Commodity Trading Tips for Crude Palm Oil by KediaCommodity

Ajay Kumar Kedia 12 September 2014

Crude-Palm-Oil CPO settled up 1.49% at 436.8 amid rising demand in the spot market following restricted arrivals from major producing belts. Further, concerns about unfavorable weather conditions in comparative oil-producing countries too supported crude palm oil prices uptrend. Prices also seen supported on concerns about unfavourable weather in comparative oil-producing countries. Indonesia is expected to cut its crude palm oil export tax to zero for October, industry sources in the world's top producer of the tropical oil said, after a similar move by Malaysia aimed at boosting overseas sales of the commodity amid weak demand. Malaysia said it will exempt crude palm oil from export taxes in September and October in a move to reduce swelling stockpiles of the tropical oil after a recent price slump and as supply outstrips demand. Stockpiles in Malaysia, the world's No.2 producer of the tropical oil, stood at 1.68 million tonnes at the end of July, but are expected to hit a seven-month high at end-August as production outstrips global demand from key consumers. Malaysian palm oil stocks swelled to their highest in more than a year at end-August as crop-friendly weather boosted production amid softer demand, industry data showed. The rise in stockpiles in the world's No. 2 producer of the tropical oil beat market estimates and may weigh on benchmark palm oil prices which have already tumbled 24 percent so far this year and hit a five-and-a-half-year low last week. Technically market is under short covering as market has witnessed drop in open interest by -14.64% to settled at 2145 while prices up 6.4 rupee, now CPO is getting support at 432 and below same could see a test of 427.1 level, And resistance is now likely to be seen at 439.9, a move above could see prices testing 442.9.