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Malaysian Crude Palm Oil Futures Forecast

Malaysian Crude Palm Oil Futures Forecast

Fundamentals affecting Palm Oil Prices (And the other Vegetable Oil Prices):

  • Prices of crude palm oil and other oils depend on the outlook for stocks
  • Palm oil – along with Soybean oil – is affected by crude oil prices, as it is used as feedstock to make biodiesel.
  • Palm oil prices are impacted by movements in Soybean oil rates, as they compete for a share in the global vegetable oil market.

According to Reuters;

Palm oil stocks in Indonesia, the world’s top producer, were at 3.9 million tonnes in November, having peaked at close to 5 million tonnes in July. Second-largest producer Malaysia saw inventories climb to a record high of 3.2 million tonnes in December.

In an effort to boost palm oil consumption, Indonesia raised its biodiesel mandate last year to require all diesel fuel used in the nation to contain biodiesel starting from the beginning of September.

Indonesia’s mandate requires a 20 %  bio-content in biodiesel, but prior to September that was mandatory only for subsidized diesel users.

At an industry conference in Malaysia on Thursday, LMC International’s head of Southeast Asia, Julian McGill, said crude palm oil prices are expected to rise to between 2,200 and 2,300 ringgit per tonne by June on a seasonal decline in stocks

If Indonesia maintains its heightened pace of biodiesel use, stocks may fall until mid-year, which will lift the crude palm oil premium over Brent. We may see a sharp rally on the prices.

Looking at the matter technically

Malaysian Crude Palm Oil Future (CUM2019) June contracts ended the week at 547. Price is testing the bearish trendline and Ichimoku Cloud ceiling on the Daily Chart.

RSI is not in the overbought zone.

Daily closings above 550 would confirm us the bullish continuation and the trend change.

Here we see a “buy and hold” opportunity.

The bullish move will continue as long as the price stays above 530.

Our Targets:

568

578

590

617

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DISCLAIMER: This is a technical analysis study, not advice or recommendation to invest money

CUM2019 Malaysian Palm Oil Futures: Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these securities. You should do your own thorough research before making any investment decisions. Chartreaderpro does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Forex involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility

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