Tuesday, May 21, 2013

Palm Oil Export Slump, Curb Price Rally 21 May 2013

Tuesday, 21 May 2013. The palm oil futures ended lower yesterday as export figures signal demand slump likely to happen for May 2013. Other news to follow.

"- U.S. stocks on Friday advanced to a fourth weekly gain, with both the Dow industrials and the S&P 500 at all-time closes, after data cast a positive spin on the economy. Up 146% from a dozen-year low in 2009, the S&P 500SPX -0.07%  is up nearly 17% for the year so far. Rising 1.6% for the week, the Dow Jones Industrial Average DJIA -0.12% rose 121.18 points on Friday to 15,354.40, with J.P. Morgan Chase & Co. JPM -0.02%  leading blue-chip gains. The Nasdaq Composite COMP -0.07%  advanced 33.72 points to 3,498.97, up 1.8% from the week-ago finish."

"- Stocks in Hong Kong and Japan jumped to lead Asian markets higher Monday, tracking a positive global lead after key U.S. indexes notched another record finish on Friday, although South Korean shares underperformed amid geopolitical concerns.

Hong Kong’s Hang Seng Index HK:HSI +1.78%  climbed 1.8% as the market reopened after Friday’s holiday, while the Nikkei Stock Average JP:NIK +0.17%  gained 1.5% in Tokyo, climbing further from levels it hasn’t seen in more than five years. China’s Shanghai CompositeCN:000001 +0.75% edged up 0.8% and Australia’s S&P/ASX 200 AU:XJO -0.54% gained 0.5%."
"-Crude-oil futures gained on Friday after data showed a rise in U.S. consumer sentiment in May, boosting optimism about the economic recovery. Crude oil for June delivery CLM3 +0.03%  added 86 cents to settle at $96.02 a barrel on the New York Mercantile Exchange."
"-July Soybeans finished up 16 at 1464 1/2, 1 1/2 off the high and 21 1/4 up from the low. November Soybeans closed down 3 1/4 at 1225. This was 14 1/4 up from the low and 4 off the high.
July Soymeal closed up 10.2 at 435.3. This was 10.6 up from the low and 0.5 off the high. July Soybean Oil finished down 0.32 at 49.2, 0.56 off the high and 0.34 up from the low. July soybeans traded higher on the day and pushed up to the highest level since March 8th as strength in the cash market and ideas that producers will continue to be tight holders of old crop helped to support. November soybeans traded down double digits as traders see little impact on the crop "if" soybeans are planted a little late. In addition, traders see the potential for corn delays in Minnesota to result in higher soybean plantings as further delays with heavy rains early this week might spark some switching soon. The July/November spread made a new contract high this morning as the market attempts to shut down crush demand in the face of tight supplies. Weekly export inspections came in at just 3.328 million bushels as compared with 5.88 million necessary each week to reach the USDA projection for the year. Cumulative exports have reached 93.3% of the USDA projection for the season as compared with 86.2% as normal for this time of the year. July meal was up sharply this morning as traders see short-term tightness but plentiful global supply by the fall. July and December oil traded down moderately on the day. Analysts see US soybean planting at 24% complete in this afternoon's planting progress report. This would be the slowest pace for this time since 1996. Plantings were estimated at 6% complete last Monday."

FCPO- Palm Oil Price Slump Due To Weak Export Data 

Surprise, surprise ? Not really, I believe most of you head of this " Buy the rumour, Sell the news," and that was what exactly happen yesterday. Prior to yesterday palm oil export data, market initially going up due to Bullish expectation of the news but once it is announce with lower than expected figures, palm oil prices quickly turn its sail and head south. At close, the benchmark Aug closed RM2 lower to 2,334, 2 points apart from the day low at 2,332. Does this sound any alarm for further down side ? In short term, it is a solid yes as there was a lower high formed on 15 minutes or lower time frame chart. But on medium term such as hourly to daily chart, the Bullish technical price outlook remain intact. Yesterday Bearish closed would dampen the outlook but not yet change the overall Bullish outlook for medium term. Nonetheless, it will be a different story to tell if the benchmark Aug manage to breach below previous low / support level around 2,326. Market is poised to head lower if that support level is breach today. The benchmark Aug is expected to open lower due to overnight Soy oil weakness which went down about 0.32 cents to 49.2 cents per pound. For today, pivot support for Aug contract is located around 2,326 followed by 2,319 while resistance is pegged at 2,346 followed by 2,359.

Daily Pivot Point
R2= 2359
R1= 2346
S1= 2326
S2= 2319
 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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