Discount $170 per-ton cost effective demands
Crude palm oil futures on Malaysia’s derivatives exchange extended declines for a fourth session Wednesday, tumbling to their lowest level in a week as traders turned cautious amid weakness in other agricultural bourses.
The benchmark July contract on the Bursa Malaysia Derivatives ended MYR53, or 1.6%, lower at MYR3,277 a metric ton, its lowest close since April 19.
However, downside may be capped in the coming weeks as demand may pick up ahead of major festivals in the Middle East and Asia over the next few months.
"With improving price competitiveness versus soyoil, there is a rising likelihood that palm oil will gain market share," Citigroup said in a note.
Citigroup said it expects crude palm oil prices to average at $1,050/ton in 2011, as rising production in the second half will drag prices lower. That price level would be equivalent to MYR3,150/ton, according to Dow Jones Newswires calculations.
TECHNICAL ANALYSIS >>> Soybean Oil : 28/04/2011
The daily stochastics have crossed over down which is a bearish indication. Declining momentum studies in the neutral zone will tend to reinforce lower price action. The market's close above the 9-day exponential moving average suggests the short-term trend remains positive. It is a slightly negative indicator that the close was lower than the pivot swing number.
The next downside objective is 57.36. The next area of resistance is around 58.91 and 59.35, while 1st support hits today at 57.91 and below there at 57.36.
ZLBT Trade Strategy
Buy CPO 3260 > 3280 with a 3230 stoploss
Target >>> 3323 @SMA 15
and/or
Next Target >>> 3380 Technical Chart Resistance
HAPPY TRADING & GOODLUCK2ALL
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