Sunday, October 14, 2012

Palm Oil Tax Reduced, Export Expected To Kick In By Next Jan ? 15th Oct 2012.

Monday, 15th Oct 2012. Crude palm oil futures went down on Soya oil weakness previous Friday while good news on Malaysia palm oil export tax rate cut limit the Sell-down. Other news to follow.

"-U.S. stocks on Friday closed their worst week in four months nearly unchanged, with the market stalling as worries about Europe overcame an unexpected rise in U.S. consumer confidence. Relinquishing what had been a 74.93-point advance, the Dow Jones Industrial AverageDJIA +0.02%  ended with a 2.46-point gain at 13,328.85, leaving it off 2.1% from the week ago close.

Down 2.2% for the week, the S&P 500 SPX -0.30%  fell 4.25 points, or 0.3%, at 1,428.59, with the consumer-staples sector the best performing of its 10 industry groups and financials the heaviest weight. The Nasdaq Composite Index COMP -0.17%  lost 5.3 points, or 0.2%, at 3,044.11."
"-Most Asian markets ended with marginal gains or narrow losses on Friday cautious investors held off from making big bets ahead of a slew of Chinese data due to be released starting this weekend. Among major regional benchmarks, Japan’s Nikkei Stock AverageJP:100000018 -0.15%  and Taiwan’s TaiexXX:Y9999 -0.20% lost 0.2% each.
South Korea’s Kospi KR:SEU +0.0088% ended little changed, China’s Shanghai Composite Index CN:000001 +0.10%  and Australia’s S&P/ASX 200 indexAU:XJO +0.07% rose 0.1% apiece, and Hong Kong’s Hang Seng IndexHK:HSI +0.65% advanced 0.7%."

"- Crude-oil prices fell Friday, with investors heading into the weekend with an International Energy Agency report estimating weaker oil demand this year while they kept watch on ongoing tension in the Middle East. Crude oil for November delivery CLX2 -0.47% fell 21 cents, or 0.2%, to $91.86 a barrel on the New York Mercantile Exchange. Oil prices swung between gains and losses during Friday's session. For the week, oil closed higher by 2.2%"

-"November Soybeans finished down 26 at 1522 1/2, 31 off the high and 12 1/2 up from the low. January Soybeans closed down 26 1/2 at 1522. This was 12 1/2 up from the low and 30 3/4 off the high. December Soymeal closed down 7 at 465.2. This was 4.7 up from the low and 8.6 off the high. December Soybean Oil finished down 0.66 at 50.67, 0.97 off the high and 0.47 up from the low. November soybeans traded sharply lower into the close and had a rocky day due to broad based commodity liquidation which triggered profit taking in soybeans after yesterday's failure to make a new high for the move. The soybean market continues to have long term support given the explosive export sales pace this year but this mornings reported sales disappointed the market with only 500,700 tonnes for the current marketing year and 23,000 for the next marketing year for a total of 523,700. As of October 4th, cumulative soybean sales stand at 69% of the USDA forecast for the current marketing year. Sales of 221,000 tonnes are needed each week to reach the USDA forecast. Total net meal sales were reported at 221,400 tonnes and 70,000 tonnes are needed each week to reach the USDA forecast. Finally, total net oil sales stand at 10,400 tonnes and 7,000 tonnes are needed each week to reach the USDA forecast. Additional pressure was linked to a favorable 6-15 day weather forecast for most of South America which should benefit row crops in the region."
FCPO- Friday Fright Night

Palm oil futures start off at five sessions high but quickly turn into a short live rallies when profit taking start to kick right after that due to new one week high and overbought reading. Unfortunately, things got a little bit worse on the second sessions begin when the market start to open gap down and kept on heading down due to news on abolishing palm oil export duty free quota and subsequently reduce the tax rate. As a result, the benchmark Dec went down to 2,379 level before recover later on due to new reduced tax rate. The new palm oil export tax that will be reduced from 23% to certain tier based on palm oil price, which range from 4.5% to 8%. Due to this news which was known later, market quickly recovered in the evening sessions after it fell on second opening session. At close, the benchmark Dec went down about RM23 to 2,500, the day high and low was 2,529 to 2,379 respectively. Further recovery potential is still presence at the moment as substantial palm oil export tax rate cut will likely reduce current record high stocks. Technically on intraday basis, the benchmark Dec is still hovering on recovery mode judging on the higher lows and higher highs price action formed on hourly chart shown above. Nonetheless, market is still susceptible on short term correction if there is any overbought reading or new high on opening session this week. Long holders might prefer to take their profit first hand if they see there is any new high. For today, pivot support for the benchmark Dec is located around 2,409 while resistance is pegged at 2,559 level.

p/s: ITS and SGS palm oil export for 1st-15th Oct is due to release today.

Malaysia Announces Tax Rates for Crude Palm-Oil Exports (Table)
2012-10-12 09:54:46.636 GMT

    Oct. 12 (Bloomberg) -- The following table lists Malaysia’s
planned tax on crude palm-oil shipments, which will be effective
from Jan. 1, according to the Ministry of Plantation Industries
and Commodities. The existing rate on shipments is 23 percent.
Prices in the table are given in ringgit per metric ton.

Prices                Tax:
2,250 - 2,400          4.5%
2,400 - 2,550          5%
2,550 - 2,700          5.5%
2,700 - 2,850          6%
2,850 - 3,000          6.5%
3,000 - 3,150          7%
3,150 - 3,300          7.5%
3,300 - 3,450          8%
3,450 - 3,600          8.5%

Daily Pivot Point
R2= 2919
R1= 2559
S1= 2409
S2= 2319
 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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