CPO FUTURES

DAILY PREVIEW
February 17, 2016
CPO Futures 3rd month daily chart Fundamental .
Malaysian palm oil prices fell yesterday for its second consecutive session
as slowing demand for the tropical oil continues to weigh on the market.
Analysts opined that weak demand and ample supplies would likely put a
cap on prices. Analysts also expect demand for the tropical oil to be
dependent on the overall Chinese economy and cold weather in the northern
hemisphere. Typically, appetite for palm oil recedes during the winter months
as it solidifies in cold climates. Volumes of BMD’s benchmark FCPO
remained well above its daily average while open interests climbed,
suggesting that players are accumulating short positions. Globally, the WTI
settled lower despite showing strength during the Asian trading hours as
inventories were seen to be on the rise. Traders were sceptical that global
supplies would drop as Iran remains determined to raise production.
Meanwhile, US soy oil prices fell as traders took profits after prices hit its
highest since July on Friday. As such, expect limited upside potential for the
tropical oil as bearish crude oil and soy oil prices would weigh on prices
while weak demand is likely cap gains.

Technicals
Malaysian palm oil prices lost 11 points to settle at 2588, forming a short
bodied black candle with a longer upper shadow. This was indicative of the
day’s trades as prices soared in the early session, fuelled by rising crude oil
prices but succumbed to selling pressure later in the day. Expect prices to
trend lower to trigger a sell signal with the parabolic SAR while the upper
Bollinger band limits the upside. Support and resistance can be eyed at
2555 and 2610 respectively..

Strategy
Traders may short with a stop on or above 2610.

Source: Bloomberg O/I chg Previous Week

Contract Sett Chg High Low Vol Open Int O/I chg Value USD High Low Cash CPO (MYR/MT) Last Bid Last Offer 3m Chg 6m Chg
MAR 16 2,526 - 20 2,566 2,518 1,302 11,424 -1,329 -19.95 Mn 1,525 2,467 MAR 16 Today 2,490 2,520 15.2% 18.0%
APR 16 2,574 - 18 2,621 2,563 12,442 31,315 -7,156 -109.44 Mn 2,595 2,495
MAY 16 2,588 - 11 2,627 2,578 23,784 52,528 6,104 93.86 Mn 2,642 2,550 30 Day
JUN 16 2,568 - 9 2,601 2,558 5,753 19,075 1,237 18.87 Mn 2,645 2,543 Spreads Last Bid Offer Vol High Low Avg
JUL 16 2,535 - 1 2,557 2,524 4,851 26,729 -457 -6.88 Mn 2,621 2,522 Mar16-Apr16 -48 -59 -46 649 -20 -75 -46
AUG 16 2,490 - 46 2,520 2,482 1,009 834 834 12.34 Mn 2,592 2,494 Mar16-May16 -62 -120 -60 533 -16 -103 -55
SEP 16 2,467 3 2,482 2,458 1,884 16,521 -218 -3.2 Mn 2,513 2,436 Apr16-May16 -14 -15 -13 7,424 26 -37 -8
NOV 16 2,450 3 2,463 2,442 1,557 18,512 -177 -2.58 Mn 2,497 2,423 Apr16-Jun16 6 6 8 1,335 49 -45 0
JAN 17 2,471 3 2,479 2,459 398 3,354 -85 -1.25 Mn 2,513 2,447 May16-Jun16 20 19 21 2,196 29 -8 9
MAR 17 2,483 3 2,492 2,470 202 4,461 80 1.18 Mn 2,516 2,457 Jun16-Jul16 33 33 35 1,255 49 -5 0
MAY 17 2,490 6 2,497 2,485 193 7,249 7 .1 Mn 2,533 2,475
JUL 17 2,487 10 2,487 2,487 1 1,128 0 . Mn 2,530 2,479 Refiner's Margin (RBDPO - Cash CPO) MYR 370
SEP 17 2,478 10 - - - 76 0 . Mn 2,510 2,510
3000
NOV 17 2,460 10 - - - 58 0 . Mn 2,475 2,475
JAN 18 2,460 10 - - - 33 0 . Mn 2,500 2,500
53,376 193,297 - 1,160

2000
Export Est FEB16 JAN16 Change (m-o-m) Change (y-o-y)
Period ITS SGS ITS SGS ITS SGS ITS SGS
1 - 10th days 249,835 196,968 323,106 322,081 -22.7% -38.8% -16.4% -35.9%
1 - 15th days 408,406 420,152 486,846 489,468 -16.1% -14.2% -19.8% -17.8%
1 - 20th days - - 666,816 666,288 - - - -
1000
1 - 25th days - - 924,983 931,173 - - - - 5/15/2015 7/15/2015 9/15/2015 11/15/2015 1/15/2016
Full month - - 1,145,649 1,149,255 - - - -
Cash CPO (LHS) RBD Palm Olein (LHS) Margin (RHS)

Crude Degummed Soybean Oil (CDSBO)/ USD 58.21

RBD Palm Olein (RBDPL) Basis (per Tonne)
Malaysian Palm Oil Board Statistic Feb Chg KDF's Expected 1000 200
Feb15 Nov15 Dec15 Jan16 (Mean) Feb 180
Production 1,121,628 1,653,068 1,399,383 1,129,835 4.97% 1,185,988 800 160
Stocks 1,743,102 2,908,494 2,631,612 2,307,843 8.77% 2,510,241 140
Export 971,640 1,499,112 1,483,214 1,279,069 -0.53% 1,272,290 600 120
Import 63,515 121,819 82,493 36,642 -2.50% 35,726 100
Commodity Futures (3rd month) Relative to FCPO 400 80
60
200 40
Overnight close +/- 1d Chg (%) 3m Chg 6m Chg 3m Chg 6m Chg 20
CPO 2588 -11 -0.42% 12.52% 27.68% 12.52% 27.68% 0 0
Dalian Olein 4996 8 0.16% 14.48% 4.91% 101.74% 82.17% 8/28/2015 11/20/2015 2/12/2016

Soybean Oil 31.84 0.03 -0.09% 13.63% 6.03% 100.99% 83.04% Spread (RHS) CDSBO USD (LHS) RBDPL USD (LHS)
WTI Crude 29.04 -0.40 -1.02% -28.60% -30.64% 88.19% 75.43%
CRB Index (realtime) 158.87 3.85 2.49% -13.53% -19.16% 63.46% 54.32% 3rd mth FCPO Volatility 30 Days 60 Days 90 Days
20.49% 21.82% 24.23%
40
Currency Last 1d Chg 3m Chg 6m Chg
USDMYR 4.2075 1.28% -5.22% 1.34%
USDIDR 13494 0.86% -2.69% -3.21%
30

Overnight Lead
U.S. soybean futures rose to their highest since Feb. 4 on Monday, supported by ideas that slow loadings of
20
recently harvested crops in Brazil will boost export demand for U.S. supplies, traders said.

10
2/9/2015 4/9/2015 6/9/2015 8/9/2015 10/9/2015 12/9/2015 2/9/2016

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