Commodity Trading Tips for Crude Palm Oil by KediaCommodity

Ajay Kumar Kedia 19 August 2014

Crude-Palm-Oil CPO settled down -1.16% at 502.1 tracking weakness in spot demand and weak global trend. Further, sluggish demand in the spot markets against ample supplies from the major producing belts too supported crude palm oil prices downside. Further pressure seen dragged by forecasts of abundant supply of competing oilseeds alongside an expected surge in Southeast Asian palm output. India's palm oil imports rose by a tenth to 657,750 tonnes in July from a month earlier, data from a leading trade body showed, as buyers boosted shipments to meet a big gap in local supplies amid poor monsoon rains. The monthly palm oil imports also hit this year's highest level, reflecting poor domestic supplies of cooking oils ahead of the festival season that starts from August. Malaysia, the second-largest palm grower, lowered its crude palm oil export tax for September to 4.5 percent, a government circular showed, the first cut in two months. Crude palm oil imports jumped 49% to 527,648 tons in July compared to 354,401 tons for the same period a year ago, data by Solvent Extractors Association Showed. Malaysian palm oil stocks rose 1.5 percent to 1,681,016 tonnes against a revised 1,656,700 tonnes at the end of June due to lower exports and higher palm oil production. Malaysian’s palm oil production exports in July stood at 1.66 million tons, 6.4% higher from the previous month but on y-o-y basis about 0.59 percent lower palm oil production noted during June. Technically market is under long liquidation as market has witnessed drop in open interest by -4.06% to settled at 4747 while prices down -5.9 rupee, now CPO is getting support at 496.4 and below same could see a test of 490.8 level, And resistance is now likely to be seen at 508, a move above could see prices testing 514.