MCX Crude Palm Oil under short covering; Resistance seen at 526.2

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Technically Crude Palm Oil market is under short covering as market has witnessed drop in by 6.3% to settled at 3329 while prices up 5.8 rupees.

Now MCX Crude Palm Oil is getting support at 518.9 and below same could see a test of 514.2 level, And resistance is now likely to be seen at 526.2, a move above could see prices testing 528.8.

Crude Palm Oil on MCX settled up by 1.12% at 523.7 on short covering after prices dropped amid concerns over slowing demand and rising production dragged down the market. There was further pressure on prices as Europeans reduce consumption amid environmental concerns associated with the tropical product.

Pressure seen on prices after the news that Malaysian CPO production to reach 20.2 million tonnes this year (up by 3.5 per cent) while Indonesia’s production would climb to 42.4 million tonnes (+7 per cent). The good weather conditions in the last 24 months would be conducive for palm oil growth and supply.

Global palm oil demand may suffer its first contraction in two decades during the 2019/20 crop year due to rising domestic oilseed supplies in top buyer and slowing demand in Europe and China.

The European Commission has concluded that palm oil cultivation results in excessive deforestation and its use in transport fuel should be phased out, setting the bloc on a collision course with major palm oil producers and Indonesia.

The Commission published its criteria for determining what crops cause environmental harm, part of a new EU law to boost the share of renewable energy to 32 percent by 2030 and determine what are appropriate renewable sources. Malaysia kept its export duty on crude palm oil for April at zero percent, according to a circular on the Malaysian Palm Oil Board’s website that cited the national customs department.

Trading Ideas:
–Crude Palm range for the day is 514.2-528.8.
–Crude Palm Oil ended with gains on short covering after prices dropped amid concerns over slowing demand and rising production.
–India’s palm oil imports in February dropped 1.1 percent from a year earlier to 751,703 tonnes as soyoil imports jumped.
–Global palm oil demand may suffer its first contraction in two decades during the 2019/20 crop year due to rising domestic oilseed supplies.
–Crude palm oil prices in spot market dropped by 1.20 rupees and settled at 515.00 rupees.

Courtesy: Kedia Commodities

Source: Commodityonline.com