SINGAPORE:Palm oil futures might test a help at 3,615 ringgit for every ton, a tear beneath which could open the way towards 3,494-3,569 ringgit range.
The contract has dropped significantly below the low of 3,721 ringgit on January 25.
While a significant win for the bulls. The probability of a further decline through BMD to the September 2022 low of 3,220 ringgit was greatly increased by the drop.
The contract may fall back to 3,721 ringgit before falling further also the level may signal the end of the pullback
However, Malaysia Crude Palm Oil Export Tax for April 2023, keep at 8% based on reference price at RM 4,031.45 /ton, rise from RM 3,710.35/ton. Maximum tax rate is 8% when prices are above RM 3,450 /ton.
The break below 3,721 ringgit may have been false if there was a prolonged pullback into the 3,733 to 3,773 ringgit range. The contract has broken through a crucial support at 3,708 ringgit on the daily chart.
The break simply eliminates any chance that the uptrend from 3,220 ringgit will continue, as Palm oil futures drops by more than 3 percent to its lowest closing price in five months.
The contract is more likely to fall into the 3,394-3,521 ringgit range the longer it stays below 3,708 ringgit.
A further rise toward 3,859 ringgit could occur following a close above 3,708 ringgit on Thursday.