Thursday, April 11, 2013

Palm Oil Retrace Yesterday As MPOB Data Priced In 11th April 2013

Thursday, 11th April 2013. Stock index climbed to test previous major high around 1,700 territory while palm oil retrace again after attempting to recover as MPOB data came out as expected. Other news to follow.

"- U.S. stocks on Wednesday rose for a third straight day, with the Dow Jones Industrial Average and S&P 500 index having their best sessions in six weeks. All 10 industries in the S&P 500 rose, led by technology and health-care stocks, with the index climbing to an intraday record of 1,589.07 to surpass the previous record of 1,576.09 set in October 2007. The S&P 500 index SPX +1.22% closed at a record 1,587.73, up 19.12 points, or 1.2%. The Dow Jones Industrial AverageDJIA +0.88% added 128.78 points, or 0.9%, to 14,802.24, also closing at a record and after setting an intraday record of 14,826.66 during the session. It was its best point gain since Feb. 27 and its best percentage gain since March 5. Up the most since Jan. 2, the Nasdaq Composite COMP +1.83% rose 59.40 points, or 1.8%, to 3,297.25. It was its highest close since November 2000."

"-Most Asian markets advanced Wednesday, with a rise in commodity prices and a surge in Chinese imports boosting resource stocks, while Japanese shares get support from the weak yen. Japan’s Nikkei Stock Average JP:NIK +1.06%  rose 0.7% to 13,288.13, a closing level it hasn’t seen since Aug. 12, 2008. South Korea’s Kospi KR:SEU +0.09%  and Hong Kong’s Hang Seng Index HK:HSI +0.75% added 0.8% each and Taiwan’s Taiex XX:Y9999 +0.52% gained 0.3%. China’s Shanghai Composite CN:000001 -2.71%  ended flat after a choppy trading session. Gains in Japan came amid expectations the U.S. dollar USDJPY -0.16% may soon cross the 100-yen level despite the pair’s inability to cross over the threshold Tuesday."

"- Oil futures for a third day in a row on Wednesday, but gasoline futures dropped for the first time in three sessions. Data from the showed a climb in last week's crude supplies that was less than expected, but gasoline stockpiles unexpectedly rose. The also cut its oil-demand forecast. May crude CLK3 -0.29% tacked on 44 cents, or 0.5%, to settle at $94.64 a barrel on the New York Mercantile Exchange."

"-May Soybeans finished down 2 3/4 at 1392 3/4, 17 off the high and 7 1/4 up from the low. July Soybeans closed down 3 3/4 at 1367 1/2. This was 8 1/4 up from the low and 14 1/2 off the high.

May Soymeal closed down 1.9 at 392.9. This was 2.4 up from the low and 8.0 off the high.
May Soybean Oil finished up 0.05 at 50.03, 0.2 off the high and 0.42 up from the low. The USDA report was considered slightly bullish for market direction after the 2012/13 carryout came in at 125 million bushels, unchanged against last month and at least 10 million bushels below trade estimates of 136 million. To offset, global supply numbers increased which helped to limit the upside advance. Crush was revised higher by 20 million bushels and export was revised up 5 million but residual usage was revised down by 25 million as an offset. World ending stocks for the 2012/13 season came in at 62.6 million tonnes as compared 60.21 million tonnes in last month's estimate and against trade estimates of 59.81 million. The Brazil soybean crop production estimate came in unchanged at 83.5 million in March which was up from trade expectations of 82.5 million. Argentina production was pegged at 51.5 million tonnes from 50.50 million expected. The higher world numbers, ideas that we can get by to the new crop season and expectations for plentiful supply for the 2013/14 season are all factors which sparked the sell-off in the market after the initial bullish reaction. Thoughts that Chinese demand is slowing and a robust supply outlook in South America are considered limiting factors for a sharp advance higher in the short term."

FKLI- Gaining Steadily Above 1,700 Level

The Bulls are not showing any sign of slowing down yet as it continue to rally prior to actual polling date. Market participants are accumulating shares in the market probably due to Bullish economy background on Malaysia. The political development in Malaysia so far is under control as there is no unnecessary incident occur yet. Polling date has been placed on 5th May next month and once again, the Malaysian will decide who is their ideal leader to rule the country for the next five years. Contrary to most anticipation on the polling date, there was no sudden correction happen yesterday. Technically, Bulls are still optimistic about rallying further but some profit taking is expected to take place if the April contract went up to 1,706~1,708 level today. Long legged lower shadows that formed on 3rd April last week couple with steady recovery made after that was the sign of Bulls commitment to rally further. Easier said than done, most traders would too afraid to commit to go Long as the market rallied to its previous all time high. Fear of market would fall swiftly from the high due to profit taking will prevent most of traders to go Short instead and it get worse if the trader himself did not place any safety stop loss order if the market does rally further. In most instances, market will continue rally or fall further due to "misplaced hopes and fear."

Daily Pivot Point
R2= 1710
R1= 1704
S1= 1686
S2= 1674


FCPO- Anti-climatic MPOB Data 


Palm oil futures retraced yesterday after gaping up higher in the morning session on better MPOB data. The slightly Bullish news anticipation help the market to gap up in the morning but it was not able to sustain the gain thereafter. The benchmark Jun fall swiftly the next minute after gaping up as traders are sceptic about the long term fundamental background for the palm oil futures to recover further. Even palm oil stocks has reported down about 10% to 2.17 millions tons (above the expectation of 3.8% only), most market participants still think that current palm oil stockpiles remain all time high. Technically, the Bulls influence are fading away as it have fail numerous rally on the morning session and retrace on later session. All the rally we saw for the past three sessions have been short lived so far. Closing at the day low, Bears definitely nailed and turn yesterday session Bearish. Traders are advised to go Short if the market attempt to rally approach to pivot resistance level today aroudn 2,400 level. On long term basis, the Bulls are going to have hard time staying afloat and sustaining gains unless Soy oil could rally substantially due to un-expected Bullish report on USDA.


Daily Pivot Point
R2= 2431
R1= 2400
S1= 2354
S2= 2339

 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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