MCX Crude Palm Oil under short covering; Resistance seen at 527.8

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Technically Crude Palm Oil market is under short covering as market has witnessed drop in open interest by 7.78% to settled at 4175 while prices up 5.3 rupees.

Now MCX Crude Palm Oil is getting support at 522.3 and below same could see a of 518.9 level, And resistance is now likely to be seen at 527.8, a move above could see prices testing 529.9.

Crude Palm Oil on MCX settled up by 1.02% at 525.7 on short covering and as support seen after data showed easing stockpiles and production. The Malaysian data showed that stock levels fell 6.6% to a sixth-month low of 2.73 million tonnes while output declined to 1.65 million tonnes, down 1.4% from March.

Exports rose 2% to 1.65 million tonnes. Meanwhile, Malaysian palm oil exports for May 1-10 rose by between 6.4% and 14.4% from the same period in April, according to data. Palm oil inventories in Malaysia, the world’s second-largest producer of the edible oil, eased to a six-month low at the end of April, official data showed, as exports edged up amid falling production.

Stockpiles at the end of April stood at 2.73 million tonnes, down 6.6% from the previous month, its second straight monthly drop, according to data from the Malaysian Palm Oil Board (MPOB). Falling production contributed to the reduction in stocks.

The MPOB data showed output fell 1.4% from the previous month to 1.65 million tonnes in April. Malaysian palm stocks are expected to hover around 3 million tonnes for the rest of the year, as improved yields from good weather and new plantings come into fruition this year and exports remain flat, whose estimates range between 2.7-3.4 million tonnes.

Trading Ideas:
–Crude Palm range for the day is 518.9-529.9.
–Crude Palm Oil gained on short covering and as support seen after data showed easing stockpiles and production.
–The Malaysian data showed that April stock levels fell 6.6% to a sixth-month low of 2.73 million tonnes while output declined to 1.65 million tonnes.
–Palm oil inventories in Malaysia, the world’s second-largest producer of the edible oil, eased to a six-month low at the end of April.
–Crude Palm in spot market gained by 4.70 rupees and settled at 523.70 rupees.

Courtesy: Kedia Commodities

Source: Commodityonline.com