Wednesday, July 17, 2013

Demand Downside Pressured Price To Fall Further On FCPO 17th July 2013.

Wednesday, 17th July 2013. The price dive for palm oil futures will continue at least for this week judging from stockpiles increase concern and weak demand from major palm oil importers. Other news to follow.

"- U.S. stocks declined on Tuesday, with the S&P 500 breaking an eight-session winning streak after a Federal Reserve member urged reduced stimulus and Coca-Cola Co.’s profit fell.

The Dow Jones Industrial Average DJIA -0.21% dropped 32.41 points, or 0.2%, to 15,451.85. Shares of Coca-Cola KO -1.90%  fell 1.9%, pacing the index’s losses after the beverage maker reported a drop in quarterly earnings."
"- Japanese stocks gained Tuesday on a weakened yen and a record finish for key U.S. indexes, while Chinese stocks edged higher after a choppy trading session amid hopes Beijing may act to avert a steeper economic slowdown. Indian stocks fell and the rupee jumped after the Reserve Bank of India tightened policies on Monday to stem the local currency’s weakness, raising fears the moves would weigh on the economy. Japan’s Nikkei Stock Average JP:NIK -0.65% rose 0.6% to end the day at a seven-week high as trading resumed after a three-day holiday-extended weekend, with the U.S. dollar USDJPY +0.2479%  rising from its level on Friday to keep the 100-yen level in sight. China’s Shanghai Composite Index CN:SHCOMP -0.33%  added 0.3%, as investors remained focused on the action policy makers might take to prevent a further economic slowdown. Hong Kong’s Hang Seng Index HK:HSI +0.31%  ended marginally higher."

"-Oil futures stuck close to $106 a barrel in electronic trading late Tuesday following news of a fall in U.S. crude supplies that generally matched expectations. The American Petroleum Institute said supplies fell 2.6 million barrels for the week ended July 12, according to sources. Analysts polled by Platts forecast a 2.5 million barrel decline. Sources also said the API reported gasoline stockpiles up 2.6 million barrels and distillate supplies up 3.8 million barrels. Analysts expected gasoline supplies to be unchanged and looked for a rise of 1.8 million barrels in distillates. Following the data, August crude CLQ3 -0.43% traded at $105.86 a barrel in electronic trading, down from the $106 settlement on Nymex." 

"-August Soybeans finished up 21 1/2 at 1475 1/4, 12 3/4 off the high and 22 1/4 up from the low. November Soybeans closed up 22 1/2 at 1286 1/4. This was 20 3/4 up from the low and 10 3/4 off the high. August Soymeal closed up 15.3 at 466.8. This was 14.6 up from the low and 3.9 off the high. August Soybean Oil finished down 0.13 at 45.71, 0.53 off the high and 0.08 up from the low. The soybean market traded sharply higher on the day and found good buying support on a setback at the midpoint of the session near the 50% retracement of the June high to July low. Strong buying support was seen into the closing bell. Bull spreading was active again today both in the old vs. new crop soybean complex as well as the meal market. Basis bids remain extremely strong on the river and in interior processing markets with facilities in the east paying 130 to 140 over. Meal end users were attempting to hold off on more coverage due to strong cash premiums and the massive inverse between nearby shipment and forward delivery. Supplies remain extremely tight and there was some talk today that Argentina meal was close to working into the US but nothing has been confirmed. The weather remains a wild card at this point with plenty of time left to make or break the new crop. Conditions are trending drier for areas of NE and IA but weather patterns have impacted the crops more favorably in IL and to the east. Weather premium is likely to remain in the market for a substantial period of time until there is more clarity and conviction as to the overall production potential given how tight the US old crop supply is."

FCPO- Downside Yet Subside

Diminishing demand on Ramadhan festive season on all major palm oil importers dragged down the price further yesterday. It is a losing battle for the Bulls to keep up with the Bears for the time being as Sellers always outnumbered Buyers when the Oct contract hitting below any support level. Closing down on eight months low, the benchmark Oct did not show any sign of recovering yet. The price action still suggest that more Bearish condition for the price to fall further. On external side, the USDA has estimate higher output and stockpiles level for Soy beans as well.To make things worse, export in Indonesia for June dropped about 11% as demand in India, China and Pakistan were badly affected due to weaker currencies in India and economy slow down in China. For today, market is expected to move within a sideways range judging on overnight Soy bean oil that close slightly lower at 45.71 cents per pound.

Daily Pivot Point
R2= 2282
R1= 2254
S1= 2210
S2= 2194
 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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