Dear Friends & Associates,

Year 2015 was indeed a remarkable year for the palm oil market.

The roller-coaster market influenced by too many outside factors took many analysts by surprise.

The much anticipated El Nino bullish impact failed to materialize in the 2Q of 2015 and instead showed its bullish head in late-September boosted by the prolong haze that cut out sunlight causing massive stress to the oil palm trees. We may get to see in months ahead the impact on fresh fruit bunches due to the prolonged period of lack of water and lack of sunlight.

Following the peak crude palm oil output months, palm oil stocks remained at historical-high levels of 2.62 MT and the sluggish Malaysian exports did little to contain the bearishness. Very few would dare to estimate the Indonesian palm oil stocks because they could be easily out by half to a million tonnes! Please see chart.

In the BMD CPO futures chart below, the short-term GMT trend-tracker signal are positive as at today’s close and indicated the potential for more upward price adjustments. The RM2,450 level would be the next formidable price hurdle. The chart says it all!

The sharp losses in the ringgit and Indonesian rupiah against the US dollar provided some underlying support to crude palm oil prices. Recent minor knee-jerk recovery in these two currencies saw some technical price rebound on account of speculative short-covering and short-hedge unwinding. Currently, based on the GMT Trend-Tracker signals, both the currencies are in a technical correction phase following recent excessive losses. We may get to see short-term influences on CPO prices due to some choppy fluctuations in both these currencies in weeks ahead. (see charts)

Light sweet crude oil prices struggled to stay above the USD45 per barrel and appear set for further sideways fluctuations with Iranian oil coming into the pipeline. Current conflict in the Middle-East has the potential to deepen and help change the dynamics of the crude oil market. Crude palm oil for biodiesel may not be too attractive with crude oil below USD45 per barrel. Kindly take a look at the light sweet crude oil chart. The GMT trend-tracker signals are incorporated in the chart and they are suggesting more sideways price action in days ahead.

CME SBO futures recovered from it late-September lows at the 26.00 US cents and is now faced with an overhead barrier at the 29.00 US cents per lb. A successful push above these level would provide the positive momentum to take prices higher to test its minor price resistance around the 31.00 – 32.00 US cents levels.

Important message for past students of the
Palm Oil Master Trader Tutorial.

I shall be conducting the Palm Oil Master Tutorials in Bali, Indonesia on 23rd & 24th November 2015. (Immediately before the Indonesian Palm Oil Conference-IPOC).

  • Early Bird Rate: USD 1,500
  • Normal Rate: USD 1,800

Past students are welcome to attend for a refresher session at special rate USD1,000.

Past students who recommend a fresh student would get to attend the Master Trader Tutorials for FREE. Limited seats are available!

For more information, please email: teohgm@gmail.com OR mtt@gbworks.com.my