Tuesday, June 24, 2014

FCPO: Heading Above 2,487 level 24th Jun 2014.

Tuesday, 24th Jun 2014. Palm oil futures for Sept contract went up to 2,488 level yesterday amid support from its rival oil, Soya bean oil futures. Other news to follow.

"- U.S. stocks ended Monday’s session marginally lower, with the S&P 500 and Dow Jones Industrial Average pausing after six straight days of modest gains. Some analysts said stock markets were overextended after hitting record levels last week. Economic data released on Monday were positive, but not strong enough to lift the mood. The main benchmarks traded in a narrow range, while the CBOE Vix index remained below 11. The S&P 500 SPX -0.01%  closed less than a point lower at 1,962.61. The Dow industrials DJIA -0.06% shed 9.82 points, or 0.1%, to 16,937.26. The Nasdaq Composite COMP +0.02% ended the day less than a point higher at 4,368.68.

"-Asian stocks ended mixed on Monday after HSBC’s preliminary reading on China’s manufacturing activity surprised to upside. The HSBC flash China manufacturing Purchasing managers index (PMI) rose to 50.8 in June, marking the highest level in seven months, a report from HSBC showed on Monday. Read more details, including economists’ reaction. Japan’s Nikkei Average JP:NIK -0.60% rose 0.1%, closing at the highest level in about five months, while the yen USDJPY -0.09% weakened to ¥101.86 from ¥102.08 in the previous session. The broader Topix index JP:I0000 -0.69% inched down 0.1%. Australia’s benchmark S&P/ASX 200 AU:XJO -0.51%  advanced 0.6%, with the AussieAUDUSD +0.03% strengthening to 94.36 U.S. cents from 93.88 U.S. cents in the prior session. South Korea’s Kospi index KR:SEU +0.35% also settled higher, by 0.4%. However, both Hong Kong and Shanghai stocks reversed gains on profit-taking in the afternoon sessions, with the Hang Seng Index HK:HSI -1.68% tumbling 1.7% at the close, and the Shanghai Composite Index CN:SHCOMP -0.11% ending 0.1% lower. In Japan, optics manufacturer Olympus Corp. JP:7733 +1.11% rallied 4.9%, steelmaker Aichi Steel Corp. JP:5482 +1.56% climbed 2.4%, and construction equipment manufacturer Komatsu JP:6301 0.00% gained 1.3%."

"- The U.S. oil benchmark fell Monday, but losses stayed limited as traders kept an eye on the latest Iraq headlines. Crude for August deliver contract CLQ4 -0.50%  pulled back 77 cents, or 0.7%, to $106.06 a barrel. The U.S. crude benchmark had jumped on Friday, closing at the highest level for a front-month futures contract in nine months as worries about Iraq simmered."

FCPO- El Nino Spur Recovery

Dry weather condition is helping palm oil futures to recover so far, at least that is what I have been told. Yesterday the benchmark Sept breached above 2,487 level, it was four weeks major resistance area. With this new four weeks high, the Sept contract is still showing steady momentum to the upside, even though the market went down for some mild correction last Thursday and Friday. The rest of the story would resound on the export data expectation this coming 25th June. If there is any positive expectation towards the 1-25th June export data, plam oil futures is likely rally further. These news about palm oil expectation can be obtain from Bloomberg survey and Reuters survey. Usually these news provider will provide market export or other data expectation from a collective of various palm oil physical operator, palm oil cargo hub and other major palm oil companies. Technically, the benchmark Sept is still rallying judging from yesterday new higher high and higher low on hourly time frame chart. Both formation of higher high and higher low is a strong indication that suggest that the market is running on positive momentum and more rally is possible when it breached above certain resistance area, i.e: major resistance level around 2,487. Unless the Sept contract retrace down below the first pivot support level today, there is still no sign of weakness yet. If you happen to missed any setup yesterday, a conservative Long setup is possible if the Sept contract dip down to 2,464~2,460 level today. For today, second pivot support level for Sept contract is located around 2,445 while resistance is pegged at 2,507.

Daily Pivot Point
R2= 2507
R1= 2495
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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