Wednesday, June 5, 2013

FCPO Aug Hitting The Second Support Trend Line 5th May 2013

Wednesday, 5th May 2013. The benchmark Aug went down again yesterday amid Bearish anticipation on upcoming fundamental report from MPOB and cargo surveyors. Other news to follow.

"- U.S. stocks fell, derailing a long-running winning streak for the Dow Jones Industrial Average, with Wall Street on alert for signals of central-bank monetary moves ahead. "The past few weeks has all been about whether the taper is going to occur or not, and what that means. The bond-buying program has propped up certain areas of the economy," Nick Raich, CEO of the Earnings Scout, said of the Fed's $85 billion in monthy asset purchases. The Dow Jones Industrial Average DJIA -0.50% fell 76.49 points to 15,177.54, halting its Tuesday winning streak at 20 sessions. The S&P 500 index SPX -0.55%declined 9.04 points to 1,631.38. The Nasdaq Composite COMP -0.58% lost 20.11 points to 3,445.25."

"-Japanese stocks rebounded Tuesday to take back some of the steep losses they suffered the previous day as banks and several beaten-down shares rallied in the wake of overnight gains on Wall Street. Other Asian markets ended mixed, after enduring wide swings between gains and losses as strong cues from U.S. stocks were countered by concerns over China’s growth trajectory. In Japan, the benchmark Nikkei Stock Average JP:NIK -0.03% rose 2.1% a day after it plunged 3.7%.  Elsewhere, the Shanghai CompositeCN:000001 -1.17%  gave up 1.2%, and Hong Kong’s Hang Seng Index HK:HSI +0.01%  ended flat, as analysts considered the outlook after the May surveys on Chinese manufacturing by the government and HSBC offered a contrasting view on factory-level activity."


"- Oil futures , with the market finding little reason by the close to move much in either direction ahead of weekly updates on U.S. petroleum supplies. July crude CLN3 +0.47% fell 14 cents, or 0.2%, to settle at $93.31 a barrel on the New York Mercantile Exchange after trading briefly above $94."
"-July Soybeans finished down 3 3/4 at 1528 3/4, 4 1/4 off the high and 10 3/4 up from the low. November Soybeans closed down 9 1/2 at 1316. This was 12 up from the low and 8 3/4 off the high. July Soymeal closed down 1.9 at 452.5. This was 3.1 up from the low and 3.1 off the high. July Soybean Oil finished down 0.07 at 48.59, 0.09 off the high and 0.43 up from the low. The soybean market traded lower on the day led by double digit losses for the November contract early on but midday weather models placed more rainfall in IA which helped to lift futures off session lows. Planting progress came in near market estimates yesterday afternoon and more progress will be made in the central and eastern portions of the Corn Belt this week. CIF basis bids were lower in the river market on soft export demand. Brazil exports continue to pick up speed which has shifting demand away from the US for soybeans. Soybean meal demand remains strong which is helping the US crush pace hold steady amid tight old crop supplies. The situation helped support the July/November soybean spread today. Soybean oil traded lower throughout the day, mostly due to a better short term supply outlook amid sluggish export demand. Malaysian palm oil continues to trade at a discount to US soybean oil which has kept a lid on any significant demand expansion. Domestic biodiesel use plus a slowdown in crush could be supportive influences long term."

FCPO- Will The Second Support Trend Line Hold ? 

Pausing from further retracement when the Aug contract approach 2,370 level, the benchmark Aug is still yet out of the danger zone. Palm oil futures is still susceptible for further correction and likely to reverse its role from Bullish to Bearish if it continue to dive down below 2,368 level this week. One more, just one more retracement below yesterday low, and it is all over for palm oil futures to resume its Bullish momentum. Recent correction would occur due to sloppy demand data from the cargo surveyors and negative anticipation for the Jun MPOB fundamental data. We might have to wait longer for the palm oil data to pick up on upcoming Ramadhan celebration. Technically, short to medium term outlook is Bearish after the benchmark Aug form a lower high when it fell more than 1% from 2,410 level and it could get worse or create a new lower low if the Aug contract fall below 2,368 level this week. Now on the bright side, the last minute recovery or rebound from the second support trend line somehow enable the possibility for the market to rebound further. Pay attention when the benchmark Aug does rally above 2,380 level, that will be the early indication for the Aug contract to recover up to 2,400 level this week. And if it manage to do just that, market will have higher chances to resume its preceding uptrend if Aug contract closes above 2,400 level. For this week, pivot support for the Aug contract is located around 2,359 while resistance is pegged at 2,395.

Daily Pivot Point
R2= 2395
R1= 2385
S1= 2367
S2= 2359
 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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