Wednesday, February 13, 2013

USDA Report Bearish On Soy 13th Feb 2013

Wednesday, 13th Feb 2013. First of all welcome back to the battlefield, not much has changed on the major economy background world wide when Bursa Derivative is closed two days for Chinese New Year holiday. But for commodity market such as grain and edible oil, price has done substantial correction due to Bearish USDA report. Other news to follow.

"- U.S. stocks pushed against resistance levels Tuesday as blue chips, led by the financial sector, closed at levels not seen in more than five years. The Dow Jones Industrial Average DJIA +0.34%  rose 47.46 points, or 0.3%, to close at 14,018.70, with 23 of 30 components finishing in positive territory. Tuesday’s close is the best since Oct. 12, 2007, and 1% off its record close of 14,164.53, set on Oct. 9, 2007. The index hit an intraday high of 14,038.97 on Tuesday. The S&P 500 index SPX +0.16%  advanced 2.42 points, or 0.2%, to 1,519.43, with technology the biggest decliner and financials the top gainer among the 10 major industry groups. The Nasdaq Composite Index COMP -0.17% , after a brief swing into positive territory, closed down 5.51 points, or 0.2%, at 3,186.49."


"- Japanese shares soared in holiday-thinned trading Tuesday, after the country’s economics minister said share prices are too cheap and the yen hit a fresh multiyear low. Fresh from a three-day weekend, investors pushed Japan’s Nikkei Stock AverageJP:100000018 -0.31%  1.9% higher by the close, with the index retaining its grip on levels last seen in late 2008."

"- Oil futures rose Tuesday for a second straight session, after OPEC upped its forecast for oil demand this year and as traders awaited this week's updates on U.S. petroleum supplies. March crude CLH3 +0.09% rose 48 cents, or 0.5%, to settle at $97.51 a barrel on the New York Mercantile Exchange."

"-March Soybeans finished down 10 1/2 at 1421, 17 1/2 off the high and 4 up from the low. November Soybeans closed up 7 1/2 at 1276. This was 10 3/4 up from the low and 1 1/4 off the high.
March Soymeal closed down 2.5 at 410.5. This was 1.9 up from the low and 6.0 off the high.
March Soybean Oil finished down 0.04 at 51.2, 0.27 off the high and 0.33 up from the low. March soybeans traded lower on the day on news that the Argentina weather forecast is beginning to show more favorable rainfall perhaps as early as this weekend. The absence of the high pressure ridge across key growing regions over the next 10 days is leading many to believe that crop growing areas that have seen stress over the last week or two may see some much needed relief. Brazil conditions remain mostly favorable with light showers scattered throughout the country followed up with periods of drier conditions to move the harvest pace along. Some crop scouts are beginning to revise Argentina soybean production lower due to the dry conditions in most of January but some suggest the losses could be offset by record large Brazilian supplies. The tight US balance sheet remains a positive fundamental factor but the trade is being influenced by what looks like a large supply of soybeans in South America in the short term."


FKLI- It's Not Over Yet.


According to the Chinese lunar year, this year will known as year of snake, water snake to be precise. It would be a year fill with cunning event but overall positive for further growth. Overall for this year, the stock market would continue to swing violently. There would be money to be made through mergers. More investment scandals may surface. The Euro Union would continue to hang on. Southern European countries may go through a period of stability but major concern about their debt crisis would not go away as yet. Back to our economy outlook, we would not looking at any contraction yet, at least for this year. Modest GDP growth is still likely to continue and through volatility, much money can be made during this period. We are still yet out from these high daily fluctuation trading on FKLI and stock index prior to the general election.  Overall outlook is still Bearish as investors are not looking to commit any long term investment yet in the stock market. Most of the players would like to stay as short term to intraday traders during this period. And that explain why the market could not recover much. Technically, the spot month contract is still susceptible for another Sell-off judging from the major lower high and lower low candle formation on daily chart. The Feb contract is also expected to weaken further even though it manage to rebound back above 1,610 level after it breached major support level around 1,590 level previous Thursday. For this week trading range, significant resistance will be place around 1,640 level while support is located around 1,588~1,590 area.

Daily Pivot Point
R2=1631
R1=1623
S1=1604
S2=1593


FCPO- Market Is Likely Open Lower On Palm Oil Rival 

If I remember correctly from a popular local Geomancer and Feng Shui master, higher than normal rain fall is expected for this water snake year locally. So, higher than normal rain fall will mean slower harvest for palm oil within this period and thus will make palm oil price more expansive or in another words, Bullish if there is too much rain. Alright, that was the "prediction" and I just want to point it out for the purpose of making this article less dull to read. Back to the front, judging from recent recovery on export and first time ever declining in stocks level, palm oil price outlook is likely consolidating and "hopefully" resume it's preceding Bullish momentum as I mentioned on previous post that the price is likely recover for longer term after it "almost" breached above psychological resistance at 2,600 level. Coming so close to breached above 2,600 level, the benchmark April clocked up to 2,594 level and then went down to 2,527 last week. Clearly, the Bulls find it hard to penetrate the psychological resistance for the time being and have to call it quit. Thus, we are likely to see more correction for the palm oil prices at least till the end of this week. Another factor to support this Bearish direction would be the recent substantial correction on Soy oil that occur on during Chinese New Year due to Bearish USDA report that mentioned better than expected harvest activity in Brazil suggest that global grain inventories would not decline much even though there was severe U.S draught last year. For today, pivot support for the benchmark April is located around

Daily Pivot Point
R2=2581
R1=2570
S1=2540
S2=2521
 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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