Monday, February 25, 2013

Palm Oil Major Correction Around The Corner 25th Feb 2013

Monday, 25th Feb 2013. Palm oil Futures is likely weaken further this week due to recent Soy oil major price correction. Other news to follow.

"-- U.S. stocks rallied on Friday, with the Dow Jones Industrial Average DJIA +0.86% erasing weekly losses, after better-than-expected results from personal-computer maker Hewlett-Packard Co. and an upbeat report on German business confidence. The Dow gained 119.95 points, or 0.9%, to end at 14,000.57; for the week, it rose 0.1%. Shares of Hewlett-Packard Co.HPQ +12.28% , the top Dow gainer, soared 12.3%. The S&P 500 index SPX +0.88% rose 13.18 points, or 0.9%, to end at 1,515.60; however, for the week the index fell 0.3%, breaking its seven-week winning streak. The Nasdaq Composite index COMP +0.97% climbed 30.33 points, or 1%, to end at 3,161.82; for the week, it dropped 1%."

"-Japanese and Australian stocks rebounded Friday as buyers circled back after a sharp decline in the previous session, while mainland Chinese and Hong Kong shares pulled further back amid concerns about policy tightening. Australia’s S&P/ASX 200 index AU:XJO +0.82%  moved 0.8% higher, Japan’s Nikkei Stock Average JP:100000018 +1.75%  climbed 0.7% and South Korea’s Kospi KR:SEU -0.0099% inched up 0.2%. Going the other direction, Hong Kong’s Hang Seng Index HK:HSI +0.04% and the Shanghai Composite Index CN:000001 +1.00% each fell 0.5%, while Taiwan’s Taiex XX:Y9999 -0.20%added 0.1%."

"-Oil futures saw a minor rebound Friday to reclaim the $93-a-barrel level, but still posted a loss of almost 3% for the week as traders fretted over ample U.S. crude supplies and weak demand prospects. Crude oil for April delivery CLJ3 -0.08% rose 29 cents, or 0.3%, to settle at $93.13 a barrel on the New York Mercantile Exchange, recouping part of Thursday’s hefty 2.5% loss."

"-May Soybeans finished down 26 3/4 at 1443 3/4, 53 1/4 off the high and 1 3/4 up from the low. July Soybeans closed down 28 at 1426 1/2. This was equal to the low and 57 off the high.
May Soymeal closed down 9.3 at 426.4. This was 0.9 up from the low and 17.5 off the high. May Soybean Oil finished down 0.95 at 50.73, 1.44 off the high and 0.06 up from the low. March soybeans surged higher in the overnight session but sank lower late in the day to trade down sharply. The Brazil Port Union called off a plan for a new 6-hour strike for next Tuesday which took old crop soybeans off the session highs. Export sales were disappointing this morning with net weekly sales for soybeans at -119,500 tonnes for the current marketing year and 62,000 for the next marketing year for a total of -57,500 tonnes. As of February 14th, cumulative sales stand at 93% of the USDA forecast for the current marketing year vs. a 5 year average of 82%. Sales of 95,000 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 25,000 for the next marketing year for a total of 261,100 tonnes. Cumulative meal sales stand at 90% of the USDA forecast vs. a 5 year average of 62%. Sales of 24,000 tonnes are needed each week to reach the USDA forecast. Net oil sales came in at 28,900 tonnes and as of February 14th, cumulative sales stand at 82% of the USDA forecast vs. 5 year average of 56%. Sales of 5,000 tonnes are needed each week to hit the USDA forecast. The USDA also announced this morning that 410,000 tonnes of US soybeans had been sold to China, including 60,000 tonnes for the current marketing year and the balance for the 2013/14 marketing year."

FCPO- Going South Big Time !!

Today's session will be starting with gap down due to substantial correction by Soy oil on previous Friday as USDA forecast sales on grain will declined significantly as shipment on South America was recorded lower. The benchmark May is trading weaker and weaker end of last week, showing the signs of Bulls are giving up the fight. And plus recent weakness by Soy oil, May contract is likely open gap down and continue to trade lower. External side, palm oil export tax is going to be raise up to 10% on March, pressuring palm oil futures to recover. Technically, the price outlook for palm oil futures is going to be grim if there is another gap down today. With another gap down coming today, it will mark another lower high (maybe lower low of the market open around 2,510 level). These significant Bearish formation on the hourly chart are showing further weakness can be easily achieve. The May contract does attempt to recover up to 2,585 level but retrace quickly after that, signifying double top formation on hourly chart above. It seem that this temporary topped out market will turn out to be a major correction from here. Conclusively, medium term and short term technical perspective are likely changed from Bullish to Bearish this week. For today, pivot support for May contract is located around 2,510~2,500 while resistance is pegged at 2,549 level.

Daily Pivot Point
R2= 2566
R1= 2549
S1= 2521
S2= 2510
 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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