Tuesday, September 10, 2013

Palm Oil Retreated On Production Spike 10th Sept 2013

Tuesday, 10th Sept 2013. Palm oil futures is having a tough time staying at the peak for the moment as market are spook by the possible production increase on the data due to release today. Other news to follow.

"-U.S. stocks climbed on Monday, with the S&P 500 extending its longest win streak since July, after Chinese exports beat projections and as investors anticipated the unveiling of Apple Inc’s new iPhone models. The S&P 500 index SPX +1.00%  climbed 16.54 points, or 1%, to 1,671.71, with materials and information technology pacing broad gains that included all of its 10 major industry groups. The Nasdaq Composite index COMP +1.26% rose 46.17 points, or 1.3%, to 3,706.18."

"-Chinese stocks pulled higher early Monday, tracking gains in other Asian markets and helped by data showing a slight easing in consumer inflation and a slowing in wholesale deflation. Hong Kong's Hang Seng IndexHK:HSI +0.57% rose 0.9% to 22,816.83, with the Hang Seng China Enterprises Index up 1.6%, while the Shanghai Composite CN:SHCOMP +3.39% climbed 1.4%. Data released as the markets opened showed China's consumer price inflation moderating to an annual rate of 2.6% in August from July's 2.7% rate, while the producer price index was down 1.6% from a year earlier compared to July's 2.3% drop."

"-November Soybeans finished down 11 1/4 at 1356 1/2, 27 1/2 off the high and 5 1/4 up from the low. January Soybeans closed down 9 1/2 at 1355 3/4. This was 5 up from the low and 25 3/4 off the high. December Soymeal closed down 2.4 at 426.5. This was 3.0 up from the low and 8.4 off the high. December Soybean Oil finished down 0.55 at 43.17, 0.96 off the high and 0.06 up from the low.Weather leans bullish to start the week for the soybean market with a mostly dry forecast for the Corn Belt and temperatures edging up near 100 degrees at one point for Des Moines, IA. There are reports of early planted soybeans being harvested in southern IL with 40 plus bushel per acre yields but production prospects as a whole remain questionable and slightly supportive. Thoughts that the weekend rainfall in central MO and western IL helped the crop were negative although most of the pressure today may have been linked to an unwind in the soybean vs. corn spread and profit taking ahead of the report on Thursday. The trade is looking for a yield near 41.2 bushels per acre in the report, down from 42.6 currently. Export inspections offered very little direction to the market with shipments for the week ending September 5th coming in at 2.2 million bushels. This was the first reporting week for the 2013/14 crop year. Shipments needed each week to hit the 13/14 export estimate are at 26.8 million bushels. The cumulative shipment pace is listed at 0.1% of the USDA forecast vs. the 5 year average of 2.6. Traders expect the shipment pace to pick up significantly by the end of this month as Brazilian shipments trend lower. Brazil shippers will be putting more emphasis on second corn crop shipments and the US will begin to load new crop soybeans for existing commitments. The trade is looking for another 3-5% decline in condition ratings this evening. Meal premiums remain strong across the Corn Belt and early harvested soybeans will be aggressively bid to cover outstanding domestic and export sales commitments."

FCPO- Bulls Are Struggling To Stay Afloat. 


The benchmark Nov is having hard time trying to stay above the 2,400 level yesterday, making it the first sign of further retracement this week. We are likely to see major Bearish candle formation on the benchmark Nov daily chart if it continue to dive below 2,380 today. At this time, only lower high was visible when the benchmark Nov closed RM43 lower yesterday. Long term trader might want to pay attention to the long term support trend line that will violated if the benchmark Nov goes down below 2,380 level today. Major resistance around 2,505 based on previous monthly high stays valid for the time being and judging how the market re-acted when it approach this level, we going to need a whole new level of increase demand and decrease palm oil supplies in order to breach above this level.  On the external side,most of the traders are turning their card to Sell as they are expecting productions to increase substantially this month. Favorable weather condition has once again taken the blame for active production cycle. On the contrary, be prepare for some serious market recovery if there is some unexpected good figures report by MPOB later today, i.e, flat production figure or even better reduce stockpiles data.  For today, pivot point support for benchmark Nov is located around 2,383 followed by 2,364 while resistance is pegged at 2,435.

Daily Pivot Point
R2= 2468
R1= 2435
S1= 2383
S2= 2364
 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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