CPO settled down -0.24% at 548.1 as investors feared that surging supplies of the tropical oil will overwhelm global demand and weigh on prices. Indonesia, the top producer, said its 2013 palm oil output likely grew to 24.4 million tonnes from 23.5 million tonnes a year ago, thanks to "an expansion in plantation areas and better weather conditions." Output in 2014 is seen rising further, to 28 million tonnes, its agriculture ministry said. Malaysia, the No. 2 producer, expects its production to hit a record 19.4 million tonnes in 2013 and inch up to 19.5 million tonnes in 2014. Crude palm oil could face increased competition from rival oilseeds that are slated to churn out bumper crops this year. The Malaysian palm oil market, which sets the tone for global prices, rose 9 percent in 2013, its first annual gain in three years. Exports of Malaysian palm oil products for December fell 3.3 percent to 1,423,644 tonnes from 1,472,694 tonnes shipped during November, cargo surveyor Societe Generale de Surveillance said. Technically market is under long liquidation as market has witnessed drop in open interest by -2.59% to settled at 2440 while prices down -1.3 rupee, now CPO is getting support at 547.2 and below same could see a test of 546.2 level, And resistance is now likely to be seen at 549, a move above could see prices testing 549.8.

Trading Ideas:

CPO trading range for the day is 546.2-549.8.

Crude palm oil dropped as investors feared that surging supplies of the tropical oil will overwhelm global demand and weigh on prices.

Indonesia, the top producer, said its 2013 palm oil output likely grew to 24.4 million tonnes from 23.5 million tonnes a year ago.

Output in 2014 is seen rising further, to 28 million tonnes, its agriculture ministry said.

Crude palm oil prices in spot market gained by 1.60 and settled at 545.00 rupees.