20th Feb 2017: FCPO Market Commentary

17th Feb 2017: Soy Oil Traded 0.06 Cents Lower, On-Shore Ringgit Traded Unchanged @ RM4.4575 Per USD.

Palm oil futures Support level for the benchmark month is now officially broken, but not the end of the world yet. This will be the first picture of how strong the benchmark month has breach below the long term Support level at 3,014~ 3,000 area. Palm oil futures for May contract took the extra miles down on previous Friday when it tumble below 2,870 on the afternoon session, signaling more weakness along with soy oil price retracement. I believe traders are spook with the upcoming active production cycle coming this 2nd quarter, plus Indonesia palm oil planting is starting to return to normal cycle. Market fear that the low stockpiles number would not be able to hold its ground that long and will start to increase starting April month. For more pressing correlation, I believe that this weak soy oil weakness has most thing to do with palm oil price correction. Just look at how swift the soy oil for March contract fell from 34.49 cents in 13th Feb to previous Friday @ 33.03 cents, a whopping straight $1.49 cents decent without stopping. Trade #182 Short @2,870 is holding overnight align with risk management rules. I hope that the soy oil will keep its ground below 33.00 cents until the palm oil futures opening. If the May contract price open above 2,870, it will close off immediately as right now trade #182 stops is at break even point after the market has moved more than 15 points last Friday. For today, palm oil futures is likely open unchanged as soy oil did not move much from its last Friday closed. Soy oil for March contract was traded 0.06 cents lower to 33.00 cents this morning. I think market is oversold and should be time for the market to rebound, the range for May is likely moving within 2,850 ~ 2,900.

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.