Market Review / Outlook of the day
Primary Sentiment : Neutral
Immediate Trend : Neutral
BMD Market Re-cap:
- BMD FCPO futures settled losses for the third week in a row on Friday, owing mostly to weak performance in competing vegetable oils. However, the situation was slightly alleviated by the increase in export figures.
- According to figures from MPOB, Malaysia's July palm oil inventories had climbed to their highest level in five months as a result of higher production. Due to the greater growth in exports, these numbers fell short of forecasts.
- Rising soybean oil and sunflower oil discounts in India were a major contributor to the increase in demand for palm oil. This development might help Malaysia and Indonesia reduce their stocks of palm oil.
- The premium of soybean oil over palm oil is around $528 per ton, compared to an average of around $489 in the past year.
World Oil and Grains
- CBOT Soybean futures turned lower on Friday as a result of the anticipation that the growing conditions in the American Midwest will improve.
- The USDA’s monthly World Agricultural Supply and Demand Estimates report, which disappointed the market, echoed the government's prediction of a smaller soybean harvest in the upcoming autumn as a result of dry conditions at the start of the growing season.
- A substantial area of the U.S. Midwest was expected to see moderate temperatures and rain over the course of the forthcoming week, which had an impact on the soybean markets.
Market Outlook
- Palm oil faced minor selling pressure on Friday as it remained in a consolidation phase. Nonetheless, the price movement suggests that there is a building negative momentum that may cancel out the previous Bullish Engulfing pattern. The current hourly trend indicator is still in neutral territory.
- It is anticipated a neutral start for the day, considering the lack of significant trading movement in Dalian palm oil and CBOT soybean oil. The price is expected to remain adequately supported as long as it doesn't drop below RM3,600.
Opening range: 3730 to 3740
Projected range of the day: 3600 to 3850
Support 3600 Next 3550
Resistance 3800 Next 3850
BMD FCPO Total Open Interest
28/07/2023: 198,531 (+2,209)
31/07/2023: 201,070 (+2,539)
01/08/2023: 201,424 (+354)
02/08/2023: 199,942 (-1,482)
03/08/2023: 199,199 (-743)
04/08/2023: 196,390 (-2,809)
07/08/2023: 196,477 (+87)
08/08/2023: 195,259 (-1,218)
09/08/2023: 196,375 (+1,116)
10/08/2023: 199,858 (+3,483)
11/08/2023: 198,125 (-1,733)
Source: Bursa Malaysia Futures