Tuesday, November 20, 2012

Mild Recovery Turned Into Short Term Recovery 21st Nov 2012

Wednesday, 21st Nov 2012. Palm oil futures went up another round due to better than expected rally on Soy oil earlier this week. Other news to follow.

"-U.S. stocks on Tuesday closed nearly unchanged after a two-session surge as Federal Reserve Chairman Ben Bernanke urged lawmakers to make a deal and end uncertainty over the so-called fiscal cliff of scheduled spending cuts and tax hikes. The Dow Jones Industrial AverageDJIA -0.06%  fell 7.45 points, or less than 0.1%, to 12,788.51. The S&P 500 indexSPX +0.07%  rose nearly 1 point to 1,387.81, with technology the poorest performer and health care faring the best among the 10 industry groups. The Nasdaq Composite COMP +0.02%  added 0.61 point to 2,916.68."

"- Japanese and Chinese stocks ended lower Tuesday, unable to hang on to early gains, as euro-zone problems grabbed investor attention after Moody’s downgrade of France’s AAA rating and before a decision on financial aid for Greece. South Korean and Australian shares, however, followed gains on Wall Street amid optimism the U.S. fiscal cliff will be averted. Australia’s S&P/ASX 200 AU:XJO +0.56%  and South Korea’s Kospi KR:SEU +0.64%  each climbed 0.6%, while Taiwan’s Taiex XX:Y9999 +0.23% gained 0.2% after U.S. stocks scored their best session in more than two months. Read: U.S. stocks surge on hope for a debt deal. Hong Kong’s Hang Seng Index HK:HSI -0.16%  retreated in afternoon trading to finish 0.2% lower, while China’s Shanghai Composite Index CN:000001 -0.40%  fell 0.4% after a higher opening. In Japan, the Nikkei Stock AverageJP:100000018 -0.12%  slipped 0.1% to break out of a winning streak over the last four trading days on mild profit-taking."

"-  Crude-oil futures settle almost 3% lower Tuesday, on the heels of a two-session climb, as hopes for a cease-fire on the Gaza Strip relieved some of the concerns over supply risks in the Middle East. Crude oil for January delivery CLF3 +0.65%  settled $2.53, or 2.8%, lower at $86.75 a barrel on the New York Mercantile Exchange."

"-January Soybeans finished up 18 at 1412 3/4, 3 1/4 off the high and 32 up from the low. March Soybeans closed up 14 1/4 at 1396 1/4. This was 30 1/4 up from the low and 2 3/4 off the high.
December Soymeal closed up 5 at 429.6. This was 9.5 up from the low and 1.6 off the high. December Soybean Oil finished up 0.43 at 48.32, 0.11 off the high and 0.69 up from the low. January soybeans saw double digit gains today on thoughts that the complex was slightly oversold which triggered a round of short covering shortly after pit trading began. Firm cash markets and strong export demand helped to support the sharp move higher. Argentina and Brazil soybean production was cut by a well-known market analyst overnight which added momentum to the positive trade throughout the day. Farmer sales of soybeans in Brazil were reported at 49% last week which was unchanged from the week prior vs. the 5 year average of 25%. Higher prices early on prompted a wave of new sales by Brazilian farmers but the recent decline in prices has slowed additional sales. Weather conditions in South America have been mostly favorable so far this crop year. Drier than normal conditions in central and northern Brazil early in year were a concern but rainfall over the last couple weeks have helped soil conditions. Concern is beginning to form around southern Brazil which has been trending drier than normal this month. Argentina has heavy rainfall in the forecast for the middle of this week followed by another period of dry weather thereafter. The wetter forecast for Argentina has delayed corn planting in areas which could mean some acreage is actually shifted over to soybeans which could be considered a long term negative to the price trend. The USDA "corrected" yesterday's 20,000 soybean oil sale to an unknown destination from US origin, to optional origin."

FCPO- Short Term Recovery Went On 

Market just never fail to amuse, surprise and caught you off guard when you are not paying enough attention.  My initial assessment on this technical rallies on the benchmark Feb would not exceed 2,450 level, most it would rally up to 2,500 level. Well, surprise surprise the benchmark Feb breached above the previous resistance level at 2,450 by open gap up at 2,472 level yesterday morning. Much of the support for the benchmark Feb to open higher might due to positive overnight Soy oil price which recovering since last Friday. Market participants might be ignoring the fact that export figures is declining at the moment but rather paying more attention to the new palm oil export tax scheme that will be implement early Jan next year. At close, the benchmark Feb ended slightly lower about RM2 to 2,457 level, the day high and low was traded within 2,485~2,434 range. Based on technical perspective, short term recovery occur on the benchmark Feb remain an ongoing event as there is no sign of weakness yet. If the price manage to breach above psychological resistance at 2,500 level, current Bearish medium term perspective will be reverse to Bullish. The benchmark Feb will create the first ever swing low or lower low on hourly chart if the market continue to recover today. Further upside confirmation will be visible if the benchmark Feb manage to breach above yesterday high at 2,485. If this event materialise, higher high will form, signifying further Bullish price action.

Daily Pivot Point
R2= 2509
R1= 2483
S1= 2432
S2= 2407
 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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