Commodity Trading Tips for Crude Palm Oil by KediaCommodity

Ajay Kumar Kedia 31 December 2013

Crude-Palm-Oil CPO settled up 0.6% at 550.5 tracking firmness in spot demand and overseas prices. Tight stocks availability in the physical market due to restricted arrivals from producing belts further fuelled the uptrend. Besides, a firming trend in overseas markets on speculation that a rally in crude oil prices to the highest level in more than two months will boost demand for the vegetable oil as feedstock for biofuels also supported the crude palm oil futures trade here. Floods would disrupt harvesting and transportation of palm fruit in the No. 2 producer, further squeezing palm supplies, after output was dented by monsoon rains which displaced about 60,000 people in parts of Peninsular Malaysia in early December. Palm oil production in Malaysia might be hampered as a second wave of flood may hit Pahang by the end of December according to Malaysia Meteorology Department's warning. Malaysia Palm Oil Board data shows the second largest matured oil palm planted area in Peninsular Malaysia is in Pahang and the possible flood may disrupt harvesting and transportation of fresh fruits in that area. As per latest release from Cargo Surveyor Intertek Agri Services, Malaysia's palm oil exports during December 1-25 stood at 1.14 million metric tonnes, down 7.13% from the November. Malaysia, the world's No. 2 palm oil producer, has kept its crude palm oil export tax for January unchanged at 5 percent, a government circular showed. Technically market is under short covering as market has witnessed drop in open interest by -1.5% to settled at 3355 while prices up 3.3 rupee, now CPO is getting support at 548.3 and below same could see a test of 546.2 level, And resistance is now likely to be seen at 551.5, a move above could see prices testing 552.6.