How to trade Crude Palm Oil Futures ( FCPO ) 21 Jan 2016

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(Jan 21): Malaysian palm oil futures stretched their losses into a second straight session on Thursday to hit a four-day low, tracking weak crude and
competing vegetable oil prices.

Palm oil prices have come under pressure in the absence of an expected pick-up in imports by key consumer China, ahead of Lunar New Year celebrations in February. A slowdown in growth in the world's No.2 economy and ample world supplies of rival soyoil have curbed the country's demand for the tropical oil.

The palm oil contract for April on the Bursa Malaysia Derivatives Exchange slid 1.3% to 2,424 ringgit (US$554.31) per tonne at the close of trade — its lowest this week.

Traded volume stood at 47,443 lots of 25 tonnes each.

"Palm oil is down as soyoil on the Chicago Board of Trade closed down yesterday night. There's also uncertainty in China's economy and weak crude oil prices," said a trader based in Kuala Lumpur, adding that palm's further slide in the afternoon was due to falling Asian equities.

With China's economic growth cooling to its slowest pace in 25 years, its demand for most commodities has been hit. The country is the world's No.2 consumer of palm oil, after India.

Cargo surveyor data on Wednesday showed shipments from Malaysia over Jan 1-20 dropped 8-10% month on month, a sharper fall than traders had anticipated.  

Asian shares lost gains on volatile crude prices, which stabilised after plumbing more than 12-year lows in the previous session. Analysts, however, say a persistent supply glut will continue pressuring the market. Lower crude prices make palm oil less attractive for blending into biodiesel.  

Palm oil may slide to 2,430 ringgit, before rising again, as suggested by its wave pattern and a Fibonacci projection analysis, said Reuters market analyst for commodities and energy technicals Wang Tao.

The U.S. March soyoil contract was down 0.4%, while the May soybean oil contract on the Dalian Commodity Exchange fell 0.9%.
 
  Palm, soy and crude oil prices at 1034 GMT

Contract	Month	Last	Change	Low	High	Volume
MY PALM OIL	FEB6	2349	-9.00	2323	2357	545
MY PALM OIL	MAR6	2399	-18.00	2372	2422	6688
MY PALM OIL	APR6	2424	-31.00	2408	2463	28713
CHINA PALM OLEIN	MAY6	4560	-122.00	4540	4650	1642328
CHINA SOYOIL	MAY6	5526	-72.00	5518	5598	739728
CBOT SOY OIL	MAR6	29.60	-1.80	29.54	29.91	5256
INDIA PALM OIL	JAN6	422.70	-1.80	421.10	424.50	622
INDIA SOYOIL	FEB6	603.15	-0.30	602.00	605.00	22730
NYMEX CRUDE	MAR6	28.26	-0.09	27.87	28.85	71828

  Palm oil prices in Malaysian ringgit per tonne
  CBOT soy oil in U.S. cents per pound
  Dalian soy oil and RBD palm olein in Chinese yuan per tonne
  India soy oil in Indian rupee per 10 kg
  Crude in U.S. dollars per barrel

(US$1 = 4.3730 ringgit)
(US$1 = 67.9950 Indian rupees)
(US$1 = 6.5785 Chinese yuan)