Friday, July 12, 2013

Soy Two Fold Stockpiles Increase Rumors Would Spark Selling Pressure 12th July 2013

Friday, 12th July 2013. Words were out that the Soy stockpiles will double before the 2014 harvest will add more Bearish pressure to the CPO market soon. Other news to follow.

"- Markets made a tepid reponse to Federal Reserve Chairman Ben Bernanke's after-hours speech late Wednesday, the second part of the day's closely followed Fed missives. S&P 500 index futures, which were drifting higher after the close of stock trading, tipped lower and then resumed gains. The September contract was lately up 3.30 points at 1,649. The stock indexSPX +1.36% closed up 0.3 point at 1,652.62 after a wobbly session that included a spike in afternoon trading after the release of the Federal Reserve's minutes."

"-Japanese and South Korean shares fell Wednesday while stocks in Shanghai and Hong Kong rebounded in volatile trading after China reported an unexpected decline in exports.

Japan’s Nikkei Stock Average JP:NIK +0.60%  ended the day 0.4% lower, while South Korea’s Kospi KR:SEU -0.48%  lost 0.3%. Both were pressured after China reported a 3.1% year-on-year drop in June exports and a 0.7% contraction in imports, against expectations of an increase. Meanwhile, Australia’s S&P/ASX 200AU:XJO +0.68% added 0.4%, and in Hong Kong, the Hang Seng IndexHK:HSI +0.39% finished 1.1% higher. The Shanghai CompositeCN:SHCOMP -0.24%  erased early losses to end the day 2.2% higher, on a wave of buying in beaten-down financial and property shares in the afternoon session.
"-Oil prices retreated from a 15-month high on Thursday after the International Energy Agency forecast a rise in oil supply from non-OPEC countries this year and next that will likely outpace demand growth. Crude for August delivery CLQ3 -0.24% fell $1.61, or 1.5%, to settle at $104.91 a barrel on the New York Mercantile Exchange, slipping from its settlement on Wednesday, which was the highest since late March 2012."
"-August Soybeans finished up 7 1/4 at 1472, 4 1/2 off the high and 12 up from the low. November Soybeans closed up 6 at 1290 3/4. This was 18 3/4 up from the low and 3 off the high.
August Soymeal closed up 8.3 at 458.0. This was 8.5 up from the low and 1.5 off the high. August Soybean Oil finished down 0.49 at 46.53, 0.77 off the high and 0.08 up from the low. August soybeans spent much of the day in positive territory and the new crop contracts traded both sides of the unchanged following a slightly bearish USDA report. The USDA pegged the 2013/14 ending stocks at 295 million bushels, up from the June estimate of 265, and up from trade estimates at 263 million. Planted acreage inched higher to 77.7 million acres and the national average yield held steady at 44.5 bushels per acre. As a result, the 2013/14 production rose to 3.42 billion bushels as compared with 3.39 in June. The 2012/13 carryout came in unchanged from last month at 125 million bushels. World ending stocks for 2013/14 were estimated at 74.12 million as compared to 73.69 million tonnes in June. China import demand was left unchanged at 69 million tonnes as compared with 59 million for the 2012/13 season. Net weekly export sales for soybeans showed a cancelation of 70,900 tonnes for the current marketing year and 410,800 tonnes of sales for the next marketing year for a total of 339,900. As of July 4th, cumulative sales stand at 102% of the USDA forecast vs. a 5 year average of 100%. Net meal sales came in at 33,700 tonnes for the current marketing year and 10,900 for the next marketing year for a total of 44,600. Cumulative sales stand at 101% of the USDA forecast vs. a 5 year average of 87%. Net oil sales showed a cancelation of 2,300 tonnes for the current marketing year and no sales were reported for the next marketing year. Cumulative oil sales stand at 89% of the USDA forecast vs. a 5 year average of 83%. Sales of 9,000 tonnes are needed each week to reach the USDA forecast. The USDA reported that private exporters sold 120,000 tonnes of optional origin soybeans to an "unknown" destination this morning. Many believe this deal is US to China.



FKLI- Jack Up In Record Time


I would not comment further about yesterday brief spike up that brought the July contract from opening gap up to 1,776 straight to 1,824 level within five minutes or less. There are folks in the community said that this is all due to what happen externally, the U.S market. Personally, in my point of view, there are too many variables that can lead to this impulsive Buying and Bernanke speech or any statement made by Federal Reserve would be just part of the reasons. It could be the good Bernanke speech or motion that would not halt their assets buying programme any time soon unless there is real growth recorded at America. My closest guess would be those foreign institutional players would frantically wish to get in the market as soon as possible when it open ? Back to the market, we have all been taken for a ride yesterday when the rally to five weeks high, does not sustain and the market fall back to close at 1,788 level. It is undeniable that the July contract has breached above its 1,800 immediate resistance level yesterday, even it is a brief break out but the Bulls has claimed to win the battle again. For more sustainable rally, it is crucial for the cash market to follow behind and breach above 1,800 as well.


Daily Pivot Point
R2=1844
R1=1816
S1=1768
S2=1748

FCPO- Selling Pressure Mounting

Soybean inventories in the U.S., the world’s biggest shipper, will more than double before next season’s harvest after farmers planted record acreage and rain boosted yields following last year’s drought-damaged harvest, government officials said. This would not serve as a good news for CPO market as the Soy oil August contract start to dip more than 2% so far. Soy oil for August contract was traded at 46.51 cents per pound, a dropped about 1.5% as the time of writing. Let me just give you straight up the game plan for today, Sell on opening if the benchmark Sept open below previous sessions low at 2,363. Traders can expect at least 10 points dropped from the opening unless it open too low around 2,340 level measure from previous closing value 2,371 with 31~32 ATR. But what if the market open higher or just slightly lower and still above 2,363 ? Solid Sell if the market open higher and solid Sell if the market open slightly lower than yesterday closing. So there you have it, the trade ideas for today, wish you best of luck and lets get to trade. 

Daily Pivot Point
R2=2399
R1=2385
S1=2360
S2=2349
 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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