Market Review / Outlook of the day
Primary Sentiment : Neutral
Immediate Trend : Slight Negative
BMD Market Re-cap:
- BMD FCPO futures slid further on Wednesday, closing at their lowest level in over four weeks, mirroring the weakness in rival vegetable oils amid declining exports from Malaysia, the world's second-biggest producer.
- Palm oil's persistent discount aims to attract buyers amidst the relentless decline in South American soybean oil, despite the approaching winter season in traditional Asian markets like India and China, where palm oil consumption typically dips due to colder weather.
- Indonesia's biodiesel usage is projected to reach 13.4 million kiloliters in 2024, a 1.9 million kiloliter increase from 2023, while the official allocation for the B35 mandate remains pending a decision from this week's ministers' meeting. The B35 mandate currently requires biodiesel in Indonesia to contain 35% palm oil.
- European Union palm oil imports for the current season, which began in July, are lagging behind last year's pace, with 1.48 million tons imported by December 3rd compared to 1.64 million tons in the same period a year ago.
World Oil and Grains
- CBOT Soybean futures dipped on Wednesday as the market focused on a rainy forecast for Brazil, the world's top soy supplier, where hot and arid conditions had threatened crops.
- China has secured 136,000 metric tons of U.S. soybeans with confirmed private sales for delivery in the 2023/24 marketing year.
- Analysts predict that the USDA's weekly export sales report on Thursday will show U.S. soybean sales in the week to 30th November ranging from 1 million to 1.8 million metric tons.
Market Outlook
- Palm oil selling pressure compounded yesterday, driving the price down to an intraday low of RM3,675 before recovering to RM3,719 at closing. Hourly trend indicators confirmed a negative shift, and the price appears to be testing the support area around RM3,700. A break below this level could trigger a further correction towards RM3,600.
- The market may continue its downward trend today, potentially opening slightly lower due to the weakness observed in both Dalian palm oil and U.S. soybean oil. However, the precise level of the current price bottom remains unknown.
Opening range: 3650 to 3670
Projected range of the day: 3550 to 3750
Support 3600 Next 3550
Resistance 3800 Next 3900
BMD FCPO Total Open Interest
20/11/2023: 208,147 (-2,676)
21/11/2023: 208,339 (+192)
22/11/2023: 210,528 (+2,189)
23/11/2023: 210,424 (-104)
24/11/2023: 211,241 (+817)
27/11/2023: 211,391 (+150)
28/11/2023: 210,674 (-717)
29/11/2023: 207,183 (-3,491)
30/11/2023: 206,142 (-1,041)
01/12/2023: 208,661 (+2,519)
04/12/2023: 208,321 (-340)
05/12/2023: 211,963 (+3,642)
06/12/2023: 216,557 (+4,594)
Source: Bursa Malaysia Futures