CPO futures prices ended firmer yesterday on the back of external factors and strong export data by ITS and SGS. The uptrend in the crude oil and soy oil prices had contributed to the gain in CPO prices higher lately.
Nevertheless, most players are still waiting for "market-moving news" from the POC. Meanwhile on the 1-10 days export, cargo surveyor, Intertek Testing Services (ITS), said palm oil exports between jumped 11.2% to 369,265 tonnes from 332,081 tonnes in the same period last month. Societe Generale de Surveillance (SSG) said exports for the same period increased 1.2% to 377,306 tonnes from 372,782 tonnes previously. At the close, Mar09 added RM20 to RM2090, April09 gainedRM45 to RM2040 while the benchmark 3rd month May09 went up RM55 to RM1995. Turnover fell to 13,187 lots from 13,716 lots last Friday while we estimate roughly 44% of the volume generate from spread. Open interests rose to 87,626 contracts from 87,358 contracts previously.
Other News.
Malaysia, the world’s second- largest palm oil producer, will raise the level at which planters pay a windfall profit tax on the edible oil, Finance Minister Najib Razak said planters in East Malaysia will pay a tax for palm oil at RM3000 ($813) a metric ton while those in Peninsular Malaysia will pay the windfall tax when prices reach RM2500. Currently, the tax kicks in when palm oil exceeds 2,000 ringgit a ton.
India will slow purchases of palm and soyoil as its import inventories have doubled to 500,000 tonnes now from three months ago, a top analyst said. Dorab Mistry, head of vegetable oils trading at Indian conglomerate Godrej International, said overall vegetable oil stockpiles in the South Asian nation would rise by the end of 2008/2009 in Oct to 1.2m tonnes from one million now.
Crude oil fell on speculation a government report will show that U.S. inventories gained as demand dropped. The Energy Department may say that supplies rose 250,000barrels last week, according to the median of 14 analyst responses in a Bloomberg News survey. World oil consumption will average 84.27 million barrels a day this year, down 1.38 million barrels from 2008, the department reported today. Crude oil for April delivery fell $1.36, or 2.98%, to settle at $45.71 a barrel on the NYMEX. Prices are up 2.5% so far this year.
Crude oil fell on speculation a government report will show that U.S. inventories gained as demand dropped. The Energy Department may say that supplies rose 250,000barrels last week, according to the median of 14 analyst responses in a Bloomberg News survey. World oil consumption will average 84.27 million barrels a day this year, down 1.38 million barrels from 2008, the department reported today. Crude oil for April delivery fell $1.36, or 2.98%, to settle at $45.71 a barrel on the NYMEX. Prices are up 2.5% so far this year.
Market Outlook
CPO futures expect to continue its range bound trade today with an upside bias. For the remaining of the week, we recommend buying on dip. The CPO turns in the positive territory throughout the day. With the MACD still gaining momentum, coupled with the increase RSI, there is room on the upside, likely towards RM2020. Also, hovering above the 7,14 & 21 days SMA may attract buyers the next few days, which may see decrease in selling pressure. Resistance maintain at RM2020-RM2050 while support at RM1970-1950.
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