Thursday, January 10, 2013

Braced For Impact 11th Jan 2013

Friday, 11th Jan 2013. Palm oil benchmark month took a dive yesterday right after it attempt to recover up to 2,433 level, demand weight in. Other news to follow.

"- U.S. stocks climbed Thursday, with the S&P 500 indexSPX +0.76% finishing at a five-year high, after better-than-expected Chinese exports data supported the view of an improving global economy. "Chinese growth is accelerating and the market over the last day or so seems to have taken on a more positive tone as it relates to earnings," said Mark Luschini, chief market strategist at Janney Montgomery Scott. The Dow Jones Industrial Average DJIA +0.60%rose 80.71 points, or 0.6%, to 13,471.22. The S&P 500 index SPX +0.76% gained 11.1 point, or 0.8%, to 1,472.12. The Nasdaq CompositeCOMP +0.51% advanced 15.95 points, or 0.5%, to 3,121.75. "

"- Asian stocks ended higher Thursday after data on China’s December exports far surpassed expectations, with Japanese stocks extending gains as exporters such as Sony Corp. got a boost from the weakened yen. Japan’s Nikkei Stock Average JP:100000018 +0.70%  advanced 0.7%, while Hong Kong’s Hang Seng Index HK:HSI +0.59%  rose 0.6%. Elsewhere, China’s Shanghai Composite Index CN:000001 +0.37% added 0.4%, South Korea’s Kospi KR:SEU +0.75%  advanced 0.8%, Australia’s S&P/ASX 200 AU:XJO +0.32% gained 0.3% and Taiwan’s Taiex XX:Y9999 +0.94%  edged up 0.9%."

"- Oil futures rose Thursday, pushing toward $94 a barrel after unexpectedly strong December export data from China and a report that Saudi Arabia cut crude production. February crude futures CLG3 +0.11% rose 72 cents, or 0.8%, to $93.82 a barrel on the New York Mercantile Exchange. The contract touched a high of $94.70. Front-month crude contract prices haven't closed above $94 since mid-September. A weaker U.S. dollar DXY +0.03% in the wake of China's report that exports jumped 14.1% also spurred gains for dollar-denominated oil."

"-January Soybeans finished down 2 1/4 at 1417 1/2, 12 off the high and 3 up from the low. March Soybeans closed down 7 1/2 at 1378. This was 1 3/4 up from the low and 16 3/4 off the high.

January Soymeal closed down 2.6 at 408.7. This was equal to the low and 4.1 off the high. January Soybean Oil finished up 0.15 at 49.39, 0.32 off the high and 0.14 up from the low. March soybeans traded mixed on the day but saw pressure at the closing bell to settle in negative territory. Traders continue to shift focus to the favorable weather conditions in South America and large production estimates, as well as tomorrow's big USDA report. The USDA reported this morning that US private exporters sold a total of 587,500 tonnes of soybeans to China and unknown destinations and 246,000 of the total were for delivery in 2013/14. Export sales were reported slightly below market expectations with sales coming in at 321,800 tonnes for the current marketing year and 85,000 for the next marketing year for a total of 406,800. As of January 3rd, cumulative sales stand at 85% of the USDA forecast for the current marketing year vs. a 5 year average of 71%. Sales of 160,000 tonnes are needed each week to reach the USDA forecast. Net meal sales came in at 118,200 tonnes for the current marketing year and as of January 3rd, cumulative meal sales stand at 80% of the USDA forecast vs. a 5 year average of 50.5%. Sales of 39,000 tonnes are needed each week to reach the USDA forecast. Net oil sales came in at 10,900 tonnes and as of January 3rd, cumulative oil sales stand at 82% of the USDA forecast vs. a 5 year average of 41%. Sales of 4,000 tonnes are needed each week to reach the USDA forecast."

FCPO- Lower High Formed, Be Very Very Wary

Whether the palm oil futures will have a bad start or good start early this year, it does not matter if you cannot be part of the action. The point here was, market will provide you opportunity each minutes passing by and it is the trader himself to "take advantage" of that opportunity itself. Enough said, let us get back to the market overview on palm oil futures. Market dipped on demand concern yesterday after independent cargo surveyors ITS and SGS released its 1-10th Jan palm oil export data yesterday. Dropping on double digits, ITS and SGS reported palm oil exports went down about 25% and 34% respectively compared to previous month on the same period. Price went on retrace further on the second session down too 2,356 level from 2,433 level, marking a significant panic Long liquidation and Selling pressure along the way. Objectively, we can get clearer picture if we look at technical perspective. The benchmark March did breach previous support turn immediate resistance level around 2,426 but it does not last long when it dipped back below 2,400 on the morning session. There was a significant lower highs formed on hourly chart, 30 minutes and 15 time frame chart when the benchmark March retrace down to 2,400 level on morning yesterday. That might be the only hint you can get on morning session prior to be gap down on second session opening. On medium term perspective, market is likely going down lower as the benchmark March has created another lower highs and lower lows again yesterday. In another words, it is easier for the market to go down rather than to turn around swiftly with Bullish price action. For today, pivot point for the March contract is located around 2,313 while resistance is pegged at 2,425.

Daily Pivot Point
R2= 2467
R1= 2425
S1= 2348
S2= 2313
 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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