Friday, July 19, 2013

Recovery Wave Forming But Market Has To Fall Today 19th July 2013

Friday, 19th July 2013. It was a good recovery attempt made in the palm oil futures recently after it went down to seven months low last week but Soy oil weakness is likely dampen today rallies. Other news to follow.

"-U.S. stocks rose on Thursday, lifting benchmark indexes to record highs, after jobless claims fell and earnings from corporations including United Health Group Inc. topped expectations as investors heard from Federal Reserve Chairman Ben Bernanke. Surpassing its prior intraday record set on May 22, the S&P 500 index SPX +0.50% rose to a session high of 1,693.12. It closed up 8.46 points, or 0.5%, at 1,689.37, its 21st record close this year. Financials paced gains among its major 10 sectors, while telecommunications and information technology posted losses."

"- Hong Kong stocks struggled early Thursday, pulling back after a higher start as mainland Chinese equities retreated amid Beijing's reluctance to provide additional stimulus. The Hang Seng Index HK:HSI +0.50% fell 0.1% and the Hang Seng China Enteprises Index slipped 0.2%."

"-Oil futures settled above $108 a barrel Thursday, the highest for a most-active contract in over a year, as it found support from recent data showing a drop in U.S. crude inventories to their lowest level since January. Positive jobless claims and Philadelphia Fed data also spurred the advance. Oil for August delivery CLQ3 -0.07% tacked on $1.56, or 1.5%, to settle at $108.04 a barrel on the New York Mercantile Exchange."

"-August Soybeans finished down 8 1/4 at 1469 1/4, 8 1/4 off the high and 10 3/4 up from the low. November Soybeans closed down 17 3/4 at 1265 3/4. This was 6 3/4 up from the low and 16 1/2 off the high. August Soymeal closed up 2.4 at 471.5. This was 8.1 up from the low and equal to the high. August Soybean Oil finished down 0.27 at 45.52, 0.4 off the high and 0.18 up from the low. November Soybeans began the Wednesday evening trade with a gap lower open and traded sharply lower into the pit opening. The market was down 24 1/2 cents on the day early in the session with more and more talk of improving crop weather into the weekend and next week for Iowa and the southwestern Corn Belt helped to pressure. Gulf basis slipped slightly with talk of limited near-term demand. Weekly export sales for soybeans came in at 110,600 tonnes for the current marketing year and 591,700 for the next marketing year for a total of 702,300. New crop sales were mainly "unknown" at 257,600 and China at 240,500 tonnes. Sales were very close to trade expectations and had little impact. Cumulative soybean sales for the new crop season stand at 33.7% of the USDA forecast for the marketing year versus a 5 year average of 23.0%. Sales of 439,000 metric tonnes are needed each week to reach the USDA forecast. With the huge inversion of old crop to new crop, buyers have been more active at booking new crop needs. Meal sales came in at 41,600 metric tonnes for the current marketing year and 38,000 for the next marketing year for a total of 79,600. Cumulative meal old crop sales stand at 99.9% of the USDA forecast vs. a 5 year average of 88.7% for this time of the year. Oil sales came in at 10,600 metric tonnes, all for old crop. Cumulative sales stand at 89.7% of the USDA forecast for 2012/2013 season versus a 5 year average of 83.8%. Sales of 9,000 metric tonnes are needed each week to reach the USDA forecast."

FCPO- Weakness On Soy Oil Likely Curb Further Rallies


The benchmark Oct had a good rallies when the price fell close to seven months low last week, attracting bargain hunter to step in and Long the market. But unfortunately, this week rallies might not sustain that long as overnight weaker than expected closing value on Soy oil is likely curbing price to go up further today. Long term outlook on Soy oil and palm oil futures remain negative for the moment and traders are reminded that previous recover attempt was meant to be short lived temporary rebound. Demand and stockpiles will remain the main headlines for the market to move as sluggish export and increase stockpiles concern would serve as main hurdles for the market to recover further this month. Technically, short term outlook is pointing at positive direction as recent breach above 2,290 level signifies strong Buyers commitment in the market. Unfortunately, market always move in wave form and today we are likely to expect some retracement if the market open lower than 2,261 level. Short positions are likely making the profit tape today as weaker than expected dive in Soy oil would spur price drop in palm oil futures soon.

Daily Pivot Point
R2= 2323
R1= 2307
S1= 2261
S2= 2231
 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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