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  1. 1. Market Weekly AnalysisMar 05, 2011 (Week 11)1) Market Last week the market moves in points range.CommoditiesOpenHighLow Close Last week Sideway upKPOc3 (RM) 32713368 3222 3352 CLc1 (USD)53.7754.07 52.5253.95 BOc1 (USD) 106.75108.2 104.35 107.42) Short-term forecast (this week)Technical Analysis: Short-Term (this week) (+) Risk of confrontation between Iran and the western countries as UN (+) USD slips to support crude oil. (+) Upcoming - US Export of soybean (Thu) (0) Upcoming US unemployment claim (Thu) (+) Upcoming Palm Export (Wed) (?) Upcoming China PMI (Thu) (?) Upcoming EU leader (17 countries) meeting on ESFS and ESM(a) Palm oil - Oscillators:Stochastic RSIMACD (b) Bollinger (c) Candlestick (d) Pattern Ascending Triangle possible to goupwards (rather than downwards)(e) Open interest Break downtrend Openinterests increase while price increase Longovercomes Short Confirm Bullish(f) Volume NeutralChumporn Palm Oil Public Company Limited (CPI)1|Page
  2. 2. Market Weekly AnalysisFundamental Factors:Date EffectFactorsFeb 6 (Mon)(+) Rains have been forecast this week in key growing regions of Argentina but dry weather over the past month was likely to reduce yields in the No. 3 world soy exporter.Feb 14 (Tue) (+) Soybeans were little changed, hovering near a four-month top on concerns of dryness in Brazil, which could further damage the crop following a drought in January that curbed South American crop yields.Feb 15 (Wed) (-) Exports of Malaysian palm oil products for Feb. 1-15 fell 14 percent to 509,107 tonnes from 591,995 tonnes shipped during Jan. 1-15, cargo surveyor Intertek Testing Services said on WednesdayFeb 16 (Thu) (+) In the week ending February 11, the advance figure for seasonally adjusted initial claims was 348,000, a decrease of 13,000 from the previous weeks revised figure of 361,000. The 4-week moving average was 365,250, a decrease of 1,750 from the previous weeks revised average of 367,000Feb 17 (Fri) (+) The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.2 percent in January on a seasonally adjusted basis, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 2.9 percent before seasonal adjustment. (+) Argentinas Agriculture Ministry on Thursday estimated the countrys 2011/12 soybean harvest at 43.5 million to 45 million tonnes, well below USDAs current forecast of 48 million.Feb 19 (Sun) (+) China is seen making more cuts to banks reserve requirements to fuel lending and sustain economic growth as the housing market cools (50 bp).Feb 20 (Mon) (-) Exports of Malaysian palm oil products for Feb. 1-20 fell 2 percent to 783,112 tonnes from 799,210 tonnes shipped during Jan. 1-20, cargo surveyor Intertek Testing Services said on MondayFeb 21 (Tue) (+) Greece wins the second bailout fund.Feb 22 (Wed) (-) The euro zones service sector has been shrinking unexpectedly this month, reviving fears that the regions economy could go into recession, the Markit Eurozone Services Purchasing Managers Index showed. [nL9E7GA00C] (-) Chinas manufacturing sector contracted in February for a fourth straight month as new export orders dropped sharply due to the euro zone debt crisis, dampening the economic growth outlook in the worlds second-largest oil user. [nB9E7NB02D]Feb 23 (Thu) (+) U.N. inspectors sent to visit the countrys nuclear installations declared their mission a failure, a setback likely to increase the risk of confrontation with the West. (+) Japan could cut Iranian imports by as much as 20 percent or more this year, a local newspaper reported, following reductions planned by other buyers in Asia and Europe as Western sanctions made trade difficult. [nL4E8DM9HO] (-) Three Democratic lawmakers on Wednesday urged the White House to signal it is ready to tap the nations oil stockpiles to combat surging fuel prices, arguing an "aggressive" strategy could tamp down speculationFeb 24 (Fri) (+) The Sentiment Index rose to 75.3 in the February survey, just ahead of the 75.0 in January, but slightly below last Februarys 77.5 - Consumers have shrugged off con-cerns about rising gas prices, the European crisis, and election year politics, preferring to focus on the favorable im-pact of job growth. (Reuters + U of Michigan) (-) U.S. crude stocks rose 1.63 million barrels to 340.71 million barrels in the week to Feb. 17, the data showed, compared with a 500,000-barrel build forecast by analysts in a Reuters poll. Weekly crude inventories were the highest since September of 2011. (EIA / US) (+) Soybean futures rose to a five-month high, helped by a weaker dollar, good export demand and concerns about crop production in Argentina and Brazil.Feb 27 (Mon) (+) Malaysian palm oil product exports during Feb. 1-25 gained 1.1 percent to 992,362 tonnes from 981,275 tonnes shipped from Jan. 1-25, cargo surveyor Intertek Testing Services said on Monday. (ITS) (+) The Ifo Business Climate for trade and industry in Germany improved in February. More companies reported a favourable business situation than in January. They expressed greater optimism about their business expectations for the fourth time in succession. The German economy is currently supported by domestic demand. (Ifo/ Germany) (-) The Group of 20 finance ministers and central bankers said on Sunday they were "alert to the risks of higher oil prices" and discussed at length the impact that sanctions on Iran will have on crude supplies and global growth. [nL2E8DQ1OA]Chumporn Palm Oil Public Company Limited (CPI) 2|Page
  3. 3. Market Weekly AnalysisMar 9 (Fri)Mar 10 (Sat)(+) Exports of Malaysian palm oil products for March 1-10 rose 29.5 percent to444,259 tonnes from 342,982 tonnes shipped during March 1-10, cargosurveyor Intertek Testing Services said on Saturday.3) Medium-term forecast (one month ahead)Technical Analysis: Medium-Term 1Q2012 (Mar 12) Assumption Expected average crude oil = 103 Target price of palm oil likely to = 3400Medium & Long-Term Fundamental:EffectTime Factor(+) Long-termMalaysias oil palm industry will spend RM4.4 billion to replant some 365,000 hectares from 2011 to 2013 (or ~13% out of all plantation area)(+) Long-termPossible of QE3 to spur economy in Q2, Q3 (Long-term)(+) Long-termM2 increases in the world economy as most central banks use monetary expansion presently.(+) Long-termBiodiesel Mandate Latin America will spur consumption of soy oil(+) Long-termChina cut legal reserve to 21%.(and cut further lately on Feb 17th 50BP)(+) Long-termECB cut the monetary interest to 1% and likely to cut to 0.75% soon(+) Long-termMajor central banks (US, Japan, Swill, Canada etc) have cut interest swap line by 0.5% to support world economy.(+) Long-termThe possibility of Fiscal Union and ESM measure in EU in 1Q2012 + Leaders completed the fiscal-discipline treaty, which speeds sanctions on high-deficit states and requires euro countries to anchor balanced-budget rules in national law(+) Long-termThe tension in Persian Gulf as long as Iran still resumes its nuclear programme(-) Long-termThe Euro-Zone debt crisis(+) Long-termExpectation of money supply increase in US benefit commodities after Fed promised to keep interest at 0% further 2 years.(+) Long-termUS defence secretary Leon Panetta believed Israel was likely to bomb Iran within months to stop it building a nuclear bomb. (April, May or June) (Washington Post columnist.)(-) Long-termThe U.S. CIA director told a Senate committee on Tuesday that OPEC member Saudi Arabias oil production appears to be ramping up and can fill some of the shortfall caused by sanctions on Iranian exports. Also, current sanctions appear to be biting much more in recent weeks. [nL2E8CVCW1](-) Long-termMalaysias 2012 palm oil production is expected to rise 2.3 percent to 19.3 million tonnes as more estates come into maturity, an official from the countrys industry regulator Malaysian Palm Oil Board said on Thursday Jan 19, 12.(o) Long-termEIA forecast the oil demand will increase in slower pace 1.27 mbpd in 2012 and 1.47Chumporn Palm Oil Public Company Limited (CPI) 3|Page
  4. 4. Market Weekly Analysis mbpd in 2013. (+) Long-term Malaysia has issued this years tax-free crude palm oil export quotas of 3 million tonnes (+) Medium-term China will expand loan in 1Q2012. (+) Medium-term La Nina to cause drought in Latin America in soybean crop belt + expected drop in output. (+) Medium-term Winter season in northern hemisphere to spur demand for oil. (+) Medium-term Recover signs in US economy (-) Medium-term S&P cut credit rating 9 country in EU including France (-) Medium-term The possibility of Fiscal Union and ESM measure in EU in 1Q2012 is in doubt with its real practice. 4) Indicative Statistics Palm oil 2,000,000 800,000 Export Trend1,843,602 Export by Destination 1,800,000 700,000700,047 1,614,720 1,600,000662,461 600,000 1,400,000 1,381,315 500,000 1,200,000 460,990(T) 1,000,0001,114,593(T) 400,000 435,664 331,903948,012 315,700 800,000 300,000 236,102 600,000 224,278217,206 200,000 400,000 200,000 100,00087,621 - -Jan Jan Jan Jan Jan Jan Jul Sep Nov Jul Sep NovMarMay Mar May Jul Sep Nov Nov Nov Mar May Mar May Jul Sep Mar May Jul SepMarMayJan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun2007 20082009201020112012 2010 20112012 Overall ExportChina India USEU Pakistan OthersFigure1 Malaysian Palm Oil Export for 5 Years TheFigure2 Palm Oil Export by Country 4 countriesexport quantity has been rising in upward trend and has aaccounted for 60% of overall export have slow theircycle in its aspect. purchasing. Soybean Chumporn Palm Oil Public Company Limited (CPI)4|Page
  5. 5. Market Weekly Analysis 100300Unit: M TonnesProduction Major Grower 20129025020082009 2010 2011 Dec JanFeb80World220.47211.96 260.85 264.18 259.22 257.00257.0070US72.86 80.7591.4290.6182.8983.1783.17200Brazil61.00 57.8069.0075.5075.0074.0