Tuesday, September 4, 2012

Market Overview 5th Sept 2012

Wednesday, 5th Sept 2012. Palm oil futures had to retraced after hitting psychological resistance level around 3,100, Soy oil price action that corrected after hitting new high also curb palm oil futures to recover. Other news to follow.

"-U.S. stocks on Tuesday ended mixed, with speculation over Apple Inc.’s next iPhone launch countering data that had manufacturing activity shrinking for a third month in August. Bolstered by Apple, which holds a more than 13% weight, the Nasdaq Composite IndexCOMP +0.26%  advanced 8.1 points, or 0.3%, to 3,075.06.

After a 113.75-point drop, the Dow Jones Industrial Average DJIA -0.42%  lost 54.90 points, or 0.4%, at 13,035.94."
"- Asian markets declined Tuesday as investor focus returned to euro-zone worries after ratings agency Moody’s downgraded its outlook on the European Union, with banks retreating in Sydney after the Reserve Bank of Australia left its key rate unchanged. Markets also turned cautious ahead of Thursday’s European Central Bank policy meeting, and in the absence of cues from the U.S., where markets were closed on Monday for Labor Day. Australia’s S&P/ASX 200 index AU:XJO -0.61%  declined 0.6%, while Hong Kong’s Hang Seng Index HK:HSI -0.66%  dropped 0.7% and China’s Shanghai CompositeCN:000001 -0.75%  shed 0.8%. Japan’s Nikkei Stock Average JP:100000018 -0.10%  slipped 0.1% and South Korea’s KospiKR:SEU -0.29%  dropped 0.3%, while Taiwan’s Taiex XX:Y9999 +0.01%  ended little changed from Monday’s close."

"- Oil futures finished lower Tuesday after data showed U.S. manufacturing contracted in August for a third straight month and the dollar extended gains. Prices seesawed between small gains and losses during the session, supported by optimism that central banks would act to spur economic growth and hit by worry about supplies after last week’s hurricane on the Gulf Coast. Crude for October delivery CLV2 +0.13%  declined $1.17, or 1.2%, to settle at $95.30 a barrel on the New York Mercantile Exchange. That was oil’s largest one-day loss since Aug. 2."


"-November Soybeans finished up 11 3/4 at 1768 1/4, 20 3/4 off the high and 12 3/4 up from the low. January Soybeans closed up 15 1/4 at 1766 1/4. This was 12 1/2 up from the low and 15 1/4 off the high. December Soymeal closed unchanged at 533.4. This was 1.6 up from the low and 8.4 off the high. December Soybean Oil finished up 1.14 at 58.22, 0.38 off the high and 0.96 up from the low. November soybeans closed higher on the day and the July 2013 contract surged to post a new high for the move. Some talk of tightening supply ahead due to poor closing weather for the western Corn Belt helped to support. Parts of South Dakota and Minnesota have had very little rain in the past two weeks and the region saw temperature highs into the 100's again this past weekend. Traders noted heavy selling of calendar spreads which added significant pressure to the September and November contracts. Export inspections came in at 15.13 million bushels which was higher than expected and shows strong upfront demand. With only 1 day left in the season (inspections for the week ending August 30th) cumulative shipments have reached 101.2% of the USDA forecast for the season. This means that old crop exports will be revised higher and this will pull down beginning stocks. Traders see some harvest progress this week and this has helped to limit the advance as basis levels slip. Talk that Argentina meal is competitively priced with US meal was also seen as a limiting factor. Talk of low bean pod counts and talk of even smaller production for the September report continue to add underlying support to the market."

FCPO- Immediate Resistance Identified
























Palm oil futures start off by opening gap up in the morning but most of the gain was quickly wipe the next hour when the market took a dive from 3,100 down to 3,032 in the afternoon session. Market have re-acted  on 3,100 psychological resistance level and retrace the next minute after hitting that level. As a result,
the benchmark Sept close unexpectedly lower yesterday about RM15 to 3,058, the high and the low of the day was recorded at 3,100~3,032 level. Volume for the benchmark Nov was traded higher to 22,806 lots. Tracking closely, Soy oil futures also re-act about the same way with palm oil futures. The most actively traded Soy oil futures started to gap up slightly above 58 cents per pound and the retrace all the way down on Asia afternoon trading session to 57.34 cents per pound. That was about 0.66 cents correction in a session. More on technical perspective, immediate resistance at around 3,100 level will be one hard level to surpass because it formed a lower high from there as well. With this significant resistance in mind, the medium term uptrend will be jeopardize soon if the Sellers are able to pushed the market down below 3,000 psychological support level. Get ready to turn your boat if there is any significant lower high and lower low formation (indicating Buying power has peak out or exhausted on lower high, Sellers are dominating when there is lower low.) at least on 15 minutes time frame chart. For today, the benchmark Nov pivot point for support is located around 2,995 while resistance is pegged at 3,094 level.

P/S: Exports of Malaysian palm oil products for August rose 19.6 percent to 1,427,052 tonnes compared with 1,193,227 tonnes shipped during July, cargo surveyor Societe Generale de Surveillance said on Tuesday. (Reuters)

Daily Pivot Point
R2= 3131
R1= 3094
S1= 3026
S2= 2995
 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.

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