CRUDE PALM OIL
CRUDE palm oil (CPO) futures prices on Bursa Malaysia Derivatives resumed the bullish charge and established a fresh historic high last week, fuelled by talk of a cut in Indian edible oil import duty and tight CPO supply situation.
Malaysia’s December output, stocks and export data released by the Malaysian Palm Oil Board (MPOB) on Friday added bullish fuel to the market.
MPOB estimated December CPO output 15.4% lower at 1.396 million tonnes from a revised 1.650 million tonnes the previous month. Palm oil stocks at end-December dropped to 1.682 million tonnes from 1.810 million tonnes at the end of November, and exports in December were estimated higher at 1.356 million tonnes compared to 1.241 million tonnes in November.
Lower exports of Malaysian palm oil in the first 10 days of January had no impact on trading. Societe Generale de Surveillance estimated palm oil exports during this period lower by 17.6% to 356,194 tonnes against 432,315 tonnes in the same period last month.
The March futures prices fluctuated widely from an intra-week low of RM3,173 and hit a fresh historic high at RM3,280 and settled the week sharply higher at RM3,280, up RM119 per tonne from the week before.
Total volume during the four-day trading week increased sharply to 84,609 contracts compared to 29,367 contracts previously.
Overall open interest as at Thursday’s close improved to 40,830 contracts from 39,806 contracts previously.
The weekly candlestick chart ended on a positive setting. There were three white candles in the last three weeks, and the steady downward pattern signalled that the main trend was still on a bullish course.
With prices now at never seen before levels, we can expect to see further volatile price swings in the coming sessions. Trading would remain choppy with technical buying and long-liquidation profit-taking activities pulling market in both directions.
The March futures immediate-term chart support stands at the RM3,260-RM3,240 level. A downward technical pullback would occur if this support is breached.
Chart resistance for this week is pegged at the RM3,300-RM3,330 level. The bullish trend would resume if this level is successfully vaulted.
The weekly technical remained bullish on Friday’s close and indicated that the main trend of the market was still positive.
The weekly stochastic ended in the bullish extended-move zone and managed to retain its buy signal. The oscillators percent K and D ended sharply higher at 90.23% and 85.06% respectively.
The main trend-tracker 3- and 7-week exponentially smoothed moving average price lines (ESA lines) ended in bullish divergence and continued to show that the trend is bullish.
The 5-week Relative Strength Index (RSI) ended higher near the overbought territory at 72.70 points and indicated that the immediate underlying strength of the market was still positive.
SOYOIL futures at the Chicago Board of Trade (CBOT) established new historic high last week following soybean futures prices that soared to an al-time high above the US$13 a bushel early last week.
Hedge funds speculative capital moving back into the commodities markets and their hedging activities against inflation helped boost the soybean complex prices.
Concerns about dryness in Argentina’s soybean regions prompted many speculative players to stay on the long side of the soyoil market.
The January futures prices rose from an intra-week’s low of 50.10 US cents and made a new historic high at 51.05 US cents and eased slightly to ended the week moderately higher at 50.85 US cents, up 0.30 US cents per pound from a week ago.
The daily candlestick chart remained bullish on Thursday’s close. There were three white candles in the last three weeks and the gradual upward pattern shows that the bullish momentum is still strong.
Chart support for the January futures is adjusted to the 50.60-50.50 US cent level. The immediate-term trend would reverse if this support is violated this week. Chart resistance for this week is seen at the 51.20-51.35 US cent level.
The weekly technical indicators ended the week mostly constructive and showed that the main trend was still bullish.
The weekly stochastic closed Thursday with its bullish signal intact and indicated that the market was still in a bullish extended move phase. The oscillators per cent K and D settled higher in the overbought territory at 95.40% and 93.00% respectively.
The trend tracker 3- and 7-week ESA lines closed in bullish convergence and indicated that the main trend was not over.
Meanwhile, the 5-week RSI ended flat in the overbought zones at 90.42 points. Currently, the weekly RSI is signalling that the underlying strength of the market is neutral to slightly negative.
ICE Futures US cocoa futures prices advanced to a five-year high on funds and speculative buying inspired by dry weather in top producer Ivory Coast.
Little or no rain fell in Ivory Coast’s cocoa growing regions the entire week as a result of the dry Harmattan wind flowed into the cocoa zones from the Sahara Desert.
The March cocoa futures prices was lifted from a weekly low of US$2,095 to US$2,175 and closed the week sharply higher at US$2,166, up US$96 per tonne from previously.
The daily candlestick chart closed the week bullish and suggested that the market’s upward rally would expand. There were two white candles in the last three weeks, and the positive upward momentum showed that the trend would stay positive.
Last week’s upward breakout from the triple-top resistance levels showed that the main trend is very bullish technically.
Chart support for this week is pegged at the US$2,140-US$2,130 level. The overall trend would remain bullish if this level is not violated. Chart resistance for this week is revised higher to the US$2,185-US$2,200 level.
The weekly indicators closed the week positive bullish and signalled that the market was in an upward rally.
The daily stochastic retained the buy signal of Dec 28 and stayed bullish on Thursday’s close. The oscillators per cent K and D settled sharply higher at 74.71% and 73.90% respectively and called for more upside trading.
The 3- and 7-week ESA lines finished in bullish divergence and confirmed that the bullish cycle was intact.
Meanwhile, the 5-week RSI surged to 71.15 points and indicated that the market’s immediate underlying strength was bullish.
TIN prices on the Kuala Lumpur Tin Market (KLTM) started the shortened four-day trading week softer and then rebounded on a late round of buying and closed with minor losses.
The KLTM tin prices ranged from US$16,400 to US$16,200 and settled the week lower at US$16,300, off US$200 per tonne from previously.
Total trading volume for the shortened four-day trading week increased to 356 tonnes from 211 tonnes a week ago.
The weekly candlestick chart ended the week neutral to slightly positive and signalled the prospect for further recovery this week. There were two white candles in the last three weeks, and the sideways pattern showed that the immediate-term momentum had turned positive.
Chart support for this week is revised slightly higher to the US$16,250-US$16,200 level. Chart resistance for this week remains unchanged from the week before at the US$16,350-US$16,400 level.
The weekly technical indicators ended the week mixed and suggested that the mild technical recovery would expand this week.
The weekly stochastic buy signal of Jan 4 remained intact on Friday’s close and called for more upward trading this week. The oscillators per cent K and D settled higher at 42.62% and 27.21% respectively.
The 3- and 7-week ESA lines remained in positive divergence and signalled that the main trend was not out of its bullish phase.
The 5-week RSI closed lower at 52.30 points and showed that the market’s immediate underlying strength was neutral to slightly negative.
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