CRUDE PALM OIL

FUNDAMENTALS

Palm oil traded weak following CPO futures at BMD amid bearish export data of palm oil for the first 10 days of September though supportive monthly data released by Malaysian Palm Oil Board limited the losses. Crude palm oil futures on Bursa Malaysian Derivatives closed at fresh one –year low amid continued selling pressure. Bearish outlook by analysts at a conference in Singapore added to the weak tone of the market. According to Dorab Mistry, director of London –based Godrej International CPO prices are likely to stabilize around MYR 2,200/ton amid good demand from bio –diesel sector. According to SGS, palm oil exports in the first 10 days of September declined by around 1.9% to 1.14 million tons. Exports are slightly below market expectation of 1.15 –1.20 million tons. According to monthly data released by the Malaysian Palm Oil Board (MPOB), Malaysia’s palm oil exports increased by 4.6% to 1.47 million tons, crude palm oil output increased by 2.5% to 1.59 million tons and stocks declined by 6.5% to 1.85 million tons in the month of August compared to previous month. The stocks are much below market expectation of around 2.0 million tons. Prices are likely to be weak in near –term.

TECHNICALS:

Candlestick pattern shows a dark candle with long upper shadow denoting selling pressure. Closure below the EMA’s and MACD in the negative territory denotes the inherent bearish tone of the market. RSI as well as stochastic is declining in the oversold region supporting near –term weakness. Volumes of trade increased and open interest declined. Prices are likely to decline further in near –term

WEATHER:

According to IMD, scattered to fairly widespread rainfall activity is likely along the west coast and parts of north peninsular India.

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