PALM OIL ANALYSIS

Dear Friends, Associates & Graduates,

The crude palm oil futures prices defied the strong bearish underlying fundamentals of the palm oil market and gingerly skipped higher in the first twenty-three trading-days of 2013.

From its sell-off lows of late-2012, CPO futures prices had regained RM350 per tonne. It is difficult to comprehend, but it has happened!

The GMTeoh Trend-Tracker (weekly) gave two trading signals in 2013 and ended yesterday on a constructive note, suggesting that the upward trending momentum could sustain. (please see chart).

The BMD May futures has a immediate upside price hurdle at the RM2,600-RM2,625 levels. A clear upward break-out from these resistances would signal the continuation of the bullish wave and set the stage for a brief test of it next price-target at the RM2,725-RM2,750 levels before the POC in early-March.

BMD CRUDE PALM OIL FUTURES, MAY, 2013 FUTURES.
WEEKLY-GMTEOH-TT SIGNALS

CME SOYOIL FUTURES – MAY, 2013 FUTURES
WEEKLY-GMTEOH-TT SIGNALS

As a professional trader, we need to accept the fact that prices of any exchange traded commodity needs to fluctuate. In the event of any fresh negative development, palm oil’s technical support base would likely remain at the RM2,500-RM2,450 levels in the 1Q2013.

Malaysian crude palm oil export duty would stay at zero in March and Indonesia’s February export duty higher at 9% is telling us that the high stocks fears there had subsided and there is little need to trade blows with Malaysia.

Importers of palm oil are laughing to the bank after having managed to average on their earlier high priced forward purchases while the retail edible oil prices in their respective countries remains high.

Point to note here is that many importers have resorted to doing a buy-hedge in BMD CPO futures for their far-forward needs and are extremely comfortable after having taken advantage of the cheap sale over the last four-and-a-half months.

The historical-high BMD CPO open-interest of 198,360 contracts (4.96 million tonnes) tells a story. While the speculators and commodity hedge funds sold aggressively influenced by the bearish fundamentals the last four months, the smart money, commercial hedgers and importers took the opposite side of the trade (buy-hedge) and are seated pretty currently.

After a seven-week price rally, soyoil price premium over palm oil are at their historical-highs and this disparity is likely to continue. Tightness in US soybeans supplies due to the worst drought of 2012 and concerns over rain stalling harvest in certain regions of Brazil and dryness threatening soybean crop in Argentina, would provide the underlying support until the US planting in April. Palm oil is destined to be priced higher in an attempt to narrow the price disparity. (please see SBO chart).

DEVELOP A PROFESSIONAL APPROACH TO PALM OIL MARKET ANALYSIS AND HEDGING FOR CONSISTENT RESULTS.

The Palm Oil Master Trader Tutorials (MTT) conducted by me and organized by GBWORKS would be held in Kuala Lumpur, on 1st & 2nd  March, 2013. This Tutorial is held ahead of the Bursa Malaysia POC. Kindly let your friends in the industry know about this event. 

For registration and further details kindly check out at “register-now” at www.palmoil-mtt.com  or contact me. Thank you.

Kind Regards,

G.M.Teoh
012-2688121
teohgm@gmail.com