MCX Crude Palm Oil under short covering; Resistance seen at 597.4
Technically Crude Palm Oil market is under short covering as market has witnessed drop in open interest by 5.71% to settled at 6985 while prices up 1.5 rupees.
Now MCX Crude Palm Oil is getting support at 592.1 and below same could see a test of 589.2 level, And resistance is now likely to be seen at 597.4, a move above could see prices testing 599.8.
Crude Palm Oil on MCX settled up by 0.25% at 595.1 amid higher domestic stocks and steady domestic demand from the stockists. Malaysian palm oil prices are set to average 2,410 ringgit ($591) a tonne in 2018, the Malaysian Palm Oil Council (MPOC) forecast on Monday, down about 14 percent from last year's average prices.
The MPOC also forecast palm oil output in Malaysia, the world's second largest producer, at 20.3 million tonnes in 2018, above last year's 19.92 million tonnes due to better yields.
Moreover, cut in tariff value for the palm oil imports and steady physical demand is keeping the prices in a range. The base import price of crude palm oil has been cut to $578 per tn from $614 per tn earlier.
Moreover, govt cuts RBD palm oil base import price to $599/tn vs $629/tn. Based on global prices and fluctuations in foreign exchange rates, the government revises base import prices every fortnight.
According to SEA monthly update, palm oil imports into the country were down 47% and 26% for CPO and RBD Palmolein in June compared to last year. Malaysia's palm oil stocks are expected to have risen to their highest in five months at end-July, a second straight gain as output growth outpaced exports.
Palm oil stocks in the world's No.2 producer grew 7 percent in July to 2.34 million tonnes from the previous month, highest since February.
--Crude Palm Oil trading range for the day is 589.2-599.8.
--Crude palm oil prices traded in range amid higher domestic stocks and steady domestic demand from the stockists.
--The MPOC forecast palm oil output in Malaysia, at 20.3 million tonnes in 2018, above last year's 19.92 million tonnes due to better yields.
--Malaysia's palm oil stocks are expected to have risen to their highest in five months at end-July, a second straight gain as output growth outpaced exports.
--Crude palm oil prices in spot market gained by 1.10 rupees and settled at 591.40 rupees.
Courtesy: Kedia Commodities