MCX Crude Palm Oil under short covering; Support seen at 556.2

Technically Crude Palm Oil market is under short covering as market has witnessed drop in open interest by 1.72% to settled at 3662 while prices up 0.6 rupees.

Now MCX Crude Palm Oil is getting support at 556.2 and below same could see a test of 553.6 level, And resistance is now likely to be seen at 562.7, a move above could see prices testing 566.6.

Crude Palm Oil on MCX settled up by 0.11% at 558.7 on short covering after prices dropped as traders were bearish over data showing weaker-than-expected output declines. According to SEA monthly update, CPO imports were up by 13.1% at 6.70 lakh tonnes in December.

However, the Nov-Dec period the import volumes dropped compared to last year. According to USDA monthly report in December, India imports figures are unchanged at 10.5 mt, up 22% compared to past year imports.

Domestic consumption for India is forecast at 10.6 mt, up 16.7% on year. India has cut import taxes on crude and refined palm oil from Southeast Asian (ASEAN) countries after a request from suppliers.

Exports of Malaysian palm oil products for February 1 – 10 fell 13.0 % to 393,353 tonnes from 451,845 tonnes shipped during January 1 – 10, cargo surveyor Intertek Testing Services said on Sunday.

Production is forecast to ease for a third straight month, down 10.9% from December to 1.61 mt, in line with seasonal trends. Moreover, India is the world’s largest edible oil importer, had cut import duties on CPO from Malaysia which may attract more export deal from India.

Indonesia’s 2018 exports of palm oils, including oleochemical and biodiesel shipments, rose 8 percent from a year earlier to 34.6 million tonnes, the Indonesian Palm Oil Association (GAPKI) said. Crude palm oil output last year rose 12.5 percent to 43 million tonnes, GAPKI chairman told.

Trading Ideas:
–Crude Palm Oil trading range for the day is 553.6-566.6.
–Crude Palm Oil gained on short covering after prices dropped as traders were bearish over data showing weaker-than-expected output declines.
–According to SEA monthly update, CPO imports were up by 13.1% at 6.70 lakh tonnes in December.
–According to USDA monthly report, India imports figures are unchanged at 10.5 mt, up 22% compared to past year imports.
–Crude Palm Oil prices in spot market dropped by 0.20 rupees and settled at 557.50 rupees.

Courtesy: Kedia Commodities