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USD Crude Palm Oil Futures

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FUPO1! trade ideas

Crude Palm Oil’s underperformanceThis chart caught our attention recently. The Crude Palm Oil – Soybean Oil Spread (in USD per Metric Ton) is trading close to an all-time high now. This spells trading opportunity for us as Palm Oil and Soybean Oil are generally considered substitute products, which means, at a large enough price difference, buyers may hop over to buy the cheaper one. Eventually closing the price gap back to its historical mean. Further comparison of Palm Oil against its other substitute, the European Low Sulphur Gasoil Financial Futures, also shows the spread between these products near the high. A price comparison among the 3 products, Palm Oil, European low Sulphur Gasoil and Soybean Oil underscores this price disparity even clearer. The prices of the 3 products have generally trended together, up until July 2022 when Palm Oil started to underperform. Stepping back into the macro side, some potential tailwinds for Crude Palm Oil include; 1) The reopening of China, which would increase the demand for palm oil from the world’s 2nd largest importer of the product. 2) Biofuel Mandates, which would put higher demand pressure on Palm Oil. 3) Slowing production growth in palm oil could lead to supply-demand imbalances, pushing palm oil higher as supply falters. One way to trade this price divergence would be to short the Soybean Oil – Palm Oil spread. This trade can be set up by selling 1 Soybean Oil Futures and buying 1 USD Malaysian Crude Palm Oil Futures. However, do note that in such a set-up, the position is not fully ‘hedged’ as the contract units are different, 1 Soybean Oil Futures has a contract unit of 60,000 Pounds (~27.21 metric tons) while 1 Crude Palm Oil Futures is for 25 metric tons. Another option would be to trade the exchange listed Crude Palm Oil – European Low Sulphur Gasoil Spread (POG) which handles the construction of the spread and is financially settled, removing delivery risk. While it’s hard to ‘call’ the top, such price divergence provides interesting opportunities that we leverage if risk is managed properly. These trade set-ups allow us to express the view that Palm Oil’s underperformance will be closed, either by Palm oil catching up with its substitutes or if its substitutes fall in prices. The charts above were generated using CME’s Real-Time data available on TradingView. Inspirante Trading Solutions is subscribed to both TradingView Premium and CME Real-time Market Data which allows us to identify trading set-ups in real-time and express our market opinions. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs www.tradingview.com Disclaimer: The contents in this Idea are intended for information purpose only and do not constitute investment recommendation or advice. Nor are they used to promote any specific products or services. They serve as an integral part of a case study to demonstrate fundamental concepts in risk management under given market scenarios. Sources www.cmegroup.com www.cmegroup.com jakartaglobe.id oec.world
CME:CPO1!Short
by inspirante
FCPO 3rd Nov 2022Global data/news (Reuters and Trading Economics) • Soybeans futures were trading above 14 per bushel in early November, close to six-week highs, supported by supply disruption in top exporter Brazil and growing export sales to major consumer China. • The dollar index DXY eased below 111.5 on Wednesday, struggling to gain traction as investors stayed on the sidelines ahead of a highly-anticipated Federal Reserve policy decision. Remarks • FCPO nearing previous August high 4495 • FCPO trading above daily 100EMA and within weekly resistance zone. • FCPO reversal head and shoulder in 15 minutes. • Short Term Trend : Bullish with major resistance Trading Plan: • Short – o If price fail to break above august high, TP1:4425 TP2:4366 SL:4500. o If price gap down and break below 4425, TP1:4366 TP2:4325 SL:4450 • Long – o If price supported above 4366 TP1:4425 TP2:4500 SL:4350 o If price maintain above 4450 TP1:4480 TP2:4530 SL:4423 o Disclaimer: This is just my IDEA on the market, not a suggestion to open any trade. Please do not follow without any personal due diligence on the market.
MYX:FCPO1!Long
by POKSAWSAW
2 Nov 2022 FCPO Global data/news • Gold prices pared some gains on Tuesday as the dollar and bond yields rebounded after strong U.S. jobs data raised worries that the Federal Reserve would stick to its aggressive stance on interest rates for some time. • Soybeans rose on hopes of more U.S. export sales to China, while protests were eyed in Brazil - including road blocks - after the presidential election. Remarks • Previous 1H resistance zone will became immediate support zone. • Potential Bearish Butterfly harmonic pattern in 1H. • 1H (20SMA crossing above 50SMA). • 1H divergence with RSI Short Term Trend : Sideways Trading Plan: • Short – o Price breakdown 1H resistance zone. TP1:4190 TP2:4079 SL:4300 • Long – o Price supported and maintain above 1H support zone. TP1:4160 TP2: 4340 SL:4140 o Price maintain above 1H resistance zone. TP1:4340 TP2:4450 SL:4250 Disclaimer: This is just my IDEA on the market, not a suggestion to open any trade. Please do not follow without any personal due diligence on the market.
MYX:FCPO1!
by POKSAWSAW
1st November 2022 Trading PlanGlobal data/news (Reuters and Trading Economics) • Chicago wheat futures jumped 6% and corn rose more than 2% on Monday as Russia's withdrawal from a Black Sea export agreement raised concerns over global supplies. (Reuters) • India sharply raised the base import prices of crude and refined palm oil and crude soya oil, the government said in a statement on Monday, as prices jumped in the world market. • Exports of Malaysian palm oil products for October 1-25 dropped from the same period in September. • A combination of pressure from the expected rate hikes, the relative strength of the dollar and rising yields continue to pressure gold prices. Remarks • FCPO consolidating near daily 100EMA. Major line to break. • FCPO rebound from 1H 100 EMA twice, both return to the 1H consolidation zone. • Triangle pattern in 1H chart. Short Term Trend : sideways Trading Plan: • Short – o Price breakdown and maintain below 1H support zone. TP1:4010, TP2:3980 SL:4080 o Price fail to break 1H resistance zone, TP1:4080, TP2: 4010 SL:4180 • Long – o Price supported and maintain above 1H support zone. TP1:4155 TP2: 4255 SL:4045 o Price breakup and maintain above 1H resistance zone, TP: 4255 SL:4155 Disclaimer: This is just my IDEA on the market, not a suggestion to open any trade. Please do not follow without any personal due diligence on the market.
MYX:FCPO1!
by POKSAWSAW