Tuesday, July 8, 2014

FCPO: Soy Oil Will Provide Further GuideThis Week 7th July 2014

Tuesday, 10th July 2014. This will be the second week of July, early third quarter of the year and most edible commodities futures have yet had a good trend run so far. We are likely to see palm oil open gap down today due to sudden Soy oil weakness. Other news to follow.

"-The U.S. stocks closed modestly higher on Wednesday after the FOMC minutes revealed that policy-makers decided to end the Fed’s bond purchases by October if the economy stays on track. The Fed plans to end purchases altogether with a final reduction of $15 billion at its October meeting, after trimming it by $10 billion at each meeting up to that point, while keeping the rates near zero for a considerable time. Investors took that as a bullish sign and pushed prices higher. The S&P 500 SPX +0.46%  gained 9.12 points, or 0.5%, to 1,972.83. The Dow Jones Industrial Average DJIA +0.47%  closed 79 points, or 0.5%, higher at 16,985.61. The Nasdaq Composite COMP +0.63%  rose 27.57 points, or 0.6%, to 4,419.03."

"- Tracking losses in the U.S. markets, Hong Kong stocks on Wednesday tumbled after China’s consumer inflation and wholesale deflation both eased in June. China’s consumer-price index rose 2.3% in June from a year ago moderating from a 2.5% year-over-year increase in May and slightly below than the 2.4% gain projected in separate Dow Jones News Wires and Reuters surveys of economists. Meanwhile, the producer-price index dropped 1.1% from a year earlier, compared with a 1.4% decline in May. The Hang Seng Index HK:HSI -1.55%   lost 1.6% at the close, falling the most since June 24. It logged the lowest closing level in about two weeks, dragged down by banks and tech stocks."


"-Palm Futures Retreat

KUALA LUMPUR: Crude palm oil (CPO) futures prices closed lower yesterday tracking the decline in crude oil futures and also due to the stronger ringgit against the US dollar, a dealer said. Phillip Futures specialist, David Ng, said the prices were traded lower following weakness in Chicago Board of Trade soya oil and global crude oil prices. July 2014 slipped RM13 to RM2,440, August 2014 shed RM17 to RM2,396, September 2014 fell RM11 to RM2,373 and October 2014 decreased RM17 to RM2,358 a tonne. Volume rose to 49,488 lots from 39,418 lots, while open interest rose to 261,210 contracts versus 247,191 previously.On the physical market, July South fell RM5 to RM2,460 a tonne. Bernama"


FCPO- News Alone Does Not Cut It


With less or no surprise on the palm oil fundamental news, market is likely turning to soy oil for further hint of direction. In this information age, most traders did know how and where to get information about the underlying instrument they are trading at, and for this case report and survey about palm oil stockpiles, export and productions are easily available in the internet. With these information easily available and vastly distributed, you can expect market to be traded efficiently, but not entirely efficient all the time. There is nothing worth mention about palm oil fundamental so far at this point as slow rising demand could not help in time to reduce stockpiles increment and steady production will make condition worse. When there is less interesting at the external side, traders will shift to Soy oil or using technical analysis for most of us. Hence, with recent weakness on Soy oil closing value, palm oil futures is likely open lower today. The most active traded Soy oil contract was traded at 37.16 cents per pound as the time of writing today, about 0.40 cents lower than yesterday 6.00PM GMT value. Back to palm oil futures, the Sept contract need to at least breach above 2,400 level in order to revive some positive momentum that would last for a few sessions. If this event  does not materialize this on next week, we are likely to see the Sept contract tumble further if the final support 2,350 area is taken out. Overall, technical outlook on Sept contract is still weak as small rally does not do any favor for the Bulls to revive and market is likely heading down further if it breach below 2,360~2,363 level today. Pivot support for Sept contract is located around 2,363  follow by 2,352 while resistance is pegged at 2,427.

Daily Pivot Point
R2=2392
R1=2383
S1=2363
S2=2352
 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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