Technically Crude Palm Oil market is under short covering as market has witnessed drop in open interest by 1.94% to settled at 2424 while prices up 9.2 rupees.
Now MCX Crude Palm Oil is getting support at 732 and below same could see a test of 724.6 levels, and resistance is now likely to be seen at 743.4, a move above could see prices testing 747.4.
Crude Palm Oil yesterday settled up by 1.26% at 739.3 prices remained supported amid hopes for lower output in July as heavy rains hit top producers Indonesia and Malaysia.
Total palm oil output in top producers Indonesia and Malaysia is expected to fall in 2020 hampered by a labour shortage, and last year's dry weather and lower fertiliser application, the Council of Palm Oil Producing Countries (CPOPC) said.
The prospect of a La Nina weather patter bringing wetter-than-normal weather to Indonesia and Malaysia could also adversely affect crop production and harvesting, it said.
"The potential of La Nina in the second half of the year will dampen any prospects of increased production," CPOPC, a palm oil board led by Indonesia and Malaysia, said in a report.
CPOPC forecast Indonesia's crude palm oil production this year would be 1-2 million tonnes below last year's 44 million tonnes. Output in neighbouring Malaysia is expected to drop 4.3% to 19 million tonnes.
The Malaysian Palm Oil Association forecast crude palm oil production during July 1-20 to have fallen 8.9% from the month before. Malaysia's palm oil exports in July 1-20 fell 10.5% from the month before to 1,089,021 tonnes, cargo surveyor SGS said.
--Crude Palm Oil trading range for the day is 724.6-747.4.
--Crude Palm Oil prices remained supported amid hopes for lower output in July as heavy rains hit top producers Indonesia and Malaysia
--CPOPC forecast Indonesia's crude palm oil production in 2020 would be 1-2 million tonnes below last year's 44 million tonnes.
--The Malaysian Palm Oil Association forecast crude palm oil production during July 1-20 to have fallen 8.9% from the month before.
--In spot market, Crude palm oil remains unchanged at by 0 Rupees to end at 743.1 Rupees.
Courtesy: Kedia Commodities