CPO settled down -0.66% at 529.3 on profit booking after prices gained as a seasonal drop in production is likely to cut excess supplies, although gains were capped by weak demand. Meanwhile, the recent hike in India’s import tax of processed palm oil products to 10% from 7.5% has resulted into higher demand for Crude palm oil from India as the refining process is encouraged to be done domestically to save costs, pushing the prices of palm oil futures higher. There was additional support for the palm oil market stemming from U.S. soybean futures, which rose for a sixth session as strong demand for U.S. stocks continued to underpin the market. Production is coming down, so the supply might get tighter in the coming months. Exports of palm oil products from Jan. 1 to 15 fell 28.1 percent to 460,248 tonnes from 640,240 tonnes shipped during Dec. 1 to 15, cargo surveyor Intertek Testing Services said. Another surveyor, SGS, reported exports during the period fell 27.4 percent to 467,817 tonnes from 644,556 tonnes shipped during Dec. 1-15. Malaysia's palm oil inventories rose to a nine-month high in December, industry data showed, missing expectations for a drop as lacklustre demand offset a fall in output caused by floods. Technically market is under long liquidation as market has witnessed drop in open interest by -11.22% to settled at 1607 while prices down -3.5 rupee, now CPO is getting support at 526.2 and below same could see a test of 523.1 level, And resistance is now likely to be seen at 534.2, a move above could see prices testing 539.1.

Trading Ideas:

CPO trading range for the day is 523.1-539.1.

CPO dropped on profit booking after prices gained as a seasonal drop in production is likely to cut excess supplies

Production is coming down, so the supply might get tighter in the coming months.

Recent hike in India’s import tax of processed palm oil products to 10% from 7.5% has resulted into higher demand for Crude palm oil from India

Crude palm oil prices in spot market dropped by 0.40 and settled at 526.30 rupees.