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Monday, December 15, 2014

FCPO: Painful Range 16th Dec 2014

Tueday, 16th Dec 2014. Palm oil futures end slightly lower yesterday despite some recovery made on Soy oil on Asia trading session. It does not look like decouple but better be alert than sorry. Other news to follow.

"-The U.S. stock market ended Monday’s volatile session lower, as an unabated fall in oil prices continued to erode investor confidence. Traders attributed wild swings in the indexes to a combination of factors, including ‘quadruple witching’ event — the week during which various index futures and options expire, unwinding of large positions by funds and uncertainty surrounding crude oil prices which resumed their slide after a brief rebound. The initial bounce in oil ahead of the regular market open prompted a rally in European stock markets. But as crude fell to new lows, the mood turned gloomy, with major exchanges finishing lower. Dow Jones Industrial Average DJIA, -0.58%  jumped more than 100 points shortly after the market open but ended 100 points, or 0.6%, lower at 17,180.84. The S&P 500’s SPX, -0.63% traded in a 29 point range, but ended 12.60 points, or 0.6% lower at 1,989.63. Utilities and financials were the biggest decliners, while all 10 sectors finished with losses. The energy sector began the day sharply higher, but ended 0.8% lower."


"- Japanese stocks tumbled Monday to their lowest level in four weeks, tracking U.S. losses at the end of last week. The Nikkei Average NIK, -1.72%  declined 1.6% to 17,099.40, its lowest settlement since mid-November. The broader Topix I0000, +0.03%  ended down 1.5%, with the yen USDJPY, +0.07%  rising to ¥118.27 against the dollar from ¥118.83 in the prior session. On Monday, the quarterly tankan survey by Japan’s central bank showed the country’s manufacturers are becoming more cautious about the future. Earlier, Prime Minister Shinzo Abe’s ruling coalition won a majority in the parliamentary elections on Sunday. Most other major Asian markets also suffered losses. Hong Kong’s Hang Seng IndexHSI, -0.95%  lost 1%, extending a three-day losing streak, as a research report from China’s central bank projected the country’s economic growth could decrease to 7.1% next year on slowing property investment. In Sydney, the S&P/ASX 200 XJO, -0.35%  finished down 0.6%, while Seoul’s Kospi Composite Index SEU, -0.61%  dipped 0.1%. However, on mainland China, the Shanghai Composite Index SHCOMP, +0.52%posted modest gains, settling 0.5% higher."

"- Oil bears have had a lot to be joyous about since midyear but it might just be the season to start booking profits on those short bets, Deutsche Bank’s top asset allocation strategist said Monday. In a note, Deutsche Bank’s chief strategist Binky Chadha identified three factors that had led Deutsche to recommend short positions back in June. Those three factors that earlier supported making betting that crude oil prices are on the decline now argue for short covering, he said. Here they are:The overvaluation gap has closed: In June, oil prices were 45% above fair value. Now, even though fair value for New York Mercantile -traded, WTI crude oil has dropped from around $80 to $58 thanks to a sharp rise in the dollar, the large fall in oil futures CLF5, -0.66%  have closed the overvaluation gap (see chart at top of page), Chadha noted. Nymex WTI futures closed Monday at a five-year low of $55.91, down more than 48% from its June high near $107 a barrel."


FCPO- Still Going Nowhere For Trend


Palm oil futures is not making any good sign yet in terms on running on any trend. Less and less sign of where it is going to head next. Export for 1-15th Dec vs Nov 2014 was reported slightly positive with just about 2% to 3% higher. Put the news aside, most of us know medium to long term traders are having very hard time since November 2014 which there is no promising trend to ride. Market quickly return to stubborn range when it hit new high or new low, and it kept repeating this incident more than sixth times in a row. Who to blame ? I rarely sees this is anyone's fault but rather unavoidable market condition that can occur over and over again without us knowing it early on. There is no way to tell either any of the trend trades would work or not, you would just have to execute it and find out. The only we can reduce or minimize losses within this ranging market would be not to trade at all or being super picky about taking a trade and trade significantly less. Other way would be waiting for more confirmation such as going into the trade later than usual, but that also would not stopping any trader from getting losses. A successful trade will be how well that trader can exploits the market condition at that particular time and execute his/her plan due diligently. Back to palm oil futures outlook, we are still travelling within a flexible range within 2,300 and 2,100 for the moment. I doubt the benchmark month would move with conviction after it hit a new high or new low for this year. We will be likely looking at no strong movement throughout until Jan or Feb next year.  For today, pivot support for the new benchmark March will be 2,149 while resistance is pegged at 2,183.

Daily Pivot Point
R2= 2203
R1= 2183
S1= 2149
S2= 2135
 Disclaimer: Information and opinions contained in this report are for educational purposes only. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness.

Tuesday, December 9, 2014

FCPO: There Is Still No Visible Trend, None 9th Dec 2014

Tuesday, 9th Dec 2014. Palm oil futures went down significantly after made it to new high above 2,200. The gains was short lived after it head down to settle at 2,171 yesterday, wiping out most of the gains made earlier. Other news to follow.


"- U.S. stocks suffered their biggest one-day slide in nearly seven weeks on Monday as a withering selloff among energy companies, which closely tracked oil’s continued price slide, dragged down key benchmark indexes. Downbeat economic reports form China, Japan and Europe also dented sentiment. Nervousness among investors was evident from a jump in 10-year Treasury yields, rising five basis points and a 20% jump in the CBOE Vix index, commonly knows as Wall Street’s fear gauge. S&P 500 SPX, -0.73%  closed 15 points, or 0.75, at 2,060.31. Losses were led by energy companies, as the sector dropped 3.9%. Materials, industrials and technology sector stocks also sold off, while defensive sectors such as utilities and health care drew buyers. The Dow Jones Industrial Average DJIA, -0.59%  dropped as much as 150 points at session lows, but ended 106.31 points, or 0.6% lower, at 17,852.48. McDonald’s Corp. MCD, -3.84% took a bite out of the blue-chip stock index followingdisappointing sales. Oil giants ExxonMobil Corp. XOM, -2.26%  and Chevron Corp CVX, -3.67%   also weighed on the index, dropping 2.3% and 3.7% respectively. The tech-heavy Nasdaq Composite COMP, -0.84%  ended the day with a loss of 40 points, or 0.8%, at 4,740.69. The heaviest-weighted component of the index, Apple Inc. AAPL, -2.26%   fell 2.3%."

"- Global oil production is concentrated among a handful of giant producer countries and about a dozen more which produce more than 1 million barrels a day, according to the U.S. Energy Information Administration. For 2013, the U.S. averaged 7.45 million barrels per day of crude oil production, third behind Russia and Saudi Arabia. However, U.S. production has been surging thanks to fracking technologies that free up oil trapped in shale formations. Total U.S. crude oil production averaged 8.9 million barrels per day in October, according to the EIA and is expected to top 9 million barrels a day in December."

"-Palm oil/Vegoils: Market factors to watch Dec 9 Tuesday

KUALA LUMPUR: The following factors are likely to influence Malaysian palm oil futures and other vegetable oil markets on Tuesday.

FUNDAMENTALS
* Malaysian palm oil futures ended lower on Monday after crude markets dived to five-year lows, forcing the tropical oil to give up earlier gains which had
stemmed from the ringgit plunging to its weakest since Sept. 2009. 
* Concerns about tight U.S. soy supplies drove soybean futures to their highest level in more than a week on Monday, while corn futures retreated for the first time in four sessions. 
* Oil dived 4 percent to new five-year lows on Monday, as Wall Street expectations of a deeper price slump next year and a Kuwaiti prediction for $65 crude set off one of the biggest declines this year. 

MARKET NEWS
* U.S. and European stocks fell on Monday after weak Chinese and Japanese data stoked worries about slowing global economic growth, while oil prices sank to five-year lows on expectations of oversupply into 2015."



FCPO- There Are Not Enough Conviction For Any Strong Move


I bet most of the major traders in local commodity and also in other major commodities market are taking a big long holiday break. There reason why I would say that would be the inactivity or less big movement in the FCPO market for the past four to six weeks and this month will be the last month for Dec. Most of the traders I know will be off to clearing leave or just taking a break from trading at this moment, maybe until the start of first quarter of 2015. Maybe that is just my opinion but that "less active" movement pattern in the market has been repeating for the same old time over and over again. Back to the market outlook, we are still likely travelling within a sideways range, there would be less likely any follow thru commitment when the price hit new high or went down to new weekly low. You can expect price went back to previous day close once it make new high or new low for this period. This is also known as sideways market where most traders were just staying on high alert or conservative mode throughout this month and maybe next month as well. For this week, we are likely looking at 2,140 to 2,215 range for the benchmark month. No tale to tell for those who trade by trend, we will just have to suck it up and hope we can survive this sideways market until February 2015. For today, pivot support level is located around 2,147 while resistance is pegged at 2,193.

Daily Pivot Point
R2= 2,215
R1= 2,193
S1= 2,159
S2= 2,147
 Disclaimer: Information and opinions contained in this report are for educational purposes only. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness.

Tuesday, December 2, 2014

FCPO: Recovery Inbound 2nd Dec 2014

Tuesday, 2nd Dec 2014. Palm oil futures is breaching below few support level and went down below the congestion area as well, but recent oversold reading may bring swift recovery. Other news to follow.

"- U.S. stocks fell on Monday as disappointing economic data from China and Europe triggered a bout of selling in global equity markets. Weak Black Friday sales were also weighing on markets, especially on retailer stocks. The Nasdaq Composite saw its steepest drop in seven weeks, dragged down by big declines in tech giants such as Apple, Inc., Google Inc., Facebook Inc., and Alibaba. Energy and utility stocks were the only bright spots on Wall Street, rising in tandem with a spike in oil prices. The S&P 500 SPX, -0.68% closed 14.12 points, or 0.7%, lower at 2,053.44, its biggest one-day decline in more than 5 weeks. The Dow Jones Industrial Average DJIA, -0.29% shed 51.31 points, or 0.3%, to 17,776.93. The Nasdaq Composite COMP, -1.34% suffered its steepest drop in seven weeks, after dropping 64.28 points, or 1.3% to 4,727.35."

"-Falling oil prices and a worse-than-expected slowdown in Chinese manufacturing activity sent stocks sharply lower in Hong Kong and Australia on Monday, while Japan provided a haven for the region’s investors. Oil extended its fall to below $65 a barrel following a surprise move Thursday by the world’s biggest oil producing nations to maintain their production target levels, meaning a glut in the market is likely to remain. Analysts predict prices could fall as low as $60 a barrel in the near term. On the New York Mercantile Exchange, light, sweet crude futures for delivery in January CLF5, -0.59%   traded as low as $64.10 a barrel on Monday, down $2.05 from late Friday in New York. They slid 17.9% in November. The drop had many of the region’s markets deepening losses into the close. Australia’s S&P ASX 200 XJO, +0.96%   benchmark index closed down 2% at 5207.70, as a gauge of its energy stocks fell 6.4%. The Hang Seng Index HSI, +0.11%   lost 2.6% to 23367.45. An index of Hong Kong-listed China shares slumped 2.9%, marking the biggest one day fall since February."


FCPO- It Is Not Hammer Time Yet, Recovery May Come First


Palm oil futures for Feb contract may recover today judging from healthy recovery from Soy oil, crude oil and some pull back on Dollar value overnight. If that three did not serve a good reason for some recovery in FCPO futures, I do not know what would. Bad news for those who just Shorted yesterday, it would be a short live Sell position if the market recovered more than 1% today. Personally, I am not a big fan of averaging up for Sell / Short positions but this condition may call for some exception. Traders need to pay close attention to averaging up or down with a losing position and know where is the next stop losses. Usually it would be a tight stop loss after the trader choose to go on averaging their position. Sometimes averaging up or down may save your losing position into a break even or slightly better outcome but it must be treated with extreme prejudice. Stick to your secondary stop loss if you are averaging down, always. Back to the outlook, FCPO Feb is likely running on Bearish trend judging on the price action. Lower highs and lower lows are obvious candle formation formed in hourly chart since last two weeks. But there is no surprise if the market would recover 4% to 5% from this week. You can call it whatever you want, dead cat bounce or just some temporary rebound, I am out if my stop losses hit, no question about that. Stop losses is there for a reason and trader should execute what they have planned for, not second guessing it again and again. For today, pivot support is located around 2,084 while resistance is pegged at 2,154.

Daily Pivot Point
R2= 2154
R1= 2131
S1= 2084
S2= 2060
 Disclaimer: Information and opinions contained in this report are for educational purposes only. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness.

Thursday, November 27, 2014

FCPO: Going Somewhere ? 27th Nov 2014

Thursday, 27th Nov 2014. Palm oil futures made a tricky U turn for the past two session after it break below 2,196~2,193 support level. Other news to follow.

"-The S&P 500 and Dow Jones Industrial Average ended slightly higher on Wednesday, scoring their 47th and 30th record closes this year, respectively. Trading on Wall Street was thin with many participants taking off early for the Thanksgiving holiday. Markets will reopen on Friday for a shortened session ending at 1 p.m. The S&P 500 SPX, +0.28%  closed 5.74 points, or 0.3%, higher at 2,072.77. The Dow Jones Industrial Average DJIA, +0.07%  added 12.81 points, or 0.1%, to 17,827.75."

"- Japan stocks nudged lower on Wednesday, snapping a three-day winning streak, as the yen crept higher against the greenback. The Nikkei Average NIK, -0.27%  dipped 0.1%, while the broader Topix I0000, +0.03%  edged 0.2% lower. Meanwhile, the yen USDJPY, -0.15%  traded little changed versus where it was a day earlier, around ¥117.85."

"- Oil futures remained lower Wednesday after the Energy Information Administration said U.S. crude inventories unexpectedly rose last week. The agency said stockpiles rose by 1.9 million barrels. Analysts surveyed by The Wall Street Journal had forecast stocks to fall by 100,000. Ahead of the data, January WTI oil CLF5, -0.85% slumped to a new four-year low after closing Tuesday at its lowest level since September 2010. Oil remains down 9 cents, or 0.1%, at $74.01 a barrel."



FCPO- No Clear Direction

There was no clear cut direction for the moment trading in FCPO market. None, not even a 100 points rally or retracement. The downside about trend trading would be its slow to re-act as most trend following system only went in to the market when a trend is already established few session ago. But ironically, that slowness of re-action is trend following is crucial to filter out most fake outs trend before that rally or retracement can confirm as a uptrend or down trend. If you think this would in time turn out to be an advantage or a better system, think again. Every trend trader will have certain entry and exit rules depends on their system, and if market only move within a certain points range, that trend trader will be scratching his head as most of the position will turn out to be a stop losses, break even or worst whipsawed. No system can be perfect, it is the trader job to implement risk management that will work along with the system, maybe the profit and losses expectation will deviate from the system testing environment but that is something we need to deal with and not to discard it. Back to palm oil outlook, palm oil benchmark Feb is making U turn recovery after it break below 2,196~2,193 major support level, this level was also a break down after a significant congestion area. I bet most of the break out trader would Short around that level too. If you look at the hourly chart, there is no conviction or promising sign for this recovery either. The Feb contract need to breach above 2,150 level and keep going for another 40 points to shine out as a strong rally this year. Other than that, the Feb contract is likely to hover within 2,180~2,286 level  until the end of year.

Daily Pivot Point
R2= 2266
R1= 2252
S1= 2215
S2= 2192
 Disclaimer: Information and opinions contained in this report are for educational purposes only. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness.

Tuesday, November 18, 2014

FCPO: 200 Points Sideways, Move Along 18th Nov 2014

Tuesday, 18th Nov 2014. Palm oil futures is doing what we called a Bulls and Bears battle, but to put it in simpler way, it is a battle between the group of trader that is confused and a some informed trader. Other news to follow.

"- U.S. stocks ended Monday's choppy session fractionally higher. A small gain on the S&P 500 was enough to send the index into record close. Stocks were under pressure in the morning trade following news that Japan fell into recession and less-than-stellar manufacturing data in the U.S. Comments from European Central Bank president Mario Draghi, who said that the ECB would be open to buying government bonds, if needed have buoyed U.S. stocks somewhat in the afternoon trade, but gains petered out. The S&P 500 SPX, +0.07% ended 1.5 points higher at 2,041.32. The Dow Jones Industrial Average DJIA, +0.07% added 13 points, or 0.1%, to 17,647.75. The Nasdaq Composite COMP, -0.37% closed 17.5 points, or 0.4%, lower at 4,671."


"- Higher starts for both the Hong Kong and Shanghai share markets, brought on by Monday's launch of the Stock Connect program, had almost disappeared half an hour into trading, with concern surfacing as new data out of China showed the bad-debt ratio for major banks had jumped to a four-year-high. The Hang Seng Index HSI, -1.21% moved off its 0.9% opening gain to trade with a loss of 0.5%. Over on the mainland, the Shanghai Composite IndexSHCOMP, -0.19% also gave up most of its initial advance of 1.2% to trade with a gain of just 0.2%. Earlier in the morning, Hong Kong and Shanghai authorities announced that the long-awaited Stock Connect, allowing direct trade between the two markets, had officially started, allowing foreign individudal investors to buy mainland Chinese stocks for the first time ever. "

"-The U.S. dollar moved lower against the euro on Friday, after U.S. a report of consumer sentiment indicated that expectations for higher inflation fell. The consumer -sentiment report suggests that the Federal Reserve may be in no rush to raise rates.
The euro EURUSD, +0.12%   moved up $1.25 against the dollar on Friday from $1.2475 late Thursday. The shared currency had been trading flat to down against the dollar, on the heels of an upbeat U.S. retail sales report. The euro climbed higher, however, after a sentiment survey indicated that consumer expectations of rising prices fell. The WSJ Dollar Index BUXX, -0.06%  was down fractionally 0.2%, to 79.89, while ICE Dollar Index DXY, -0.15% a measure of the dollar’s strength against a basket of six currencies, notched lower to 87.54 from 87.82 on Thursday."


FCPO- Where It Is Going ?


Most of us know that this currently it is a sideways market with no force gaining the upper hand yet. When the price dipped too low, Bulls will likely take advantage and support price from going lower and when the price is rising too fast, profit taking will kick in to take control. No one is getting the edge here, thus no trend is running either. I am talking about medium term trend traders and slightly longer term trend traders, I believe these types of traders might not getting or getting lesser cheese this month. Just look at the hourly chart and daily, a swift pull back with tons of zig zag price action in hourly chart. Most trend traders are getting their positions breaking even or likely, cutting losses. I might be wrong about cutting losses but it is somehow close. Points is, these are the times where trend traders hurt, and I hope it is not for long. Back to the palm oil outlook, the new benchmark Feb is likely moving within 2,286 ~ 2,193 this week. We might be looking at some new direction if the market breach either of these range. For external fundamental, stocks level is still high, too high for price surge for the moment and demand is consistently weaker. Palm oil rival, soy oil is still Bearish from where it stood, the Dec contract was traded at 32.35 cents per pound, up about 0.25 cents as the time of writing. For today, pivot support for Feb contract is located around 2,214 while resistance is pegged at 2,252.

Daily Pivot Point
R2= 2252
R1= 2242
S1= 2214
S2= 2196
 Disclaimer: Information and opinions contained in this report are for educational purposes only. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness.

Friday, November 7, 2014

FCPO: Bulls Are Having Hard Times 6th Nov 2014

Thursday, 6th Nov 2014. Palm oil futures is heading down for some correction after breaking above previous resistance level but the path to northern is not all smooth. Other news to follow.

"-The S&P 500 and Dow Jones Industrial Average closed at new highs on Wednesday, as an upbeat report on the labor market, and results that left Republicans with a Senate majority, lifted stocks. Investors appeared to give the service sector data a pass, which showed it has been growing at a somewhat slower pace. S&P 500 SPX, +0.57% gained 11.46 points, or 0.6%, to 2,023.56, with utilities and energy sector stocks leading the gain. The Dow Jones Industrial Average DJIA, +0.58%  jumped 100.69 points, or 0.6%, to 17,484.53. The Dow industrials hit fresh records in tandem with the Dow transports and Dow utilities. A rare occurrence, dubbed Dow Trifecta has happened only 26 times in the history of the averages. The last time this happened was on April 25, 2007, according to FactSet. The Nasdaq Composite COMP, -0.06%  lagged the main benchmarks and closed down 2.91 points or 0.1%, at 4,620.72."

"-Hong Kong stocks enjoyed some slim gains in early Thursday trading, with the Hang Seng Index HSI, +0.15% up 0.1%, rubbing out a little of its 0.6% loss in the previous session. The gains came as Hong Kong's H-share index fell 0.2%, and Shanghai's Composite Index SHCOMP, +0.25% edged 0.1% higher in initial trades."

"-U.S. crude-oil futures settled higher Wednesday after a U.S. supply report showed a smaller-than-expected increase in crude inventories. On the New York Mercantile Exchange, light, sweet crude futures for delivery in December CLZ4, +0.31%   rose $1.49, or 1.9%, to settle at $78.68 a barrel. That snapped a four-session losing streak that took prices to their lowest in three years. It was also oil’s largest one-day gain in nearly two weeks."


FCPO- It Is Not Always How It Seems To Be


What we thought for FCPO Jan to continue rally at least amid the expectation of better demand as palm oil substance will be use on bio-diesel fuel in Malaysia that has started. Plus the palm oil export duty exemption may not help much for the moment due to Soy oil weakness so far. Market is having hard time rallying after hitting it high at 2,345 last Friday. Most medium term trend trader might find it challenging to held on Long positions due to recent steep correction. As it market is just letting go, maybe for the time being. The Bulls will come back if there is some stimulating news such as further increase in demand, maybe ?? Or continue to falter due to stockpiles rising. Back to the outlook, we are likely to expect lower opening on palm oil futures today due to overnight weakness in Soy oil. Soy oil for Dec contract is doing 32.62 as the time of writing, that was 0.50 cents lower than yesterday value on 6.00pm GMT. Even though palm oil futures has been tanking recently, long term price perspective remain Bullish. Reason behind were multiple formation on higher high and higher low on daily chart and until we see a new lower low and lower high in daily chart, there would not be any downside trend form yet. Pivot point for support is located around 2,233 while resistance is pegged at 2,280.

Daily Pivot Point
R2= 2308
R1= 2280
S1= 2233
S2= 2214
 Disclaimer: Information and opinions contained in this report are for educational purposes only. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness.

Thursday, October 30, 2014

FCPO: The Upper Range Is Broken, Bulls Coming Back 30th Oct 2014.

Thursday, 30th Oct 2014. Palm oil futures is likely open higher today judging on promising recovery in Soy oil futures. Soy oil futures for Jan contract was traded at new high at around 34.51 cents per pound as the time of writing. Other news to follow.

"-The Dow Jones Industrial Average snapped a four-day winning streak on Thursday, after the Federal Reserve made official its plans to end the last round of its recession-era stimulus program. Most major stock benchmarks slipped lower, after an initial knee-jerk bout of panic, in the wake of the Fed’s policy decision, which came just after 2 p.m. Eastern time. Stocks did recover somewhat, but still ended Wednesday’s trading session in the red. The S&P 500 SPX, -0.14% closed 2.75 points, or 0.1%, lower at 1,982.30. The Nasdaq Composite Index, which was already under pressure from Internet stocksCOMP, -0.33% lost 15 points, or 0.3%, to 4,549.23. Meanwhile, the Dow industrialsDJIA, -0.18% ended down 31.44 points, or 0.2%, at 16,974."

"-The Hong Kong Stock Exchange (HKEx) announced Sunday that it did not know when the Shanghai-Hong Kong Stock Connect, or “Hu-Gang Tong,” would be launched because it has not received the central government’s approval.  Fears of the program being derailed by pro-democracy demonstrations in Hong Kong were voiced before the HKEx 0388, -0.12% HKXCF, +1.98%  announcement. The Hong Kong Commercial Daily, a Chinese-language newspaper sold in the city and in neighboring mainland areas, cited an anonymous source as saying Hu-Gang Tong will probably not be introduced by the end of the year because central government authorities think the atmosphere in the former British colony is causing bad timing for any new economic cooperation scheme."

"-MPOC Expects CPO Prices to Rise Next Year
KUALA LUMPUR: The Malaysian Palm Oil Council (MPOC) expects crude palm oil price (CPO) to increase to between RM2,100 and RM2,500 next year, lifted by factors such as biofuel demand and petroleum price level. Its chief executive officer, Tan Sri Yusof Basiron, said besides supply and demand, biofuel demand and petroleum price level would determine whether more or less of biodiesel would be used. "The announcement by Plantation Industries and Commodities Minister, Datuk Seri Douglas Uggah Embas, to impose a requirement for biodiesel to use seven per cent palm oil, from five% now, was a way to firm up the CPO price," he told Bernama yesterday. Basiron said this on the sidelines of MPOC's International Palm Oil Trade Fair and Seminar 2014 here. Uggah had said the move aimed to lower stocks and boost prices that had declined by over 20% this year. The implementation would start in stages from November in Peninsular Malaysia and in Sarawak, Sabah and Federal Territory Labuan by December, he said. Basiron said the government also tried to remove depressing factors on prices by providing export duty exemption for CPO."This would remove any bearish factors affecting palm oil price. "The move will also stimulate the country's export and help rationalise the stock level," he said. Source : Bernama"



FCPO- The Bulls Are Out Of The Cage. 

Palm oil futures rallied to multi sessions high and closed at 2,267 yesterday amid strong rally in Soy oil. More promising rally is about to happen again today as Soy oil manage to record about 0.80 cents rally overnight and it is still rallying at the time of writing. Yesterday market frantic rally may contributed by the news of declining output in palm oil top producer and depleting inventories as well. For whatever the reasons were, again, it is not a must that the trader knows it, but it is compulsory for a trader to consistently follow the trading plan before him, period. I for an instance, does not know such news until today, so does it make me to less informed to other trader in the market ? The answer is no doubt yes, I am less informed on this news and I did not care because it was not the news that made me enter and exit my positions based on these kind of news. I have a plan, and it was crucial for me that I trade based on that plan. Staying and working according to the your tailored made plan or system is the best edge you have, to stand a chance winning in the long term. News or known as external factors in my vocabulary did not give me any measurable technique to use in the market. By the time I knew there was such news, it was already too late as the price would have moved away from your exit point. Back to palm oil futures outlook, "the bulls are indeed out of the cage," and it might continue to charge further until there some indication in hourly chart that may suggest slowing down. For this week, resistance is pegged at 2,325 while pivot support is located around 2,233.

Daily Pivot Point
R2= 2,296
R1= 2,279
S1= 2,233
S2= 2,204
 Disclaimer: Information and opinions contained in this report are for educational purposes only. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness.

Tuesday, October 21, 2014

FCPO: TaKing Its Own Sweet Time To Move 21st Oct 2014

Tuesday, 21st Oct 2014. Palm oil futures is trading below the previous support range at around 2,136 level but kept on staying there for the moment, Soy oil getting weaker. Other news to follow.


"- U.S. equity investors began the week on an optimistic, albeit cautious, note on Monday, with gains in broader markets led by defensive sectors such as consumer staples and utilities. Monday’s positive movement in the Dow industrial comes even as one of its major components, IBM, posted disappointing quarterly results, pushing shares of the tech giant lower and dragging down the broader index. The Dow Jones Industrial Average DJIA, +0.12%  closed 19.26 points, or 0.1%, higher at 16,399.67. The blue-chip index is down 1.1% since the start of the year. The S&P 500 SPX, +0.91%  gained 17.25 points, or 0.9% to 1,904.01. The benchmark index fell below its 200-day moving average last Monday and still remains a few points below that key level. The Nasdaq Composite COMP, +1.35%  rose 57.64 points, or 1.4%, to 4,316.07, led by gains in biotech and internet stocks."


"-Stocks in Tokyo staged their biggest rally in 16 months on Monday as investors bargain-hunted despite lingering concerns about global growth that sparked volatility in markets last week. After sliding 5% last week, the Nikkei Stock Average NIK, -0.57%  rose 4.0% to 15,111.23. The index had hit correction territory on Friday, having fallen more than 10% from a peak in late September. The market also rallied on news that Japan’s Government Pension Investment Fund, the world’s largest public pension fund with some $1.21 trillion in assets, is working on raising its portfolio allocation devoted to domestic stocks to around 25%. There was a scramble to cover short positions, pushing shares higher."

"-Crude-oil futures ticked lower Monday, ending a brief relief rally that emerged late last week. Traders remained unsure whether prices for the commodity have hit bottom and oversupply concerns continued. On the New York Mercantile Exchange, light, sweet crude futures for delivery in November CLX4, +0.01%  declined 4 cents, or less than 0.1%, to settle at $82.71 a barrel. December Brent crude LCOZ4, -0.18%  on London’s ICE Futures exchange declined 76 cents, or 0.9%, to finish at $85.40 a barrel, also putting a stop on two straight days of gains."


FCPO- Might Be Looking At Equally Matched Bulls And Bears

Palm oil futures had break below the major support level at around 2,136 last week but manage to stay afloat around this level for the moment. Even though Soy oil is continuing to record lower prices, palm oil futures is still manage to descend slowly than expected this week. In any market, a downforce or Bearish move should be swifter than uptrend but not in this case as there was still some Bulls influence throughout the trading session. I am starting to think Bears are not that aggressive for this particular downside and it is taking its time too long to descend or maybe it is just me wondering when is the next new low would be form. By looking at where we are right now, the Jan contract does break down from previous major support but manage to stay up so far, making this particular move a guessing game. Most of you may ask is this downside finished ? It is likely to be over if the Jan contract manage to breach above 2,150 level and follow by 2,180 level anytime this month. If it does that, we are likely moving into a ranging market condition that range within 2,100 ~2,223 area. More upside is possible if the upper range or major resistance above 2,223 level is breach. By that, most long term trader might want to consider taking Long positions as the market condition has changed. For today, the benchmark Jan contract is likely open slightly lower judging from lower Soy oil price compare to yesterday palm oil session closed at 6.00pm GMT. The Dec soy oil was traded at 31.71 cents per pound as the time of writing.

Daily Pivot Point
R2=2145
R1=2138
S1=2118
S2=2105

Disclaimer: Information and opinions contained in this report are for educational purposes only. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness.

Thursday, October 16, 2014

FCPO: Recent Support Range Broken, Bears Are Mauling 16th Oct 2014

Thursday, 16th Oct 2014. Palm oil futures went down and this time, it mean new business to South. Other news to follow.

"- Interconnected worries over deflation, a potential rerun of the eurozone debt crisis and some surprisingly rotten U.S. economic data shocked investors on Wednesday, triggering a whipsaw session that saw stocks plunging only to trim losses before the final bell. It was panic mode in the early going and again in the afternoon. The DowDJIA, -1.06%  dropped by around 460 points and were on track for the biggest one-day percentage drop in three years before a late rebound. In the end, the index finished down 173.45 points, or 1.1%, at 16,141.74.The S&P 500 SPX, -0.81% temporarily erased its gain for the year but also trimmed losses by the end of the session. The small-cap Russell 2000 RUT, +1.02%  , which has been under heavy pressure this month, led the late rebound, finishing the day with a 1% gain.
The S&P 500 recorded a decline of more than 9% from its intraday peak reached on Sept. 19 to its trough on Wednesday."
"-Stocks in Asia were mostly higher Wednesday, with markets in Japan and Indonesia rebounding to lead the way as Chinese inflation data gave investors hope for fresh stimulus for the world’s second-largest economy. The Nikkei Stock Average NIK, -2.44%  finished up 1% at 15,073.52, while Indonesia’s Jakarta Composite Index JAKIDX, +0.82%  gained 0.8% to 4,962.94, and Australia’s S&P ASX 200 XJO, -1.14% gained 0.7% to 5,245.60. Investors appeared to hunt for bargains after the market suffered heavy losses earlier this week, fueled by worries over the pace of global economic growth and anticipated tightening of U.S. monetary policy. In Japan, the Nikkei rose from a two-month low and broke a five-session losing streak as investors bought exporters benefiting from dollar strength. The dollarUSDJPY, +0.08% traded at ¥107.21, versus ¥107.06 late Tuesday in New York."
"- Crude-oil inventories rose by 10.2 million barrels in the week ended Oct. 10, the American Petroleum Institute said late Wednesday, according to reports. Gasoline supplies declined by 3.1 million barrels, and inventories of distillates were down by 200,000 barrels. The API report comes a day ahead of more closely watched data from the Energy Information Administration due Thursday. Analysts polled by Platts expect the EIA to report a supply increase of 2.5 million barrels. Both reports were delayed by a day due to Monday's Columbus Day holiday. "


FCPO- The Game Is On, Negative Slope Trend Is Coming. 


Palm oil futures broke down below medium term major support level at around 2,136 level yesterday for the first time, signalling further retracement this month. The new benchmark Jan 2015 contract will take over the active month soon, but the rest of the story will remain the same. The current story for palm oil futures would be, retreating Bulls giving way to Bears. This round, Bears are likely acquired an edge by taking out the medium support level around 2,136 lately. And couple with double digit negative export figures plus recent lower Soy oil futures, this downward pressure is likely turn into a good old correction. On the technical side, we are expecting previous support level become resistance level around 2,136 level if the market open lower and continue to breach new low below 2,110 today. As always, there would not be a straight line retracement but rather a few recovery along the way of this short term correction. The benchmark Jan 2015 is looking to open slightly lower today judging on current Soy oil futures is hovering around 32.10~32.20 level, which is 0.30 cents lower compare to yesterday 6.00pm GMT. For today, pivot support is locating around 2,087 while resistance is pegged at 2,162.

P/s: Most analyst is blaming Soy oil and other commodities weakness on crude oil, they are related but not entirely correlated. We all know what happen to a trader when you trade with correlation.

Daily Pivot Point
R2= 2189
R1= 2162
S1= 2111
S2= 2087
 Disclaimer: Information and opinions contained in this report are for educational purposes only. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness.