Friday, January 18, 2013

Price Breached Support Trend Line 18th Jan 2013

Friday, 20th Jan 2013. Palm oil prices dipped below pivot support level yesterday after gaining for few session starting last Friday.

"- U.S. stock gains on Thursday propelled the S&P 500 index to its highest finish since late 2007 as upbeat jobs and housing reports offered respite from politics and other concerns. Rising above the 1,474 resistance level, the S&P 500 index SPX +0.56%  rallied 8.31 points, or 0.6%, to 1,480.94, its highest close since Dec. 26, 2007. After a 122-point surge, the Dow Jones Industrial Average DJIA +0.63%  ended at 13,596.02, up 84.79 points, or 0.6%. The Nasdaq Composite indexCOMP +0.59%  rose 18.46 points, or 0.6%, to 3,136."

"- Asian markets ended mostly lower after a choppy session Thursday, with mainland Chinese stocks extending losses from recent highs as investors locked in gains ahead of key economic growth data due on Friday.

The Shanghai Composite Index CN:000001 -1.06%  and Taiwan’s Taiex XX:Y9999 +1.01%  fell 1.1% each, South Korea’s Kospi KR:SEU +0.61% lost 0.2% and Hong Kong’s Hang Seng Index HK:HSI -0.07%  slipped 0.1%.
Japan’s Nikkei Stock Average JP:100000018 +2.09%  climbed 0.1%, paring sharp losses earlier in the day, while Australia’s S&P/ASX 200 AU:XJO +0.40%  ended 0.4% higher."
"- Crude-oil futures on Thursday finished at a four-month high, keying off supply concerns arising from the takeover of a natural-gas plant in Algeria by Islamist militants and the subsequent deaths of some hostages. Light, sweet crude for February delivery CLG3 -0.31% closed up $1.25, or 1.3%, at $95.49 a barrel on the New York Mercantile Exchange. "

"-January Soybeans finished down 5 1/2 at 1431, 17 off the high and 8 3/4 up from the low. November Soybeans closed down 11 3/4 at 1285 1/4. This was 2 1/2 up from the low and 15 3/4 off the high.
January Soymeal closed up 2.1 at 414.0. This was 3.3 up from the low and -2.1 off the high. January Soybean Oil finished up 0.18 at 51.49, 0.17 off the high and 0.57 up from the low. March soybeans traded lower on the day despite explosive export sales data this morning. Net weekly export sales for soybeans came in at 1,608,800 tonnes for the current marketing year and 180,000 for the next marketing year for a total of 1,788,800. The USDA also reported that US exporters sold 240,000 tonnes of soybeans to an unknown destination for the 2013/14 crop year. Sales of only 117,000 tonnes are needed each week to reach the USDA forecast. Net meal sales came in at 236,100 tonnes for the current marketing year and 9,000 for the next marketing year for a total of 245,100 tonnes. Sales of 45,000 tonnes are needed each week to reach the USDA forecast. Net oil sales came in at 12,900 tonnes for the current marketing year and sales of 8,000 tonnes are needed each week to reach the USDA forecast. Strong demand from international buyers continues to add support to the market but an expected record crop in Brazil could limit gains long term. A private analyst in Brazil raised their production forecast for Brazil to 84 million tonnes, up 900,000 tonnes from their prior estimate and vs. the USDA forecast of 82.5 million tonnes."

FCPO- Weakness Prevail.

The palm oil futures ended on day low yesterday as market participants expecting worse case scenario on diminishing demand that will further add up to record inventories. Price will have trouble to sustain gain if background is filled with negative news such as piling up stockpiles and bad export figures. Half of the gain  made by market recovery since last Friday was wipe out in a single afternoon session when the benchmark April settle at the day low. At close, the benchmark April finished RM50 lower to 2,378 level with higher volume transacted to 22,082 lots yesterday. Technically, we might be looking at resuming weakness on most time frame, short term to medium term as the benchmark Apr manage to breached below support trend line shown on the hourly chart above. Do note that, this retracement does closed below the support trend line, which might signifies substantial Bearish price action. The Bears have stage a come back after it gone silent since last Friday. And they make their presence significant when the price breached below psychological support level around 2,400 too. For today, market might open slightly higher due to yesterday oversold condition. Pivot support for the benchmark Apr is located around 2,334 while resistance is pegged at 2,421.

Daily Pivot Point
R2= 2464
R1= 2421
S1= 2356
S2= 2334
 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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