Market Review / Outlook of the day
Primary Sentiment : Neutral
Immediate Trend : Neutral
BMD Market Re-cap:
- Malaysian palm oil futures experienced their third consecutive session of decline on Tuesday, primarily due to concerns about an increase in palm oil supplies. However, the weakening of the Malaysian ringgit helped limit the losses.
- Palm oil production has been growing at a higher rate than initially estimated, surpassing the market's expectation of a 2-3% increase.
- Industry analysts have predicted that global palm oil production is likely to decrease next year due to the influence of El Nino, while demand from the edible oil and energy sectors is expected to grow, which could support palm oil prices.
- Malaysian Ringgit saw a slight uptick against the US dollar during its opening on Tuesday, with market participants closely evaluating whether the FED would alter its stance in response to the latest jobs market report released last week.
World Oil and Grains
- CBOT soybean futures experienced a shift to close mostly lower on Tuesday, reversing from a two-month high that had been driven by concerns about weather conditions in Brazil.
- China made its most significant single-day purchase of U.S. soybeans in at least three months, a positive development for the crucial U.S. agricultural export, which had been lagging behind its usual pace for the 2023 harvest.
- In the past two days, the USDA has confirmed private sales of 236,000 metric tons of U.S. soybeans through its daily reporting system. Traders anticipate additional "flash sales" in the wake of the recent deals on Tuesday.
Market Outlook
- Palm oil remained neutrality with prices showing no significant breakthrough to escape the consolidation range. The market sentiment continued to be influenced by a high supply outlook and subdued year-end demand. Nevertheless, it's believed that the market has already incorporated the impact of weak fundamentals into the current price environment.
- In light of the overnight losses in U.S. soybean oil, it is anticipated that the market may open lower today. The current level of support on the downside is approximately around RM3,600.
Opening range: 3660 to 3670
Projected range of the day: 3600 to 3800
Support 3550 Next 3500
Resistance 3850 Next 3900
BMD FCPO Total Open Interest
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)
03/11/2023: 215,228 (-1,515)
06/11/2023: 212,598 (-2,630)
Source: Bursa Malaysia Futures