Market Review / Outlook of the day
Primary Sentiment : Neutral
Immediate Trend : Neutral
BMD Market Re-cap:
- BMD FCPO closed marginally higher after sliding for two days, helped by rising shipments from Malaysia, however limited gains were observed due to fears over higher inventory.
- Market participants remain concerns that demand from top importer India will wane as festive season buying, which typically peaks a few weeks before Diwali, draws to a close. The Hindu festival of lights will be celebrated in mid-November this year.
- Oil prices rose slightly in Asian trade on Wednesday, ahead of significant meeting of U.S. central bank this week. The market also kept a tight eye on the latest developments in the Israel-Hamas conflict.
- Soybean oil premium over palm oil narrowed to $361 per ton, compared to an average of $459 per ton in the previous year.
World Oil and Grains
- CBOT soybean futures finished higher on Wednesday due to technical buying, despite the fact that harvesting resumed and yields were higher than predicted, and weather forecasts improved in South American crop area.
- The gains were capped limited by better crop weather in South America and chances for a huge Brazilian harvest. Analysts raised their projection for Brazil's soybean production in 2023/24 to 165 million metric tons, up from 164.1 million earlier.
- Traders expect the USDA to publish sales of 900,000 to 1,500,000 metric tons of U.S. soybeans for 2023/24 in the week ending October 26 and the report is schedule to release on Thursday.
Market Outlook
- Palm oil remained in a consolidation zone yesterday, trading between RM3,658 and RM3,729 before settling at RM3,688. The market remains fairly neutral from a technical perspective, although some weaknesses have been observed in other vegetable oil markets due to the ongoing harvest.
- Market may likely begin lower opening price due to losses in U.S. soybean oil. Negative trading bias will continue with immediate support near RM3,600.
Opening range: 3670 to 3680
Projected range of the day: 3550 to 3750
Support 3550 Next 3500
Resistance 3850 Next 3900
BMD FCPO Total Open Interest
17/10/2023: 226,044 (-2,484)
18/10/2023: 224,020 (-2,024)
19/10/2023: 223,998 (-22)
20/10/2023: 224,055 (+57)
23/10/2023: 222,092 (-1,963)
24/10/2023: 212,102 (-9,990)
25/10/2023: 211,404 (-698)
26/10/2023: 215,447 (+4,043)
27/10/2023: 212,089 (-3,358)
30/10/2023: 211,928 (-161)
31/10/2023: 213,479 (+1,551)
01/11/2023: 215,845 (+2,366)
Source: Bursa Malaysia Futures