Monday, May 20, 2013

Palm Oil Might Take Off Higher On Export Positive Anticipation 20th MAy 2013

Monday, 20th May 2013. Commodities market participants are getting early hint on the upcoming palm oil export figure that might recover, the data is due to release today. 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 +1.03%  is up nearly 17% for the year so far. Rising 1.6% for the week, the Dow Jones Industrial Average DJIA +0.80% rose 121.18 points on Friday to 15,354.40, with J.P. Morgan Chase & Co. JPM +2.61%  leading blue-chip gains.

The Nasdaq Composite COMP +0.97%  advanced 33.72 points to 3,498.97, up 1.8% from the week-ago finish."
"- Asian stock markets traded mostly higher Friday, with Japanese blue chips swinging to gains in the afternoon session. Japan’s Nikkei Stock Average JP:NIK +1.12%  closed 0.7% higher, undoing losses from the morning session and erasing Thursday’s 0.4% retreat, which had followed a major jump of 2.3% on Wednesday. Losses for Wall Street overnight had helped dampen sentiment earlier in the day, as the S&P 500 SPX +1.03% finished down 0.5% after a Federal Reserve official tipped a pullback in the central bank’s easing programs could come as soon as this summer."
"-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 +0.07%  added 86 cents to settle at $96.02 a barrel on the New York Mercantile Exchange."
"-July Soybeans finished up 22 at 1449 1/2, 1/2 off the high and 25 1/2 up from the low. November Soybeans closed up 10 3/4 at 1228 1/4. This was 16 3/4 up from the low and 3/4 off the high.
July Soymeal closed up 10.2 at 425.1. This was 11.9 up from the low and 0.4 off the high. July Soybean Oil finished unchanged at 49.52, 0.38 off the high and 0.21 up from the low. July soybeans traded up double digits on the day and the July/November spread made a new contract high on firm cash markets and strong meal demand. Traders noted that technical buy signals were triggered midday which helped soybeans advance higher as well. Cash crush margins remain healthy in various areas of the US which helped support old crop contracts relative to new crop. In addition, a modest amount of risk premium was added due to the uncertainly over how long a port worker strike in Brazil will last after the government approved new port reform legislation Thursday night. The USDA announced this morning that private exporters sold 120,000 tonnes of US soybeans to China for the 13/14 marketing year and 138,000 tonnes to an unknown destination. In addition, 18,000 tonnes were sold for 12/13 delivery and 120,000 tonnes for 13/14 delivery both to unknown destinations. A well-followed grains analyst released new 13/14 planted acreage estimates this morning and pegged soybean planting at 78.3 million acres, up from 77 million prior and against the USDA forecast of 77.1 million. Yield was estimated at 43.9 bushels per acre as compared with the USDA estimate of 44.5 bushels per acre. Many in the market expect a decline in corn acreage on future USDA reports given the late start to planting and as a result, farmers likely switched over some acres to soybeans."

FCPO- Setting Up For Some Recover On Improve Demand

Closing at the day high for the new benchmark contract, the Aug contract ended RM22 higher to 2,336 on previous Friday. Big market participants such as fund manager, institutional trader, physical palm oil traders might get the early heads up on the upcoming palm oil export report but not all of them did re-act on that news. Although that group of traders might get the early news, most of them are still sceptic whether this positive news will effect the market or how different this news would be ? Asking too much question (doubt yourself) behind your head will only lead to abandoning your trade entry and trading system. The best to avoid risk will be not trading at all, which most traders would do when they are unsure. Back to palm oil outlook, we are expecting decent recovery for Aug contract based on these short term Bullish candle formation. The benchmark Aug is forming higher low as shown on hourly chart above since last Thursday. Take this as early sign for the market to recover as market does not create any lower low for the past one week. If you zoom out to daily chart, it may seems that the Aug contract is coming out from a four week consolidation phase, a good opportunity to go Long currently as market is showing more sign for further rally, today. Pivot support for the Aug contract is located around 2,320 while resistance is pegged at 2,350 level.

Daily Pivot Point
R2= 2350
R1= 2343
S1= 2328
S2= 2320

 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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