Commodity Trading Tips for Crude Oil by KediaCommodity

Ajay Kumar Kedia 16 June 2014

Crude-Palm-Oil CPO settled up 2.62% at 524.9 as investors covered short position at lower levels and expectations of improved demand for bio-fuel. However, an increase in Malaysian crude palm oil production and stockpiles, capped the gains prices to some extent. India's new government will not raise duties on palm oil in the short-term, despite demands by domestic oilseed processors to cut cheap imports from the world's top producer Indonesia, official sources said. Market participants said although demand for palm oil improved in May compared to April, the export growth slowed down towards the end of the month, signalling dwindling demand for the tropical oil despite a major festival just around the corner. Cargo surveyor Intertek Testing Services (ITS) reported that a total of 1,315,952 tonnes of Malaysian palm oil products were shipped in May, 7.8 percent higher month-on-month, but slower than the 23 percent jump recorded in the May 1-15 period. Palm oil stocks in Malaysia likely edged up for a third straight month in May to touch their highest since the end of January, as a rise in production outstripped export demand for the tropical oil. Stockpiles in Malaysia, the world's second-largest producer, have grown continuously since the beginning of March due to higher crude palm oil output amid poor global demand. A further rise in inventories would add pressure on benchmark palm prices that are already down nearly 10 percent this year. Technically market is under short covering as market has witnessed drop in open interest by -7.66% to settled at 1711 while prices up 13.4 rupee, now CPO is getting support at 516.1 and below same could see a test of 507.2 level, And resistance is now likely to be seen at 531.8, a move above could see prices testing 538.6.