Monday, May 13, 2013

FCPO Surged Amid Positive Palm Oil Data 13th May 2013

Monday, 13th May 2013. Palm oil futures went up last Friday as encouraging palm oil data support the rally. Other news to follow.

"- U.S. stocks rose Friday as Wall Street racked up a third week of record-setting gains while considering global monetary easing and as finance ministers started a two-day meeting.

The Dow Jones Industrial Average DJIA +0.24%  added 35.87 points to 15,118.49, its highest close ever. Also finishing at an all-time high, the S&P 500 index SPX +0.43%  added 7.03 points to 1,633.70, with health care the best performing and energy the worst performing among its 10 sectors."
"- Japanese stocks were propelled higher Friday after the U.S. dollar climbed atop the 100-yen level for the first time in four years, stoking sharp gains in exporters. Most other regional markets also rose, although gains were capped as stocks on Wall Street dropped overnight, taking a breather after key U.S. benchmarks closed at record highs on multiple occasions recently. Japan’s Nikkei Stock AverageJP:NIK +1.46%  finished the day 2.9% higher at 14,607.54, clinching a weekly gain of 6.7%. The broader Topix JP:I0000 +1.71%  gained 2.4% to 1,210.60.

"- Crude-oil futures recovered most of their Friday losses to score a modest gain for the week, but pressures from a stronger U.S. dollar and a weak demand outlook remained.
The Organization of the Petroleum Exporting Countries warned of challenges ahead that could change its demand outlook, even as it left its key oil supply and demand forecasts unchanged. Crude oil for June delivery CLM3 -0.81% fell 35 cents, or 0.4%, to settle at $96.04 a barrel on the New York Mercantile Exchange on Friday. It recovered most of the session’s steep losses — a selloff which saw prices fall below $94."

"-May Soybeans finished down 3 at 1488 1/4, 15 1/2 off the high and 7 1/4 up from the low. July Soybeans closed down 9 3/4 at 1399. This was 9 up from the low and 20 1/2 off the high.
July Soymeal closed down 6.4 at 406.8. This was 0.8 up from the low and 12.5 off the high.
July Soybean Oil finished up 0.01 at 49.23, 0.28 off the high and 0.63 up from the low. The soybean market traded sharply lower on the day with the November contract acting as the leader to the downside. The USDA report was considered bearish against trade expectations after the USDA pegged new crop ending stocks at 265 million bushels, up from trade estimates at 236 million. The 2012/13 carryout came in unchanged from last month at 125 million bushels. Crush and export numbers were left unchanged. Planted acreage was estimated at 77.1 million acres and yield at 44.5 bushels per acre to leave a production forecast of 3.39 billion bushels which would be a new record high. World ending stocks for the 2012/13 season came in at 62.46 million tonnes as compared 62.6 million tonnes in last month's estimate. World ending stocks for 2013/14 were estimated at 74.96 million tonnes as compared with trader estimates near 69 million tonnes. This is a record high. The Brazil soybean crop production estimate came in at 83.50 million, unchanged from last month. Argentina production was pegged at 51.0 million tonnes from 51.50 in April."

FCPO- Eyeing More Upside, Looking At Medium Term Role Reversal

Most of the rally happened last week was highly related to Bullish anticipation on palm oil stock piles will dropped over 10% and further rally was re-affirm when the data came out with 11% stock piles reduction in palm oil. We have actually twice break out on palm oil futures last week prior to market rally last Friday. The first one occur on the 8th May when the July contract breached 2,280 and the second break out was done on 10th May last Friday when the July contract gap up above 2,290 level. So there you have double small break out in hourly chart couple with previous sign of rally before the July contract breach above the resistance trend line shown. Final result from this recovery, market manage to clock about RM100 or 4%, which still leave more room for it to climb as typical medium term rally in long term Bearish market can run for around 8%~12%. Technically, short term outlook for the benchmark July remain Bullish after the price went on and formed higher high and higher low candle pattern. If the  July contract manage to rally another 1% this week, we might looking at promising medium reversal role to Bullish. But all these will be only possible if there is some significant rally on Soy oil, or known as palm oil rival products. For today, pivot support for July contract is located around 2,292 while resistance is pegged at 2,337.

Daily Pivot Point
R2= 2337
R1= 2321
S1= 2292
S2= 2279
 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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