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Tuesday, August 19, 2014

FCPO: We Are Yet Out Of The Jungle 19th AUg 2014

Tuesday, 19th Aug 2014. Palm oil futures is still subject to fall further as sentiment on palm oil output and stocks are still high. Other news to follow.

"-U.S. stocks finished with strong gains Monday, helped by deal news and easing Ukraine-Russia tensions. A better-than-expected reading on the housing market also boosted sentiment and kicked off a big week for economic data. The S&P 500 SPX, +0.85% rose 16.68 points, or 0.9%, to close at 1,971.74, adding to its 1.2% weekly gain last week. The benchmark index stands just 0.8% off its July 24 record close, as it’s bounced back from a slump in late July and early August.The Dow Jones Industrial Average DJIA, +1.06% jumped 175.83 points, or 1.1%, to finish at 16,838.74. The blue-chip barometer achieved its biggest point gain since Aug. 8. The Nasdaq Composite COMP, +0.97%  climbed 43.39 points, or 1%, to 4,508.31, scoring its highest close since March 2000. Yahoo Inc. YHOO, +2.50%  and Google Inc. GOOGL, +1.54% GOOG, +1.51%  rose 2.5% and 1.5%, respectively, as tech stocks enjoyed broad gains."

"- Here are the closing levels for Asia's major stock markets: Tokyo (Nikkei Average) flat ; Hong Kong (Hang Seng Index) flat ; Shanghai (Shanghai Composite Index) up 0.6% ; Sydney (S&P/ASX 200) up 0.4% ; Seoul (Kospi) down 0.5% ; Taipei (Taiex) down 0.7%."

"- Oil futures dropped again Monday, as investors pushed geopolitical concerns surrounding violence and unrest in Ukraine and Iraq to the back burner. On the New York Mercantile Exchange, light, sweet crude futures for delivery in September CLU4, +0.26%  fell 94 cents, or 0.9%, to close at $96.41 a barrel. October Brent crude LCOV4, +0.07%  on London’s ICE Futures exchange fell $1.93 to $101.60, its lowest finish in more than a year."

"-CPO Futures End Marginally Lower
KUALA LUMPUR: Crude palm oil (CPO) futures prices ended marginally lower yesterday due to the prevailing negative sentiment, a dealer said. Phillip Futures derivative product specialist David Ng said expectation of higher production and stocks level weighed heavily on prices. Spot month September 2014 fell RM8 to RM2,099 a tonne, October 2014 declined RM6 to RM2,087 a tonne, November shed RM3 to RM2,088 a tonne and December 2014 eased RM6 to RM2,129. Volume slipped to 40,507 lots from 44,266 lots recorded on Friday while open interest increased to 283,460 contracts from 205,112 contracts previously. On the physical market, August South slipped RM30 to RM2,110 a tonne.Bernama"


FCPO- Do Not Hope For Recovery Too Soon

We are yet out of the Bearish market or this Bearish momentum is come to an end whatsoever. There is no conducive sign for us to take into consideration yet even palm oil futures prices have fall to five years low. The only intelligent guesses you can make will be, this Bearish market is yet over. More weakness is possible with current active output due to good weather and this will subsequently increase palm oil stocks to 1% to 4% gradually. With this in mind, there is no telling where is the next support or where palm oil futures Bearish momentum will run-off its steam. Moving on, we are looking at slightly higher opening today as Soy oil futures manage to recover slightly above 30.02 cents as the time of writing. But bear in mind that we are yet out of negative price movement yet. The new benchmark Nov contract can fall below 2,000 level this month if there is not much good news from export figures, ITS and SGS cargo surveyors. Technically, without incorporating any fancy indicators or calculation, we might looking at first resistance level around 2,095 followed by 2,104 level while support is located around 2,080 followed by 2,074 level. The Nov contract is likely recover further if the first resistance level broken, and bad news if it manage to breach below 2,080 level today. More weakness is expected anything below 2,080 level.

Daily Pivot Point
R2=2104
R1=2095
S1=2080
S2=2074

 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, August 14, 2014

FCPO: Palm Oil Price Is Still Bearish 14th Aug 2014.

Thursday, 14th Aug 2014. Forget what you saw for the past few sessions this week, palm oil price is no doubt still in Bearish mode and we are yet knowing anything about where is the next support. Other news to follow.

"- The U.S. stock market closed with modest gains on Wednesday, led by advances in the health-care and technology sectors. The main benchmarks gained in the three of the past four sessions, bouncing off the lows reached last week. Gains on the Nasdaq Composite were led by biotechnology companies, with the iShares Nasdaq Biotechnology ETF IBB +0.01%   up 2.2%. The Nasdaq Composite COMP +1.02% added 44.87 points, or 1%, to 4,434.13. The Dow Jones Industrial AverageDJIA +0.55%  added 91.26 points, or 0.6%, to 16,651.80.
The S&P 500 SPX +0.67%  climbed 12.97 points, or 0.7%, to 1,946.72. Vertex Pharmaceuticals Inc.VRTX +3.91%   led gainers." 
"-Here are the closing levels for Asia's major stock markets: Tokyo (Nikkei Average) up 0.4% ; Hong Kong (Hang Seng Index) up 0.8% ; Shanghai (Shanghai Composite Index) up 0.1% ; Sydney (S&P/ASX 200) down 0.3% ; Seoul (Kospi) up 1% ; Taipei (Taiex) up 0.7%."
"-U.S. oil supplies rose by 1.4 million barrels in the week ended Aug. 8, the Energy Information Administration said Wednesday. That contrasted with expectations of a fall by 2 million barrels, according to analysts surveyed by Platts. Supplies of gasoline decreased by 1.2 million barrels, and stockpiles of distillates, which include heating oil, were down by 2.4 million barrels, the EIA added. Analysts polled by Platts had expected gasoline stocks to decline 1.5 million barrels, and distillate stocks were seen up 250,000 barrels. Crude-oil for September delivery CLU4 -0.24% recently traded at $96.92 a barrel on the New York Mercantile Exchange, off 47 cents, or 0.4%. It was trading around $97.20 a barrel before the supply report. "


FCPO- No Support In Sight

With the rate of Soy oil and majority of the edible commodity falling, there is no telling where is the next support for palm oil price. As of writing, Soy oil futures dipped to multi year to 33.73 cents per pound, making it the worse losses so far. Palm oil futures is likely following its rival oil foot steps soon. For start, palm oil futures might be opening twenty to thirty points lower today. Soy oil futures is likely set the tone for the palm oil opening bell and there would not be any different for today. Both palm oil technical and fundamental ground are still Bearish. MPOB reported very Bearish news as output and palm oil stocks rose 6.1% and 1.5% respectively, and export was down 2.3%. Not only that, technical outlook has been Bearish as well with series of lower high and lower lows can be found on daily chart. Even most of the time frame was Bearish all this time, shorter time frame traders or intraday traders will have better flexibility to navigate their Long or Short positions throughout the day. Never overnight a position if you are an intraday trader, I saw too many example intraday trader turned into overnight trader, especially holding on losing position. And of course, shrinking their account equity after that, not knowing what to do or what to expect even after numerous guide provided. These inferior traits that applied in trading business will only derive one result, blowing up a capital account fast. The way that a trader can progress would be, learn how risk work, how to manage it and at the end knowing when to stop and when to hold on. Unfortunately, most instances I saw was traders misplaced their hopes and fear. They are fearful when they are right, hopeful when they are wrong. Both of these behaviour are destructive weapon you brought in when trading. To sum up on today outlook, palm oil futures is still Bearish on every time frame, be it short term or long term, most price recovery to pivot resistance level is a good place to go Short.

Daily Pivot Point
R2= 2218
R1= 2197
S1= 2159
S2= 2142
 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, August 12, 2014

FCPO: New Monthly Low, Just A Beginning 12th AUg 2014

Tuesday, 12th Aug 2014. Palm oil futures went down again yesterday and this time it is big. To Make things worse, palm oil rival also dropped to multi-months low. Other news to follow.

"-U.S. stocks advanced Monday, led by a rally in small-cap companies, though continued tensions in Ukraine and the Middle East put a cap on the S&P 500’s gains. The Russell 2000 RUT +0.94%   rose 10 points, or 0.9%, to the preliminary 1,141.58. The index of small companies has outperformed the large-cap S&P 500 in the five of the past six sessions, and many analysts see the leadership of small stocks as a sign of improving markets. The S&P 500 SPX +0.28%  rose 5.32 points, or 0.3%, to 1,936.91, Consumer staples and technology stocks lead the gains. The Dow Jones Industrial Average DJIA +0.10%  gained as much as 75 points in the morning, but pared gains in the afternoon. The blue-chip index closed 16.05 points, or 0.1%, higher at 16,569.98. The Nasdaq Composite COMP +0.70%  ended the day up 30.43 points, or 0.7%, at 4,401.33."

"- Here are closing levels for Asia's major stock markets: Tokyo (Nikkei Average) up 2.4% ; Hong Kong (Hang Seng Index) up 1.3% ; Shanghai (Shanghai Composite Index) up 1.4% ; Sydney (S&P/ASX 200) up 0.4% ; Seoul (Kospi) up 0.4% ; Taipei (Taiex) up 1%."

"-CPO Futures Close Lower
KUALA LUMPUR: Crude palm oil (CPO) futures contracts on Bursa Malaysia Derivatives closed lower yesterday on expectation of higher inventories and production in August ahead of Malaysia Palm Oil Board's report due to be released today. "Prices seem well-supported at RM2,400 level but any breach below this level could trigger further selling pressure and extend further weakness towards RM2,370 level. Spot month September 2013 fell RM31 to RM2,401 and December 2013 decreased RM42 to RM2,402 per tonne. October 2013 and November 2013 declined RM45 each to RM2,402 and RM2,399 per tonne, respectively. Volume eased to 29,350 lots from 30,152 lots while open interest fell to 180,260 contracts versus last Friday's 187,951 contracts."

FCPO- There Is No Telling Where Is The Next Low. 


I might sound dramatic but dramatic is what you need if you wish to achieve success in any field. Palm oil gets the hammer down not only yesterday but for the past six months this year. Try to flip a daily chart and you will instantly see what is going on, with that in mind yesterday sell-off was actually expected. Unfortunately, only few percentage of traders would expect that to happen, traders who actually sticking to their plan and execute it. Majority does not see this down fall, to make things worse, most are going against it. To go Long in a very low or very cheap priced instrument in futures is suicide attempt because there is no telling where is the next low the price would stop dropping, none to tell whatsoever. Trend trader might having the best blast this time around, and we all know this moment is hard to come around. Both fundamental and technical reading are still suggesting Bearish market. With July palm oil output increase about 6.1%, export down 2.3% and stocks was up 1.5%, it is clear picture that palm oil direction is down. Technically, yesterday seventy points sell down might signifies that the Bearish momentum is still strong and still have more juices to go down. This weakness might just be the beginning, there is no telling where is the next support. For intraday traders, beware if you are going Long on market rebound because it will be a Short live rally. Most recovery is likely turn out to be chance to go Short. To do that, pay attention to daily pivot resistance level.

Daily Pivot Point
R2=2263
R1=2220
S1=2154
S2=2131
 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, August 5, 2014

FCPO: Dry U.S Weather Might Help Soy Bean Price To Recover 5th Aug 2014

Tuesday, 5th August 2014.   Palm oil futures closed lower yesterday after it recover from a steep gap down on early morning session. Other news to follow.

"-U.S. stocks rallied on Monday and recouped some of the heavy losses from last week’s rout, but investors remained cautious over the timing of the Federal Reserve’s interest-rate hikes. The S&P 500 SPX +0.72%  closed 13.8 points, or 0.7%, higher at 1,938.99, its first gain in three sessions. The Dow Jones Industrial Average DJIA +0.46%  added as much as 102 points during the session, before finishing the day 75.91 points, or 0.5%, higher at 16,569.28 and snapping a four-day losing streak. The Nasdaq Composite COMP +0.72% rose 31.25 points, or 0.7% to 4,383.89. The data calendar was empty for Monday and few companies reported earnings. Instead, investors focused on last week’s performance, which included the biggest weekly drop in two years for the S&P 500 SPX +0.72% . While Friday’s jobs report wasn’t as strong as expected, the data over the week provided more evidence that the economy continues to gain momentum, which in turn makes it more likely the Federal Reserve could raise interest rates sooner than expected.

" Here are the closing levels for Asia's major stock markets: Tokyo (Nikkei Average) down 0.3% (closed) ; Hong Kong (Hang Seng Index) up 0.3% (closed) ; Shanghai (Shanghai Composite Index) up 1.7% (closed) ; Sydney (S&P/ASX 200) down 0.3% (closed) ; Seoul (Kospi) up 0.4% (closed) Taipei (Taiex) up 0.7% (closed) Aug. 4, 2014, 4:08 a.m. EDT."

"-Crude-oil futures rose Monday, recouping some of their steep losses last week and notching their largest one-day percentage increase in nearly two weeks. On the New York Mercantile Exchange, light, sweet crude futures for delivery in September CLU4 +0.07%  ended at $98.29 a barrel, up 41 cents, or 0.4%. That broke a five-session losing streak. September Brent UK:LCOU4 +0.01%  crude on London’s ICE Futures exchange rose 57 cents, or 0.5%, to end at $105.41 a barrel."


FCPO- Palm Oil Futures Like Recover On Rival Oil 

With the new support level situated around 2,246, palm oil futures likely found some base to recover for the moment. News out that Soybeans poised for biggest advance in week on dry U.S. weather, and this alone might give some cheer to the Soy bean oil market to recover too, hopefully. Palm oil futures is likely follow this lead as the progress so far for Soy bean oil recover is underway. The most actively traded Soy oil went up about 60 points overnight from 35.40 cents to 35.92 cents per pound as the time of writing today. Hence we are likely to see 10~20 points gap up this morning due to that positive recovery on Soy bean oil alone. Not all news is good for palm oil market, recent diminishing export figures might curb palm oil futures to recover substantially. Palm oil demand is slowly deteriorating as we speak, recent Ramadhan festival does not help much for palm oil export to increase. Technically, the Oct contract manage to slow downed its descend yesterday when it start recovering and closed at day high at 2,268 level, a good sign that Bulls are able to take control at the closing bell. Although long term technical perspective remain Bearish, we are likely looking at further price recovery if the Oct contract could open higher than 2,270 this morning. For today, pivot point for support is located around 2,257 level while resistance is pegged at 2,280 followed by 2,300.

Daily Pivot Point
R2= 2280
R1= 2274
S1= 2257
S2= 2246
 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, July 31, 2014

FCPO: Heading South With Oversupply 31th July 2014

Thursday, 31th July 2014. Palm oil futures is heading back to south again after recovered to 2,294 on previous Friday before Bursa closed for Hari Raya holiday for two days. Other news to follow.

"- U.S. stocks finished a choppy session slightly higher, as the Federal Reserve appeared to soothe fears that it might start raising interest rates sooner than anticipated. The S&P 500 SPX +0.01%  closed up less than a point at 1,970.08. The Dow Jones Industrial Average DJIA -0.19%  finished off session lows, but with a loss of 31.75 points, or 0.2% to 16,880.36.
The Nasdaq Composite COMP +0.46%  added 20.20 points, or 0.5%, to 4,462.90 as tech stocks took their cue from New York Stock Exchange-listed Twitter Inc., which soared on stellar results."
"- Japanese stocks went bubbling higher in early Thursday action, as the market enjoyed a sharply softer yen as it digested mixed earnings among the blue chips. The Nikkei Stock Average JP:NIK +0.63% was trading 0.6% higher, with the Topix up 0.5%, extending their string of gains (Nikkei Average is up 1.8% so far this week). With the dollar USDJPY +0.00% rising to ¥102.82 from around ¥102.22 at the previous day's close, exporters and other globally exposed names got a boost: TDK Corp.  Here are the closing levels for Asia's major stock markets: Tokyo (Nikkei Average) up 0.2% ; Hong Kong (Hang Seng Index) up 0.4% ; Shanghai (Shanghai Composite Index) down 0.1% ; Sydney (S&P/ASX 200) up 0.6% ; Seoul (Kospi) up 1% ; Taipei (Taiex) up 0.6%.

"- Gold prices continued to pull back Wednesday as a stronger-than-expected report on the U.S. economy dampened demand for safety plays. Gold for August delivery GCQ4 -0.01% fell for a second day, dropping $3.40, or 0.3%, to settle at $1,294.90 an ounce, while September silver SIU4 +0.14%  edged up a penny to $20.60 an ounce."


FCPO- Its Back To South, Again. 

Palm oil futures sentiment have been negative for the month of July so far. The effect on oversupply and sloppy demand on palm oil maybe the main reasons why price cannot recover more than 2,300 level for the moment. Today, we will have palm oil export figures announce by ITS and SGS. Survey shows that palm oil export for the period July vs Jun 2014 would only raise about 3%~6% at most. With these expectation, it is bad news for the price to recover this week. Palm oil export has to climb more than expectation or else its futures price will dive easily. On technical side, the new Oct benchmark contract was dropping below 2,260 level yesterday, which was previous Friday low but manage to settle at 2,267, some consolation prize for the Bulls before the market closed. Even thou it close 11 points above the low, damage has been done, price action suggest that the Oct contract is likely retracing further soon. Price recovery on morning session was quickly eliminated when the Oct contract went down below 2,273 level yesterday, bringing more Sellers into the market when the Oct contract fail to sustain its recovery. Couple with Soy oil overnight weakness which dropped 0.30 cents further to 36.03 per pound, palm oil market have more reasons to go down than to recover today. With all said and done, aggressive Short setup is possible when the Oct contract went down lower than 2,260 level and more promising level to Short is when the Oct contract does drop below 2,253 level, which appear to be yesterday low.  For today, pivot support for the Oct contract is located around 2,235 while resistance is pegged at 2,286.

Daily Pivot Point
R2= 2305
R1= 2286
S1= 2251
S2= 2235
 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, July 8, 2014

FCPO: Soy Oil Will Provide Further GuideThis Week 7th July 2014

Tuesday, 10th July 2014. This will be the second week of July, early third quarter of the year and most edible commodities futures have yet had a good trend run so far. We are likely to see palm oil open gap down today due to sudden Soy oil weakness. Other news to follow.

"-The U.S. stocks closed modestly higher on Wednesday after the FOMC minutes revealed that policy-makers decided to end the Fed’s bond purchases by October if the economy stays on track. The Fed plans to end purchases altogether with a final reduction of $15 billion at its October meeting, after trimming it by $10 billion at each meeting up to that point, while keeping the rates near zero for a considerable time. Investors took that as a bullish sign and pushed prices higher. The S&P 500 SPX +0.46%  gained 9.12 points, or 0.5%, to 1,972.83. The Dow Jones Industrial Average DJIA +0.47%  closed 79 points, or 0.5%, higher at 16,985.61. The Nasdaq Composite COMP +0.63%  rose 27.57 points, or 0.6%, to 4,419.03."

"- Tracking losses in the U.S. markets, Hong Kong stocks on Wednesday tumbled after China’s consumer inflation and wholesale deflation both eased in June. China’s consumer-price index rose 2.3% in June from a year ago moderating from a 2.5% year-over-year increase in May and slightly below than the 2.4% gain projected in separate Dow Jones News Wires and Reuters surveys of economists. Meanwhile, the producer-price index dropped 1.1% from a year earlier, compared with a 1.4% decline in May. The Hang Seng Index HK:HSI -1.55%   lost 1.6% at the close, falling the most since June 24. It logged the lowest closing level in about two weeks, dragged down by banks and tech stocks."


"-Palm Futures Retreat

KUALA LUMPUR: Crude palm oil (CPO) futures prices closed lower yesterday tracking the decline in crude oil futures and also due to the stronger ringgit against the US dollar, a dealer said. Phillip Futures specialist, David Ng, said the prices were traded lower following weakness in Chicago Board of Trade soya oil and global crude oil prices. July 2014 slipped RM13 to RM2,440, August 2014 shed RM17 to RM2,396, September 2014 fell RM11 to RM2,373 and October 2014 decreased RM17 to RM2,358 a tonne. Volume rose to 49,488 lots from 39,418 lots, while open interest rose to 261,210 contracts versus 247,191 previously.On the physical market, July South fell RM5 to RM2,460 a tonne. Bernama"


FCPO- News Alone Does Not Cut It

With less or no surprise on the palm oil fundamental news, market is likely turning to soy oil for further hint of direction. In this information age, most traders did know how and where to get information about the underlying instrument they are trading at, and for this case report and survey about palm oil stockpiles, export and productions are easily available in the internet. With these information easily available and vastly distributed, you can expect market to be traded efficiently, but not entirely efficient all the time. There is nothing worth mention about palm oil fundamental so far at this point as slow rising demand could not help in time to reduce stockpiles increment and steady production will make condition worse. When there is less interesting at the external side, traders will shift to Soy oil or using technical analysis for most of us. Hence, with recent weakness on Soy oil closing value, palm oil futures is likely open lower today. The most active traded Soy oil contract was traded at 37.16 cents per pound as the time of writing today, about 0.40 cents lower than yesterday 6.00PM GMT value. Back to palm oil futures, the Sept contract need to at least breach above 2,400 level in order to revive some positive momentum that would last for a few sessions. If this event  does not materialize this on next week, we are likely to see the Sept contract tumble further if the final support 2,350 area is taken out. Overall, technical outlook on Sept contract is still weak as small rally does not do any favor for the Bulls to revive and market is likely heading down further if it breach below 2,360~2,363 level today. Pivot support for Sept contract is located around 2,363  follow by 2,352 while resistance is pegged at 2,427.

Daily Pivot Point
R2=2392
R1=2383
S1=2363
S2=2352
 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, July 3, 2014

FCPO: Holding Up,But Not For Long 3rd July 2014

Thursday, 3rd July 2014. Pal moil futures recover slightly yesterday as Soy oil futures hold steady around 39 cents per pound but all that might change to Bearish soon. Other news to follow.

"- U.S. stocks mostly inched higher Wednesday, building slightly on the prior day’s sizeable advance, as a better-than-expected report on private-sector hiring underscored the economy’s recent strength. The Dow industrials DJIA +0.12%  rose 20.17 points, or 0.1%, to end at 16,976.24, putting it once again within striking distance of 17,000, while the S&P 500 SPX +0.07%  nudged up 1.30 points, or 0.1%, to finish at 1,974.62. Each index scored a record close for the second straight day.
The Nasdaq COMP -0.02%  bucked Wednesday’s positive trend, falling 0.92 point, or less than 0.1%, to close at 4,457.73. The tech-heavy index snapped a three-session winning streak."
"-Gold futures on Wednesday found some support, as traders stretched the metal’s price advance to a fourth session in a row, reluctant to sell the precious metal ahead of Thursday’s much-anticipated monthly U.S. jobs report and a long holiday weekend. Gold scored gains even after a stronger-than-expected estimate of U.S. private-sector payrolls fed expectations for a strong employment report. August gold futures GCQ4 -0.35%  tacked on $4.30, or 0.3%, to settle at $1,330.90 an ounce on the Comex division of the New York Mercantile Exchange. Prices, which tallied a gain of nearly $10 an ounce over the past three trading sessions, settled at their highest since March 21, based on the most-active contracts."

"-China Palm Oil Imports Seen Falling on Slower Economy
By Bloomberg News  Jun 23, 2014 4:13 PM GMT+0800 
Palm oil purchases by China, the second-biggest buyer, may decline by about 11 percent this year as economic expansion slows and banks tighten lending to commodity importers, a survey shows.
Imports may fall to 5.9 million metric tons in the 12 months to Sept. 30 from a year earlier, according to the median of five researchers and traders surveyed by Bloomberg News. That’s steeper than the 4.4 percent drop to 6.3 million tons estimated by the U.S. Department of Agriculture on June 11. China’s first-quarter gross domestic product growth slowed to 7.4 percent, the weakest pace since 2012. Declining Chinese purchases may further weaken the price of the commodity traded in Kuala Lumpur, which has slipped 8.2 percent this year as demand for the edible oil fell. It has been a favored vehicle for Chinese traders who use commodities as collateral to obtain credit and this may begin to change amid a probe at Qingdao port that will make banks more stringent about lending, Liu said. “Palm oil is used commercially rather than in homes, making it more sensitive to the slower economy,” said Liu Xianwu, general manager at researcher China Cereals & Oils Business Net. “With less commodity-finance lending and abundant soybeans, there’s no reason for imports to increase.” Crude palm oil for delivery in September rose 1.4 percent to 2,477 ringgit ($770) a ton on Bursa Malaysia Derivatives at 4:03 p.m. in Beijing. Refined palm oil on the Dalian Commodity Exchange rose 1.6 percent to 6,034 yuan ($969) per ton, with the most-active contract losing 0.1 percent this year.
Quality Control
China’s palm oil imports rose to a record 6.6 million tons last marketing year partly because traders rushed to get shipments in before the introduction of stricter quality requirements on Jan. 1, Liu said. Rising imports of soybeans also cut the market share of palm oil, according to Liu. On average, 19 percent of the yield from crushed soy beans is oil, said Liu. Soybean shipments into China increased 31 percent in October to May from a year ago, customs data show. That added about 2 million tons of soybean oil into supplies of cooking oil, according to calculations by Bloomberg News."


FCPO: We Are Yet Out Of The Woods 

The probably reason for the palm oil futures to tumble was due to dry weather condition, and perhaps its rival oil prices that move so far. But for the remaining of this first week of July, palm oil futures is susceptible for further price drop. Volume was not recorded higher for yesterday recovery and this would likely mean most of the Short holders are still in the market, probably waiting for adding up their Short position when the price going lower. On the external side, demand is not something we can count on anymore with merely few 5% reported higher on Jun vs May 2014, supplies will be sitting on record high again. Not only that, more reason behind palm oil futures price cool down would include price weakness from Soy oil due to steady production increament on South America, and weak demand for palm oil itself even Ramadhan festive season is just weeks away. However, palm oil futures would not tumble swiftly as dry weather condition would likely curb price from falling too fast. Technically, major Bearish signal is likely appear if the benchmark Sept breach below 2,400 today and form another lower low if it breach lower than 2,385, previous Tuesday low. All these support level are the sign that most Short holder would look whether to hold their position or to exit part of their positions while liquidating their Short positions if the Sept contract manage to breach above 2,436~2,439 level. For today, pivot support for Sept contract is located around 2,408 while resistance is pegged at 2,439.

Daily Pivot Point
R2= 2453
R1= 2439
S1= 2408
S2= 2391
 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, July 1, 2014

FCPO: Bulls Turned Down South 1st July 2014

Tuesday, 1st July 2014. Palm oil futures retrace for another session yesterday amid lack luster increment in export figures, other news to follow.

"-U.S. stocks ended June and the second quarter higher, even as the broader market closed marginally lower on Monday.
The S&P 500 recorded the fifth consecutive month of gains and the biggest second-quarter gain since 2009. The benchmark index SPX -0.04%  closed less than a point lower at 1,960.19, gaining 3.9% over the month and 5% over the quarter. The Dow Jones Industrial Average DJIA -0.15%  shed 25.24 points, or 0.2%, to 16,825.96, but gained 1.9% over the past month and 2.2% over the past quarter. The Nasdaq Composite COMP +0.23%  defied the trend and ended the day 10.25 points, or 0.2%, higher at 4,408.18. The tech-heavy index gained 3.9% in June and 5% over the past quarter. "
"-Mistry Sees Palm Rallying Less on El Nino Delay, Biofuel
By Ranjeetha Pakiam and Swansy Afonso  Jun 27, 2014 1:26 PM GMT+0800
Palm oil, the most-used cooking oil, may rally less than an earlier forecast as demand for biodiesel trails estimates and an El Nino starts later than expected, said Dorab Mistry, director at Godrej International Ltd.
Futures may climb to 2,800 ringgit ($873) a metric ton by December if the weather event occurs from mid-August, Mistry said, scaling back his March 5 forecast for a run-up to as much as 3,500 ringgit. Palm may trade between 2,300 ringgit and 2,500 ringgit in the next few weeks, temporarily reaching 2,600 ringgit if a dry period in Southeast Asia extends beyond the next two weeks, he said at a conference in Mumbai.
Prices in Kuala Lumpur have retreated from an 18-month high in March as rising output from Indonesia and Malaysia, the largest producers, add to record global cooking oil supplies. The failure of Indonesia and Malaysia to absorb additional quantities of biodiesel has disappointed palm oil prices, Mistry said yesterday. Cheaper palm may help extend a decline in global food costs amid forecasts for the El Nino that often roils global agriculture markets. “Production of palm oil has been better than expected since February,” Mistry said, according to prepared remarks. “If the El Nino turns out to be mild and delayed, as many weathermen are predicting of late, palm oil production will turn out to be better than my earlier estimates.”

Biggest Producers
Indonesia may produce 30.5 million tons or more this year while Malaysia’s output will total 19.7 million to 19.9 million tons, more than the March forecast of as much as 19.7 million tons, said Mistry, who’s traded vegetable oils for more than three decades. The two Southeast Asian producers together account for about 86 percent of world supplies.
Futures traded 1.1 percent lower at 2,444 ringgit a ton by midday break on the Bursa Malaysia Derivatives today. Prices jumped to 2,916 ringgit on March 11, the highest level since September 2012. Mistry, who in November correctly forecast palm oil would trade from 2,600 ringgit to 2,900 ringgit through March, said his price outlook is based on the assumption that Brent crude oil trades in a range of $100-$120 a barrel. “Prices will depend very much on the development and the severity of El Nino in the medium term,” Mistry said. “Palm has become far too dependent on biodiesel demand and that is an unreliable, opportunistic and sporadic market.”

El Nino Alert
A moderate El Nino would reduce output by as much as 12 percent in Malaysia, according to IOI Corp. (IOI) An event as severe as the one in 1997-1998 may cut production by as much as 15 percent, Chief Executive Officer Lee Yeow Chor estimates. Goldman Sachs Group Inc. says disruptions associated with El Ninos have been most important for palm oil, coffee and sugar.
The event, caused by the periodic warming of the tropical Pacific, brings drought to the Asia-Pacific region and heavier-than-usual rains to South America. Australia remains on El Nino alert even as a slowing in Pacific Ocean warming may push back its onset to September, the Bureau of Meteorology said June 17.
There’s a 60 percent chance that an El Nino will set in by the end of August, the World Meteorological Organization said yesterday. The probability of the phenomenon becoming established by the end of December rises to as high as 80 percent, the United Nations agency said in a statement.

‘Hot Spots’
“El Nino may be delayed, but we’re already experiencing dry weather,” said Alvin Tai, an analyst at RHB Investment Bank Bhd. in Kuala Lumpur, who’s covered the plantations industry for 10 years. “We are already seeing hot spots developing in Sumatra and West Malaysia, so that means rain has not been sufficient,” possibly hurting production later, he said. The southwest monsoon, which started on May 15 and may last until September, will generally be a dry season for Malaysia, according to the Malaysian Meteorological Department.  Palm’s rally in March, caused by a dry period in Southeast Asia in February, reduced its appeal as a feedstock for biodiesel and discouraged its use in Indonesia, Mistry said. The country’s use of palm biodiesel in the first five months of this year is roughly the same as in the same period a year earlier, and full-year consumption will not increase, he said. “We are told this is due to a lack of infrastructure for blending and handling,” said Mistry. “While this may be one reason, the real reason could be the high price of CPO and the lack of competitiveness of biodiesel in 2014.”  Global food costs dropped 1.2 percent last month and are 3.2 percent lower than a year ago, according to a gauge of 55 food items tracked by the Rome-based Food & Agriculture Organization.



FCPO- It Is Hammer Time


Short term trend has turned to Bearish this week as the benchmark Sept crossed down below previous support trend line and never attempt to recover. Remember I mentioned previously the support trend line at 2,470 will serve as first defense line for the Bulls to survive, well now the defense line have broken. Never-mind other indication you can see on the market, the benchmark Sept is likely heading down further judging from yesterday price action. Lower high and lower low have formed on hourly chart. With these Bearish candle formation formed, traders are likely to expect negative price action throughout this week. I am also aware that there are palm oil analyst that predicts the price would go to 2,800 ish by December. It will serve as a good entertainment read on those headlines. Junior or seasoned analyst can come with price numbers anyway they can come up with, but that was a long shot. And I do not have any expectation for long shot nor I would use it to trade. One thing I am grateful to have analyst would be forth telling their weather expectation in the future, that is all I got use for them. Back to the technical reading, we are likely looking at more weakness if the benchmark Sept manage to breach below 2,420 level today. It is very likely judging on overnight Soy oil futures that closed at 39.05 level as the time of writing this morning. Soy oil 0.95 cents is substantial enough to force palm oil futures to open at least 15 points lower. With this Bearish expectation of opening, long holders have to beware that the worst is only beginning, market can trade even lower this week. With Bearish soy oil futures, psychological support at 2,400 would be easily taken out today and there is no telling how low for the Sept contract would go, 2,380 would be my first stop for the moment. For today, pivot support for Sept contract is located around 2,409 while resistance is pegged at 2,437.

Daily Pivot Point
R2= 2449
R1= 2437
S1= 2417
S2= 2409
 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, June 26, 2014

FCPO: Still Running On Positive Note 26th Jun 2014

Thursday, 26th Jun 2014. Palm oil futures for Sept contract break the 2,500 silence easily and rose up to 2,511 level but ended slightly short at 2,482 level. Other news to follow.

"- U.S. stocks finished higher Wednesday, recovering from a weak revision of first-quarter economic performance, as media stocks got a lift from a Supreme Court ruling and refinery stocks wobbled on a weakening of an oil export ban. The S&P 500 SPX +0.49% rose 9.55 points, or 0.5%, to end at 1,959.53, according to preliminary FactSet data. The Dow Jones Industrial Average DJIA +0.29% gained 49.38 points, or 0.3%, to finish at 16,867.51. The Nasdaq Composite COMP +0.68% climbed 29.40 points, or 0.7%, to close at 4,379.76. The S&P 500 and Dow both snapped two-day skids, but remain down for the week after closing at record levels on Friday."

 "-HONG KONG (MarketWatch) — Asian stocks ended mostly higher on Tuesday, and Japan’s Nikkei Average nudged higher to hit another five-month high. Investors were waiting for Japanese Prime Minister Shinzo Abe to unveil a package of economic reforms, known as the “third arrow” of Abenomics, after the market close. In the meantime, Japan’s Nikkei Average JP:NIK +0.17%   rose for a second straight day, edging up 0.1% to its highest settlement in five months. The broader Topix indexJP:I0000 +0.17%   also inched 0.1% higher. The yen USDJPY -0.13%   softened against the dollar, trading at ¥101.952 from ¥101.905 in the prior session. Hong Kong and Shanghai stocks recovered losses from Monday, with the Hang Seng Index HK:HSI -0.06%   and the Shanghai Composite Index CN:SHCOMP -0.41%   up 0.3% and 0.5% respectively. South Korea’s Kospi index KR:SEU +0.58%   gained 1%. However, Australia’s S&P/ASX 200 AU:XJO +0.52%   fell 0.4%, weighed by banking stocks.""-


"- Oil futures climbed on Wednesday, with the U.S. benchmark logging the first gain in three sessions after the Obama administration loosened a ban on crude exports. Prices saw some pressure during the session after government data early Wednesday showed U.S. durable goods fell by 1% in May and the economy shrank more than previously expected in the first quarter, while U.S. crude inventories rose last week. Crude oil for August delivery CLQ4 +0.14%  climbed 47 cents, or 0.4%, to settle at $106.50 a barrel on the New York Mercantile Exchange after tapping a high of $107.50 in electronic trading overnight. Just ahead of the government supply data, the contract was at $105.85."

FCPO- Bulls Are Still Controlling The Game

Yes, that is correct, the Bulls are still hanging around in the market even though we saw some profit taking activities towards the closing bell yesterday. Nothing the freak the Long holder out yet as last hour market retrace in an uptrend market is deem normal condition. Short term trader that Longed might take some of the profit out when the market hit 2,500 barrier yesterday, a level that most Long positions holders would take their profit. We should be looking at further market retracement if the benchmark Sept does go down below 2,461 level this week. If that event does not materialize, Long setup is still good to take on. The good side is, the 1-25th Jun vs May 2014 export figure was reported slightly better with 3% rose by ITS surveyor. Palm oil price should be supported by dry weather season too for the moment and steady soy oil price likely help cushion any steep retracement as well. Technically, the benchmark Sept first support trend line will be shown on hourly chart above. Do not get freak out if the Sept contract does fall below this support trend line around 2,478 as we are likely expect it to rebound back to recovery after that. It would be a minor pullback, which is healthy in any uptrend but things might get a bit uglier if the last support line at 2,461 would be taken out as well. Conservative traders might want to place their Long order around 2,465~68, stop loss around 2,455 level and expect 15~20 points gain from your entry level. For this week, pivot support for Sept contract is located around 2,461 while resistance is pegged around 2,501.

Daily Pivot Point
R2= 2521
R1= 2501
S1= 2471
S2= 2461
 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.