16th Feb 2017: FCPO Commentary

15th Feb 2017: Soy Oil Traded 0.20 Cents Lower, On-Shore Ringgit Traded Slightly Firm @ RM4.4475 Per USD.

Palm oil futures had a small recovery going on currently as there was no surprise correction happen on soy oil during Asia trading session. Market volume for Apr contract seems quite active with 17k contract traded while more and more traders are shifting their positions to May contract gradually. The May contract recorded about 14k contracts traded, that was just 3k contracts behind the Apr contract. The 3rd palm oil futures months will be May contract today, taking on the helm of active benchmark month. Maybe some of you did not notice on the spread for March April has widen about 125 points !! It was huge backwardation if you look at it. Usually an unusual price hike caused by un-expected weather changed such as extreme El-Nino last has forced near month price to rise faster and higher than the forward months price. I had no trade setup so far after trade #181 had met its doom on previous Tuesday, but I am not sitting there like a duck either. I have a new idea to incorporate some other oscillator so that there is other signal or trade setup in-line with the trend while waiting for the next position. I have tested a few indicators and it seems by combining Parabolic SAR, it yield better results. I still have a lot of data to go thru and back testing before I can conclude anything. Palm oil export for 1-15th Feb vs Jan 2017 only rose about 1.4%, it was reported by ITS cargo surveyors. You are advise to be wary on this particular price recovery as it does not show a promising strength so far. The rally we seen starting from previous Tuesday is not as strong as how it came down previously. This would also mean, the Buyers are still cautious overall. For today, palm oil futures is likely open lower on overnight soy oil retracement. The soy oil for March was traded 0.20 cents lower to 34.02 cents this morning. Range for the new benchmark month May is likely moving within 2,930 ~ 2,970.

 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.