As for FCPO, market eased yesterday in narrow range trading. Prices pulled back from strong gains the past 3 days on absence of fresh factors. Selling was led by profit taking as sellers took protection against the likelihood of a negative MPOB April data coming out on Monday. Sentiment was also undermined by easier CBT soyoil and China Dalian futures. Weaker ringgit helped to check losses. Prices were 22 to 10 lower in the morning and held steadier throughout the afternoon.
There are no new factors. The relatively strong CBT soyoil, amid reports of Chinese interest, and crude mineral oil are supportive. Adding to the positive sentiment is the prospect of lower Indonesian exports due to the export levies. However, higher production in the coming months and the prospect of stocks building up are negative.
Technical view - indicators are neutral as prices retraced from the 2200 resistance. Trend sideways ; RSI 52.78 ; stochastic overbought ; support 2110 / 2070 / 2050 / 2000 ; resistance 2200 / 2250 / 2320.
In other news...
🇺🇸 Federal Reserve Chairwoman Janet Yellen said stock market valuations appear “quite high” and some bond and loan markets suggest investors may be taking excess risks, though she said risks to financial stability generally are contained.
🇺🇸 U.S. stocks fell after Fed Chairwoman Janet Yellen drew attention to elevated valuations in the equity market, as investors weighed higher bond yields and oil prices ahead of Friday's important jobs report.
€ European stocks were up as they rebounded from a 2-1/4 month low after the Eurozone Apr Markit composite PMI was revised upward. Investors also reacted to a slew of earnings reports and new economic data, as the euro rallied against the dollar.
🇳🇿 Australia's S&P ASX 200 index crashed to a three-month low, as the sell-off in banking shares worsened after Commonwealth Bank of Australia announced flat third-quarter cash earnings.
🇨🇳 Shares in Shanghai tumbled for a second day, pushing losses on the market’s benchmark index to 5.6% in two sessions, with comments by state-media failing to prop up the market .
🇨🇳 The HSBC/Markit services purchasing managers' index (PMI) rose to a four-month high of 52.9 in April, slightly higher than March's 52.3 and comfortably above the 50-point level that separates expansion from contraction.
Oil prices spiked in a volatile session as weekly data showed U.S. stockpiles fell for the first time this year, but the market gave back much of its gains amid a continued bearish backdrop. For one, it showed a sharp drop in imports for the week, which analysts said played a big role in the overall stockpile decline and would likely revert to normal in the coming weeks.
Gold prices fell, giving up earlier gains as investors grew cautious ahead of Friday’s U.S. employment data.
MPOB is set to release April data on May 11. Market participants seen end April palm oil stocks at a 5-month high of 2.13MMT, up 14% from last month, with production up nearly 12% at 1.67 MMT. The rise is expected to solidly outpace the estimated 3% increase in exports to 1.22 MMT.
Indonesia's president signed the new regulation putting the previously-proposed export duty on palm oil effect by the 4th week of May. A duty of $50/tonne on crude palm oil and $30/tonne for processes Palm oil products will be paid by exporters as a way to pay for domestic subsides for the developing bio-diesel industry as Indonesia aims to notably boost bio-diesel production/consumption over the coming years. The new export duty will be assessed as long as export prices are below $750/tonne. Above $750/tonne, a separate export goes into effect and will precede the bio-diesel levy.
FCPO closed higher (RM2,183) as continue strength in CBT Soyoil, China Dalian futures and crude mineral oil. Sentiment was also underpinned by news on Indonesia's new regulation. However, price were checked by strong Ringgit and the Reuters poll showing big increase in end April stocks. Indicators are neutral to positive.
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