Thursday, June 25, 2009

Trader's Comment: Palm oil futures recovered from yesterday’s losses to end broadly higher on India monsoon concern.

Palm oil futures recovered from yesterday’s losses to end broadly higher on India monsoon concern. News that India’s monsoon rain, a lifeline to its farmers for irrigation, are expected to be below normal for the first time in four years led Benchmark Sep09 to rally through out the day to settle RM86 higher at 2336, as traders speculate on more imports from India. On the other side, the results of 1-25 June export data released by both private cargo surveyors showed slightly improved from last month corresponding period and this had also lent some support to the CPO prices. External markets were supportive as both Dalian palm and eCBOT soy oil were up more than 1% while Asian time NYMEX crude oil clawed back its earlier losses to inch higher in late trading.

Breaking News-RTRS-Palm oil set to boost share of total oils demand

LONDON, June 24 (Reuters) - Palm oil is well-placed to raise its share of total world oils and fats consumption as it has higher yields than other oilseeds, a long productive life, and is cheap to produce, delegates told a conference on Wednesday.
Paul Nellens, a member of the executive committee of SIPEF N.V., a palm oil producer, told the Public Ledger's Edible Oils 2009 conference that palm oil output had surged to 43 million tonnes in 2008 from around 2 million tonnes 30 years ago.
He said palm oil had increased its share of the consumption of the world's leading 17 oils and fats to 27.5 percent in 2008/09 from 13.9 percent in 1990/91, which he attributed to the high yields per hectare of palm oil compared to alternatives.

Breaking News-RTRS-UPDATE 1-Edible oils demand rise dented but defiant

LONDON, June 24 (Reuters) - The global economic crisis is dragging on demand for edible oils but production and consumption are expected to increase markedly over the longer term, an industry analyst said on Wednesday.
"Edible oil consumption is growing but with a temporary slowdown," said Vito Martielli, industry analyst with Rabobank.
"Confidence and economic recovery are key to a recovery in demand," he told The Public Ledger's Edible Oils 2009 conference.

Breaking News-RTRS-Indian trade body calls for import tax on veg oils

NEW DELHI, June 24 (Reuters) - India, the world's biggest vegetable oil buyer after China, should tax imports of cooking fat to check a surge in overseas purchases, a leading trade body said on Wednesday.
"We have strongly recommended to the government to revisit the import duty structure," Ashok Sethia, president of the Solvent Extractors' Association of India (SEA), said in a statement.
The SEA said the government should slap an import tax of at least 20 percent on crude palm oil, 30 percent on RBD palmolein, 25 percent on crude soyoil.

Trader's Highlight

DJI-NEW YORK, June 24 (Reuters) - The Dow fell for the fourth day and other indexes ended well off the day's highs on Wednesday after the Federal Reserve reiterated concerns about the economic outlook at the end of its policy meeting.

The Fed, as expected, left the benchmark fed funds rate at almost zero. The bond market sold off on disappointment that the Fed did not announce an acceleration or increase of its purchases of Treasury and mortgage-related debt.

The Fed's words on the economic outlook were mixed. The central bank said the economy was likely to remain weak for a time, but the contraction's pace was slowing.

The Dow Jones industrial average <.DJI> was down 23.05 points, or 0.28 percent, at 8,299.86. But the Standard & Poor's 500 Index <.SPX> was up 5.84 points, or 0.65 percent, at 900.94. The Nasdaq Composite Index <.IXIC> was up 27.42 points, or 1.55 percent, at 1,792.34.

NYMEX-NEW YORK, June 24 (Reuters) - U.S. crude oil futures ended lower on Wednesday after the dollar extended gains following the U.S. Federal Reserve's decision to keep interest rates unchanged, as expected.

On the New York Mercantile Exchange, August crude settled down 57 cents, or 0.82 percent, at $68.67 a barrel, trading from $68.06 to $69.86.

CBOT-SOYBEANS - July up 6 cents per bushel at $11.85. November up 3-1/2 cents at $10.08. Tight soy supplies continue to give soybean market a boost. Hot, dry conditions in U.S. crop belt seen removing some of the market's weather premium.

CBOT-SOYOIL
- July down 0.49 cent per lb at 36.44 cents.

FCPO-KUALA LUMPUR, June 24 (Reuters) - Malaysian palm futures fell 1.6 percent on Wednesday, retreating from the previous day's surge as weakening soyoil prices prompted some investors to take profits.

Sentiment remained buoyant as Malaysian palm oil shipments were expected to show improvement in the June 1-25 reporting period in data from cargo surveyors Intertek Testing Services and Societe Generale de Surveillance that is due on Thursday.

The benchmark September palm oil contract on the Bursa Malaysia Derivatives Exchange settled down 36 ringgit at 2,250 ringgit ($637) per tonne, having closed six percent higher the previous day.

Overall traded volume stood at 11,380 lots of 25 tonnes each. Open interest dropped to 68,421 lots, from 73,086 lots on Tuesday.

REGIONAL EQUITIES-BANGKOK, June 24 (Reuters) - Major Southeast Asian stock markets rose on Wednesday, ending two days of falls, with financials and energy heavyweights leading the way ahead of news from a U.S. Federal Reserve policy meeting.

Malaysia's index <.KLSE> gained 1.3 percent, recouping most of a two-day fall of 1.42 percent, with palm planter IOI Corp up 2.2 percent and Malayan Banking up 2.7 percent.

Singapore's index <.FTSTI> climbed 2.4 percent, erasing a 2.1 percent loss over the previous two days, with outperformers including United Overseas Bank , which surged 3.3 percent, and Singapore Airlines , which jumped 4.1
percent.

Trader's Comment: Palm oil futures eased off from yesterday’s strong rebound to close lower in a tight range trading.

Palm oil futures eased off from yesterday’s strong rebound to close lower in a tight range trading. Benchmark Sep09 opened RM11 lower at 2275 and immediately fell to intra day low of 2231, tracking the early losses in eCBOT soy oil. It then bounced back slightly and started to hover between a tight range of 2233-2270 level through out most of the sessions until it finally settled RM36 lower at 2250. External markets were rather mix with no signs of major movement seen. Dalian palm inched higher today while eCBOT soy oil gave up some of its overnight gains to edge lower. Asian time NYMEX crude oil was slightly down to below $69 level. Market talk of 1-25 June export data which is scheduled to release tomorrow may improve to about last month figure. 1-20 June export was down 3%-4% compared with corresponding period (1-20 May) reported by both surveyor ITS & SGS. Daily volume reduced significantly to only 11,380 contracts changed hands.

KLSE Daily: still Firm


Market rebounded and recovered for the 2nd day had helped to strengthen the market momentum. As for now, resistance is stood at 1060-1065. For downside, support is pegged at 1046-1044 (gap left over on 24/6/2009.

FKLI Daily: remains Supportive


Market tested the resistance at 1055-1060 had strengthened further the immediate outlook. Thus, we continue to look for the immediate support at 1040-1030. To the upside, resistance is at 1065-1070.

FCPO Daily: Searching for direction


Market is searching for direction after a strong rebound. Thus, market may extend its consolidation phase until it shows a significant breakout either to the downside at 2149 or the upside resistance at 2350.