Crude Palm Oil and Soybean Oil Futures

Asian Crude Palm Oil Lower On CBOT Soyoil; Liquidation 

BUY 3550; SELL 3677


Crude palm oil futures on Malaysia’s derivatives exchange ended off highs Thursday as investors booked profits following weakness in crude oil.

The benchmark May contract on the Bursa Malaysia Derivatives ended MYR10 higher at MYR3,600/ton, after easing to an intraday low of MYR3,564/ton.

Prices slipped into the red in the afternoon session after Nymex crude plunged in Asia following news that Libyan leader Moammar Gadhafi has agreed to a multinational commission to resolve the crisis in the North African country.

“The decline on BMD showed how sensitive markets are to crude price movements. I expect further liquidation (in CPO futures) as funds will seize this opportunity to pull money off the table,” said a trading executive in Singapore.

Still, the market rebounded at the end of the day on intraday buying interest, “as some investors may reduce net short exposure ahead of next week’s palm oil conference,” said an analyst at a Kuala Lumpur-based commodities brokerage.

The most active rupiah-denominated CPO contract for May on the Indonesia Commodity & Derivatives Exchange was last traded 0.3% higher at IDR10,480 a kilogram at 0933 GMT.

CME Group’s dollar-denominated contract for June delivery was last traded $13 lower at $1,180/ton at 0930 GMT.

In the cash market, refined palm olein was traded at $1,237.50/ton, and July, August, September at $1,200 and $1,202.50/ton, free on board Malaysian ports, said a Singapore-based physical market broker.

Cash CPO for prompt shipment was offered unchanged at MYR3,660/ton. Open interest on the BMD was 104,004 lots, versus 104,263 lots Wednesday. One lot is equivalent to 25 tons.
A total of 25,517 lots of CPO were traded versus 35,869 lots Wednesday

Technical Readings
May soybean oil closed down 3-pts. at 58.77.
May soybean oil closed slightly lower due to light profit taking on Thursday as it consolidates some of the rally off last week's low but remains above the 20-day moving average crossing at 58.02. The mid-range close sets the stage for a steady opening on Friday.

Stochastics and the RSI remain bullish signaling that sideways to higher prices are possible near-term. If May extends the rally off last week's low, February high crossing at 60.50 is the next upside target. Closes below the 10-day moving average crossing at 57.16 would temper the near-term friendly outlook.

First resistance is today's high crossing at 59.35.

Second resistance is February's high crossing at 60.50.

First support is the 10-day moving average crossing at 57.16.

Second support is last Wednesday's low crossing near 53.95.

HAPPY TRADING