I am NOT a Crude Palm Oil (CPO) expert. I do not profess to be one too. I am more interested in the statistical element of CPO prices.
Commodities like CPO are dependent on cycles (seasonal factors). In fact, there are weather considerations that will impact on CPO prices. The following graph shows the historical CPO price since November 2007, with a historical median CPO price of RM2,585.
As shown below, it is observed that there are some “seasonal weakness” in the CPO prices (mainly in Q2-Q3), middle of the year):
The following table shows that on average (since Nov 2007), there is a probability that CPO price will tend to fall below the median price of RM2,585 in the months of Aug, Sep, Oct and Nov:
The following graph shows the estimated CPO price (by month) by adding the average differential (between CPO Price and CPO median) with historical median CPO price of RM2,585. Strictly For Educational and Illustrative Purposes Only
One may argue that trading in commodity or commodity-related companies should be based on seasonal factors and cycles. If that argument holds and assuming that the above high-level statistical analysis works out as planned, I may personally consider the months of October-November as a possible (not a certainty) entry point for trading CPO or palm oil-related stocks. It is important to note that there are NUMEROUS factors that impact on CPO prices. Statistics may not work at times.
DISCLAIMER: THIS IS A PERSONAL BLOG AND SHALL NOT BE RELIED IN WHATSOEVER MANNER BY ANYONE. ALL ARTICLES CONTAINED IN THIS SITE ARE STRICTLY FOR INFORMATION AND ILLUSTRATIVE PURPOSES ONLY AND DOES NOT PURPORT TO SHOW ACTUAL RESULTS. IT IS NOT, AND SHOULD NOT BE REGARDED AS INVESTMENT ADVICE OR AS A RECOMMENDATION REGARDING ANY PARTICULAR SECURITY OR COURSE OF ACTION. SOURCES USED IN THIS SITE HAVE NOT BEEN INDEPENDENTLY VERIFIED FOR ACCURACY, COMPLETENESS AND TIMELINESS. YOU SHOULD SEEK INDEPENDENT AND PROFESSIONAL INVESTMENT ADVICE IN REGARD TO YOUR INVESTMENT DECISIONS. THE AUTHOR MAY HOLD POSITIONS IN THE SECURITIES MENTIONED IN THE ARTICLES.