Thursday, April 18, 2013

New Formed Lower Lows And Lower High On FCPO 18th April 2013

Thursday, 18th April 2013. Palm oil futures is poised to trade lower this week due to weak technical and sluggish demand. Other news to follow.

"-U.S. stocks fell sharply on Wednesday to reclaim much of the prior day’s advance, with sentiment hit by disappointing company results and an Apple Inc. supplier’s tepid outlook. After a 195-point slide, the Dow Jones Industrial Average DJIA -0.94%  finished at 14,618.59, down 138.19 points. The S&P 500 index SPX -1.43%  shed 22.56 points to 1,552.01, with the technology and energy sectors weighing most heavily. The technology-heavy Nasdaq CompositeCOMP -1.84%  declined 59.96 points to 3,204.67. "

"-Most Asian stocks rose Wednesday as a higher finish overnight for U.S. equities and gold prices encouraged buyers, and with Japanese shares rebounding after a three-day losing streak as the yen weakened. Australia’s S&P/ASX 200 AU:XJO -0.59% gained 1.1% while South Korea’s KospiKR:SEU -0.89% and Taiwan’s TaiexXX:Y9999 +0.10%   edged 0.1% higher each.

Hong Kong’s Hang Seng Index HK:HSI -0.47% fell 0.5% for its fourth straight day of losses, and the Shanghai Composite IndexCN:000001 -0.05%  eased 0.1%. Japan’s Nikkei Stock Average JP:NIK -1.24% jumped 1.2%."
"- Crude-oil futures settled with a loss of over 2% Wednesday, with a surprise climb in last week’s U.S. distillate supplies, weak gasoline demand and a rise in the dollar pushing pries below $87 a barrel. May crude-oil futures CLK3 -1.12% dropped $2.04, or 2.3%, to settle at $86.68 a barrel on New York Mercantile Exchange."

"-May Soybeans finished up 10 3/4 at 1422 1/4, 7 1/2 off the high and 16 1/4 up from the low. July Soybeans closed up 4 3/4 at 1380. This was 12 up from the low and 9 1/4 off the high.
May Soymeal closed up 6 at 407.3. This was 6.9 up from the low and 1.5 off the high. May Soybean Oil finished up 0.41 at 49.39, 0.32 off the high and 0.83 up from the low. May soybeans traded slightly lower midday but exploded to the upside late in the session with the May contract leading the charge. The breakout was likely technically driven but there were also rumors that the port workers in Brazil may go on strike tomorrow. No confirmation of this has been made at this point. November soybeans traded down on the day due to delays in corn planting for the US Midwest and Northern Plains which could switch some acreage over to soybeans. Cool and wet conditions will plague North Dakota, Minnesota, and Wisconsin into this weekend before warming up next week. The US CIF basis was weaker midday on light export demand which helped to push futures lower but bull spreads held up rather well and meal was higher which suggests the market is still well aware of the rationing job that is needed in the US crush market. Cash basis in processor markets remains extremely firm as processors fight for local bushels in order to fulfill meal sales commitments. The World Health Organization suggested today that a number of people who have tested positive for the new strain of bird flu in China have had no history of contact with poultry, adding to the uncertainly of the situation which has killed 16 people. The investigation is ongoing but the uncertainly over the situation suggests infections could rise from the current 77. Consumer demand in poultry has been sluggish as of late which could have a negative impact on meal demand in China."

FCPO- Bearish Outlook Ahead.

It is clear that the Bears are still cornering the market when the benchmark July closed on day low yesterday. Market participants are not that keen to see any major recovery before the benchmark July hit another significant support level around 2,244, which is today second pivot support level. We have witnessed most most of the rallies made earlier Tuesday and Wednesday this week were quickly wipe out. Sluggish demand that would not help to reduce much record high stock piles will make price outlook even weaker. And while we are still far away from any unfavourable weather to curb palm oil production, best bet to place right now would be at the Sellers side. Technically, the benchmark July price outlook remain Bearish as there was more lower highs and lower lows formed across all time frame in the chart. Most rallies approaching today's pivot resistance level will only draw Sellers to step into the market and start Selling. For this morning, palm oil futures may open slightly higher amid recent recovery made on Soy oil, overnight. Traders can choose to go Short when there is any sign of retracement from that rallies as it is likely turn out to be a fail recovery on later session.

Daily Pivot Point
R2= 2326
R1= 2301
S1= 2260
S2= 2244
 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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