Palm oil prices rose on Tuesday, on the back of the rally in US soybeans as investors worried about the adverse weather conditions in South America affecting crop yields. In addition, the weakening of the Ringgit against the dollar spurred demand for the tropical oil.
Overnight crude oil fell, tracking weaker retail sales figures in the US, as well as fresh concerns on Europe over a potential downgrade of its triple-A ratings for France, Britain and Austria. On the other hand, US soyoil rose to a near four-month high yesterday, due to production concerns in Brazil and signs of fresh US export demand. Expect futures to trade range bound with upwards bias today as lingering European issues may counter the adverse weather conditions in South America.
US soybean futures end mostly higher, with old crop contracts rallying to nearly four-month highs.
Soybean futures rose for the third consecutive trading day, fueled by worries about hot, dry
conditions in southern Brazil leading to lower crop yields, analysts say.
Futures closed at 3205.0, up 2.36 percent. Futures managed to settle above psychological level of 3200 depicted by a long white candle as strong buying interest seen throughout the day. A sustained break above this level would likely see futures head towards testing 3240. The MACD reaffirmed the bullish outlook as it crossed its 8-day moving average on a bullish divergence. As such, support and resistance can be pegged at 3185 and 3240 respectively.
Strategy : Aggressive trade may long with a stop on below 3185.