Tuesday, September 24, 2013

Rising Stockpiles And Improve Palm Oil Production Spur Market Weakness. 24th Sept 2013.

Tuesday. 24th Sept 2013. Palm oil futures is still hovering on Bearish note most of the time for the moment judging on weak fundamental report from MPOB and other surveyors. Other news to follow.

"-U.S. stocks fell on Monday after notching three weeks of gains, as investors heard from Federal Reserve officials and worried about another standoff in Washington. Down for a third consecutive session, the Dow Jones Industrial Average DJIA -0.32%  declined 49.71 points, or 0.3%, to 15,401.38.

Also down for a third day, the S&P 500 index SPX -0.47% lost 8.07 points, or 0.5%, to 1,701.84, with the financial sector hardest hit among its 10 major sectors."
"-Hong Kong stocks traded modestly lower Monday after the market open was delayed until 1 p.m. local time (1 a.m. U.S. Eastern time) due to a storm. The Hang Seng Index HK:HSI -0.56% fell 0.2% to 23,463.23, while the Hang Seng China Enterprises Index was flat. The Shanghai market, which opened at its regular time, rose after better-than-expected Chinese manufacturing data, with the Shanghai Composite CN:SHCOMP +1.33% rising 1%. Sharp losses on Wall Street on Friday helped weigh on some shares with heavy global exposure."
"-Oil futures closed below $104 a barrel on Monday, tallying a three session loss of about 4% as concerns over Middle Eastern supplies continued to ease, in part due to growing output from Libya. Data showing that China’s economy was healing faster than expected appeared to only provide modest, temporary support for prices as worries over that nation’s slowdown in economic growth lingered too. November crude oil CLX3 -0.22% dropped $1.16, or 1.1%, to settle at $103.59 a barrel on the New York Mercantile Exchange."

"-November Soybeans finished down 7 1/2 at 1307 3/4, 10 off the high and 2 1/4 up from the low. January Soybeans closed down 7 1/2 at 1310 1/2. This was 2 up from the low and 9 1/2 off the high.
December Soymeal closed down 2.4 at 409.2. This was 0.5 up from the low and 4.9 off the high. December Soybean Oil finished down 0.1 at 42.24, 0.16 off the high and 0.28 up from the low. November soybeans closed 7 1/2 cents lower on the day and experienced the lowest close since August 22nd. Ideas that last week's rains will help boost crop conditions for tonight's weekly update helped to pressure the market. Traders see good-to-excellent conditions improving by about 1% to near 51% and that areas of northern Iowa and Minnesota which still have some green fields have benefited from recent rains. Weekly export inspections came in at 16.8 million bushels as compared with 2.9 million last week. Inspections need to average 27.2 million bushels per week to reach the USDA projection for the year. Traders sense that producers are more inclined to sell soybeans and store corn after harvest. Talk of harvest pressures ahead plus fears that the market will remain in a long liquidation selling mode after the COT report showed funds holding a hefty net long position are seen as negative forces."

FCPO- Increasing Stockpiles And Active Productions Pressured Price

According to USDA report, Indonesia is having record increase in their palm oil production, making it the biggest gain in production ever. Record inventories of palm in Indonesia, the largest producer, will add to the biggest global supply of vegetable oils in history, driving down costs for makers of everything from food to fuel to soap. Indonesian stockpiles of the most-used oil derived from crops will rise 66 percent to 3 million metric tons by the end of 2013-2014, the U.S. Department of Agriculture says. Global output of nine oils including soy, peanut and palm will expand 4.3 percent to 167.3 million tons, USDA data show. Palm oil rallied the most in almost three years last month as hot weather threatened the U.S. soybean crop, which also yields oil used in food and fuel production. Both commodities are retreating again on prospects for a record harvest in Brazil and Argentina, the biggest shippers of soybean oil. Even with last month’s rally, palm never emerged from the bear market that began in June 2012 after the highest ever average prices the previous year spurred farmers to extend plantations. Technically, we may expect the price to rebound temporary if there is any higher low and higher high form at least on hourly chart, but that price formation is no where to be seen yet. The benchmark Dec continue to dive down to at least five weeks low yesterday to 2,279 yesterday on opening session. Fortunately, market was able to recover up to 2,315 on afternoon due to oversold condition. Bottom line, palm oil futures is still travelling on Bearish momentum judging on current lower high and lower low candle formation on daily chart. For today, pivot support for the Dec contract is located around 2,287 followed by 2,265 while resistance is pegged at 2,323 followed by 2,337.

Daily Pivot Point
R2= 2337
R1= 2323
S1= 2287
S2= 2265
 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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