CPO FUTURES Review For 08052012 ( FCPO )

SINGAPORE (Dow Jones)–Crude palm oil futures on Malaysia’s derivatives exchange mostly rose Monday after erasing early losses. Traders shifted their focus from bearish external cues, including election results in France and Greece Sunday that may signal changing fiscal priorities in Europe as well as disappointing U.S. jobs data Friday, to palm oil market fundamentals, which are more bullish.

 

In France, President Nicolas Sarkozy lost to Socialist candidate, Francois Hollande, who has resolved free his countrymen from the burdens of austerity, while in Greece uncertainty looms over who will form the government and how the new caretakers might depart from an austerity program that had been brokered by European Union peers.

 

“The negative sentiment came from equity markets reflecting European election news, but people are now focusing on vegoil fundamentals,” a Kuala Lumpur-based trading executive said.

 

The benchmark July contract on Bursa Malaysia Derivatives ended MYR2 higher at MYR3,360 a metric ton after hitting an eight-week low of MYR3,311/ton in morning trade.

 

In the U.S., a Labor Department report showed nonfarm payrolls rose 115,000 in April, well off the 168,000 estimate forecast by economists surveyed by Dow Jones Newswires.

 

CPO prices will likely be underpinned by supply risks to the South American soybean crop and declining palm oil inventories, a second Kuala Lumpur-based trading executive said, tipping immediate resistance at MYR3,390/ton.

 

Malaysia’s end-April palm oil stocks likely slipped 3%-7% from a month earlier to the lowest level in eight months, as export demand growth appears to have outpaced production, some traders and analysts said Monday, projecting end-April inventories at 1.83 million-1.90 million tons.

 

The Malaysian Palm Oil Board is scheduled to release Malaysia’s April palm oil stocks, exports and output data Thursday. Any deviation from market expectations will likely impact CPO prices.

 

May 1-10 Malaysian palm oil export estimates from cargo surveyors Intertek Agri Services and SGS (Malaysia) Bhd. are also due Thursday and will provide further demand cues.

 

In the cash market, refined palm olein for July/August/September was traded at $1,115-1,120/ton while October/November/December was traded at $1,102.50-1,105/ton, free-on-board Malaysian ports, a Singapore-based physical market broker said.

 

Cash CPO for prompt shipment was offered MYR30 lower at MYR3,370/ton.

 

Open interest on the BMD was 125,434 lots, versus 128,166 lots Friday. One lot is equivalent to 25 tons.

 

A total of 23,092 lots of CPO were traded versus 31,440 lots Friday.

 

Resistance Area To Watch : 

3400 3416 3433 3450

 

Support Area To Watch :

3337 3320 3304 3287

 

Seems the price will rebounce from the lower floor. Just watchout for the highligted price ( Bigger font 00- 50 )

P/S still in red box territory beware ok