Tuesday, August 13, 2013

No Gap Down, How About Gap Up ? 13th Aug 2013

Tuesday 13th Aug 2013. Instead of opening gap down, palm oil futures went up throughout yesterday trading session due to demand upbeat.

"-U.S. stocks closed a low-volume, light-news session with slight losses on Monday, though the technology-dominated Nasdaq Composite managed a gain.

The S&P 500 SPX -0.12%  edged down 1.95 points, or 0.1%, to 1,689.47 and the Dow Jones Industrial Average DJIA -0.04%  dipped 5.83 points, or 0.04%, to end at 15,419.68."
"- Mainland Chinese stocks rose Monday after data showing banks made more loans than expected in July, while Hong Kong shares were weighed after a lower finish Friday on Wall Street. The Shanghai CompositeCN:SHCOMP +2.39% rose 0.3% to 2,057.43 after data released following the stock market's close on Friday showed Chinese banks made 699.9 billion yuan ($114.3 billion) worth of local-currency denominated loans in July, beating expectations. In Hong Kong, the Hang Seng Index HK:HSI +2.13% fell 0.2% to 21,771.04."

"-Oil futures posted a mixed performance Monday, with West Texas Intermediate eking out a minor gain and Brent futures edging lower in the wake of weaker-than-expected Japanese economic data and supply disruptions in Libya.
WTI crude oil for September delivery CLU3 +0.03% rose 14 cents, or 0.1%, to settle at $106.11 a barrel in floor trade at the New York Mercantile Exchange." 
"-August Soybeans finished up 33 at 1373 3/4, 1/4 off the high and 35 1/2 up from the low. November Soybeans closed up 43 at 1225 1/4. This was 42 1/4 up from the low and 2 3/4 off the high. August Soymeal closed up 5.2 at 425.7. This was 7.4 up from the low and 9.0 off the high. August Soybean Oil finished up 0.92 at 42.32, equal to the high and 0.59 up from the low. The USDA report was considered bullish against trade expectations after the USDA pegged the 2013/14 ending stocks at 220 million bushels from the July estimate of 295 million and from trade estimates at 263 million. November soybeans are traded sharply higher on the day as a result. Planted acreage was estimated at 77.2 million acres vs. 77.7 million in July and the national average yield was pegged at just 42.6 bushels per acre vs. 44.5 in July. As a result, total 2013/14 production fell to 3.255 billion bushels as compared with 3.420 last month. The 2012/13 carryout came in unchanged from last month at 125 million bushels. Exports were revised lower by 65 million bushels which was an offset to the friendly supply news. World ending stocks for the 2012/13 season came in at 62.22 million tonnes as compared with 61.52 million tonnes in last month's estimate. World ending stocks for 2013/14 were estimated at 72.27 million as compared to 74.12 million tonnes in July. China import demand was left at 69 million tonnes as compared with 59 million for the 2012/13 season. Demand leans bullish with the USDA reporting new sales this morning. US private exporters sold a total of 853,000 tonnes to China and unknown destinations for the 2013/14 marketing year. About 713,000 tonnes were to China and 140,000 to unknown destinations. Export inspections were estimated at 3.4 million bushels for 12/13, up from 1.4 the week prior. The cumulative shipment pace is at 98% of the USDA forecast as compared to the 5 year average of 95%. About 8 million bushels need to ship each week for the remainder of the marketing year to hit the current USDA estimate."

FCPO- Time To Rally.

Palm oil futures is riding up on Bullish export figures yesterday when the cargo surveyor ITS reported 22% rise in palm oil demand for the period of 1-10th Aug vs July. The recovery came better than expected when it rally up to 2.6% yesterday before it close slightly lower right before the closing bell on profit taking activities. Now, palm oil futures have more reason to recover further as the active traded Soy oil contract rose about 0.92 cents to 42.32 overnight due to Bullish USDA stocks report. Not only that, palm oil futures is likely gap up this morning based on Aug contract Soy oil last traded price at 42.45 at the time of writing. Technically, it is the first attempt by the Bulls to resume control after a higher low point formed when the market rallied about 2,230 yesterday. Confirmation of more sustaining rallies can be achieve if the benchmark Aug manage to recover above 2,290 today. Traders are advised to go Long on opening even though a gap up is unavoidable at this circumstance as there is more space for the market to recover further. For today, pivot support is located around 2,210 while resistance is pegged at 2,290~2,300.

Daily Pivot Point
R2= 2290
R1= 2265
S1= 2210
S2= 2180
 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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