Thursday, June 12, 2014

FCPO: Bad Fundamental Curb Recovery 12th Jun 2014.

Thursday, 12th Jun 2014. Palm oil futures went down lower yesterday on bearish MPOB data announcement and worse is yet to come. Other news to follow.

"- U.S. stock futures followed global equities lower on Wednesday after a downbeat economic growth forecast from the World Bank. Airlines were seeing some pressure premarket after a stark warning from Germany’s Lufthansa AG, while H&R Block Inc. and Apple Inc. may also see premarket action. Extending earlier losses, futures for the Dow Jones Industrial AverageDJM4 -0.37%  fell 70 points, or 0.4%, to 16,872, while those for the S&P 500SPM4 -0.01%  dropped 9 points, or 0.5%, to 1,941.50. Futures for the Nasdaq-100 index NDM4 -0.03% dropped 17.25 points, or 0.5%, to 3,783.25."

"-Gold futures settled higher for a third session in a row Wednesday, modestly extending a rise above $1,260 an ounce as optimism over global growth prospects took a hit and equities gave back some gains from their record run. Gold for August delivery GCQ4 -0.06%  rose $1.10, or 0.1%, to settle at $1,261.20 an ounce on the Comex division of the New York Mercantile Exchange. Prices, which marked a fresh two-week closing high, gained roughly 0.6% over the past two trading sessions. July silver SIN4 +0.04%  settled little changed at $19.17 an ounce.

"Palm oil down 0.2% on weak demand. Market analysts said offloading of positions by speculators on sluggish demand in the spot markets kept pressure on crude palm oil pricesCrude palm oil prices fell for the third consecutive day by losing 0.22% to Rs 510.30 per 10 kg in futures market today as speculators offloaded positions due to sluggish demand in the spot market. At the Multi Commodity Exchange, crude palm oil for delivery in June fell Rs 1.10, or 0.22% to Rs 510.30 per 10 kg in a business turnover of 22 lots. Similarly, the oil for delivery in July traded lower by a similar margin to Rs 506.50 per 10 kg in 7 lots. Market analysts said offloading of positions by speculators on sluggish demand in the spot markets kept pressure on crude palm oil prices in futures trade."

FCPO- No Sign For Recovery Yet. 

It is Selling setup from here when the benchmark August attempt to rebound due to any reason at all. There is no reason for us to "hope" for miracle to happen for the moment, so that palm oil futures will be able to recover. Going into the third months of weakness due to favorable weather condition for production and weak demand, palm oil futures has been Selling off, and the latest 2,379 level yesterday. No need to remind you that 2,379 was the lowest level since Oct 2013, and yes it is weak and can still go lower than current level. No promising sign or any reading on oscillator (yes it is oversold on daily chart) that suggest the benchmark August is going to recover this week. Your best bet would be Shorting if the benchmark August attempt to recover to today first pivot resistance level, place some stop loss slightly above those level and expect to cash out up to 10 points when the market does move down. Hourly chart wise, the reading is still good for the market to go down further this week judging on lower low and lower high candle formation that are still forming so far. Another supporting factor for palm oil futures to stay weak would be, weak Soy oil price which traded at 38.64 cents per pound as the time of writing today. For today, pivot point for support is located around 2,355 while resistance is pegged at 2,387.

Daily Pivot Point
R2= 2395
R1= 2387
S1= 2367
S2= 2355
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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