Thursday, November 7, 2013

Palm Oil Correction Time !!! 7th Nov 2013

Thursday 7th Nov 2013. Palm oil futures starting to decline since Monday this week when traders are covering up their Long positions due to constant weakness on Soybean oil. Other news to follow.

"- U.S. stocks mostly finished higher on Wednesday, with the Dow industrials scoring a record closing high. The Dow Jones Industrial Average DJIA +0.82%gained 128.66 points, or 0.8%, to end at 15,746.88, topping its prior record close on Oct. 29. Meanwhile, the S&P 500 SPX +0.43%advanced 7.52, or 0.4%, to close at 1,770.49. The benchmark index was on track to top its Oct. 29 record close, but didn't manage to do so after paring some gains. The Nasdaq Composite COMP -0.20% bucked the positive trend, closing down 7.92 points, or 0.2%, at 3,931.95. Strategists said there was no specific U.S. event that spurred buying, saying the underlying backdrop for stocks just remains positive."

"- Oil futures rallied Wednesday back above $94 a barrel, scoring the best one-day gain in about a month after weekly reports showed a smaller-than-expected climb in U.S. crude supplies along with declines in gasoline and distillate inventories that were higher than analysts’ forecast. Prices for oil’s European benchmark, Brent crude, turned a bit lower late in the trading session as Bank of America Merrill Lynch strategists reiterated a forecast for average Brent prices of $101 a barrel in the first quarter of next year. December crude CLZ3 +0.13%  rose $1.43, or 1.5%, to settle at $94.80 a barrel on the New York Mercantile Exchange. Prices were trading around $94.22 before the government supply data were released."

"-January Soybeans finished up 4 3/4 at 1255, 6 off the high and 5 3/4 up from the low. March Soybeans closed up 4 1/4 at 1240 1/2. This was 5 1/2 up from the low and 5 1/2 off the high. December Soymeal closed up 4 at 396.8. This was 4.5 up from the low and 0.4 off the high. December Soybean Oil finished down 0.01 at 41.14, 0.28 off the high and 0.06 up from the low. January soybeans closed up 4 3/4 on the session and stayed inside of yesterday's range. The market traded up as much as 10 3/4 cents higher on the day ahead of the pit opening and was up just 1 cent on the day into the mid-session as weakness in corn and wheat kept the trade choppy. Talk of good weather for the developing crops in South America helped to pull the market down from the early highs. Weakness in the dollar and a risk-on vibe from outside markets plus talk that the market was a bit oversold after the sell-off from Thursday's peak helped to support the market early. For the weekly export sales report in the morning, traders see soybean sales near 1 million tonnes as compared with 113,500 tonnes necessary to reach the USDA export projection for the year. Light producer selling had gulf basis firm early today."

FCPO- The Time Has Come, To Adjust Lower !!

What come up, must come down, eventually. We are looking at current correction on palm oil futures that has started since last Monday. It seems that previous 2,632 was too much for the Bulls to handle and most of the optimistic sentiment quickly evaporate as palm oil data or fundamental does not changed much. Long positions were starting to trimmed by most of the medium term technical traders around yesterday closing session when the price went down below 2,560 level. The closing on 2,547 level is not a good sign for the market to signal recovery anytime soon. Most of the price action in smaller time frame below hourly chart is showing further adjustment to the downside. The gap around 2,519~2,510 should be filled if the benchmark Jan does retrace further this week. For now, based on previous major resistance that will become current major support, the 2,500 level will serve as the first rebound area for the price to recover. Market should turn weaker than expected if the 2,500 level broken. Play of the day would be abandon the rally, and go Short on the first weakness after the market finish rallied. Pivot support for the benchmark Jan is located around 2,530 while resistance is pegged at 2,561.
Daily Pivot Point
R2= 2576
R1= 2561
S1= 2538
S2= 2530
 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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