Member Info for JohnLewis79

Our acknowledged cpo (crude palm oil) aka the 'Demon' oil industry expert says Brent crude sets the floor for cpo prices. Well cpo has fallen c.8% last 5 days so do we set the floor for Brent? Discuss....heh heh heh!

Worth noting as cpo continues its plunge from ytd high now $57 give or take..... that wks 1-4 last year averaged c.$526.

Start to get twitchy when prices go sub $700 and at the current rate of decline will be next week.

Off $52 in 5 trading days from ytd high which confirms that prices go down a bloody sight quicker than they go up.

Its Friday so i wont trot out the usual aphorism but REA shares 'dont-do' Fridays, not recently anyways.
With cpo on the slide current $788 are we seeing the never saw this happening prt (2) just as we never saw this happening part (1) in the saga of palm prices?

Too early to tell but at
Wk 3 cpo will average above $812 ytd at current $788 atm. For cpo average to fall below $800 for the year at wk 4 it will need cpo to average $760 next week that's a c.$55 decline or c.7% from current.
Not out of bounds is it?

Palm oil industry expert James Fry said cpo prices will struggle to stay above RM 3300 in the next 6 months without higher petroleum prices as it loses its competitive edge over other veg oils.
The mrkt is giving out strong signals to price-sensitive buyers to switch from palm oil to notably sunflower oils.

He said that any further cpo price rises would primarily depend on 'Brent'
crude prices moving higher as 'crude' sets the floor price of veg oils.
Others opined the slower rate of palm replanting and B30 would support higher prices in 2020/1.

We may have to take more heed of Brent crude prices now which have done little ytd (-2%) but rose 22% last year.

Overnight US stocks surged higher for the 3rd day on deals being signed, good retail sales and higher bank Q4 earnings led by M.Stanley and Bank of N.York.
DJ +267 (29298) R
SP +28 (3317) R
NS +98 (9357) R
R2 +23 (1705) R

MSCI (w) +4 (577)

Far East mrkts mixed not caught up in US stock mrkt fever preferring to look through phase-one deals further ahead.
TK +105
HK -16
SH -1
SK +4

The nos:- Oil $64.62.
Gold $1555. Palm $793.
VIX 12.3. $1.307. € 1.174.
PI 7527. FP 8288. IDR 13650. FF+16. DF+32.
Morning all.

The $800 didnt hold which dealers have been testing for a few days now. Is it significant? I doubt it, being a days snapshot in time.
For cpo to travel to the low/mid $700s will need some real evidence apart from traders positions in the price which as we know veers as the wind blows.
Totally insignificant imo, just your usual traders games which us pis have to deal with every day by the ******* London barrow boys and machine led algos whose only interest does not coincide with yours.
Bring back the gentlemen traders of Wedd Zurlacher, De Zoete Bevan, Cazenove and Capel to bring some sanity to this rigged Reno Casino fruit machine mrkt where pis are regularly fleeced as the regulators
tot up their daily expenses
in dingy square mile pubs (is the Jamaica still going near the old HKSBC HQ?)..... catching up on the latest Corry episode.

The LSE has got away with murder over the years from the Banking crisis of the 70s and worse with little protection for pis in a succession of corrupt management skullduggeries, way too many to mention.

Will we ever get a even break? If your reading this the answer is probably not. "Caveat Emptor" they say, that imo is a trite saying if you invest in a management who sail too close to what is acceptable what can you do?
The Woodford debacle is a case in point while underhand machinations are not suggested the philosophy / strategy was questionable especially as H.Lansdown gave him their seal of approval as he invested in a succession of very long shot illiquid stocks which only benefited the management. I know I lost a bundle on a stock that had c.£70m raised from investors (me inc) over 10 years for a certified ground breaking medical device fully CE marked, fully approved by GOSH (Great Ormond St), Queen Elizabeth Hospital Birmingham and leading European centres of hospital care ...... that could not raise 2/- at the final hurdle. That smells to me and if you ever see
an automatic blood gas analyser parading under another guise please let me know.
I'll say it now because I have said it before that this was Woodfords greatest sleight of hand.
Afternoon all.

A co I used to have shares in has just updated the mrkt with a bunch of pretty impressive figs overall. Making lots of money, profits, great cash flow, 6% yield on divs and output increases in Q3/4.

A cynic like me would say thats a recipe for the stock to tank. Well it didn't but also didn't go up. Who's surprised? When REA report near break even nos don't think the mrkt will reward holders unless the jobbers are caught short and when did that last happen? The price may be 180 but think 160.

Cpo sub $800 that's a $30 swing H to L. Current bounce to $806.

Wot you doing splashing your millions on Allied Minds....you
kept that quiet!

I'd say " it ain't half bad Mum"....

Half time in wk 3 and trade vols barely over 14000 deals. The demon palm oil fights too many battles on too many fronts.
As if the green lobby wasn't bad enuff pis/iis indifference to the sector hamstrings a decent advance despite palm oil being in the top 1 of best performing commodities in '19.

The sector has had a torrid few years besieged on all sides and almost down and out when palm hit $470 and few big estates can make money at those prices, let alone paying for labour.
So while the price has reverted to more sensible levels at roughly the 10yr average, investor interest has not, perhaps even declined. Quite often pis get so fed up with a stock or sector they sell out just as a turnaround is beginning. I know I've done it myself.

If all the messages we are getting from those closer to palm oil 'analytics' investors can look forward to a bright few years ahead even if your stock of choice does not at least it should improve returns to holders.
So assuming your not a rabid green and palm is an anathema to you the sector should provide opportunities to pis who can stomach the constant negativity.

Last time I looked the pound in my pocket had no loyalty to a cause, religion or country outside of arming our enemies. I try to turn a coin which fuels cash into the economy or further REA
stock...hmmm?

Stockpiles of palm oil have dropped to their lowest level in 8 months due to the exceptional 'dry' weather.
Inventories declined by 13% in Nov to c.3.5mt while output contracted about 5% to c.4mt with exports off 1% to c.2.9mt.
Domestic useage steady at 1.45mt in Dec.

However the main story is the dry weather which will impact Nov & Dec output particularly in Kalimantan and Sumatra both key palm oil areas.
Indonesia continues to push biodiesel usage which might boost palm consumption by 3mt this year.
Dealers expect palm oil futures to remain strong in the RM 3000-3300 range.

Overnight the Dow closed above 29000 for the first time on back of China /US phase-one deal, some tariffs remain until phase-2 deal agreed the US-Mexico-Canada agreement to come and Iran anxieties easing. Sentiment (fear of missing out) is good as investors see further gains this year as Q4 nos roll in some 77% of the 10% reported beating Wall St forecasts.

MSCI(w) 574.

DJ +90 (29030) R
SP +6 (3289) R
NS+7 (9259) R
R2 +7 (1682) R

Far East.
TK +9
HK -7
SH -9
SK +10
Little action after US/China deal. Global damage to trade averted for now. Trump impeachment seen as a side-show.

The nos:- Oil $64.42.
Gold $1559. Palm $810.
Vix 12.4. $1.305. €1.170.
PI 7529. FP 8084. FF +1.
DF+66.
Morning all.

Doubt we have seen a 'floor' price for cpo which flirts with $800 then backs off. Daily moves of $20 up
and down are fairly common but I dont think REA make many forward sales at fixed /spot prices preferring to sell into the local refinery mrkt at current average prices ahead of delivery.
They may forego a sudden spike in cpo prices but it works the other way as well.
In 2018 REA achieved cpo price was $472 av ($592) and cpko $1007 av ($1134). Its early days in 2020 but even at an av cpo of $750 for the year revenues and the bottom line will be higher if REA can achieve c.$620+pt. Whether that will be enough to see profits depends on other factors, debt repayments, increasing estate costs due to greenfield planting (if any) and bunding in low lying palm areas if flooding has occured. Fuel, seeds, fertiliser increases and especially labour as palm is a very labour intensive business add to the overall costs of running an estate.

Rarely does a big increase in cpo price fall straight to the bottom line, there will always be unexpected calls on monies to be used to sort out something or other it's just the way it is.
One just hopes selling prices will be high enough to absorb shocks and leave enough to grow the business in the years to come.

Unless the economics of supply and demand have got screwed or traders have pumped up the cpo I see no reason for the cpo to be falling just as I thought the upside had been too optimistic.
Perhaps cpo down in the $750s would be more realistic, satisfying buyers, sellers and producers.
At $750 even serial loss maker REA might break even! Cpo testing the low $800-$810s again after a damp squib rise and some small lot selling has taken the sp to 170-188 a crazy 11% spread.
Dont deal at those prices as I'm sure you can get inside 188. I think 180 is more realistic but for purely pecuniary purposes I'd prefer 170 so I'm sitting on my hands. I'm in no rush to buy.
Feb trading update is going to have to be stellar to move REA into the 200s and tbh I think were going to have to see the H/Y nos before any serious upward move near that level and as we know great results often send shares down so 200 might be a stretch.

Not that I'm predicting anything as I'm usually wrong (nothing ever goes well for me, oh woe is me type thing!) so 200 here we come!! Never rule anything out or in for that matter. Until the H/Y it's all huff and puff.

Palm just hit $800 testing Jan 6 low of $797 and poss next stop $780. No news to warrant the near $40 fall from 2020 high.
Expect a bounce up.

Overnight:-

MSCI(w) 573 (u/c)

DJ +33 (28940)
SP -5 (3283)
NS -23 (9251)
R2 +6 (1676) R
Trump to keep c.$250bn of tariffs through 2020 knocked the Dow off 29054 high, Gold better crude flat at $58.10.

Far East:-
TK -115
HK -211
SH -23
SK -13
A long road ahead for 'phase-2' talks possibly years and the Huawei problem take the shine off Eastern mrkts.

The nos:- Oil $64.36.
Gold $1554. Palm $807.
Vix 12.4. $1.303. €1.170.
PI 7548 (-53). FP 8094.
FF -14. DF-30.
Morning all.

Cpo might be finding a better trade level at $810-$820 if demand eases and to date there has been no indication of that.
The roll out of B30 has ways to go as palm is diverted for domestic usage. How this impacts export of cpo is not known as Indonesia may not up production in 2020 in fact its estimated to be c.1mt less on biodiesel etc...and Malaysia will be hit on Indias boycott if maintained, so output from the global no 1&2 producers will be lower at a time when world demand is strong.
A floor will be set on palm prices, just a question will it be sub $800 or not?

India value of palm oil imports from
Indonesia $3.8bn
Malaysia $1.3bn.

Following the trade boycott on Mal palm the country seeks to expand its trade with Palistan who imported c.1.6mt worth $730m in 2018.
Since the spat the 94 year old Malaysian PM has reiterated his views saying "we don't retract and change" adding that Malaysia will be significantly affected.