CPO yesterday settled up 0.57% at 551.5 tracking firmness in spot demand and overseas prices as concerns lingered over crop-damaging dry weather in the soy producing U. S. Midwest. Forecasts for stressful weather in the U. S. farm belt boosted palm oil prices by as much as 3.5 percent, as a smaller amount of soybeans for crushing into soybean oil could shift some demand to the competing palm oil. Malaysia's palm export demand remained resilient with cargo surveyors reporting a 7.1-7.5 percent increase in Aug. 1-25 shipments from the same period a month ago, supported by stronger demand from Europe, India and China. The government of Indonesia will lower the export duties on crude palm oil (CPO) from 10.5 percent in August to 9 percent in September. The international palm oil market is expected to remain stagnant in August and September. Stockpiles of CPO in Malaysia and Indonesia are projected to rise between September and December 2013. Rising CPO stockpiles are partly responsible for the difficulty for international palm oil prices to strengthen significantly in the second half of 2013. Global palm oil production is dominated by Indonesia and Malaysia. Technically market is under fresh buying as market has witnessed gain in open interest by 6.55% to settled at 2716 while prices up 3.1 rupee, now CPO is getting support at 549.2 and below same could see a test of 546.9 level, And resistance is now likely to be seen at 554.3, a move above could see prices testing 557.1.

Trading Ideas:

CPO trading range for the day is 546.9-557.1.

Crude palm oil ended with gains tracking firmness in spot demand and overseas prices.

Forecasts for stressful weather in the U. S. farm belt boosted palm oil prices.

Malaysia's palm export demand remained resilient with cargo surveyors reporting a 7.1-7.5 percent increase in Aug. 1-25.

Crude palm oil prices in spot market gained by Rs 4.10 and settled at 563.60 rupees.