MCX Crude Palm Oil under short covering; Support seen at 641.7
Commodity Online | May 27 2020
UPDATED 11:20:47 IST

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Technically Crude Palm Oil market is under short covering as market has witnessed drop in open interest by 26.03% to settled at 1370 while prices up 8.7 rupees.

Now NCDEX Crude Palm Oil is getting support at 641.7 and below same could see a test of 636.6 levels, and resistance is now likely to be seen at 651.3, a move above could see prices testing 655.8.

Crude Palm Oil yesterday settled up by 1.36% at 646.9 on short covering after prices dropped amid forecasts of higher May production.

The market is expecting May inventories to increase further due to higher output from the biggest palm-producing state of Sabah.

The Malaysia pledged to bolster its trade ties with top palm importer India, while improving May exports limited the downside.Indian buyers contracted up to 200,000 tonnes of Malaysian crude palm oil for June and July, after a four-month gap following a diplomatic row.

Malaysia’s exports to India in January to April fell to 96,145 tonnes, down 94% from the same period in 2019, Plantation Industries and Commodities Minister Mohd Khairuddin Aman Razali said.

But crude palm oil prices falling below Malaysia’s palm oil duty threshold level and New Delhi’s decision not to extend restrictions on refined palm oil imports have led to an increase in purchases.

Malaysia, the world’s second-largest palm oil producer and exporter, slashed the June palm oil export duty to zero, lowering its price against rival Indonesian palm.

Top producers Indonesia and Malaysia both announced plans to continue their respective biodiesel programmes, alleviating concerns that the plans would be scrapped amid low crude prices.

Trading Ideas:
--Crude Palm Oil trading range for the day is 636.6-655.8.
--Crude Palm Oil on short covering after prices dropped amid forecasts of higher May production.
--The market is expecting May inventories to increase further due to higher output from the biggest palm-producing state of Sabah.
--The Malaysia pledged to bolster its trade ties with top palm importer India, while improving May exports limited the downside.
--Malaysia, slashed the June palm oil export duty to zero, lowering its price against rival Indonesian palm.

Courtesy: Kedia Commodities