Member Info for JohnLewis79

Commodities will cont to be 'weaponised' in 2020 says the Nikkei Asian Review.
China in particular which accounts for 90% of the world's rare earth minerals will have no compunction in using them as bargaining chips by taking them hostage. Commodities reflect what is happening in the world and China has now fully integrated their many suppliers into 6 large State owned enterprises for ease of control. China of course denies any allegations of weaponisation.

Soybeans have also become trade war fodder between the US and China. China has switched to Brazil the 2nd largest global supplier for its soybean imports. A bushel (36 litres) of soybean fetched $9 recently down 10% from 2 years ago as the stalemate continues.

'Weaponising' palm oil was used by India who halted imports from Malaysia due to the Kashmir question and the EU seeks to ban palm oil by 2030 over deforestation concerns.

As we know palm prices have been unaffected to date mainly due to output worries and expected Chinese demand for palm oil to increase at soybean expense.
'Weaponising' other Rare Earths continued as Indonesia the world's biggest nickel ore supplier is intent on banning exports as it tries to ramp up it's own refining industry. Signs that commodities are becoming unstable due to resource nationalisation will only put upward pressure on prices into 2020.

Isn't it gratifying that "oorderrr" Bercow got not a 'gong' of any description..hip hip hooray! My faith in the distribution of medals for outstanding services has been partly restored.

For sure we can quibble about silly grants to sportsmen who take the occasional wicket which is hardly risky or those that can cite the alphabet backwards in 30 seconds or the footballer paid millions to kick a ball around the park, missing goal mostly... obviously a Palace player.

The whole 'celebrity' system has fallen into disrepair not to mention derision from the populace when Fanny Adam's of TV soap fame struts her OBEs in the Rovers Return for the price of a Mackeson.
Who remembers the deserving few who sacrifice their time and energy for no reward?
Who even cares? Hell why even bother?

MBE, OBE, CBE, Knights of the Garter, there's one for everyone just throw yer hat in the ring...you never know one might come your way. This silly 'glad handing' nonsense must end.
John Lennon returned his MBE and George his OBE capturing the public mood. As in music they were ahead of their time. We haven't learnt much in the intervening years have we?

Morning SheerClass i have had a quick look over DKLs 2018 AR. Little debt to worry about but with only c.2000ha planted REA will be 40+ x as big by 2025. No doubt DKL have expansion plans to increase production etc..which at H1 2019 was c.29kt and from Ayenouan 175,000t over 5 years. That's small potatoes but from a standing start.
The cashew project looks to be a cashcow heh heh heh with bags of potential.
Your cashew our biodiesel.

Longevity in the palm business is REAs forte having been in Indonesia since the 1900s in an earlier 'rubber' life but as REA Holdings since the 1980s so has a huge start over DKL in plantation terms.

I can see the investment attraction at DKL as a small plantation Co going places and your pretty much in on the ground floor. Having survived 2 of the worst years for palm oil it can only get better and % wise you will benefit more than REA.

Rugs tells me he knows and trusts the management a prerequisite in any investment so I'd say your investment is in good hands.

Commodities had a difficult time in 2019 largely due to the China/US trade spats which impacted on global trade.

Not all commodities performed badly, while base metals lost c.5% Palladium outshone Gold and CPO was the best of the rest as stocks dwindled, output declined and biodiesel is set to continue the cpo rally in 2020. One beneficiary of any US trade agreement with China is soyabean which China will resume buying in quantity.

Avtar Sandu Chief Commodities Manager said " one should keep an eye on Palm Oil as prices are likely to remain elevated" Much depends on whether Indonesia can implement B30 successfully and hit their 20% target for the biofuel
edible oil two hugely important strings for the Indonesian economy.

B20 in operation for c.2 years is very popular among motorists as its half the cost of regular fuel and more energy efficient (less gas emissions) with negligible mpg difference for cars.
It's been est that among the heavy goods trucking industry mpg will be c.2%
less.
Given that the fuel bill for imported crude est at 1.7mbopd the savings will be huge.

Indonesia and India are set to cement and foster closer economic ties. Tariff cuts on a quid pro quo basis and are aiming at $50bn trade value by 2025. Much at Malaysias expense over the Kashmir issue.

Simply I have changed my mind due to the wide discrepancy between cpo and sp relationship which has widened.
But tomorrow I could be thinking of adding. I'm afraid I'm a gut feeling investor at times and I often do the opposite of what I say I'm going to do. No hard and fast reason just my crazy way of investing at times and my posts contain a certain degree of tongue in cheek parlez.
I agree DKL has potential but it's still a tiddler with c. 7 x REAs outstanding so making the nos is going to be a lot harder than on REAs 43m. As ever you pays your money and..
I have stated many times debt is a worry but with over 1mt of output this year and a huge plant out on the cards when fully completed will give REA over 80,000 ha under palm by 2025 that's another 50,000ha and with a fair wind v a v the palm price and B30 / B40 REA will be making many millions more than DKL assuming all the ponderables line up.
I may be talking my own book but it's the only one I'm reading atm.
I take it your invested in DKL so good luck could be a very good year for the Ivorians! Trading updates for Indonesian palms due Feb will give me a stronger basis for any further investment in REA....if I can hold out that long!

Today closes the year at wk 52 though the calendar year closes on Tuesday the 31st.
I'll do year end nos etc on Wed 1st of Jan a public holiday. It will be a comprehensive list of nos some of which will have no bearing on REA.

Suffice to say the two most important wk 52 nos are REA closing at 166 for a 78p loss on the year ( -32%) and CPO $803 up $218 (+37%). The cpo(r) over 52 wks fell from 2.40x to 4.83x a 101% slippage to the resurgent cpo price.

It might have been a hell'uva lot worse.

The current cpo price of $803 at close after $810 might not be the one you use/calculate or even look at.

It's the one I use as I'm a lot more pessimistic about the stellar cpo rise these last 6 months than others on various boards and the grudging sp following along behind (I'm missing something there). I'd be much happier at low sustainable $700s given the over exuberance.

Whatever, I hope REA have managed to assay cpo to the bottom line which after all is all that matters be palm at $100 or $1000. Can you convert the top line to the bottom line without all those middle nos cratering the net profit with exceptionals which boards like to throw in.

So, while the going has been good since July that sure don't make a $900 future into H1 2020. We shall see in the next 2 months if they have managed to 'convert' their 'good fortune' since July.

Don't hold your breath as I'm a glass half empty guy
because until I see the actual nos I will be a huge sceptic of REAs ability to deliver for shareholders, given their outstanding lack of success to date (thats a bit unfair)....
i know but facts be facts.

I will be more than happy to be proved wrong..... in spades but I restate 220 tops in 2021. Cpo(r) has slipped to 4.83x which tells me all I need to know about the sp direction into H1 2020.
I will hold (not add) until the mrkt tells me in wrong. Afternoon all.

We don't mention cpko prices much. Currently the Nov price is $756pt. (Cif Rtdm) a long way down from the $1737 in Jan '17.

Year to Nov cpko averages $637 above Hardmans $600 for 2020. The last of the $1000 cpko prices was in April '18 and then fell every month to $542 low in June'19 thence recovered as with Cpo.

110 trades in my last oil stock and that's on the low av side. Cant compare the two outside of being commodity shares.
I very much doubt REA will ever have that volume of trades given where we are
situated.
Personally I think potential investors are put off by anything to do with palm oil, the 'greens' and climate change. Despite oil usage causing damage to the environment investors see better returns in that sector and are happy to ignore what palm has to put up with.

Money has no loyalty it seeks the best returns wherever they may be and that's as it should be.

5 London palm stocks and just 11 trades among the lot. Says it all
really in this unloved sector.

That's the casino hour for share prices ended.
Anglo -7
Dkl +0.25
Epa u/c
Mpe u/c
Rea +3.

Q4 prices.

Oct $511
Nv $641
Dc $732 (est)

Q4 av price $628. As usual treat with caution but pretty close methinks.

Lower in Anglo unchanged in the others....whaddya expect?

If you look at the 3 year chart you will note REAs bounce is pretty anaemic.
Recovering from the 2018/9 stock price pasting was always going to make hard work of ever seeing 300+ again.
I think that's out of the question. Take a look at the long term Cpo av price, around $800 and ways below the $1200 of yore
and were stuck sub 200p.
Should we not be a lot higher or were the heady days of 300+ unrealistically high?

The omens look good for 2020/1 even if the "naysayers" are right REA should manage to hit the black nos if output is increased. Not sure of the break even price for REA they don't divulge that info
unlike oil companies but perhaps $500-$550 achieved?

At cpo $600 with better oil extraction rates, increased output and a hold on capex REA should do okay. That's a worst case scenario but worth keeping in mind.

Atm it's a one way street for palm prices now c.$790. When does one start to panic, $725
$700, lower?
The bullish case for CPO 2020 is hard to deny however will the mrkt agree tending as it does to downplay good news and focus on the banana skins lying in wait?

Some analysts are forecasting CPO prices to come off by 10%-20% by Q2 next year as any US/China deal will lift soybean and pressure palm down.
Palm looks overbought and usually takes 3-4 months to unwind. Additionally stocks are set to decline in Mal to c.1.5mt as the lean season to March is arriving.

We know about the 'image'
problem assailed on all sides by bankers, investors and the hate palm oil lobby. Negative sentiment is a fact of life for palm producers.

Caution should concern investors regarding Indonesias ambitious B30 bio programme whereby c.20% of its output is targeted for use by 2020.
Any slippage will hit prices (over promised under delivered).
If sentiment turns a 20% hit to current will see prices back to the low $600s which will knock palm stock prices, (REA 130?). As you know they go down a lot faster than they go up in my experience anyway.

As in any sector or commodity it's as well to factor in over exuberance as banana skins are strewn along the way to catch unwary investors, rather like the mrkt was blindsided by the 'turnaround' in cpo from July. They didn't see that.
Best you prepare for coming headwinds.

Overnight:-
DJ +106 (28621) R
SP +17 (3240) R
NS +70 (9022) R
R2 u/c (1678) R

Asia:-
TK -62 (closed)
HK +320
SH +7

The nos:- Oil $68.00
Gold $1517. Palm $786.
Vix 12.65. $1.299. €1.168
PI 7645. FP 8191. FF +10
DF +55.
Morning all.

Looking back over REAs share price decline in H1 2019 there were some chunky vols, in REA terms of course. I noted some of the trade vols as below but not that they were buys or sells.

11k @ 208
100k @ 194
42k @ 174
43k @ 145
23k @114
35k @105
26k @96
16k @95

Some going back up:-

10k @137
33k @152
32k @162
67k @160
58k @160

Tomorrow could be an interesting day for palm stocks as it falls into the Santa Rally. So far REA has not kept up with the cpo rally slipping to 4.7x.
I would expect this to change pretty rapidly given how the bottom line will benefit.
Of course the mrkt is not much interested in 'Palmers' atm so I'm not getting my hopes up and sticking to my 220 H1 range.

That's a near $300 rise from July lows of $478 a whopping 63% rise. Has to be the best commodity price gain this year?

As we know nothing goes up in a straight line so I'd be more than happy to see palm H1 average at $720.

Just hit $776 up $25. Might have to revise 2020 av cpo prices a touch!

The trading update scheduled for late Feb should show a marked improvement on HI nos.
The Cpo price will have averaged c.$590 since wk 26 considerably up on wk 1-26 which averaged c.$531, my figs of course so at best in the ball park.

Unfortunately the bottom line will not be enough to wipe out the very bad H1 op loss of c.$14m and PBT of -$29m due in the main to a 20% fall in palm and a $16m finance outflow. With costs much reduced (capex) and better OER who knows it could be a close run to brk/even or small loss
for the F/Y.

With a land acreage of c.82,000ha (planted 36.5k)
there is plenty in the bank heading to 2025 when the Co hopes to be fully planted out given continuing funding availability.

At c.$700 av CPO price HI 2020 the Co will surely be in the black. Achieved CPO prices are forecast at $505 for 2020 which looks too low at current $750 price and Hardmans FY loss of $9m will be revised shortly barring any 'nasties'. Output might remain the same perhaps an increase of 5-6% (group and 3rd party) to 1.1mt a record for REA.

So increased cpo/cpko prices, increasing output better FFB yields offset by planting costs which should be well absorbed, the near future to 2020/1
looks a lot better than the low points of recent years 18/19. It must be remembered that US$ notes will become due in 2021 and dividends on the pref might be resumed next year. Debt as ever with REA will cont to be a bugbear which holders will have to live with for years ahead with total liables at 60% of shareholders funds (est 2019)....ouch!!

So it's not all a walk among the palms but much better than anyone foresaw back in June 2019.
A week in politics is considered a longtime or a lot can change in a short time as exactly happened on the 24/7/2019 when CPO jumped $29 to $508 and never looked back.
Morning all.