Crude palm oil futures up 0.72% to Rs 880.20 per 10 kg in evening trade

Crude palm oil (CPO) futures traded firm at Rs 880.20 per 10 kg on December 3 as participants increased their long position as seen by the open interest. Malaysian palm oil futures gained 0.39 percent to settle at 3,329 Ringgits on Bursa Malaysia Bhd.

India reducing import taxes on CPO by 10 percent and Indonesia increasing export tax on palm oil by $30 are construed to be positive for BMD CPO.

Kshitij Purohit, Product Manager, Currency and Commodities, CapitalVia Global Research Limited, said, “CPO is trading in negative biased and it is making Lower High and Lower Low pattern. Bumper production and government policies are not favourable for the prices; 3 days' moving average is placed at Rs 873 levels and prices are trading below the same.”

Downside support for CPO is at Rs 851.50 and Rs 839.10 levels whereas Rs 885.70 and Rs 890 levels act as strong resistance. Purohit advises short position in MCX CPO December futures at Rs 875 with a stop loss of Rs 891 for the downside target of Rs 840-820 levels.

In the futures market, CPO for December delivery touched an intraday high of Rs 881.30 and an intraday low of Rs 865.10 per 10 kg on MCX. So far in the current series, CPO has touched a low of Rs 738.10 and a high of Rs 943.

CPO delivery for December gained Rs 6.30, or 0.72 percent at Rs 880.20 per 10 kg at 19:48 hours IST with a business turnover of 5,181 lots.

CPO delivery for January rose Rs 6.40, or 0.73 percent at Rs 881.10 per 10 kg with a business volume of 3,053 lots.

The value of December and January contracts traded so far is Rs 306.25 crore and Rs 130.49 crore, respectively.

Kotak Securities says lower edible oil stock in Malaysia and bean in the global market will support CPO from lower levels.

As of December 1, MCX CPO December contract was trading at a discount of Rs 17 from import cost at Kandla Port (Rs 896).