 2,437, with a traded volume of 12,071.
On Friday, FCPO ended at 2,439, 15 points higher than the previous close of 2,424, with a traded volume of 15,151.
Based on the daily candlesticks chart, FCPO might still in downtrend despite EMA 25 and EMA 50 are close to crossover. There is not much movement during the week as FCPO went into consolidation phase as well as tug-of-war between buyers and sellers. Judging from weekly candlesticks chart, FCPO is still in downward trend. In the coming week, aggressive traders may initiate short position while conservative traders may wait for further confirmation.
Resistance lines will be positioned at 2,450 and 2,482, whereas support lines will be at 2,410, and 2,395. These levels will be observed in the coming week.
Major fundamental news this coming week
AmSpec, SGS, and MPOB reports will be released on June 10.
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.