Commodity Trading Tips for Crude Palm Oil by KediaCommodity

Ajay Kumar Kedia 13 June 2014

Crude-Palm-Oil CPO settled up 0.45% at 511.5 after pick-up in domestic as well as export demand. An increase in Malaysian crude palm oil production and stockpiles, capped the gains in crude palm oil prices to some extent. Malaysia, world's second-biggest palm oil producer, crude palm oil output jumped 6.5% to 1.65 million tons in May compared to 1.55 million tons in March, data from the Malaysia Palm Oil Board (MPOB) showed. Palm oil stocks in Malaysia likely edged up for a third straight month in May to touch their highest since the end of January, a survey showed, 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. May's palm output was seen rising 7.1 percent to 1.67 million tonnes, according to the survey. Exports were forecast at 1.36 million tonnes, up 8.0 percent from April. Palm oil stockpiles in Malaysia, the world’s second-biggest supplier, increased for a second month in April as production rose to the highest level since December. Inventories climbed 4.6 percent to 1.77 million metric tons from a month earlier, the Malaysian Palm Oil Board said. Technically market is under short covering as market has witnessed drop in open interest by -7.16% to settled at 1853 while prices up 2.3 rupee, now CPO is getting support at 508.9 and below same could see a test of 506.3 level, And resistance is now likely to be seen at 513.7, a move above could see prices testing 515.9.