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Technically Crude Palm Oil market is under fresh buying as market has witnessed gain in open interest by 3.89% to settled at 5897 while prices up 1 rupees.
Now MCX Crude Palm Oil is getting support at 484 and below same could see a test of 479.5 level, And resistance is now likely to be seen at 492.4, a move above could see prices testing 496.3.
Crude Palm Oil on MCX settled up by 0.21% at 488.4 on short covering after prices dropped tracking weakness in spot demand amid rising inventories.
Indonesia’s palm oil production and exports fell in October from the previous month following the peak of the harvest season, while domestic consumption rose on demand for biodiesel.
Palm oil output fell to 3.99 million tonnes in October, from 4.25 million tonnes in September, according to a survey. Production of palm oil in Indonesia, the world’s top producer, typically peaks around September and slows down in the following months.
Exports of the vegetable oil were seen at 3.03 million tonnes last month, down slightly from 3.06 million tonnes in September.
Domestic use of palm oil was estimated at 1.24 million tonnes in October, up from 1.15 million a month earlier and the highest figure since Reuters began the survey in 2014.
Indonesia implemented a mandatory B20 biodiesel programme starting in September which is aimed at absorbing excess supply of palm oil, which is used as feedstock for the fuel’s bio-content.
By the end of October, palm oil stocks were estimated at 4.35 million tonnes, according to the survey, down from 4.80 million tonnes a month earlier.
Inventories in top producers – Indonesia and Malaysia – were expected to rise for the next two months, with demand unlikely to jump from key buyers as palm oil solidifies in winter months.
–Crude Palm Oil trading range for the day is 479.5-496.3.
–Crude Palm Oil gained on short covering after prices dropped tracking weakness in spot demand amid rising inventories.
–Malaysia maintained its export tax on crude palm oil for December at zero percent.
–Indonesia’s palm oil production and exports fell in October from the previous month following the peak of the harvest season, while domestic consumption rose.
–Crude Palm Oil prices in spot market dropped by 14.00 rupees and settled at 486.10 rupees.
Courtesy: Kedia Commodities