Tuesday, August 27, 2013

Set Sail To North 27th Aug 2013

Tuesday, 27th Aug 2013. The benchmark Nov continue to go up amid better demand data reported by cargo surveyors yesterday. Other news to follow.

"- U.S. stocks closed lower in light volume Monday after Secretary of State John Kerry called Syria’s actions ‘inexcusable’ and a report said the U.S. would hit its debt limit in October. After rising as much as 39 points and falling 65, the Dow Jones Industrial AverageDJIA -0.43%   finished at 14,946.46, down 64.05 points, or 0.4%. The S&P 500 indexSPX -0.40%   shed 6.72 points, or 0.4%, to 1,656.78, with telecommunications the worst performing and health care faring best of its 10 major sectors. The Nasdaq CompositeCOMP -0.01%   was off a fraction at 3,657.57."

"- Hong Kong stocks edged higher Monday on an increase in commodity prices and some hopes the Federal Reserve may delay paring its bond purchases, with the market also supported by some better-than-expected results. The Hang Seng Index HK:HSI +0.65% rose 0.7%."

"-Oil futuresclosed with a loss on Monday, as weaker-than-expected durable-goods orders dulled the outlook for energy demand while the resumption of oil exports from a terminal in Libya eased supply concerns. October crudeCLV3 +0.55% fell 50 cents, or 0.5%, to settle at $105.92 a barrel on the New York Mercantile Exchange. "

"-November Soybeans finished up 61 1/2 at 1389 1/2, 8 1/2 off the high and 41 1/2 up from the low. January Soybeans closed up 58 1/2 at 1387. This was 42 1/4 up from the low and 11 1/4 off the high. December Soymeal closed up 17.2 at 436.7. This was 9.7 up from the low and 5.2 off the high. December Soybean Oil finished up 1.88 at 44.88, 0.44 off the high and 1.83 up from the low. The hot and dry weather for the month of August is beginning to take a toll on the US soybean crop and the market is looking for another decline in Good/Excellent conditions on this afternoon's Crop Conditions report. Good/Excellent ratings were estimated at 62% last week. November soybeans traded just shy of $14 and new crop spreads made new highs for the move, increasing their backwardation (inverse). The 7-14 day forecast leaves very little bearish sentiment in the marketplace with warm and dry conditions prevailing across Missouri, most of Illinois and Indiana, and Iowa. Areas of Minnesota and Wisconsin may see showers flare up as those growing regions sit at the edge of the "heat dome" that will hover over the US Midwest this week. Some analysts are now giving consideration that this year's production may fall in line or below the 2012/13 level at 3.015 billion bushels, 240 million less than the August USDA 13/14 estimate. Assuming harvested acreage is left unchanged at 76.4 million acres, the yield would need to see a decline of 3.14 bushels per acre from the current estimate of 42.6 bushels per acre. Funds were net buyers of soybeans, meal, and oil last week. Long positions extended for soybeans and meal while oil saw short covering due to their hefty net short position. The Brazilian Real was weaker today and this along with rising US prices could temper Chinese interest in US soybeans for new crop and likely send buyers to South America. Brazilian planting is expected to expand by up to 5% but this may increase further if the soybean vs. corn spread continues to edge higher. Export inspections were considered bearish the old crop market but traders paid very little attention to the data given the current weather patterns and supply-side sentiment. Shipments for the week ending August 22nd were estimated at only 2.5 million bushels, down from 5.3 a week ago and compared to the 3 million needed on a weekly basis to hit the export forecast for 12/13."

FCPO- No Sign Of Retracement Yet

Palm oil futures is on the run to topple the next major resistance around 2,500 level amid recent good data on export. Most of the foreign institutional players and also some local institutional traders are supporting this particular rally based on steady demand data. Market is gradually forgetting the high stockpiles and production cycle for the fourth quarter of 2013 when weather is expected to be conducive for palm oil harvesting activities. Technically, there is no sign for the market to retrace yet from here, maybe there would be some minor technical correction but nothing major. Palm oil futures positive momentum is still good to ride, probably for the entire week as well. The gap up happen yesterday might be a measuring gap and it is a strong gap that further confirm Bulls are still controlling the game.  The term measuring gap is also used for runaway gaps. This is an interpretation that is hard to find examples for, but it is a way of helping one decide how much longer a trend will last. The theory is that the measuring gap will occur in the middle of, or half way through, the move.Sometimes, the futures market will have runaway gaps that are caused by trading limits imposed by the exchanges like trading hours or holiday break. Getting caught on the wrong side of the trend when you have these limit moves in futures can be horrifying. The good news is that you can also be on the right side of them. These are not common occurrences in the futures market despite all the wrong information being touted by those who do not understand it, and are only repeating something they read from an uninformed reporter. Do measuring gap or runaway gap get fill up ? A vague answer would be "eventually" but a better answer would be unlikely for the moment. For today, pivot support for the benchmark Nov is located around 2,418 while resistance is pegged at 2,465
Daily Pivot Point
R2= 2465
R1= 2449
S1= 2418
S2= 2403

 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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