Palm oil soared 1.57 percent on the first trading day of the year, lifted by firm crude oil market and weather concerns in South East Asia region which may cause harvest-disrupting floods. Market sentiment improved as decline in outbound shipment is moderating. Cargo surveyors, Intertek Testing Services & Societe Generale de Surveillance, said export for full month of December was down 2.6 percent and 3.3 percent respectively. NYMEX crude oil rocketed 4.18 percent due to escalated political tension between US Navy and Iran near
Persian Gulf area. US soyoil gained 1.5 percent, boosted by weaker dollar and hot weather in Argentina threatening crop growth. Expect futures to trade higher, tracking spillover strength in commodity markets and encouraging US manufacturing data last night.
Overnight Leads
US soybean futures ended at their highest level in two months, fueled by broad-based speculative buying across asset classes. Commodity-wide buying was sparked by weakness in the US dollar, combined with ongoing fear of yield losses in South America due to heat and dryness to propel prices.
Technicals
Futures opened 34 points higher and finished at 3225. An inverted hammer formation may suggest bearish reversal signal to the remarkable gain of nearly 10 percent in the past two trading session. Despite firm bullish trend image reflected in MACD, buyers are urged to trade cautiously as price deems attractive for profit taking. As such, support and resistance to be pegged at 3150 and 3250 respectively.
Strategy
Aggressive trade may long with stop on close below 3180.
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