Friday, February 15, 2013

Palm Oil Correction May Pro Long 15th Feb 2013

Friday, 15th Feb 2013. The old April benchmark month for FCPO will be replace by May contract next week and margin requirement remain unchanged at RM7,750.00 per contract. Other news to follow.

"- U.S. stocks finished mostly higher Thursday, trading within tight ranges, as news of a host of M&A deals competed with sour economic data out of Europe. The Dow Jones Industrial Average DJIA -0.07% finished down 9.52 points, or less than 0.1%, at 13,973.39, its second day of losses after Tuesday's close above 14,000. With a high-low differential of 0.5% on the day, the Dow is trading within the tightest range in 25 years. The S&P 500 IndexSPX +0.07% rose 1.05 points, or less than 0.1%, to close at 1,521.38, near its five-year high. The Nasdaq Composite IndexCOMP +0.06% advanced 1.78 points, or less than 0.1%, to close at 3,198.66. Both the S&P 500 and the Nasdaq only varied by 0.6% on the day."

"-Stocks in Asia advanced Thursday, with Japanese shares rising amid an improved economic outlook and some strong earnings reports, while the Hong Kong market climbed as traders returned after a holiday-extended weekend.

Japan’s Nikkei Stock Average JP:100000018 -0.75%  rose 0.5%, South Korea’s KospiKR:SEU -0.06%  inched up 0.2% and Australia’s S&P/ASX 200 AU:XJO -0.14%  gained 0.7% for its highest finish since Sept. 8, 2008, a week before Lehman Brothers’ bankruptcy filing. Mainland Chinese and Taiwanese markets remained closed for the week. In Hong Kong, the Hang Seng Index HK:HSI +0.85%  climbed 0.9% to start the Year of the Snake on an upbeat note."

"- Oil futures settled higher Thursday, holding above $97 a barrel after U.S. data showed a decline in weekly jobless claims, boosting the outlook for demand, but strength in the U.S. dollar kept a cap on gains.
Natural-gas futures dropped to a six-week low with traders disappointed over the size of last week’s fall in U.S. inventories.Oil for March delivery CLH3 +0.05% climbed 30 cents, or 0.3%, to settle at $97.31 a barrel on the New York Mercantile Exchange."

"-March Soybeans finished down 5 at 1418, 10 3/4 off the high and 12 up from the low. November Soybeans closed down 7 3/4 at 1264 3/4. This was 8 up from the low and 12 off the high.
March Soymeal closed down 1.3 at 406.8. This was 4.1 up from the low and 3.6 off the high. March Soybean Oil finished up 0.02 at 51.68, 0.1 off the high and 0.55 up from the low. March soybeans traded lower on the day after extremely disappointing export data this morning. The trade was looking for total sales to come in between 700,000-1.1 million tonnes but the report fell well short of expectations. Net weekly export sales showed that 109,100 tonnes were canceled for the current marketing year and 345,000 tonnes were sold for the next marketing year for a total of 235,900 tonnes sold. As of February 7th, cumulative sales stand at 93% of the USDA forecast vs. a 5 year average of 80%. Sales of 88,000 tonnes are needed each week to reach the USDA forecast. Overall, the export demand pace remains strong but many traders believe sales will continue to slow going forward as South American soybeans begin to hit the market. Net meal sales came in at 132,400 tonnes for the current marketing year and as of February 7th, cumulative meal sales stand at 87% of the USDA forecast for the current marketing year vs. a 5 year average of 60.5%. Sales of 30,000 tonnes are needed each week to reach the USDA forecast. Net oil sales came in at 16,600 tonnes for the current marketing year and as of February 7th, cumulative oil sales stand at 79% of the USDA forecast vs. a 5 year average of 54%. Sales of 6,000 tonnes are needed each week to reach the USDA forecast."

FCPO- Correction Phase Yet Over

The benchmark April ended 7 points lower yesterday with thin trading volume as most traders are still yet come back from Chinese New Year extended holiday. Low trading volume is somewhat expected on the month on February when there is more public holidays for Kuala Lumpur in any months in a year. Low trading volume does not always mean that the movement generated by the market is less genuine or less active than usual, it should be treated the same priority as other normal trading day especially for intraday or short term trader. Each passing trading sessions tell the same important story from price movement. For this instance, the benchmark April has made some corrections after the market resume for trading last Wednesday. The Bearish candle formation on hourly chart also supported that the market is likely going down on Wednesday opening. Price continue to create lower high and Bears become significant when the April contract breached below 2,529 level on previous Wednesday. For today, market is likely continuing its weakness as there is no sign of market recovery yet from hourly chart. However, for intraday or short term trader, switching to 15 minutes chart will provide better clarity for any sign of market recovery if there is any higher low and higher high candle formation formed on that time frame. On longer term perspective, Bullish price outlook on the benchmark contract remain intact as recent correction may reflect as market temporary weakness on daily chart. To support this, there was a swift correction occur earlier Jan when the benchmark month weaken about 7.3% and then recovered above its previous high at 2,516 level.

Daily Pivot Point
R2= 2561
R1= 2537
S1= 2498
S2= 2483
 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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