CPO on MCX settled down -0.41% at 555 on profit booking after prices gained on the back of pickup in demand at the spot market. Downside seen limited on expectation that gains in crude oil will benefit palm oil as it may boost demand for bio-diesel in Indonesia, which will reduce inventories of palm oil. Meanwhile, the tariff value of CPO increase by $25 to $764 per tonne for the 1st half of Dec compared to previous fortnight. This is third straight increase but still lower than the September tariff price. As per USDA report, ending stocks of palm oil in India in 2016/17 will dropped 30% to 381,000 tonnes compared to previous month estimates. As per SEA data, imports of RBD palmolein increase to 2.63mt vs 1.66 mt in 2015-16 (Nov-Oct) and India's crude palm oil imports is also lower at 5.75 mt Vs 7.72 mt. Palm oil shipments from Malaysia, the world's No. 2 producer of the tropical oil, fell 10-12 percent for the full month of November from the previous month, according to data from cargo surveyors on Wednesday. Palm output from Indonesia and Malaysia are expected to fall by 10-15% and 9.8%, respectively, this year. Malaysia's palm oil products during November 1 to 25 fell 9.6 per cent to 895,625 tonnes compared with 990,939 tonnes during October 1 to 25. Palm output from Indonesia and Malaysia are expected to fall by 10-15% and 9.8%, respectively, this year. Technically market is under long liquidation as market has witnessed drop in open interest by -2.8% to settled at 5029 while prices down -2.3 rupee, now CPO is getting support at 550.3 and below same could see a test of 545.7 level, And resistance is now likely to be seen at 560.7, a move above could see prices testing 566.5.

Trading Ideas:

CPO trading range for the day is 545.7-566.5.

Crude palm oil prices ended with losses on profit booking after prices gained on the back of pickup in demand at the spot market.

Downside seen limited on expectation that gains in crude oil will benefit palm oil as it may boost demand for bio-diesel in Indonesia

Meanwhile, the tariff value of CPO increase by $25 to $764 per tonne for the 1st half of Dec compared to previous fortnight.

Crude palm oil prices in spot market gained by 1.80 rupees and settled at 562.60 rupees.