Commodity Trading Tips for Crude Palm Oil by KediaCommodity

Ajay Kumar Kedia 26 July 2013

Crude-Palm-Oil CPO yesterday settled down -0.87% at 492.4 tracking weakness in spot demand and overseas prices. Exports for July 1-25 fell 7 percent from the same period last month, also weighing on the market, although traders said this was a recovery from a 15.9 percent drop in the first ten days of the month. Ideal weather in the U.S. Midwest could pave the way for a record soybean harvest. That could possibly boost supplies of soyoil and shift some food and fuel demand away from palm oil. Production will start going up and we will see a build up in stocks. Exports of Malaysian palm oil products from July 1 to 25 fell 7 percent to 1,085,392 tons when compared to 1,167,266 tons shipped during June 1 to 25 period, as per industry sources. Last week, crude palm oil and palm oil prices recorded a weak trend in the global market on speculation that the upcoming palm oil production season may cause to build large palm oil inventories in Malaysia, the world's second largest palm oil producer after Indonesia. World palm oil production may increase 4.4 percent to a 58.2 mn tons when compared to the previous season amid higher than expected palm oil production from Indonesia and Malaysia, the Oil World said on July 16. However, palm oil reserves in Malaysia fell 37 percent to 1.65 mn tons in June from a record in December, according to the data released by the palm oil board. Technically market is under long liquidation as market has witnessed drop in open interest by -10.19% to settled at 1472 while prices down -4.3 rupee, now CPO is getting support at 485.7 and below same could see a test of 479 level, And resistance is now likely to be seen at 500.8, a move above could see prices testing 509.2.