FCPO Commentary: 9th Nov 2017

9th Nov 2017

• Palm oil hipments rose 2.3% from 1,384,665 tons in Sept. 1-30, according to Societe Generale de Surveillance.
• In another report, palm oil shipments rise 8.3% from 1,105,555 tons during Sept. 1-25 period, according to cargo surveyor Societe Generale de Surveillance.
• MPOB fundamental data, Palm oil stockpiles in Malaysia, world’ second-largest producer, rose 4% to 2.02m metric tons in September from month earlier, output fell 1.7% m/m to 1.78m tons; exports rose 1.8% to 1.52m tons. 

9th Nov 2017: Soy Oil Dec Traded 0.12 cents Lower to 35.12 cents, On-Sho

re Ringgit Traded Firmer@ RM4.2070 Per USD.

The Jan contract had some mild setback yesterday when it retrace in the evening session. I guess Buyers has to give back some gain as soy oil was losing some traction and slide lower on Asia evening session. Correlation is something that I would call a coin toss, it works sometime and most of the time we could not use it as a reliable barometer because of timing issue. Market do not need to be efficient and it does not have to, that is why trader who use purely on correlation alone will likely stopped out pre-maturely. To my dismay, rain does not seems to stop for the time being, and according to  our meteorological department, ample rain is expected towards the mid of Nov. I do not think we will have severe flooding issue in the east coast and south side of Malaysia but traders are advise to keep a updating latest forecast via www.met.gov.my, there are tons of useful information and apps you can download there. Nothing much has change on the candle chart, it is still positive in the long term outlook and perhaps some small turbulence for uptrend to continue in the short term basis. If you look at 30 minute chart, yesterday last 30 minutes Sell-off is quite noticeable to make some changes to the overall short term technical outlook to Bearish. On the news side, analyst are blaming yesterday palm oil price retracement on weaker demand expectation. Major fundamental data such as palm oil stocks, export and production is due to release today around noon couple with export report from SGS and ITS at the same time (+8 GMT). For today, palm oil futures is likely open lower due to soy oil for Dec contract was traded 0.14 cents lower 35.12. Range for Jan contract is likely moving within 2,790 ~ 2,830.   

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.