Thursday, May 29, 2014

FCPO: Tough Deal On Intraday Trading Session 29th May 2014.

Thursday, 28th May 2014. Palm oil futures ended slightly lower yesterday amid lack luster session where there is less interest for the price to recover further. Other news to follow.

"-Asian shares consolidated their recent gains on Thursday while global bond prices surged, pushing their yields to multi-month lows, both supported by expectations of easy monetary policy. MSCI's broadest index of Asia-Pacific shares outside Japan stood flat near one-year high hit on Wednesday, while Japan's Nikkei share average shed 0.5 percent after gains after five straight days of gains. On Wall Street, S&P500 index snapped a four-session winning streak on Wednesday to end slightly below a record closing high hit on Tuesday, though it hit an intraday record high. More notable moves were in U.S. and European bond markets. The 10-year Treasuries yield fell to 2.44 percent from 2.52 percent, hitting its lowest level in almost 11 months."

"-Malaysia Palm Oil Exports Seen by Oil World at 4-Year Low. Malaysia’s palm oil exports are forecast to be a four-year low in 2014 partly because of dry weather and also due to a shortage of labor, Oil World said. Exports will be 17.2 million metric tons, down 1 million tons from last year, the Hamburg-based researcher said in a report. Yields will decline to 4.26 tons a hectare (2.47 acres), the lowest since 2010, it said. Malaysia is the biggest producer of palm oil after Indonesia, according to the U.S. Department of Agriculture. “It is quite alarming that palm oil yields are set to decline for the third consecutive year,” Oil World said. “Weather conditions can only partly be blamed for this development. It is also indicated that there is an increasing problem with the growing share of old trees having surpassed the optimal age as a result of insufficient replanting.” Malaysia’s palm oil production will climb 0.9 percent to 19.4 million tons this year, according to the report. The first effect of reduced rain in January to April will probably show up in September-December, when crude palm oil production is seen falling below year-ago levels, Oil World said."

FCPO- It Is  A Waiting Game, Likely To The Downside.

Yes, you heard me, palm oil futures is still weak and there is no promising sign for it to recover yet. Forget what your thoughts are, or what is your hallucination about palm oil futures recovery because all the price surge you saw yesterday when the benchmark August went to 2,527 was just another fail attempt for Buyer to gain control. The Bulls quickly abandon right after the price hit 2,527 level yesterday, no follow up Buying interest after that, none at all. To sum up this week intraday session, it was a dead boring session where price just zigzag all the way throughout the trading session. Some of us think it was forming a support base because the major support around 2,480~2,487 is yet broken after five sessions, it would be broken down for my take, maybe early next week. If that event materialized, we are looking at another price downfall all the way to 2,300 level. Yes I know it is a long shot, but that is where the market should be heading to if the major 2,480 support could not hold the line. To support my take, palm oil futures has no ground to recover for now unless we have a big surprise expectation from various survey that May palm oil inventories is going to have double digit percentage reduction which is very unlikely. Furthermore, if you are planning to look at any price should recover or rebound after it hit a major support, it would but we would not know for sure how much and that major can be broken eventually. It is not a science price should recover after it hit certain major support, just happen that most of the traders would pay heed that the price is ridiculously oversold (or overbought if it hit major resistance), the price might rebound from that major support. Today, the benchmark August is likely open lower due to overnight weakness on the Soy oil market, price dip down to 39.81 cents (three months low) this morning as the time of writing. If you fail to see the magnitude of palm oil Bearish sentiment, be-careful if you want to go Long because the price will get cheaper and cheaper for you to go Long. For this week, support is located around 2,480 while resistance is pegged at 2,550.

Daily Pivot Point
R2= 2541
R1= 2522
S1= 2488
S2= 2473
 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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