Monday, October 20, 2008
FCPO Daily: in range trading
Market stuck in range bound mode after the recent sell down to 2-year low. Looks may extend its range trading in near term. We currently look for the support at 1593 while upside resistance is at 1727-1734 (gap left over since 15 Oct, 2008)followed by 1798-1825 (gap left over on 14 Oct, 2008).
Trader's Comment: Palm oil futures recover from last Friday’s losses in the midst of uncertainty and recession fears.
Palm oil futures recover from last Friday’s losses in the midst of uncertainty and recession fears. Benchmark Jan 09 initially open RM64 higher at 1699, after US crude oil ended $2 higher at above $70 level, coupled with higher e-CBOT in Asian time zone. News that government world-wide injecting capital into the financial markets, and also expectations that OPEC oil ministers may decide to cut oil production in their next week’s emergency meeting, had helped lift some bullish sentiment in the local commodity market. CPO prices then “float” at a steady pace to hover between the narrow range of 1690-1718 level for the whole morning session. Nevertheless, players are still cautious on the fundamentals beneath the current market conditions, such as slowing global demand and oversupply of stock in China and India. Prices then easing off and dived to 1660 after it hit intra day high of 1727 in the early part of the afternoon session. Private cargo surveyor SGS released its weaker 1-20 Oct export data also provided some selling pressures onto the market. However, prices then rebounded back to around 1700 level again before it closed at 1677, up by RM42. Daily volume remain good, with 10,189 contracts changed hands.
FKLI Daily: rebound from early losses
FKLI rebound and recover from early losses following market defended well at 888.5. Looks may due for correction in near term. We look for the immediate downside support at 888. For upside, resistance is at 931-944 (gap left over since 15 Oct, 2008).
KLSE Daily: survive at 900 mark
KLSE hits the fresh low at 888.28 in intra-day basis but manage to bounce back to close above 900 mark with a long lower shadow canlde printed. Market looks may due for correction and looking to trade in range between 888 to 930 in near term.
Breaking News-RTRS-Palm seen at 1,600 ringgit on weak economies-Mistry
KUALA LUMPUR, Oct 17 - Malaysian crude palm oil futures are likely to hover at 1,600 ringgit per tonne as long as oil prices trade around $80 a barrel amid a slowdown in the global economy, top industry analyst Dorab Mistry said on Friday. Mistry said palm oil at 1,600 ringgit -- slightly more than a third above the break even point for mid-size plantation firms -- was also thanks to bumper harvests in top producers Malaysia and Indonesia while Asian demand cooled.
He said prospects of palm getting channeled into biofuels could be slim unless prices continue to stay low for at least 8 to 10 weeks because margins are always erased when traders start locking in positions in anticipation of higher demand.
"If crude oil is trading at or below $80 and the prognosis is for a weak economy and lower prices, then palm oil needs to get ahead of the curve and to demonstrate its price competitiveness," Mistry said in a speech to be delivered at an industry conference in China.
He said prospects of palm getting channeled into biofuels could be slim unless prices continue to stay low for at least 8 to 10 weeks because margins are always erased when traders start locking in positions in anticipation of higher demand.
"If crude oil is trading at or below $80 and the prognosis is for a weak economy and lower prices, then palm oil needs to get ahead of the curve and to demonstrate its price competitiveness," Mistry said in a speech to be delivered at an industry conference in China.
Trader's Highlight
DJI-NEW YORK, Oct 17 -U.S. stocks fell on Friday on weakness in manufacturing and financial stocks after bleak data on consumer confidence and construction, but the Dow still snapped a disastrous three-week losing streak with it best weekly gain in more than 5 years.
It was a week marked by extreme volatility, and Friday's trading was no different, with stocks swinging back and forth between positive and negative territory. A big afternoon rally was snuffed out in the last hour of trading as uncertainty took hold before the weekend.
The Dow Jones industrial average fell 127.04 points, or 1.41 percent, to 8,852.22, while the Standard & Poor's 500 Index dropped 5.88 points, or 0.62 percent, to 940.55. The Nasdaq Composite Index slipped 6.42 points, or 0.37 percent, to 1,711.29.
NYMEX-NEW YORK, Oct 17 - U.S. crude futures ended $2 higher on Friday on expectations that OPEC's emergency meeting
next week would decide to cut the group's output and as stocks on Wall Street rose sharply.
When they meet Oct. 24, OPEC oil ministers are leaning towards cutting production by 1-1.5 million barrels per day, the United Arab Emirates' news agency WAM said on Friday, citing an OPEC source.
On the New York Mercantile Exchange, November crude settled up $2, or 2.86 percent, at $71.85 a barrel, trading from $69.84 to $74.30. A bout of late pre-weekend profit-taking pared gains.
CBOT SOYBEANS - November up 27 cents at $8.94 per bushel; January up 26-1/2 at $9.06-3/4.
Short covering after this week's drop to a 14-month low. Robust export sales add support, along with strength in crude oil and upturn in U.S. stock market.
SOYOIL - December up 0.05 cent at 35.50 cents per lb. Buoyed by strength in soybeans and crude oil.
FCPO-JAKARTA, Oct 17 - Malaysian palm oil futures gave up gains of more than 3 percent to finish lower on Friday, unsettled by fears that a global recession will cut demand, traders said.
The early rally was mainly driven by a rebound in crude oil prices in Asian trade after a 6 percent drop on Thursday.
"People are lacking confidence in the upside despite oil's recovery. People are more concerned about the global economy, so sentiment is still bearish," a trader at a commodity brokerage in Malaysia said.
The benchmark January contract on the Bursa Malaysia Derivatives Exchange closed down 16 ringgit, or 0.97 percent, to 1,635 ringgit ($463) a tonne.
REGIONAL MARKET-SINGAPORE, Oct 17 - Most Southeast Asian stock markets fell to fresh multi-year lows on Friday as concerns over an impending global recession added further pressure on banks reeling from the credit crisis.
Losses were widespread, but the region's investors were given some reprieve from the heart-stopping share price swings seen earlier in the week.
Singapore slipped 3.7 percent, closing at a four-year low, while Indonesian shares fell 4.4 percent to their lowest close in more than 26 months.
Malaysian shares ended down 1.6 percent after hitting their lowest since July 2006, while the Philippine index shed 1.1 percent to end the week flat.
Thai shares fell 1.3 percent, while Vietnamese stocks dipped 0.6 percent on Friday but the two markets were the only ones to gain slightly this week.
It was a week marked by extreme volatility, and Friday's trading was no different, with stocks swinging back and forth between positive and negative territory. A big afternoon rally was snuffed out in the last hour of trading as uncertainty took hold before the weekend.
The Dow Jones industrial average fell 127.04 points, or 1.41 percent, to 8,852.22, while the Standard & Poor's 500 Index dropped 5.88 points, or 0.62 percent, to 940.55. The Nasdaq Composite Index slipped 6.42 points, or 0.37 percent, to 1,711.29.
NYMEX-NEW YORK, Oct 17 - U.S. crude futures ended $2 higher on Friday on expectations that OPEC's emergency meeting
next week would decide to cut the group's output and as stocks on Wall Street rose sharply.
When they meet Oct. 24, OPEC oil ministers are leaning towards cutting production by 1-1.5 million barrels per day, the United Arab Emirates' news agency WAM said on Friday, citing an OPEC source.
On the New York Mercantile Exchange, November crude
CBOT SOYBEANS - November up 27 cents at $8.94 per bushel; January up 26-1/2 at $9.06-3/4.
Short covering after this week's drop to a 14-month low. Robust export sales add support, along with strength in crude oil and upturn in U.S. stock market.
SOYOIL - December up 0.05 cent at 35.50 cents per lb. Buoyed by strength in soybeans and crude oil.
FCPO-JAKARTA, Oct 17 - Malaysian palm oil futures gave up gains of more than 3 percent to finish lower on Friday, unsettled by fears that a global recession will cut demand, traders said.
The early rally was mainly driven by a rebound in crude oil prices in Asian trade after a 6 percent drop on Thursday.
"People are lacking confidence in the upside despite oil's recovery. People are more concerned about the global economy, so sentiment is still bearish," a trader at a commodity brokerage in Malaysia said.
The benchmark January contract on the Bursa Malaysia Derivatives Exchange closed down 16 ringgit, or 0.97 percent, to 1,635 ringgit ($463) a tonne.
REGIONAL MARKET-SINGAPORE, Oct 17 - Most Southeast Asian stock markets fell to fresh multi-year lows on Friday as concerns over an impending global recession added further pressure on banks reeling from the credit crisis.
Losses were widespread, but the region's investors were given some reprieve from the heart-stopping share price swings seen earlier in the week.
Singapore slipped 3.7 percent, closing at a four-year low, while Indonesian shares fell 4.4 percent to their lowest close in more than 26 months.
Malaysian shares ended down 1.6 percent after hitting their lowest since July 2006, while the Philippine index shed 1.1 percent to end the week flat.
Thai shares fell 1.3 percent, while Vietnamese stocks dipped 0.6 percent on Friday but the two markets were the only ones to gain slightly this week.
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