Malaysian Crude Palm Oil Futures Longterm ForecastFundamentals affecting Palm Oil Prices (And the other Vegetable Oil Prices):
Prices of crude palm oil and other oils depend on the outlook for stocks
Palm oil – along with Soybean oil – is affected by crude oil prices, as it is used as feedstock to make biodiesel.
Palm oil prices are impacted by movements in Soybean oil rates, as they compete for a share in the global vegetable oil market.
According to Reuters;
Palm oil stocks in Indonesia, the world’s top producer, were at 3.9 million tonnes in November, having peaked at close to 5 million tonnes in July. Second-largest producer Malaysia saw inventories climb to a record high of 3.2 million tonnes in December.
In an effort to boost palm oil consumption, Indonesia raised its biodiesel mandate last year to require all diesel fuel used in the nation to contain biodiesel starting from the beginning of September.
Indonesia’s mandate requires a 20 % bio-content in biodiesel, but prior to September that was mandatory only for subsidized diesel users.
At an industry conference in Malaysia on Thursday, LMC International’s head of Southeast Asia, Julian McGill, said crude palm oil prices are expected to rise to between 2,200 and 2,300 ringgit per tonne by June on a seasonal decline in stocks
If Indonesia maintains its heightened pace of biodiesel use, stocks may fall until mid-year, which will lift the crude palm oil premium over Brent. We may see a sharp rally on the prices.
Looking at the matter technically
Malaysian Crude Palm Oil Future (CUM2019) June contracts ended the week at 547. Price is testing the bearish trendline and Ichimoku Cloud ceiling on the Daily Chart.
RSI is not in the overbought zone.
Daily closings above 550 would confirm us the bullish continuation and the trend change.
Here we see a “buy and hold” opportunity.
The bullish move will continue as long as the price stays above 530.
Our Targets:
568
578
590
617
Palmoil
FCPO 2019 Outlook - Sideways-Up Situation for 2019Hi Guys, as usual, start the year with annual outlook on FKLI & FCPO.
First try on video commenting, microphone volume was abit too low, just turn up your volume will do ;)
Hope you like it!
Happy Hunting & Happy 2019!
-jk-
FCPO - Gap ResistanceFCPO filled last week open gap 2195. The filled gap named "exhaustion gap" in technical analysis, this indicate the buying have adapted the recent selling. While intraday price quickly retrace from 2195 to find support between 2181 to 2175 .
Price have no significant direction in current price structure with no PalmOil data for today and tomorrow. FCPO may factoring price movement of BO1! and oil price movement.
Info on Exhaustion gap stockcharts.com
FCPO - Tracking Crude oil PriceFCPO rebound from 2137 (a decades price support level) was affected by rising crude oil prices. Please see right chart correlation indicator. When palm oil price reached 2137, the correlation between oil was as low as -76% due to stronger production. And the rebound start at 20 Sep when price at 2137, on yesterday closing, CPO vs oil correlation has come to almost 80% correlation.
With Soybean oil rises 1.16% from yesterday 6pm. FCPO is likely to open high and retest 2200 level. Thus, the rebound is like to continue. As mentioned yesterday, the current rebound have no strong indication of price reversal yet. The strength of the current rebound can be refer to the left chart, resistance at 2200 & 2220.
FCPO - Eye on Export DataPalm oil had dropped almost 150 points in just two weeks time as concern on rising inventory. In fact, demand were surprisingly good during the first 15 days of September. The first 20 days export data is due on today. Trader please be cautious if the continue strong demand will trigger potential price rebound if market have overdone. Speculation of 3.3 m inventory by Dorab still uncertain with surprised demand.
On the left chart showing a 2 months chart, the horizontal line in orange plot at 2013 Jul low 2137, If you look at the the entire chart, price did not trade lower than this for almost a decade except 2014 to 2015. As price near to this level, market is expect to be volatile. Meantime,
In technical view, price may initiate rebound with nearing long term price zone 2137. Market is expect to open higher with Soyoil increased 1.36% from yesterday 6 pm closing of Bursa FCPO1!. And price have achieved 7 multiples of golden ratio at 2158 (see right chart)
If rebound, resistance at 2175 to 2187.
If open gap up, price may fill the gap and trend remain favorable to selling.
If open gap up, price do not fill the gap fully, price factoring in potential strength for rebound.
Stay tune for intraday updates in the same post.
FCPO - Sideway before MPOB Data ReleaseImpulsive swing target 2337 remain in FCPO price projection as long as price above 2262. The latest MPOB Aug survey data suggesting increase in inventory with CIMB released the most bearish survey data. As long holiday ahead, and MPOB data to release at 12 Sep after holiday. The market is expect to be trading sideway.
Bloomberg Poll Aug vs Jul MPOB:
Prodn 1.65m vs +1.50m (+10%)
Expt 1.24m vs 1.21m (+2.5%)
Stks 2.41m vs 2.21m (+9%)
Reuters Poll:
Prodn 1.65m (+9.88%)
Impt 50k
Expt 1.23m (+2.25%)
LDsp 270k
Stks 2.41m (+8.96%)
CIMB Poll:
Prodn 1.681m (+11.8%)
Impt 44k
Expt 1.236m (+2.5%)
LDsp 239k
Stks 2.464m (+11.3%)
FCPO daily chart Gap Up and bullish may continue to 0.0% levelFCPO daily opens gap up due to fundamentals, following CBOT bullish momentum and Indonesia palm oil stockpile down m/m.
Another reason of reversal was price hit the bottom trendline from Chart W1.
Price may move in ranges if it reaches 0.0% level.
FCPO COMPLEX CORRECTION WAVE 4 COMPLETE??FCPO ELLIOTT WAVE DAILY CHART ANALYSIS
Complex correction of wave 4 forming WXY double combo.
Where X wave = triangle , X = 3 structure & Y = irregular flat.
For this counting, im assuming the cycle of wave 4 already complete and expecting the decline movement from 2498 to unfold into five wave movement and my next target is at 2255 area.
Long DKL from Multidiagonal BreakoutThe initial breakout here was actually earlier in 2017, but now that the upper diagonal (that was acting like a price ceiling) has been taken out, I think we could be due a bull run here.
On this rare occasion I also have fundamental research notes too:
themaskedstocktrader.blogspot.co.uk
CLX: Clorox bleeding cash, structural shortI think this is a really good short setup. The company is bleeding cash, funding their huge dividend with debt, not complying with regulations regarding the usage of sustainable palm oil on their products and the technical chart shows an ideal entry against resistance here.
The entry is very tactical, a perfect technical setup, paired with bad fundamentals for this company, with only a 1% earnings yield, a 1.2% free cash flow yield, and falling free cash flow and after tax margins.
Good luck if taking it.
Ivan Labrie.
