Monday, September 16, 2013

FCPO Making New Low, Still Weak 17th Sept 2013

Tuesday, 17th Sept 2013. Palm oil futures went down to four weeks low at around 2,306 level on last Friday before it closed slightly higher at 2,349. Other news to follow.

"-U.S. stock investors shouldn't be fazed if the much-anticipated “Septaper” hits this coming week. Since the Fed started its first round of quantitative easing bond purchases in late November 2008, the S&P 500 SPX +0.27%  has rallied more than 96%. From its bear-market low in 2009, it’s gained about 150%. It’s off about 1% from its record high reached in early August.

Still, stocks have come back a bit recently. In the past week, the Dow Jones Industrial Average DJIA +0.49%   gained 3%, its best week since January. The S&P 500 rose 2%, and the Nasdaq Composite COMP +0.17%   added 1.7%. In the year to date, the S&P 500 is up 18%, the Dow 17% and the Nasdaq 23%."
"- Most Asian stock markets saw modest gains Thursday, with energy stocks offering a bright spot after an increase for oil futures, though Japanese shares lagged. South Korea’s Kospi KR:SEU +1.04%  improved by 0.5%, leading gains among the major indexes, while Hong Kong’s Hang Seng Index HK:HSI -0.17%   rose 0.3%, Australia’s S&P/ASX 200 AU:XJO +0.80%   added 0.2%, and the Shanghai CompositeCN:SHCOMP -0.86%  swung to a 0.1% gain after trading solidly lower earlier in the day. On the downside, Japan’s Nikkei Stock Average JP:NIK +0.12%  lost 0.2%, though off its earlier lows. After New York-traded oil futures scored their first win in three sessions on Wednesday, energy shares saw the broadest buying in Asia."
"-November Soybeans finished down 14 1/2 at 1381 1/2, 18 1/2 off the high and 1 1/2 up from the low. January Soybeans closed down 13 3/4 at 1379 3/4. This was 1 1/4 up from the low and 18 off the high. December Soymeal closed down 4.4 at 442.8. This was 0.4 up from the low and 8.4 off the high. December Soybean Oil finished down 0.47 at 42.56, 0.73 off the high and 0.15 up from the low. The soybean market traded lower on the day, led by losses in the November 2014 contract which was down 26 3/4 cents. The November/November spread traded sharply higher at a +215 inverse. Concerns that the supply and carryout forecast for 13/14 might decline again in the October USDA report plus expectations for another bumper crop in South America and increases in US planting next year is supportive to the spread although some suggest it may be nearing overbought levels given that the November 2014 outright is edging closer to the lows of the calendar year. Basis has softened throughout the week as harvest begins in the southeast and delta and due to the rise in prices on the board although producer sales remain slow. NOPA will release updated crush data next week with many looking for a 3-5 million bushel decline from 116.338 last month. The trade continues to debate the size of the crop this year with many looking for a decline in pod weights going forward which could be a drag on yield and production. Spreads continue to firm on thoughts another year of severe demand rationing lies ahead."

FCPO- Market Is Still Adjusting Lower


Palm oil futures is still not yet out of Bears domination. Other than the long legged Doji closed on last Friday, the correction we see so far is not showing any sign of stopping yet. The final hour recovery last Friday might due to last minute Short covering before the market closed for three days holidays. Intraday and mostly swing traders are covering all or part of their Short positions ahead of 16th Sept 2013 Malaysia day public holiday. With Soy oil still under pressure from active productions and over supplies concern have led to Dec Soy oil contract closed 0.47 cents lower to 42.46 cents per pound. For palm oil futures, the only news that halting the price to free fall might be steadier export figures reported by the cargo surveyors. It would be all different scenario if the market get hit by weaker export together with increasing productions data. Trader can expect gap down on the opening if that scenario materialize. For now, technical reading for the new benchmark Dec remain Bearish judging on the previous gap down on 9th Sept followed by a weak closing price on 10th Sept. Market would set to head down even further if the psychological support around 2,300 is taken out. We are likely to see palm oil futures tracking overnight performance on Soy oil when the market open to trade on tomorrow Tuesday. More weakness would be expected if the Dec Soy oil continue to close lower while a we might see the first sign of market further market recovery if the Dec Soy Oil close substantially higher. For today, pivot point support for the Dec contract is located around 2,316 followed by 2,283 while resistance is located around 2,393.

Daily Pivot Point
R2= 2448
R1= 2393
S1= 2316
S2= 2283
 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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