How to trade Crude Palm Oil Futures ( FCPO ) 22 Jan 2016

#HowtotradeFCPO

 (Jan 22): Malaysian palm oil futures rebounded on Friday from a near one-week low in the previous session, supported by expectations of lower output and as traders covered their short positions ahead of a long holiday weekend.

The palm oil contract for April on the Bursa Malaysia Derivatives Exchange ended 1.5% higher at RM2,459 (US$572.66) per tonne.

Traded volume stood at 46,673 lots of 25 tonnes each.

"There's extended weekend covering interest ahead of the public holiday (on Monday)," said a trader based in Kuala Lumpur, adding that expectations of lower production in the coming months could have also propped up prices.

"The decline in output will be more pronounced in February ... Prices will remain above the RM2,400 trajectory until signs of improvement are sighted in production after the first quarter of the year," said another trader.

Output from Malaysia, the world's No.2 palm producer, is seen declining in the coming months on lower seasonal trend and as the impact of the El Nino dry weather effect kicks in.

A government body forecast Malaysia's 2016 crude palm oil production at 20.1 million tonnes during a conference in Kuala Lumpur on Tuesday, up slightly from 19.96 million tonnes last year, while a leading analyst expects the output to fall slightly to 19.8 million tonnes.  

The El Nino weather event brings dry weather across Southeast Asia, impacting palm's fresh fruit yields and lowering output.

Palm oil may retest a resistance at RM2,495 per tonne, as suggested by its wave pattern and a Fibonacci projection analysis, said Reuters market analyst for commodities and energy technicals Wang Tao.

The US March soyoil contract rose 1.2%, while the May soybean oil contract on the Dalian Commodity Exchangegained 0.6%.

Palm, soy and crude oil prices at 1014 GMT

Contract	Month	Last	Change	Low	High	Volume
MY PALM OIL	FEB6	2384	+35.00	2358	2384	646
MY PALM OIL	MAR6	2434	+38.00	2407	2437	3850
MY PALM OIL	APR6	2459	+37.00	2435	2462	26709
CHINA PALM OLEIN	MAY6	4632	+34.00	4558	4642	1303448
CHINA SOYOIL	MAY6	5590	+32.00	5526	5606	650236
CBOT SOY OIL	MAR6	30.29	+1.90	29.91	30.36	5565
INDIA PALM OIL	JAN6	427.90	+1.90	426.40	428.70	404
INDIA SOYOIL	FEB6	609.00	+4.50	605.10	610.40	36450
NYMEX CRUDE	MAR6	30.89	+1.36	29.53	31.04	93514

Palm oil prices in Malaysian ringgit per tonne
CBOT soy oil in US 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 US dollars per barrel

(US$1 = RM4.2940)
(US$1 = 67.6700 Indian rupees)
(US$1 = 6.5786 Chinese yuan)