Monday, January 21, 2013

Still Under Pressure For Palm Oil Futures 21st Jan 2013

Monday, 21st Jan 2013. Palm oil futures outlook remain gloomy as trading participants are anticipating exports news soon today, which may turn out to be another disappointing figures. Other news to follow.

"-U.S. stocks gained on Friday following strong results from General Electric Co. GE +3.47% , though a slump for Intel Corp. INTC -6.31% weighed on the technology sector. The Dow Jones Industrial Average DJIA +0.39% rose 53.68 points, or 0.4%, to end at 13,649.70, leaving it up 1.2% for the week. The S&P 500 indexSPX +0.34% climbed 5.04 points, or 0.3%, to 1,485.98; it posted a weekly gain of 1%. Bucking the positive trend, the technology-heavy Nasdaq Composite COMP -0.04% slipped 1.30 points to 3,134.71, though it rose 0.3% for the week."

"- Asia markets finished with strong gains Friday, helped by above-forecast Chinese economic data, with Japan surging as the yen touched new multiyear lows.

Japan’s Nikkei Stock Average JP:100000018 -1.18%  ended a hefty 2.9% higher. Hong Kong’s Hang Seng Index HK:HSI -0.15%  rose 1.1%, and the Shanghai Composite IndexCN:000001 +1.41%  added 1.4%, with both Chinese benchmarks extending their gains late in the session. Elsewhere in the region Australia’s S&P/ASX 200 index AU:XJO -0.08%  rose 0.3%, Taiwan’s Taiex XX:Y9999 -0.53% jumped 1.5%, and South Korea’s KospiKR:SEU -0.49%  gained 0.7%."
"-Oil futures held their ground above $95 a barrel Friday to finish 2.1% higher for the week as the International Energy Agency raised its global oil demand forecast for this year and China's economy grew more than expected in the fourth quarter. February crude oil CLG3 -0.23%rose 7 cents, or 0.1%, to settle at $95.56 a barrel on the New York Mercantile Exchange."
"-January Soybeans finished down 3 1/4 at 1427, 11 1/2 off the high and 6 up from the low. November Soybeans closed up 7 at 1292 1/4. This was 10 1/2 up from the low and 2 3/4 off the high.
January Soymeal closed up 0.4 at 414.4. This was 2.8 up from the low and 2.2 off the high. January Soybean Oil finished up 0.19 at 51.68, 0.07 off the high and 0.61 up from the low. March soybeans traded both sides of the unchanged on the day on light profit taking ahead of the weekend. Strong domestic crush demand and explosive export sales data continues to add underlying support to the market. A Chinese agency released trade statistics overnight and reported that domestic crushers bought a total of 1.8-1.98 million tonnes of soybeans from the US, Brazil, and Argentina in the last week compared to 1.2 million tonnes normally. Stronger domestic crush margins helped to boost purchases from all the major world suppliers. The South American weather forecast was unchanged on the day with a warm and dry pattern settling into Southern Brazil and Argentina over the next 7-10 days while scattered showers will persist in areas of Northern Brazil. There is a chance for light showers in areas of Argentina late next week but confidence is low at this point. Harvest has begun in Mato Gross but light showers are delaying progress in some areas. A private analyst released new 2013 planting intention estimates today and pegged the 2013 soybean acreage at 78.78 million acres vs. 78.96 in December and against the USDA estimate of 77.2 for the current crop year.

FCPO- Still Susceptible For Next Wave Of Weakness

Palm oil futures closed higher about RM21 to 2,399 on previous Friday but this recovery does not eliminate the anxiety of Bearish market outlook recently. Palm oil prices are still susceptible for another round of correction soon judging on weak demand and record high stocks level. Maybe the degree of the correction may not be that swift as these Bearish news are widely heard and expected in the market. In fact, market would not move much if the news released is within expectation. Technically, what we are looking at was a trading range for the benchmark April to move within these few sessions. These range is identified from hourly chart shown above, which mean it is short term in most cases ( Intraday to three days most). The lower trading range will be known as temporary support while the upper range will be known as major resistance. Resurface Selling pressure is likely presence when the benchmark April approach the upper trading range but there might no Buying interest if the price approach the lower trading range as medium term price action remain Bearish at the moment. In other words, market is expected to correct further if the benchmark April manage to breach below 2,370 level. For today, pivot point for the benchmark April is located around 2,357 while resistance is pegged at 2,439 level.

Daily Pivot Point
R2= 2439
R1= 2419
S1= 2378
S2= 2357

P/s: CME will be closed for Martin Lurther King holiday from 18th - 22nd Jan  2013.

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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