Thursday, August 1, 2013

All System Green On FCPO 1st Aug 2013

Thursday, 1 Aug 2013. The benchmark Oct continue to rally despite weakness on Soy oil recently, sluggish demand and increasing stockpiles are the main concern for the price to recover further. Other news to follow.

"- U.S. stocks on Wednesday ended little changed, but posted monthly gains, after the Federal Reserve offered few clues on potential changes to its monetary policy. The Dow Jones Industrial Average DJIA -0.14% fell 21.05 points, or 0.1%, to 15,499.54. The blue-chip index had risen as high as 15,634.32, clearing intraday and closing records reached Tuesday of last week. The Dow rose 4% for July, its eighth monthly rise in nine."

"- Mainland Chinese and Hong Kong stocks rose Wednesday after the Communist Party's politburo pledged to maintain steady growth in the second half of 2013, lifting shares of property developers and financials. The Shanghai Composite CN:SHCOMP +0.19% climbed 0.7% to 2,004.89, returning back above the 2,000-point level. In Hong Kong, the benchmark Hang Seng Index HK:HSI -0.32% rose 0.1%."

"-Oil futures notched a monthly gain of nearly 9%, with prices closing above $105 a barrel on Wednesday, as mostly upbeat economic data, including stronger-than-expected second-quarter U.S. growth, helped improve the outlook for energy demand.

Prices briefly pared gains after a weekly government showed a surprise increase in crude supplies. They climbed back up and saw a last minute jump ahead of the close to finish at the session’s high after the Federal Reserve’s statement on monetary policy. Crude oil for September deliveryCLU3 +0.53% rose $1.95, or 1.9%, to settle at the session’s high of $105.03 a barrel on the New York Mercantile Exchange.

"-August Soybeans finished up 24 at 1374, 1 1/2 off the high and 30 1/2 up from the low. November Soybeans closed up 3 1/4 at 1206 1/4. This was 12 up from the low and 5 1/4 off the high.
August Soymeal closed up 5.9 at 435.1. This was 11.6 up from the low and 2.4 off the high. August Soybean Oil finished down 0.02 at 42.09, 0.52 off the high and 0.06 up from the low. The soybean market traded mostly higher on the day, led by double digit gains in the August contract. November soybeans traded both sides of the unchanged but ended the day with modest gains. The Malaysian palm oil market was higher overnight and has scratched out 2 consecutive days of gains which helped to support soybean oil futures. The basis in the US was steady to slightly higher for some processors as supply coverage dwindles to 2 weeks. Farmers remain on the sidelines with additional sales given the drop in futures and basis over the last week. The USDA reported that US private exporters sold 120,000 tonnes to an unknown destination for the 2013/14 marketing year this morning. Weather leans negative for the market with a cooler temperature trend prevailing and long term forecasts hint at better heat in the last part of August and early September which bodes well for growth and yield potential. A private crop forecaster trimmed their estimate for US soybean production in 13/14 to 3.310 billion bushels, down from prior forecasts of 3.315 billion, and this is also down from the USDA estimate of 3.420 billion. The US soybean yield was estimated at 42.9 bushels per acre vs. the USDA estimate of 44.5 bushels per acre. World soybean production was left unchanged at 283 million tonnes, down slightly from the USDA forecast of 285.89 million. There's talk that Argentina soybean planted acreage will rise to near 20 million hectares in 2013/14, up from 19.5 in 2012/13. The USDA sees Argentina soybean production next year at 53.5 million tonnes, just short of a record high and against 50.3 million in the current marketing year."

FCPO- Surge On Improved Export Figures

It might be a little controversial to expect price does went up due to slight recovery in the demand percentage. Instead of recording a bad negative percentage on July vs June export figures yesterday, ITS reported July export was up 4% from its previous month. This will give something for the Buyers to cheer about, but this moment would not last for long as palm oil price further recovery is heavily curb by Soy oil constant weakness. The most active traded Aug contract dip down back to 42.09 level from 42.60 on Asian session yesterday. Technically, we are looking at strong commitment for the benchmark Oct to recover further based on previous sessions rally. The Bullish green candle formed on last Friday does provide some hint that the Bulls are gradually taking over. Higher lows and higher highs are also visible on lower time frame but even the pictures are clearly pointing at north, this would quickly change if there is some weak price action on its rival products. Palm oil market participant will decide whether Soy oil will continue to serve as a barometer for the market opening price or continue to its recovery today.

Daily Pivot Point
R2= 2261
R1= 2249
S1= 2221
S2= 2205
 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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