Tuesday, March 19, 2013

External Cues Might Weight Down Commodities And Stock Market Recovery 19th March 2013

Tuesday, 19th March 2013. Commodity futures is having tough time to recover for the moment amid recent financial unrest on European zone. Other news to follow.

"- U.S. stocks on Monday fell for a second session as Europe’s efforts to get a handle on a rescue of Cyprus provided enough uncertainty for a much-anticipated retreat on Wall Street. After a 109-point fall, the Dow Jones Industrial Average DJIA -0.43%   recovered nearly all of those losses only to resume its downward spiral amid conflicting reports on Cyprus. The S&P 500 index SPX -0.55%  shed 8.06 points, or 0.6%, to 1,552.10. Financial companies led declines among the index’s 10 industry sectors, while telecommunications was the best performer. The Nasdaq Composite COMP -0.35%  fell 11.48 points, or 0.4%, to 3,237.59."

"- Asia stocks reacted badly on Monday to plans for an unprecedented levy on private bank deposits in Cyprus in exchange for a financial bailout — with U.S. stock-index futures and the euro also sharply lower.

Japan’s Nikkei Stock Average JP:100000018 +1.94%  tumbled to end 2.7% lower, while South Korea’s Kospi KR:SEU +0.50%  lost 0.8%, and Australia’s S&P/ASX 200 indexAU:XJO +0.81%  closed 2.1% lower. In Chinese trading, Hong Kong’s Hang Seng IndexHK:HSI -2.00%  was down 2.1% in the afternoon session, while the Shanghai Composite Index CN:000001 -1.68%  sat 1.1% lower."
"- Crude-oil futures clawed back to score a gain Monday, as the initial shock of the proposed bailout plan for Cyprus, which includes a levy on bank deposits, started to wear off. Crude oil for April delivery CLJ3 +0.05%  added 29 cents, or 0.3%, to settle at $93.74 a barrel on the New York Mercantile Exchange, after losing as much as 1.8% to touch a low of $91.76. Prices marked the highest settlement for a front-month contact since Feb. 20."
"-May Soybeans finished down 15 1/2 at 1410 1/2, 14 3/4 off the high and 6 1/4 up from the low. July Soybeans closed down 16 1/4 at 1394 1/2. This was 6 1/4 up from the low and 14 3/4 off the high.
May Soymeal closed down 5.8 at 413.0. This was 0.7 up from the low and 5.8 off the high. May Soybean Oil finished down 0.23 at 49.68, 0.26 off the high and 0.46 up from the low. May soybeans traded lower into the closing bell on weak technical signals and data that may suggest demand is beginning to slow out of the US. Profit taking in bull spreads was also noted by traders. NOPA crush came in below market estimates last Friday which was seen as a negative for market direction and worse than expected export inspection data today added to the downside momentum. Shipments for the week ending March 14th came in at 8.9 million bushels, down from 17.1 the week prior. This was a new marketing year low for shipments. Shipments needed each week to reach the USDA export estimate are at 7 million bushels, down from 7.07 the week prior. The cumulative shipment pace is at 87% of the USDA forecast vs. the 5 year average of 74%. The weather forecast looks dry for areas of Argentina this week but new crop supply is expected to come on line by the end of this month or early April. Brazil conditions remain favorable with the exception of northeastern Brazil which is trending drier than normal. Southern Brazil should see showers this week."

FCPO- Palm Oil Recovery Likely Jeopardize By European Zone Financial Unrest.

Wonder why previous rally that took us up to 2,433 was so short lived where most of the last Friday gain were wipe off yesterday ? My guess was recent development on EU financial crisis that puts Cyprus in the spotlight. Cyprus's official that plan to took out certain percentage of depositors fund to cushion their financial problems not only sparks many other social issue but other concern such as confidence and integrity of European banks in a whole. Cyprus financial crisis cannot be treated as single isolated case but it is the short coming of European monetary and financial structure. You can count on this financial unrest will turn out to be a plague and spreads to other EU country. Commodities and other instrument such as stock index and currencies will be effected if this EU financial crisis gets out of hand. Overnight Soy oil continue to retrace yesterday, signifying that traders are re-acting negatively to the EU financial unrest. The new benchmark Jun retraced about RM36 to 2,383 level after it went up to 2,433 last Friday. Technically, we are yet out of the mess as the Bears is still controlling the tempo judging from Daily chart. There was more lower highs were created since 20th Feb till now. Last Friday rally that almost went parabolic might turn out to be a temporary rally as there was no follow up recovery yesterday. For today, we are likely to see the benchmark Jun trading within 2,425 to 2,361 area with downside bias on short term.

Daily Pivot Point
R2= 2425
R1= 2405
S1= 2372
S2= 2361
 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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