Kedia Cpo Report as on 29032012

8/2/2019 Kedia Cpo Report as on 29032012

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Thursday,March29,2012 1|P a g e


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Crude Palm oil yesterday traded with the positive node and settled 0.13% up at

595.8 as traders bet on strong export growth after droughts had damaged the SouthAmerican soy harvest that is crushed into competing soyoil. The upswing in pricescould set the stage for a correction in the coming days. Exports rose 7.7% and 6.6%for the first 25 days of March from a month ago, said cargo surveyors IntertekTesting Services and Societe Generale de Surveillance respectively. Market players

are focusing on Malaysia's palm oil supply, as a lower crude palm oil production couldpush prices up further. Buyers from the Indian subcontinent and the Middle East may

stock up vegoils ahead of the Muslim holy fasting month of Ramadan in July, whenMuslims break the fast in the evening with feasts and dinner gatherings, liftingoverall consumption of cooking oils.

I ndonesia expo r t t ax i n f ocus

Strong Asian demand chasing limited edible oil supply may boost palm oil prices that

have gained 7.16% in this year, reflecting the appeal of food commodities at a timeof shaky global growth and rising geopolitical tension. Traders are now shifting theirfocus to demand from top buyers India and China with limited palm oil output growthin Southeast Asia helping a little to offset the shortfall in soyoil after drought in

South America withered crops. Prices can hit Rs.700-750 by the end of June/July dueto low palm oil output cycle, strong demand from India in peak summer months and

stocking by Muslim countries ahead of the fasting month as support seen from thedecline in both global soybean and rapeseed output the first time ever would boost

palm oil prices.


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Apart from limited oilseed production, surging Brent crude oil prices driven by fear ofpolitical instability from Iran's nuclear programme could lift palm oil as the appeal ofedible oil-based biodiesel grows and besides this Indonesia's export tax change has

been a hot topic since several days.

GLOBAL SUPPLY/DEMANDGlobal demand growth seen at 6mt in the current Oct-Sept crop year, compared to5.3mt rise in edible oil production. The demand from the food sector up as worldeconomic growth seen rising by 3% although high prices will limit the demand

growth to 3mt. As for biodiesel industry growth, issues in Iran will boost prices andlift the appeal of renewable energy.

SUPPLY FACTORS- PALM OILCrude palm oil output will be the single most important factor driving edible oil pricesin 2012. Biological high cycle for palm oil production ended in December and there

are now signs of tree stress. The new low cycle will result in flat output for 2012. Andfrom March onwards, output each month will be less on a year-on-year comparison.

Low cycle will end in November this year. Which keeps same estimate for Malaysian2012 production which first issued in December Output seen flat between 18.6-19million tonnes. Also estimates are coming that Indonesian production will be higherby about 1.4 million and will reach 26.5mt this year on maturing acreage. Official

Indonesian forecast is an increase of 14% to 25.7mt.


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Malaysia's move to continue tax-free export quota for crude palm oil "can be a cleverstrategy if they will keep releasing more quota from time to time. Malaysian crudepalm oil exports will keep stocks down and keep futures high although refineries will

become idle like its biodiesel industry. Consumers like India, China and Pakistanunlikely to retaliate against Indonesia's tax change to protect their own refining

sector as inflation in these countries remain high. Greater food demand to come fromIndia's plan for a massive food security programme that will guarantee minimumamounts of cereals and food to each citizen at subsidised prices. India likely to buy arecord 7.2mt of palm oil in Nov-Oct oil marketing year, up 8% from a year earlier.

OUTLOOKLooking to the oil counters we expect prices to appreciate in the coming months.Although we have already appreciated quite considerably since January, we couldsee another increase palm oil as there is an interesting development shaping up for

April-September, following an unusually big increase in production and exports untilMarch, the past 12 months until this March, the growth in production and exports in

April-September, will be very small. We can see prices moving towards 615-620level in the period of next 1-2 month duration where us we continuous to see pricesmoving till 700-720 soon in next 4-5months period.


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MCX CRUDE PALM OI L

Close 595.80 Change+/ 0.80 Change% 0.13

Open 597.00 High 600.00 Low 593.30

Volume 3218 Turnover 1904778 Open Interest 4646

RSI(18) 76.51 WeeklyHigh 600.00 WeeklyLow 591.10

SMA(50)555.24

MonthlyHigh600.00

MonthlyLow547.20

MCX CRUDE PALM OI L LEVEL

Support 592.50 586.20 572.80Trend Bullish

Resistance 603.10 614.50 634.20

CRUDE PALM SPREAD

RATES APR MAY JUNE

APR 595.80 1.80 3.50MAY 597.60 1.70

JUNE

599.30


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CHART

Techn ica l Out look : Last time also we have seen the prices moved lower from 600 mark and this time

also we have seen market is taking resistance at 600 level but looking to the fundamentals 570 will be agood support to the market for a rally towards 640 and above soon. Now for short term market is looking

to take support at 592.50, a break below could see a test of 572.80 and whereas resistance is now likelyto be seen at 603.10, a move above could see prices testing 634.20.

ACTI ON: BUY CPO ON PULL BACK TI LL 57 0- 57 5 SL 52 5 TGT 60 4- 63 5.


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The to ta l s tock pos i t i on o f Ed ib le andN on- Ed ib l e Oi l A t Ma jo r Po r t s o f I nd i a

Oil Sto cks ( I n Mts )

CPO 110000

RBD Palm 43887

Soyaoil 3769

Sunflower 5595

Rapseed Oil 8139Cotton Oil 1817

Safflower 618

Coconut Oil 1069

Others 10652

Tota l 185546

Kedia Cpo Report as on 29032012

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