More downward pressure on CPO


MALAYSIA Derivatives Exchange (Mdex) crude palm oil futures prices traded sideways for most of the early sessions and slipped in late trading on news that India had failed to cut its custom duties for palm oil in its budget presentation. Bullish traders who bought earlier in anticipation of a 10% cut in custom duties on palm oil were keen sellers last Friday.  

Societe Generale de Surveillance (SGS) estimated the Malaysian palm oil exports for February at 731,215 tonnes, down from 873,901 tonnes in January. The lower-than-expected exports had limited bearish impact on trading as traders maintained a positive outlook with the idea that the Indian custom duty reduction would trigger off another bullish rally. 

The benchmark third-month May 2003 futures ranged from an intra-week high of RM1,618 to RM1,589 and finished the week moderately lower at RM1,594, down RM17 per tonne from a week ago.  

Chart-wise, the May 2003 crude palm oil futures' immediate outlook remain bearish and are expected to continue in downtrend this week. Vital chart-support is seen for this week at the RM1,575-RM1,580 level. Breaking of this chart-support would indicate that the market’s downward momentum could dominate trading this week. Minor chart-support for this week is peg at the RM1,560-1,550 level. Chart resistance for this week stands at the RM1,605-RM1,600 level.  

The daily technical indicators concluded the week bearish and signalled that the market is technically weak and could trade further downward this week.  

The daily stochastics retained its sell-signal during Friday’s close and indicated that the market is slightly oversold. The oscillator per cent K and D ended the week sharply lower at 25.40% and 28.50%. A bearish extended-move would start if both oscillators fall below the 20% mark this week.  

The 3-day and 7-day exponentially smoothed moving-average price-line (ESA-line) triggered the sell-signal on Feb 27 and remained bearish during Friday’s close. The 3-day and 7-day ESA-lines settled the week slightly lower at 1,600 and 1,603 points respectively.  

The daily moving-average convergence/divergence (MACD) (not shown in the chart) triggered the sell-signal on Friday’s close and indicated that the market’s immediate trend is bearish. The daily MACD ended the week below the trigger-line and closed the week higher at minus 5.10 points and minus 5.05 points respectively.  

The daily momentum index (MI) dipped below the 100-point mark on Feb 27 and settled the week lower at 99.81 points. Analysis of the daily MI shows that the market’s immediate momentum is negative.  

Soioil

Soyoil futures at the Chicago Board of Trade (CBOT) fell strongly in early trade and rebounded on a mild correction on renewed buying by funds amid bullish sentiment supported by tight US soybean stocks and strong technicals. Drier weather forecast in Brazil, which should enable fine soybean harvesting, kept a lid on advances last week.  

The May 2003 soyoil futures prices rebounded from a weekly-low of 20.30-21.01 US cents and closed the week higher at 20.88 US cents, up 0.12 US cents per lb from a week ago.  

Chart-wise, the May 2003 soyoil futures prices closed the week slightly positive and had not given any clear indication that the bullish momentum could be sustained. Chart resistance for this week is at the 21.10-21.20 US cents per lb level. An upward breakout from this chart barrier could see the market higher to the 21.50-21.60 US cents per lb level. Chart-support for this week is pegged at the 20.60-20.70 US cents level. Violation of this immediate support would signal an end to the upward wave and take the May futures lower for a test of its chart-support at 20.40-20.30 US cents.  

The daily technical indicators ended the week slightly positive and suggested more upside trading this week.  

The daily stochastics turned positive during Thursday’s close and indicated that the upward cycle could continue this week. The daily oscillator per cent K settled above the D and closed sharply lower at 62.83% and 53.74% respectively.  

The daily MACD expanded on its buy-signal of Feb 18 and closed the week positive. The daily MACD ended above the trigger-line and closed higher at minus 0.02 and minus 0.05 point respectively. Based on the daily MACD, the market is likely to stay buoyant this week.  

The 3-day and 7-day ESA-lines closed Thursday positive and indicated that the market’s immediate trend is bullish. The 3-day and 7-day ESA-lines finished the week higher at 20.74 and 20.65 respectively.  

The daily momentum index (MI) pushed above the 100-point mark and settled in the positive territory at 102.10 points. Analysis of the daily MI shows that the market is in a bullish phase.  

Cocoa

Cocoa futures prices on the Coffee, Sugar & Cocoa Exchange (CSCE) in New York turned volatile last week as prices experienced wild swings on the downside and upside, and finally closed Thursday with moderately losses. Prices plunged 7.5% to an 11-week low on Tuesday as stale-bulls unwound speculative longs as the fundamentals of Ivory Coast turned bearish as the tension in Ivory Coast persisted. 

The May 2003 cocoa prices plunged from a weekly-high of US$2,115 per tonne and rebounded from a sell-off low of 1,940 US dollar to closed the week sharply lower at US$2,038, off US$40 per tonne from a week ago.  

Chart-wise, the May 2003 cocoa futures prices closed the week slightly positive and are expected to remain choppy this week. Technically, the market is still bearish and resumption of the bearish momentum could trigger-off fresh selling and add margin-call pressure. Chart-support for this week is seen at the US$1,980- US$1,950 levels. Violation of this chart-support would indicate the resumption of the bearish cycle and take the May futures sharply lower to test its minor support at the US$1,900- US$1,850 per tonne levels. Chart resistance for this week stands at the 2,090-2,120 levels.  

The daily technical indicators closed the week mixed and called for sideways-to-lower fluctuations this week.  

The daily stochastics triggered the buy-signal on Feb 26 and signalled that the market has reached a temporary bottom. The daily oscillator per cent K ended above the oscillator per cent D and closed sharply lower at 24.42% and 11.82 % respectively. Analysis of the daily stochastics indicate that the market could settle for a mild upward adjustment this week.  

The 3-day and 7-day exponentially smoothed average price-line (ESA-line) closed the week with a strong negative divergence and signalled that the immediate cycle is bearish. The 3-day and 7-day ESA-lines finished the week sharply lower at 2,084 and 2,036 respectively.  

The daily moving-average convergence/divergence (MACD) retained its sell signal of a week ago and settled the week bearish. The daily MACD and trigger-line closed lower in the negative zones at minus 35.21 and 14 points respectively.  

The daily momentum index (MI) remained below the 100-point mark on Thursday and ended lower at 87.02 points. Analysis of the daily MI shows that the market’s immediate momentum is bearish.  

Tin prices on the Kuala Lumpur Tin Market (KLTM) resumed its bullish rally last week and closed Friday with moderate gains. Heavy selling on Friday prompted by a sharp downward correction on the London Metal Exchange (LME) forced the market to return a good portion of its earlier gains.  

Tin

The cash tin prices settled the week moderately higher at US$4,765 per tonne, up US$55 per tonne from previously. Trades for the week ranged from US$4,825 to US$4,760 per tonne.  

Total volume for the week increased to 292 tonnes from 199 tonnes a week ago. 

Chart-wise, the cash tin price' immediate trend is positive and are expected to hold firm this week. Chart-support for this week is seen higher at the US$4,700-US$4,725 per tonne level. For the bullish momentum to continue, these levels must not be violated. Chart-resistance for this week is seen at the US$4,800- US$4,830 level. Penetration of this immediate chart resistance could push the market higher and test its minor resistance at the US$4,850- US$4,900 per tonne level. 

The weekly technical indicators ended the week bullish and suggest that the bullish trend could continue this week.  

The weekly stochastics triggered the buy-signal last week and closed on a positive note. The weekly oscillator per cent K and D ended sharply higher at 82.81% and 73.90%. Analysis of the stochastics shows that the market could stay bullish this week.  

The weekly moving-average convergence/divergence (MACD) maintained its buy-signal of a week ago and called for more upward trading this week. The MACD and the trigger-line closed the week in the positive territory at 0.12 and 0.10 points respectively.  

The 3-week and 7-week exponentially smoothed average price-lines (ESA-lines) extended on its positive divergence and indicated that the upward trend is continuing. The 3-week and 7-week ESA-lines settled higher at 4,684 and 4,573 respectively.  

The weekly momentum index stayed above the 100-point mark and settled higher at 111.00 points. Analysis of the weekly MI shows that the underlying strength of the market is bullish. 

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