MCX Crude Palm Oil under short covering; Support seen at 781.3
Commodity Online | October 16 2020
UPDATED 11:20:36 IST

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Technically Crude Palm Oil market is under short covering as market has witnessed drop in open interest by 1.65% to settled at 3636 while prices up 18.1 rupees.

Now MCX Crude Palm Oil is getting support at 781.3 and below same could see a test of 767.8 levels, and resistance is now likely to be seen at 802.6, a move above could see prices testing 810.4.

Crude Palm Oil yesterday settled down by 2.46% at 784.2 on profit booking amid demand worries driven by lower Oct. 1-15 exports. The production pattern in the northern and central region (of Malaysia) is unusually low, and major refiners there are not getting enough supply of crude palm oil.

Output this year has been hit by a wetter-than-usual season due to the La Nina weather pattern and as a coronavirus-induced restriction on movement worsens a long-standing labour shortage.

Even in peak production months of September and October output has been constrained, with the Malaysian Palm Oil Board (MPOB) reporting a marginal rise in production for the previous month.

Meanwhile, Malaysian exports during Oct. 1-15 fell 2% from the same period in September as shipments to top palm markets China and the European Union declined, cargo surveyors said.

Cargo surveyor Intertek Testing Services estimated shipments to the Indian subcontinent, which is set to celebrate Diwali in mid-November, rose 60% in the first 10 days of October.

Malaysia's palm oil end-September inventories rose 1.24% from the month before to a three-month high of 1.73 million tonnes.

Malaysia's end-September palm oil stockpile expanded 1.24% from the previous month to a three-month high, as a surprisingly small advancement in output and exports squeezed supply, according to industry regulator data.

Trading Ideas:
--Crude Palm Oil trading range for the day is 761.5-813.9.
--Crude Palm Oil prices dropped on profit booking amid demand worries driven by lower Oct. 1-15 exports.
--Malaysian exports during Oct. 1-15 fell 2% from the same period in September as shipments to top palm markets China and the European Union declined
--Even in peak production months of September and October output has been constrained, with the MPOB reporting a marginal rise in production for the previous month.
--In spot market, Crude palm oil dropped  by 5.1 Rupees to end at 800.4 Rupees.

Courtesy: Kedia Commodities

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