Thursday, September 5, 2013

Heading No Where ? 5th Sept 2013

Thursday, 5th Sept 2013. Palm oil futures starting to weaken further yesterday as the good news on increase demand is gradually wear off. Other news to follow.

"-U.S. stocks gained Wednesday for a second straight day as Ford Motor Co. posted its best retail-sales month in seven years, while investors kept one eye trained on the debate over prospective U.S. intervention in the Syrian civil war. After an early 35-point retreat, the Dow Jones Industrial Average DJIA +0.65% rose as much as 123 points and finished up 96.91 points, or 0.7%, at 14,930.87. The S&P 500 index SPX +0.81% advanced 13.31 points, or 0.8%, to 1,653.08, with telecommunications and health care the best performers and utilities the sole decliner among its 10 major industries."

"-Asian stocks were mostly lower Wednesday, as renewed concerns over U.S. military intervention in Syria weighed on regional sentiment. The Hang Seng Index HK:HSI -0.31%   fell 0.3% to 22326.22 and the Hang Seng China Enterprises Index was 0.2% lower at 10233.03.

The Shanghai Composite CN:SHCOMP +0.21% , however, managed a 0.2% gain to 2127.62. China Construction Bank Corp. HK:939 -1.35%   stock was in focus in Hong Kong. Japan’s Nikkei JP:NIK +0.01%  recouped early losses as the yen maintained its recent weakness, ending the day 0.5% higher at 14053.87. The U.S. dollar traded at ¥99.62 late in Asia, compared with ¥99.57 late Tuesday in New York."
"- Oil futures fell on Wednesday to settle at their lowest level in more than a week with traders looking at developments linked to Syria and awaiting the latest updates on U.S. petroleum supplies, the first of which is due in the afternoon. October crude CLV3 +0.22% dropped $1.31, or 1.2%, to settle at $107.23 a barrel on the New York Mercantile Exchange."

"-November Soybeans finished down 34 1/4 at 1352 1/2, 34 3/4 off the high and 11 up from the low. January Soybeans closed down 34 at 1351. This was 10 3/4 up from the low and 34 off the high.
December Soymeal closed down 16.2 at 422.7. This was 2.4 up from the low and 16.4 off the high. December Soybean Oil finished down 0.26 at 43.93, 0.33 off the high and 0.28 up from the low. Failure for the bulls to take out the September 14th contract high for November soybeans at 1409 3/4 over the last 2 weeks sparked some heavy technical selling today. The overnight session saw similar action which filled the first gap on the chart but one more remains which technicians have their eyes on. Fundamentally, the new crop outlook remains in question and slightly supportive with the broader market in large agreement that yields have likely turned lower from the August USDA estimate of 42.6 bushels per acre implying total production of 3.255 billion bushels. Private crop production forecasts began hitting the market today ahead of the USDA report on September 12th. A private satellite firm estimated soybean production at 3.114 billion bushels on an average yield of 40.4 bushels per acre. This is down from their prior estimate of 3.14 billion and 40.8 bushels per acre. Another private advisory firm estimated the crop at 2.98 billion bushels with a yield of 39 bushels per acre. The final yield in 2012/13 was estimated at 39.6 bushels per acre with production at 3.015 billion bushels amid some of the worst drought conditions on record. However, timely rainfall at the end of August last year helped to push yields higher in some areas while this year, a broad-based soaking across the Corn Belt has failed to develop. Midday weather models suggested the northwestern portion of the Corn Belt could see significant and timely rainfall in the next 5 days but confidence remains low. FC Stone is expected to be out later today with their updated production forecast. Harvest has started in the delta region but early bushels will be soaked up quickly given the hefty export book on for new crop and aggressive bids from processors in the east."

FCPO- Staying Above The Positive Support Trend Line 

Palm oil futures is still deciding whether to temporary disembark current Bullish train as it retreated substantially since last Thursday. Market is always hungry for the next news for it to move and if it does not find it, sideways will be the next direction. Uncertainty however, is a different story all together. Market would be heading into negative momentum if there is any heavy uncertainties arise regarding stockpiles or demand figures. But that is not we are expecting at the moment. What we are trading right now is a retracement after the market went up to 8 weeks high last week. There will either a nasty retracement or sharp correction when the market retrace from a steady uptrend. Technically, the benchmark Nov is attempt to cover up some part of the continuous gap occur on 26th Aug but still hovering on uptrend momentum as the second support trend line still hold up well. If anything goes wrong from there, further weakness is expected if the benchmark Nov manage to breach below the second support trend line located around 2,380 this week. Pending on the upcoming fundamental data announcement from MPOB, market is likely hovering within range trading around 2,380~2,438.

Daily Pivot Point
 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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