Tuesday, November 19, 2013

Sloppy export Dragging Down Price Recovery 19th Nov 2013

Tuesday, 19th Nov 2013. Palm oil is moving within the line for the moment ranging from 2,632 and 2,500 level. These level might be staying for some time if there is not much movement on Soy oil this month. Other news to follow.

"-.S. stocks closed mostly lower on Monday after activist investor Carl Icahn said he’s “very cautious” on equities and they could experience a “big drop.”

For the first time ever, the Dow Jones Industrial Average DJIA +0.09% and S&P 500SPX -0.37%  rose above the milestone levels of 16,000 and 1,800, respectively. But they couldn’t finish above those levels, although the Dow did score another record close. The S&P 500 fell 6.65 points, or 0.4%, to close at 1,791.53, while the Nasdaq CompositeCOMP -0.93%  shed 36.90 points, or 0.9%, to finish at 3,949.07, as it also trades near its own milestone of 4,000."
"-Chinese stocks jumped Monday, with Shanghai rising the most since September, after China published a broad outline for economic reform. Investors had their first opportunity to react to a reform plan that was released by Beijing late Friday, with the Shanghai Composite CN:SHCOMP +2.87%  rising 2.9% and Hong Kong’s Hang Seng Index HK:HSI +2.73%  up 2.7%. Chinese companies listed in Hong Kong were at the forefront of the day’s gains, as the Hang Seng China Enterprises Index soared 5.7%."
"-January Soybeans finished up 7 at 1287 1/2, 2 1/2 off the high and 11 up from the low. March Soybeans closed up 7 1/2 at 1273 1/4. This was 11 1/4 up from the low and 2 1/4 off the high.
December Soymeal closed up 5.3 at 415.8. This was 9.2 up from the low and 0.8 off the high. December Soybean Oil finished down 0.36 at 40.11, 0.64 off the high and 0.16 up from the low. January soybeans closed 7 cents higher on the session and traded mostly in a choppy 5 cent trading range since the pit opening. The market was trading 8 1/2 cents higher into the mid-session as the market clawed back some of the steep losses from Friday led by solid export demand. December soybean oil moved down to the lowest level since October 7th as EPA proposed bio-fuel cuts and continued talk of trans-fat cut for the coming year had traders talking about reductions in usage. In addition, the crush report on Friday showed hefty yields and this had traders talking about increased oil supply as well. Traders see harvest near 96% complete for tonight's update. Weekly export inspections came in at 87.8 million bushels as compared with 82.6 million last week and just 22.6 million necessary each week to reach the USDA projection for the year. Cumulative shipments have reached 35.1% of the USDA projection for the year as compared with 29.2% as average for this time of the year. December meal moved to a 6-session low overnight but was trading $3.40 higher on the day into the mid-session. Talk that demand for US soybeans to China could be slowing helped to limit the advance."


FCPO- Tough Recovery Due To Soy Oil Weakness


Palm oil futures is going to have tough times ahead as Soy oil did not do well for a couples of session recently. The actively traded Soy oil dip back close to 40.00 cents per pound as the time of writing,  today. Sluggish price action on Soy oil also dampen palm oil sentiment as both are rival products all-together. The benchmark Feb dropped about RM20 to 2,590 on yesterday closing, about 17,371 lots were traded as well. Technically, the benchmark Feb is trapped within 2,627~2,571 for the moment. Breaking below of this range will induce more Selling pressure while I am less expecting the Feb contract to breach above 2,627 for the moment, judging from Soy oil weakness. Market is likely open lower today due to Soy oil overnight weakness. On the fundamental side, decrease export figure will become the main look out as sloppy demand is expected to pro-long for the final quarter of 2013. We are not likely looking export figure to improve until mid first quarter. Palm oil price is likely Bearish as we are having high production cycle on the end of year. For today, pivot support for the Feb contract is located around 2,568 while resistance is pegged at 2,599~2,600.

Daily Pivot Point
R2= 2608
R1= 2599
S1= 2579
S2= 2568
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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