Sunday, December 16, 2012

FCPO Support Is Here To Hold, Temporary 17th Dec 2012

Monday, 17th Dec 2012. More recovery is expected for palm oil futures as Feb contract manage to recover from weekly major support. Other news to follow.

"-U.S. stocks fell Friday, with the Dow Jones Industrial AverageDJIA -0.27% and the S&P 500 index SPX -0.41%tallying their first weekly drop in four, as investors fretted over the lack of a budget deal. Apple Inc. AAPL -3.76% led the technology sector lower after UBS AG cut its price estimate for shares of the consumer technology company. The absence of a comprehensive fiscal policy "is confounding investors and certainly businesses," said Eric Wiegand, senior portfolio manager for The Private Client Reserve, a division of U.S. Bank Wealth Management. Down 0.2% for the week, the Dow Jones Industrial Average lost 35.71 points, or 0.3%, to 13,135.01. The S&P 500 shed 5.87 points, or 0.4%, to 1,413.58, off 0.3% from the prior Friday's close. The Nasdaq Composite COMP -0.70% declined 20.83 points, or 0.7%, to 2,971.33, down 0.2% for the week, its second consecutive weekly drop."

"- Chinese shares soared to lead Asian markets by a wide margin Friday as strong manufacturing data boosted confidence about an economic recovery in the world’s second largest economy. 

The Shanghai Composite Index CN:000001 +4.32%  soared 4.3%, helping other regional markets add to gains or pare early losses, after an initial measure of HSBC’s China manufacturing Purchasing Managers’ Index for December rose to a 14-month high of 50.9. The performance marked the index’s best single-day percentage gain since October 2009. Hong Kong’s Hang Seng Index HK:HSI +0.71%  advanced 0.6% and Australia’s S&P/ASX 200 AU:XJO +0.0065%  ended marginally higher. Japan’s Nikkei Stock Average JP:100000018 -0.05%  and South Korea’s Kospi KR:SEU -0.39% pared early losses to finish down 0.1% and 0.4%, respectively, while Taiwan’s TaiexXX:Y9999 -0.75%  dropped 0.8%."
"- Crude-oil futures settled higher Friday, tacking on 0.9% for the week, as upbeat economic data on China manufacturing offered a good sign for demand and as ongoing violence in Syria raised concerns over oil supplies from the Middle East region. January crude oilCLF3 +1.07% rose 84 cents, or 1%, to settle at $86.73 a barrel on the New York Mercantile Exchange."

"-January Soybeans finished up 19 1/2 at 1496, 1 off the high and 21 3/4 up from the low. March Soybeans closed up 19 at 1491 1/2. This was 21 1/4 up from the low and 1 off the high.
January Soymeal closed up 2.4 at 457.7. This was 3.1 up from the low and 2.6 off the high. January Soybean Oil finished up 0.99 at 49.99, 0.08 off the high and 1.08 up from the low. January soybeans traded 18 higher on the day after the market saw another round of strong demand side data. November NOPA crush came in at 157.308 million bushels, in line with market estimates and was the largest monthly crush rate in 3 years. The strong crush and export demand continues to support the market but January futures are holding steady in their recent trading range. Crush margins have improved in China the last couple of weeks which has triggered a flurry of soybean purchases from the US. No big changes to South American weather at the moment. Good rainfall over the next 7-10 days for most of Brazil and Argentina should dry down during this period. Both countries should see stable temperatures which should promote good conditions for row crops and move along the planting pace. The strong cash markets and calendar spreads added a positive tilt to the market throughout the day which helped support the move higher."

FCPO- Support Tested And Holding, Looking For Further Recovery. 

Palm oil futures mange to recover last week Friday after it survive from a vicious Sell-off from previous Thursday and Wednesday. Price outlook for edible oil no doubt has weaken for the past few months but market participants are awaiting new export tax rate scheme to be announce Jan next year. Initial reaction will be positive as Malaysia new palm oil export tax scheme is introduce so that local exporter can compete with Indonesia palm oil producer due to their low tax, whcih is just 9% for CPO and 3% for RBD palm olein. The benchmark Feb closed RM46 higher to 2,276 as Buyers took control after it hit previous major weekly support around 2,220 level. The March contract which ended RM43 higher to 2,346 will to act as new benchmark month begin today. From technical perspective, the rebound occur after the benchmark Feb manage to rebound from major support around 2,220 was a sign for market to recover further. What is so special about this rebound (especially after it hit the major support) was it rarely happen on any chart pattern. And when it does appear, this chart pattern is unlikely to produce fake signal. The chart pattern I am referring to is called triple bottom and it is expect to produce more recovery as it occur on daily chart. The ability for the benchmark Feb to recover above previous Wednesday high was justify enough to identify this as a triple bottom formation. Not only that, palm oil futures is poised to recover on short term judging from the higher lows and higher high candle formation formed on 15 minutes and hourly time frame. For today, pivot support for the Feb contract is located around 2,243 while resistance is pegged at 2,317.

Daily Pivot Point
R2= 2317
R1= 2296
S1= 2243
S2= 2211
 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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