Indonesia's Failure To Meet Palm Oil Biodiesel Target...

Indonesia's failure to so far live up to a government mandate to use more palm oil in transport and electricity fuel has disappointed the market prompting prices to fall in the past three months, high-profile vegetable-oil analyst Dorab Mistry said at an industry event in Mumbai Thursday...

 While Indonesian authorities have attributed lower-than-targeted biodiesel use to a lack of blending and handling facilities, Mr. Mistry said the "real reason" is more likely generally high palm-oil prices this year which have limited biofuel demand.

...At MYR2,700/ton, for instance, BMD palm oil won't be competitive unless Brent crude oil prices climb to $125 a barrel. "If energy prices do not climb so high at MRY2,700/ton Indonesia will dramatically reduce palm bio diesel consumption," he said. Brent oil is currently around $114/bbl.

 Palm "desperately needs to regain its competitiveness" with refined, bleach and deodorized palm olein needing to fall $120 below soyoil prices in the high-production and high-demand months of August, September and October, Mr. Mistry said.

 ... "Palm has become far too dependent on biodiesel demand and that is an unreliable, opportunistic and sporadic market. Palm must fight for market share of edible food demand," Mr. Mistry, who is also a London-based director at Godrej International Ltd., said.

 ... "Demand will be good at the lower end of [this MYR2,300-MYR2,500/ton] range. At the upper end at MYR2,500/ton Malaysian stocks will soon exceed 2 million tons and work their way to a peak of almost 2.5 million tons by November," Mr. Mistry said.

... Mr. Mistry maintains his forecast for Indonesia palm-oil production to be 30.5 million tons this year--up 11% year over year from 27.5 million tons. Malaysia will produce between 19.7 million tons and 19.9 million tons of palm oil this year, he added...

Telequote News excerpts from Dow Jones Newswires...

Write to Huileng Tan at huileng.tan@wsj.com

India's 2014/15 edible oil imports seen 5.4 pct up or 11.7mt

India's edible oil imports are expected to increase 5.4 percent to 11.7 million tonnes in 2014/15, an industry expert said on Thursday.

"Rise in demand due to population increase and an expected lower oilseeds production due to this year's weak monsoon are likely to push cooking oil imports next year," Govindbhai Patel, a trade expert from India's western city of Rajkot, said at a palm oil conference in Mumbai.

He also said India, the world's leading importer of vegetable oil, would import on an average 1.05 million tonnes of edible oil each month until October.

Patel forecast the monthly imports of palm oils at 700,000 tonnes until October. India's edible oil marketing year runs from November to October.

Sources: Reuters (Reporting by Rajendra Jadhav; Editing by Anand Basu)

6pm 2446 And The Last Update For Hourly Key Indicator

The long 2403 will do a stop and reverse sell trade if 6pm cpo futures price is closed 2446 or lower at 6pm today which is another 30 minutes to close.

It will be the last update for stop and reverse trade signal once the sell signal is triggered. Therefore, there will be no stop and reverse Buy trade signal given in next update once the sell trade is initiated at 6pm today. The hourly key indicator for short term technical trend trading will temporarily stop updating on any stop and reverse trade signals.

6pm Hourly Key Indicator SAR At 2441

The hourly key indicator long 2403 will have to take profit and turn short if cpo futures price is closed below 2442 at 6pm later today.

Therefore, the stop and reverse sell trade signal for 6pm is 2441 or lower.

How Far The Long 2403 Had Reached?

Since the long 2403 on 12/6, the cpo futures price had gone up to high 2473 yesterday and the hourly key indicator on short term technical trend trading strategy had never been triggered with stop and reverse sell trade signals until 1130am last traded 2459 just now.

Again, as said in previous post, there will temporarily be NO more stop and reverse BUY trade signals posted in this blog once the stop and reverse sell trade signal is triggered.

The long 2403 will have to take profit and turn sell once cpo futures price is closed below 2435 at 1230pm today; or else, hold on the long for afternoon trading sessions which the stop and reverse sell signals may keep adjusting higher depend on certain cpo futures prices. It is definitely a profit for the long 2403!

100 Ticks Profit And Stop!

As the hourly key indicator is used for short term technical trend trading strategy, it is quite hard to keep posting the stop and reverse trade signals on time or in advance in this blog due to time factors and unforeseen circumstances. 

The accumulated profits since the beginning of June had over 100 ticks or equivalent to RM2,500.00 per contract size in just 2 weeks time, and therefore it may be considered a good trading system (with over 500 ticks of profit per contract size since January 2014, proven in spreadsheet record). The next stop and reverse trade signals will be 2421 for 1130am, and about 2421 also for 1230pm today if 1130am remain long 2403.

After this stop and reverse sell trade signal is triggered, there will temporarily be no stop and reverse trade signals available for viewing. 

If you have interest to know more how it works on the short term technical trend trading strategy, purchase "101indicators On Futures Trading" book. Google search it and you will find me!

The Hourly Long 2403 Still Alive And The NLT Transaction

The hourly key indicator did not make a stop and reverse sell trade in the morning trading sessions 1130am and 1230pm, even 4pm was still remained in the long 2403. For 5pm stop and reverse sell signal, the hourly key indicator will turn sell once cpo futures price is traded traded 2419 or lower at 5pm today. If no sell signal is triggered at 5pm, the SAR for the 6pm will be around 2419 too with just a few ticks difference. 

The long 2403 may have to carry overnight again if there is no stop and reverse trade signals at 5pm and 6pm today.

News alert - Big Boys' Game in Bursa Malaysia Derivatives!
 BMD has approved the following NLT transaction.
 Date of NLT transaction : 17/06/2014
 Product : FCPO
 Contract Month : AUG 2014 No of contracts : 1632
 Contract Month : SEP 2014 No of contracts : 1632

1130am SAR 2413

The hourly key indicator will have to do a stop and reverse sell trade if cpo futures price is traded 2413 or lower at 1130am today for the short term technical trend trading. It had been holding long 2403 since the close on 12/6/2014.

For 1230pm the SAR will be still around the same with 1130am SAR if cpo futures price is traded above 2413 at 1130am not triggering a sell signal.

Hourly SAR 2410 And India Palm Oil News

For 5pm and 6pm, the stop and reverse sell trade signal based on the hourly key indicator will be estimated at 2410 or lower. It is still holding on the long 2403 after 4pm trade.

*****

India's palm oil imports rose 22 percent to 654,255 tonnes in May from a month ago, a trade body said on Monday, as buyers stocked up ahead of the Muslim holy month of Ramadan when demand for the tropical oil typically peaks...

India's total vegetable oil imports rose 24 percent from a month ago to 1.03 million tonnes in May, data from the Solvent Extractors' Association of India (SEA) showed. "Refiners purchased more to build up stocks," said B.V. Mehta, executive director of SEA. Imports of soyoil rose 54 percent to 174,209 tonnes from a month ago, while sunflower oil imports rose to 5 percent to 178,753 tonnes...

Last month, the price for imported crude palm oil (CPO) averaged $876 a tonne against $934 for soyoil and $942 for sunflower, the trade body data showed. In April, CPO was quoted at $907, soyoil $974 and sunflower oil $946.

May's total palm oil imports included refined oil of 100,605 tonnes, up 24 percent from April as the import price in May was cheaper by $31 per tonne at $866. Half of India's annual demand of 17-18 million tonnes of cooking oil is met through palm oil imports, while it buys about 1 million tonne each of crude soy and sunflower oil.

Source: Reuters India (Reporting by Ratnajyoti Dutta; Editing by Himani Sarkar)

NO Update On Profit Taking Targets

Readers traders should always aware that this blog will never cover profit taking targets which I always believe that profit taking targets will be up to traders own greed and fear since they are already profit for them. I will only update on the stop and reverse trade signals with possible level and I do sometimes fail to provide the stop and reverse trade signals due to unforeseen circumstances and I therefore wish to apologize for this inconvenience.

The hourly key indicator's stop and reverse sell trade signal will be 2405 or lower in the morning trading sessions today (1130am and 1230pm which may have slight different in the SAR signals for this 2 time frames due to certain higher high and lower close). It had turned long 2403 since 12/6/2014 as stated in previous post.

Hourly Key Indicator 6pm Long 2403

The hourly key indicator had finally taken profit 21 ticks and turned long 2403 at 6pm close just now. As said earlier the 6pm SAR is 2395 or higher and cpo futures price was really closed above the SAR 2395. In the last 3 stop-and-reverse trades, the hourly key indicator accumulated 84 ticks or RM2,100.00 of profit per contract size basis. So, let's wait and see by end of the month what will be the accumulated profit or loss!

Now, we can calculate out that the 1130am SAR sell signal for tomorrow short term technical trend trading will be 2394 or lower; while, the 1230pm SAR will probably be around 2394 if there is no post being published. If no cpo price is traded below the SAR level at both specific trading decision time at 1130am and 1230pm, the long 2403 will be kept holding on for the afternoon trading sessions or even carrying over the weekend until Monday. 

There is a new futures contract on Bursa Malaysia Derivatives coming Monday - USD RBD Palm Olein Futures or FPOL for the trading code.   

5pm 2394 Missed 1 Tick

As 5pm last traded was 2394, the hourly key indicator short 2424 is remained. Therefore, if 6pm cpo futures price is closed 2395 or higher, it will trigger a stop and reverse buy signal for the short term technical trend trading indicator against its short 2424.

Readers traders must understand that it is sometime difficult to provide all the trade signals in advance due to a possible higher high or lower low between hourly data. Now you know that if 6pm is above 2394, it is a buy, but you may not get such update for tomorrow 1130am trade signal due to the above issue even though I have the trade signal at 1130am but not available in updating a post in this blog.

5pm SAR Buy Signal Is 2395

The short 2424 in hourly key indicator will have to do a stop and reverse buy if cpo futures price is last traded 2395 or higher at 5pm today which I has promised giving in advance for readers traders to have a look on hourly technical trend trading system.

In other words, short term technical trend traders who follow hourly key indicator will take profit and turn long if 5pm cpo futures price is traded above 2394 against its short 2424 on 5/6/2014 at 1130pm.

Hourly CPO Futures Remains Short 2424

As mentioned in previous post, the short 2424 based on one of the hourly key indicator that I wish to update in the month of June is having its stop-and-reverse (SAR) buy signal above 2395 in next 2 60-minute trading sessions, it is believed that the hourly key indicator will remain in selling signal for its short term technical trend trading.

If only the cpo futures prices keep lower, then the SAR buy signals will get lower; otherwise, it is highly possible that the short will remain until 6pm market close. Therefore, 2395 will be the marking point for next few trading sessions. 

What Is Indonesia’s Biodiesel Producers Profitable Level

( Readers traders can take this crucial level as the benchmark for major support level on cpo future since cpo price may head to such level if June's end month stock hit 2 million tonnes level as posted in my previous article.) 

RM2,300.00 was reported on crude palm oil (CPO) prices per metric tonne for Indonesia’s biodiesel producers profitable level is the crucial level in CPO Futures trading that I wish to emphasize here!

Below is the news excerpts:

...despite the higher inventory expected, the downside in crude palm oil (CPO) prices should be limited to RM2,300 per metric tonne as this level is within the research firm’s expectations of Indonesia’s biodiesel producers profitable level, which will subsequently spur discretionary demand.

Palm oil inventory is expected to increase by five per cent to 1.93 million metric tonnes, while demand has been viewed as sustainable, driven by positive indicators in the food sector.

The research arm of Kenanga Investment Bank Bhd (Kenanga Research) in a report yesterday believed June’s total supply of 1.72 million metric tonnes should outpace total demand of 1.63 million metric tonnes. “We have assumed one per cent production growth month-on-month in line with the seasonal pattern...

Source: The Borneo Post

El Nino Risks On Palm Oil Supply Outlook

Excerpts from Bloomberg News that readers traders may have interest to learn...

Prices may advance to a range of 2,650 ringgit ($827) a metric ton to 2,850 ringgit from August if the event occurs, Lee said in an interview in Kuala Lumpur. Futures closed at an eight-month low of 2,385 ringgit yesterday. An El Nino pattern as severe as in 1997-1998 may cut production by as much as 15 percent, Lee said, without specifying a period for the decline.

Oil palms thrive in tropical regions near the equator with rain ranging from 1,500 millimeters (59 inches) to 4,000 millimeters a year without dry periods of more than a month, according to Barclays Plc. Studies show that less than 100 millimeters over two consecutive months can reduce output by 5 percent over the next three years, while droughts longer than six months cut production by 20 percent, analysts including Ephrem Ravi and Krishan Agarwal wrote in January.

The last moderate El Nino occurred in 2009-2010, according to the Climate Prediction Centre. Malaysian output declined 3.4 percent to 17 million tons in 2010 from 17.6 million tons a year earlier, palm oil board data show.

In 1997-1998, the strongest El Nino on record back to 1950 helped push the global mean temperature in 1998 up 1.2 degrees to what was then an all-time high of 58.1 degrees Fahrenheit (15 degrees Celsius), according to the U.S. National Oceanic and Atmospheric Administration. The event in 2006-2007 caused droughts in the Asia-Pacific region, more than halving Australia’s wheat output and hurting Indonesia’s coffee harvest.

To contact the reporters on this story: Ranjeetha Pakiam in Kuala Lumpur at rpakiam@bloomberg.net; Chong Pooi Koon in Kuala Lumpur at pchong17@bloomberg.net
To contact the editors responsible for this story: James Poole at jpoole4@bloomberg.net Shamim Adam
The News Link - http://www.bloomberg.com/news/2014-06-11/el-nino-risk-dents-ioi-s-palm-oil-supply-outlook-southeast-asia.html

World Biodiesel Output Seen by Oil World Reaching Record

Excerpts From Bloomberg News...

Rising use of vegetable oil for biodiesel is “still sizably exceeding the growth rates in other usage categories, like the food sector,” Oil World wrote. “Palm oil is gaining importance as a feedstock, accounting for roughly a third of biodiesel output worldwide.”

An estimated 9.5 million to 9.6 million tons of palm oil will be used to make biodiesel this year, according to the researcher. Indonesia’s production of palm-oil based biodiesel may increase by 1.2 million tons to 3.8 million tons, Oil World wrote.

Soybean oil use for biodiesel production is forecast to rise by 300,000 tons to 7.3 million tons, according to the report. Soybean-based biodiesel output in the U.S. is seen at 2.3 million tons, Brazil may produce 2.1 million to 2.2 million tons and Argentina 2.05 million tons.

The European Union used a record 6.9 million tons of palm oil in 2013, according to Oil World estimates. Energy accounted for 3.6 million to 3.7 million tons of use in 2013 from 2.68 million tons, lifting the proportion of palm oil used as fuel to about 53 percent from 45 percent.

EU consumption of 17 oils and fats totaled 30.85 million tons last year, with 17.8 million tons for food use and 9.01 million tons for biodiesel, according to Oil World. Within the EU’s palm oil use, 3.25 million tons was for food and chemicals, 2.51 million tons for biodiesel and 1.14 million tons to generate electricity and heat, Oil World said.

To contact the reporter on this story: Rudy Ruitenberg in Paris at rruitenberg@bloomberg.net

What Is The June's End Month Stock Level?

MPOB had released the end month stock for the month of May at 1.84 million tonnes, up 4 over percent against April 1.77 million tonnes. May production was 1.657 million tonnes with export 1.405 million tonnes. Looking at such  figures, the stock usage ratio will be pushing higher fundamentally and making a bearish tone for the cpo futures market.

If (only if) palm oil production in June is  up 10%, the output figure will be over 1.82 million tonnes, minus out the sluggish export assumed at 1.4 million as the same with last month, the end month stock for the month of June will be hitting 2 million mark - the psychology level on bumper crop!!! El Nino is coming but not now! So, who can help reducing the end month stock for June???

Note: this is just a fundamental guess on palm oil supply and demand in Malaysia market.

As a start for June short term technical trend trading, an hourly key indicator had started another good profit for the beginning of this month with profit carried over from the month of May when short 2505 and then bought 2433 on 4/6/2014 with a profit of 72 ticks. However, It cut loss turned short at 2424 the very next day at 11:30am and holding the short 2424 until today. It will remain short 2424 since the stop and reverse buy signal is still far away especially in the morning trading session. 

Who Are The Players In Bursa Malaysia Derivatives?

Here is the slide that I get from an email about the market demography for year 2009 to 2013 - the players on Bursa Malaysia Derivatives that cpo futures traders who wish to know where they stand:

Foreign Players Are Major Players Now

No doubt 38% of the total market participants is from Foreign Institutions for year 2013, more than 60% market volume is still generated by local players, being institutions or retails locals.  

Malaysian Palm Olein Futures Contract To Launch Next Week

Malaysia's derivatives exchange said on Monday it will launch its palm olein futures contract on June 16, though traders said it could face a challenge building up turnover to match the success of its benchmark futures contact.

Bursa Malaysia's RBD palm olein futures contract, which will trade in U.S. dollars, will provide a new path to hedge and lock in refining margins of palm oil -- the world's most traded vegetable oil. The new contract will need to generate ample liquidity to attract traders.

"The main concern is liquidity. If there's high participation and high liquidity, then it will be a success," said a trader at a foreign commodities brokerage in Kuala Lumpur who declined to be named.

"If the future contract tracks the cash contract, you may see people going in. But if everyone is watching everyone else, there there will be a problem." RBD palm olein is a refined, bleached and deodorized form of crude palm oil, used as cooking oil and as an ingredient in a variety of products ranging from margarines to instant noodles, as well as soaps and cosmetics.

Bursa Malaysia Derivatives (BMD) chief executive officer, Chong Kim Seng, said he was confident the new contract would match the success of palm oil. "What we do for crude palm oil, we can now do for palm olein," said Chong, speaking on the sidelines of an investment conference in capital Kuala Lumpur.

"Now refiners finally have a tradeable instrument on a similar platform that BMD offers for crude palm oil," Chong added. The crude palm oil futures contract on Bursa Malaysia Derivatives Exchange has set the tone for global palm oil prices for the last ten years, with about 200 million metric tonnes traded last year.

Palm olein futures are also traded on China's Dalian Commodities Exchange. Chong said palm olein futures could be used to hedge against the risk of crop-damaging weather making prices more volatile. Meteorology experts say that there is a higher possibility that El Nino, a warming of sea temperatures in the Pacific that can trigger both floods and drought in different parts of the globe, will return this year. While palm oil growers expect minimal damage to crops for now, they do not rule out that prices could surge if there is prolonged and severe dry weather.

Trading hours of the palm olein futures contract will be between 9.00 am-12.00 pm Malaysian time (0100-0400 GMT) and 1.30 pm-6.00 pm (0630-1000 GMT). India and China are the world's top palm oil consumers, while Indonesia and Malaysia are the biggest exporters that produce about 85 percent of global supply. (Reporting By Anuradha Raghu; Editing by Ed Davies)

Source: Reuters