Top Calls
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Sector Update - Plantation
(OVERWEIGHT, maintain)
- Record April production, inventory up 4.6% Record high April CPO production (+3.9% MoM) coupled with lethargic exports (+1.2% MoM) and higher imports (+27,919 MT) contributed to a 4.6% MoM increase in palm oil closing inventory to 1.77m MT. CPO 3-Month futures remain trapped in the RM2,500/MT-RM2,700/MT range as sentiment continues to be capped by lethargic exports as yields swing higher towards the seasonal highs around October. Oil World has raised its world production estimate for the 7 Oilseeds but the stock-usage for the 8 Major Oils is still projected to decline. Locally-delivered CPO prices reported by the Malaysian Palm Oil Board have also trended lower but have consistently remain above RM2,600/MT. On the weather front, the US NOAA however has raised the chance of El Niño during the summer to over 65%. We maintain our CPO ASP forecast of RM2,700/MT for 2014 and RM2,850/MT for 2015-16 underpinned by higher edible and non-edible demand and declining world stocks-usage ratio. Sector OVERWEIGHT is also maintained.
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Other Calls
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| For important disclosures, please refer to the Disclosure section at the end of the individual linked research reports. |
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