Tradder's Comment: Bear continue to be in charge as palm oil futures extended from yesterday losses

Bear continue to be in charge as palm oil futures extended from yesterday losses and tested 2350 level on talk of higher production. Benchmark Aug09 initially hovered between 2469-2422 level through out the morning session after opened almost unchanged at 2449. However, the emerged of market talk that the production in May could improve significantly had triggered some aggressive selling activities in local CPO market and saw Benchmark Aug09 slid to intra day low of 2350 in the afternoon session. The appear of late short covering led prices to bounce back and settled RM15 lower at 2430. External market had also added some weaker sentiment. Dalian palm ended more than 2% lower while eCBOT soy oil edged lower.

Breaking News-Indonesia to reimpose duty on CPO exports

JAKARTA: Indonesia, the world's largest palm oil producer, will resume taxing shipments of the commodity from next month after prices rebounded, according to Diah Maulida, director general of foreign trade at the Ministry of Trade.

The country will impose a 3 per cent duty on crude palm oil exports and also raise the so-called base price for calculating the tax to US$700 (US$1 = RM3.49) a tonne from US$560, Maulida wrote yesterday in a text message. Indonesia had scrapped a 7.5 per cent tax last November after prices tumbled amid the global recession.

The reintroduction was expected by the Indonesian Palm Oil Producers' Association, which held talks with government officials last week on the move. The government said in October the charge may be re-imposed, fixed at 1.5 per cent if palm oil in Rotterdam was more than US$700 a tonne, or 3 per cent if it averaged US$751 to US$800 a tonne.
Published: 2009/05/26

Trader's Highlight

FCPO-KUALA LUMPUR, May 25 (Reuters) - Malaysian palm futures slid 3 percent to a near four-week low on Monday as weak export growth showed Asian buyers had cut purchases from Malaysia, waiting for high pricing and dwindling supplies to ease.

The benchmark August contract on Bursa Malaysia's Derivatives Exchange settled down 76 ringgit to 2,445 ringgit ($700.8) per tonne, a level unseen since April 28. Overall volume stood at 13,230 lots of 25 tonnes each.

REGIONAL EQUITIES-BANGKOK, May 25 (Reuters) - Most Southeast Asian stocks rose
on Monday, with Singapore Petroleum and Keppel Corp pushing its market higher, while banking shares fell in Thailand after the latest data confirmed the country was in recession.

Singapore's index <.FTSTI> climbed 0.99 percent,Malaysia <.KLSE> added 0.8 percent, Indonesia <.JKSE> gained 0.3 percent, the Philippine index <.PSI> rose 0.8 percent and Vietnam <.VNI> jumped 4.2 percent.

KLSE Daily: Bulls dominated

Bulls dominated with another day of good closing. As for now, we are looking for the upside resistance at 1070-1080. To the downside, support is stood at 1047-1045 (gap left over on 25/5/2009).

FKLI Daily: Can't see the TOP

Bulls look likely to extend its northern journey to march higher. We are now looking for the upside resistance at 1075-1080. Downside support is pegged at 1030-1025.

FCPO Daily: into Bearish zone

Market continue to tumble had turned the immediate daily technical landscape into bearish mode. Violation of 2400-2390 physiological support will provide more room to downside potential. To the upside, resistance is at 2540-2560.