CPO may trade weak as BMD Futures fall

Fundamental Analysis

MCX CPO futures closed lower on weak global market sentiments on Tuesday.

Sharp fall in crude oil prices at NYMEX also generated selling pressure in CPO on bio-diesel concerned.

Harvesting pressure and record high production estimates of soybean also added bearish market sentiments.

According to SGS, palm oil exports in the first 10 days of October declined by around 11.7% to 346,579 tonnes in comparison with the same period in September. The exports are below market expectation of 375,000 tonnes.

MMTC Ltd. has floated a tender to import 12000 metric tonnes of edible oil. It is seeking to import 6,000 metric tonnes CPO and 6,000 RBD palmolein. Shipment is expected to deliver by Oct 15.

Technical Analysis

CPO Prices (MCX Oct Contract) closed lower at 300.10 on Friday; from its high of the day (310.00) and touched a low of 296.50.

Prices closed below its 10 Days & its 20 Days EMA. 14-Days RSI is at 21.64.

Prices are likely to trade sideways down with short-term and support and Resistance as follows:

Outlook

Crude palm oil futures are expected to trade lower on sharp fall in BMD CPO futures. Sharp fall in crude oil prices are also in favour of bears on bio-diesel concerned. Prices are expected to come down on higher stock of Malaysian and Indonesian palm oil. Government of India is importing more edible oil to control prices. Record high production estimates of soybean are also in favor of bears.

Courtesy: Angel Commodities