Crude palm oil futures rose to settle at Rs 1,094 per 10 kg on April 1 as participants trimmed their position as seen by the open interest. Malaysian palm oil futures marginally gained 0.05 percent to settle at 3,739 Ringgits on Bursa Malaysia Bhd.
It ended the week with a loss of Rs 37.6 or 3.32 percent on the domestic bourse. Crude palm oil prices jumped in two out of the four trading sessions on the MCX in a holiday-shortened week.
The agri commodity has been trading higher than 50, 100 and 200 days’ moving averages but lower than the 5 and 20 days’ moving average on a daily chart. The Relative Strength Index (RSI) is at 48.31 which indicates sideways momentum in the prices.
MCX CPO prices had traded lower during March as there had been decreased buying in the domestic market for vegetable oils including Mustard and Refined Soy Oil. Stronger rupee with respect to dollar had led to support higher imports of vegetable oil.
According to Solvent Extractors Association (SEA), Palm Oil imports fell by 97.96 percent in February 2021 to 3.94 lakh tons from 7.80 lakh tons in January 21.
As per the Malaysian Palm Oil Board (MBOB) data, CPO production has been reported at 1,105,690 tonnes for February 21, lower compared to 1,126,457 tonnes reported in January. Crude Palm Oil exports from Malaysia during February 21 has been reported at 211,780 tonnes.
“Fundamentally for the coming month, we expect MCX CPO futures to be bullish as firm demand from India and China and rise in crude oil prices are expected to support CPO prices in coming days. Global crude prices is expected to rise as OPEC is likely to maintain supply stable that support prices of the vegetable oil complex,” said Sunand Subramaniam, Senior Research Associate at Choice Broking.
Subramaniam also said that higher domestic demand for Mustard oil and Soy oil, which happens to be premium oil as compared to crude palm oil is expected to support prices. However, the rising US Dollar Index could also dampen demand in Europe could limit extreme bullishness. Overall, we expect a bullish trend in MCX Crude Palm Oil prices for the coming month, Subramaniam noted.
In the futures market, Crude Palm Oil (CPO) for April delivery touched an intraday high of Rs 1,101.40 and an intraday low of Rs 1,081 per 10 kg on MCX. So far in the current series, CPO has touched a low of Rs 883.10 and a high of Rs 1,130.90.
CPO delivery for April gained Rs 17.70, or 1.64 percent to settle at Rs 1,094 per 10 kg with a business turnover of 5,892 lots.
CPO delivery for May rose Rs 17.50, or 1.67 percent at Rs 1,066 per 10 kg with a business volume of 1,619 lots.
The value of April and May’s contracts traded on April 1 was Rs 362.13 crore and Rs 95.33 crore, respectively.
Next Week Outlook
Kshitij Purohit, Product Manager, Currency & Commodities, CapitalVia Global Research Limited
Strategy: For the upcoming week, traders should keep an eye on Buy on dips opportunity in MCX Crude Palm Oil in April future from the level at Rs 1075 – 1080. For such a position, one should keep the target around Rs 1060 and stop loss at Rs 1120.
Rationale: Data released by cargo surveyor Intertek Testing Services today showed that Malaysia’s palm oil products export stood at 1.27 million tonnes in March 2021, up 26.82% from 1 million tonnes in February 2021,” he told Bernama. Total volume decreased to 62,888 lots from 84,396 lots on Tuesday, while open interest declined to 247,463 contracts from 271,188 contracts previously.
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