Market Review / Outlook of the day
Primary Sentiment : Neutral
Immediate Trend : Neutral
BMD Market Re-cap:
- BMD FCPO gained the most in over three weeks as top producer Indonesia stated it will maintain its present supply-control strategy and on expectations that China will expand purchases of the tropical oil.
- At present, palm oil companies in Indonesia are currently allowed to export four times the volume they have sold through the DMO mechanism, and this ratio will be maintained in 2024.
- Market participants also speculate that Chinese buyers may become more active in order to build reserves for the Lunar New Year in 2024.
- According to the Solvent Extractors' Association of India, top importer India is predicted to acquire 15 million tons this year, down from a record 16.5 million tons the previous year due to significant carry-over stocks in the South Asian country.
World Oil and Grains
- CBOT soybean futures gained on Thursday as China said their country imports will likely continue high, despite the fact that the country had set an all-time high for crop purchases this year, while weather concerns remained in Brazil.
- Prospects for Chinese demand of U.S. soybeans brightened after news that U.S. agriculture representatives met with their Chinese counterparts in Beijing on Thursday to bolster farm trade, despite strained political ties.
- Weekly soybean export sales was reported at 1 million metric tons for 2023-24 which was within expectation, but soymeal sales of 86,400 metric tons fell short of predictions of 250,000 to 550,000 metric tons.
Market Outlook
- Palm oil reversed course yesterday, forming a strong bullish candlestick pattern. It erased its recent losses and hovered near RM3,800 due to strong positive factors from Indonesia. However, the market remains within the RM3,600-RM3,800 price range, so further upward movement may require more buying force to break out of the current consolidation.
- The market may open slightly higher today, following the gains in Dalian palm oil and U.S. soybean oil markets. It may also challenge the immediate resistance level to see if a new trend can be established.
Opening range: 3810 to 3820
Projected range of the day: 3700 to 3900
Support 3550 Next 3500
Resistance 3850 Next 3900
BMD FCPO Total Open Interest
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)
02/11/2023: 216,743 (+898)
Source: Bursa Malaysia Futures