How to trade Crude Palm Oil Futures ( FCPO ) 27 Jan 2016

#HowtotradeFCPO

(Jan 27): Malaysian palm oil futures rose for a third straight session on Wednesday to hit their highest level in 19 months, on tighter supplies.

The palm oil contract for April on the Bursa Malaysia Derivatives Exchange rose as much as 1.41% in afternoon trade, to touch its highest level since June 25, 2014 at 2,510 ringgit (US$590.17) per tonne, before settling up 1.1% at 2,502 ringgit.

Traded volume stood at 62,044 lots of 25 tonnes each.

"The market will hold... The reason is tight availability of crude palm oil. Moving forward there will be a production decline and stocks are manageable," said a trader with a Kuala Lumpur-based brokerage that deals in palm oil.

Palm oil output growth may decline this year in Southeast Asia, as dry weather caused by the El Nino weather phenomenon affects fresh fruit yields and lowers productivity.

Malaysian palm output will rise only 0.7% in 2016, from a year ago, to 20.1 million tonnes, the Malaysian Palm Oil Board is forecasting. Indonesia, the world's biggest palm-oil producer, will see exports drop to about 23-24 million tonnes, the Indonesian Palm Oil Association has predicted, the first decline in five years, as supply is directed to domestic uses.

Palm oil shipments from Malaysia have fallen about 8% so far this month, according to data from cargo surveyors, on slowing economic growth in top consumer China.

Stockpiles in Malaysia as of end-December were at 2.6 million tonnes, down from an all-time high of 2.9 million tonnes a month ago.

In related markets, crude oil prices fell to around US$30 per barrel on a surprise rise in U.S. inventories, which could take a drag on palm oil prices as the vegetable oil is used for blending into fuel for biodiesel.

The U.S. March soyoil contract gained 0.2%, while the May soybean oil contract on the Dalian Commodity Exchangerose 0.6%.
 
  Palm, soy and crude oil prices at 1017 GMT

Contract	Month	Last	Change	Low	High	Volume
MY PALM OIL	FEB6	2413	+26.00	2380	2414	533
MY PALM OIL	MAR6	2476	+29.00	2439	2481	4538
MY PALM OIL	APR6	2502	+27.00	2463	2510	27834
CHINA PALM OLEIN	MAY6	4750	+76.00	4686	4750	1084532
CHINA SOYOIL	MAY6	5642	+36.00	5586	5644	617330
CBOT SOY OIL	MAR6	30.80	+4.10	30.57	30.93	5291
INDIA PALM OIL	JAN6	433.00	+4.10	429.50	433.60	1178
INDIA SOYOIL	FEB6	612.20	+2.85	610.00	613.60	23590
NYMEX CRUDE	MAR6	30.24	-1.21	30.14	31.22	83043

  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 = 4.2530 ringgit)
(US$1 = 68.0300 Indian rupees)
(US$1 = 6.5779 Chinese yuan)