Malaysian palm oil futures ended lower on Friday, on profit-taking and prospects of higher output combined with the strengthening of the ringgit against the dollar. The Malaysian Palm Oil Board is expected to revise upwards its output forecast for 2008 to 16.7 million tonnes from an earlier projection of 16.2 million tonnes.
Malaysia produced 15.8 million tonnes of palm oil in 2007. Subsidies for lower income households in India for imported palm oil could dampen sentiment among private importers, which could hurt anticipated robust demand from India due to recent duty cuts.
CPO active contract pulled up higher, but failed to garner enough momentum to push forward. Supports are now at 3495-3510 Malaysian ringgit (MYR) tonne levels. Failure to hold support here could take prices even lower towards 3375 or 3275 MYR/tonne levels now.
Despite the break of 3650 MYR/tonne, we still remain a bit apprehensive of any major bullishness to set in into the edible complex. The grains complex--wheat, has technically shown clear bearishness now and the energy complex is also vulnerable for a good profit taking, after its recent run up. The wave counts need a complete re-look, as the present move has altered most of the big picture counts we have been tracking so far.
A new impulse began from 1427 MYR/tonne and this could be the third wave which has not ended so far. We can expect a corrective fourth wave in the form of A-B-C to have begun now. RSI is in the neutral zone now, indicating that it is neither overbought nor oversold.
The averages in MACD are above the zero line in the indicator indicating bullishness to be intact. Therefore, look for palm oil futures to test the support levels now.
Supports are at MYR 3495, 3370 and 3275. Resistances are at MYR 3595, 3650 and 3700.
Malaysia produced 15.8 million tonnes of palm oil in 2007. Subsidies for lower income households in India for imported palm oil could dampen sentiment among private importers, which could hurt anticipated robust demand from India due to recent duty cuts.
CPO active contract pulled up higher, but failed to garner enough momentum to push forward. Supports are now at 3495-3510 Malaysian ringgit (MYR) tonne levels. Failure to hold support here could take prices even lower towards 3375 or 3275 MYR/tonne levels now.
Despite the break of 3650 MYR/tonne, we still remain a bit apprehensive of any major bullishness to set in into the edible complex. The grains complex--wheat, has technically shown clear bearishness now and the energy complex is also vulnerable for a good profit taking, after its recent run up. The wave counts need a complete re-look, as the present move has altered most of the big picture counts we have been tracking so far.
A new impulse began from 1427 MYR/tonne and this could be the third wave which has not ended so far. We can expect a corrective fourth wave in the form of A-B-C to have begun now. RSI is in the neutral zone now, indicating that it is neither overbought nor oversold.
The averages in MACD are above the zero line in the indicator indicating bullishness to be intact. Therefore, look for palm oil futures to test the support levels now.
Supports are at MYR 3495, 3370 and 3275. Resistances are at MYR 3595, 3650 and 3700.
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