CPO On MCX Settled Up 0.43% At 491.9

 
 
 
 
CPO on MCX settled up 0.43% at 491.9 on short covering after prices seen under pressure on reports of good stocks in the country due to higher imports during last month. As per SEA, palm oil import rose 2.25% y-o-y to 7,52,632 tonnes in April on higher shipment of crude palm oil. There was increase in tariff value for the palm oils in the country. Crude palm oil base import price ups to $739/tonne against $711/tonne while RBD palm oil base import price to $752/tonne against $721/tonne.

Pressure also seen on forecasts of rising output and declining export demand. Palm oil output in Malaysia, the world's second-largest producer of the tropical oil, is seen gaining in the second half of this year on seasonal demand and as it recovers from the crop-damaging effects of El Nino.

Moreover, palm oil shipments are seen falling after the festive season of Eid-al-Fitr, the holiday that marks the end of the fasting period, on less consumption and lower demand. Market participants are expecting pressure on prices in the week due to stronger ringgit and the forecast of better output.

According to China’s General Administration of Customs (CNGOIC), China’s April palm oil imports rose 54.6 percent to 4.24 lakh tons compared to April 2016. Year to date imports of palm oil rose 16.91 percent to 16.76 lakh tons compared to corresponding period last year.

Technically market is under short covering as market has witnessed drop in open interest by -2.93% to settled at 5001 while prices up 2.1 rupees, now CPO is getting support at 487.6 and below same could see a test of 483.2 level, And resistance is now likely to be seen at 495.2, a move above could see prices testing 498.4.
 
 
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