CRUDE PALM OIL
BURSA Malaysia Derivatives crude palm oil (CPO) futures prices remained under selling pressure throughout last week as stale-bull liquidation and moderate speculative selling forced the market to close the week at its worst levels in 3½ months. Declines in the Chicago Board of Trade (CBOT) soyoil futures prices, worries over sluggish demand in the third quarter and increasing palm oil stocks in the peak production months of July to September failed to motivate any aggressive buying last week.
Cargo surveyor Societe Generale de Surveillance estimated the Malaysian palm oil exports for the first 15 days of June slightly higher at 492,546 tonnes from 479,152 tonnes in the same period in May.
In its monthly report, the Malaysian Palm Oil Board indicated the May CPO output was 8.97% higher at 1,099,165 tonnes from 1,008,717 tonnes in April. End-May stocks were reported to be 4.1% higher at 1,042,796 tonnes and total exports in May were up 0.43% at 950,790 tonnes.
The September 2004 CPO futures prices fell from a weekly high of RM1,523 to RM1,443 and ended the week lower at RM1,457, down RM32 per tonne from a week ago.
The daily candlestick chart closed the week negative. There were four black candles and one white candle for a net of three white candles last week. Three black candles occurred in the last three days and although these candles were not large enough to develop three black crows, the steady downward pattern is bearish.
The September 2004 futures immediate chart support for this week is adjusted lower to the RM1,440-RM1,420 level. Violation of these supports would signal the continuation of the bearish momentum and take the September futures lower and trade below the RM1,400 per tonne level. Chart resistance for this week stands at the RM1,465-RM1,475 level.
The daily technical indicators ended the week mostly negative and signalled that the market would stay under bearish pressure this week.
The daily stochastic triggered the sell signal on June 16 and closed the week bearish. The oscillator per cent K settled below the oscillator per cent D and ended the week sharply lower at 15.34% and 26.69% respectively. Analysis of the daily stochastic indicates that the market has more room for further downside trading.
The 3-day and 7-day exponentially smoothed moving average price line (ESA line) stayed in bearish divergence on Friday’s close and signalled that the downward trend is intact. The 3-day and 7-day ESA lines ended the week lower at 1,468 and 1,488 points respectively.
The daily moving average convergence/ divergence (MACD) (not shown in the chart) ended the week with a strong negative convergence and indicated that the market would turn further south this week. The daily MACD closed above the trigger line and ended lower in the negative territory at minus 67.90 points and minus 68.75 points respectively.
The daily Momentum Index (MI) dipped from the week's high of 98.23 points on June 14 and ended lower in the negative zone at 89.11 points. Analysis of the daily MI shows that the momentum of the market is bearish.
THE Chicago Board of Trade (CBOT) soyoil futures prices expanded on its bearish trend last week with active long liquidation prompted by weaker soybean prices and excellent weather conditions in the US Midwest soybean region.
Recent heavy rains in the US Midwest had replenished soil moisture and provided excellent environment for plant growth. The National Weather Services predicted below-normal temperatures in July and this bearish price factor continue to keep bullish players on the sideline.
The August soyoil futures prices declined from the week's high of 27.95 US cents to 26.48 US cents and settled the week moderately lower at 26.54 US cents, down 0.47 cents per pound from a week ago.
The daily candlestick chart finished the week negative and suggested that the downward trend would continue.
There were three black candles and one white candle over the last four sessions. The negative downward pressure suggests that the immediate term trend will stay bearish.
The daily chart shows an immediate chart support for the August 2004 futures at the 26.50-26.35 US cents level. Violation of this support could pressure the market to below the 26.00 US cents level. Chart resistance for this week is revised lower from a week ago to the 26.75-26.85 US cents level.
The daily technical indicators ended the week mostly bearish and indicated that the bearish cycle is still intact.
The daily stochastic triggered the sell signal on June 16 and stayed bearish during Thursday’s close. The daily oscillator per cent K ended below the oscillator per cent D and closed lower at 6.43% and 8.02% respectively. Analysis of the daily oscillator shows that the bearish extended move is continuing.
The daily MACD expanded on its sell signal of June 10 and confirmed that the downward trend could be sustained. The MACD ended the week below the trigger line and settled lower in the negative territory at minus 1.05 and minus 1.02 points, respectively.
The 3-day and 7-day exponentially smoothed prices lines (ESA lines) remained in negative divergence and signalled that the bearish cycle could expand. The 3-day and 7-day ESA lines closed the week lower at 26.68 and 27.07, respectively.
The daily MI settled below the 100-point mark and closed slightly higher at 96.33 points. It shows that the market is still in a bearish phase.
COCOA futures prices on the Coffee, Sugar & Cocoa Exchange (CSCE) in New York recovered from a round of early losses and struggled to hold on to minor gains and finally closed on Thursday with small losses. Trading remained lacklustre as the speculators and funds have rolled over their short positions in the July/September spread and the general lack of fundamental news should keep the market in range-bound trading.
The September 2004 cocoa futures prices fluctuated from the week's high of US$1,390 to US$1,335 and closed Thursday slightly lower at US$1,345 per tonne, off US$15 a tonne from a week ago.
Chart-wise, the candlestick chart closed the week negative and signalled more downside trading this week. There were three black candles followed by a doji star on Thursday. The downward gap of the doji star suggests that the immediate term momentum is bearish.
Chart support for this week remains unchanged from a week ago at the US$1,350-US$1,330 level. Breaching this support would signal the continuation of the bearish trend. Chart resistance for this week is seen slightly higher at the US$1,375-US$1,390 level.
The daily technical indicators closed the week slightly positive and called for to more sideways band trading this week.
The daily stochastic triggered the buy signal on June 17 and closed the week slightly positive. The daily oscillator per cent K settled above the oscillator per cent D and ended lower at 42.85% and 40.00% respectively.
The 3-day and 7-day ESA lines indicated the start of a short-term bullish cycle when it triggered the buy signal on June 17. The ESA lines closed the week lower at 1,360 and 1,357 respectively.
The daily MACD gave the bullish trend reversal signal on June 16 and signalled that an upward cycle has started. The daily MACD and trigger line closed the week higher at minus 6.01 and minus 6.47 points respectively.
The daily MI remained below the 100-point mark and ended slightly lower in the negative territory at 95.36 points. The daily MI continues to show that the market’s immediate momentum is negative.
TIN prices on the Kuala Lumpur Tin Market (KLTM) extended its bearish momentum last week as producers selling failed to meet strong buying interest, allowing the market to fall to its lowest level in five weeks.
The cash tin price declined US$200 for the week and closed at US$9,180 per tonne. Trading for the week ranged widely from US$9,490 to US$9,100 per tonne.
Total trading volume for the week dipped marginally to 272 tonnes from 283 tonnes a week ago.
The candlestick chart ended the week bearish and signalled that the immediate term trend would stay negative. A long upper shadow candle occurred last week. This was a typically bearish signal as it occurred near a rally high.
Chart support for this week is revised lower to the US$9,000-US$8,900 per tonne level. Chart resistance for this week stands at the US$9,250-US$9,290 level.
The weekly indicators closed the week bearish and indicated the continuation of the bearish trend this week.
The weekly stochastic triggered retained its sell signal during Friday’s close and signalled more downward pressure this week. The weekly oscillator per cent K and D ended the week sharply lower at 47.80% and 73.91% respectively.
The weekly MACD remained bearish on Friday’s close and called for more downward pressure this week. The MACD and trigger line ended the week lower in positive territory at 0.83 and 0.87 points, respectively.
The 3-week and 7-week ESA lines ended with a sharp negative convergence and indicated that a main cycle change is about to start. These ESA lines settled the week lower at 9,350 and 9,314 respectively.
The weekly MI closed above the 100-point mark and ended lower at 109.67 points. Analysis of the weekly MI indicates that the immediate momentum of the market bearish