Crude Palm Oil market is under short covering as market has witnessed drop in open interest by 24.04% to settled at 1125 while prices up 5 rupees.
Now Crude Palm Oil is getting support at 495.8 and below same could see a test of 491.4 level, And resistance is now likely to be seen at 503.3, a move above could see prices testing 506.4.
Crude Palm Oil on settled up by 1.01% at 500.2 on short covering after prices dropped amid rising inventories and physical demand showed no signs of improvement. 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 491.4-506.4.
–Crude Palm Oil gained on short covering after prices dropped amid rising inventories and physical demand showed no signs of improvement.
–Indonesia’s palm oil production and exports fell in October from the previous month following the peak of the harvest season.
–Inventories in Indonesia and Malaysia were expected to rise for the next two months, with demand unlikely to jump as palm oil solidifies in winter months.
–Crude Palm Oil prices in spot market dropped by 4.90 rupees and settled at 500.60 rupees.