Crude Palm oil yesterday traded with the negative node and settled -0.22% down at 545.1 tracking weakness in Malaysian palm oil in cautious year-end trading, but losses were limited by worries that heavy rains may hit production in second-largest producer Malaysia.
On the weather front, the Malaysian weather office warned heavy rains could trigger floods in low-lying areas in the key oil palm growing states of Pahang, Johor and Sabah, accounting for almost 60 percent of national palm oil output.
While there have not been any reports of a disruption in deliveries of Crude Palm Oil to refineries and ports, traders are watching the weather development closely, especially as palm oil production in Malaysia is in the seasonally low-yield phase.
In Asia, heavy rains brought on by the northeast monsoon in peninsular Malaysia and the La Nina are slowing harvesting rounds and disrupting transportation of the cooking oil from refineries to ports.
In yesterday's trading session Crude Palm Oil has touched the low of 540.4 after opening at 548.9, and finally settled at 545.1.
For today's session market is looking to take support at 540.4, a break below could see a test of 535.7 and where as resistance is now likely to be seen at 549.8, a move above could see prices testing 554.5.
Trading Ideas:
Crude Palm Oil trading range is 535.7-554.5.
Crude palm oil dropped tracking weakness in Malaysian palm oil in cautious year-end trading
Malaysian weather office warned heavy rains could trigger floods in low-lying areas in oil palm growing states
Crude palm oil looks to test support at 540.40 and resistance is seen at 549.80 level.
Crude palm oil prices in spot market dropped by 1.60 rupees and settled at 542.40 rupees.
Courtesy: Kedia Commodities??
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