CPO settled up 1.36% at 544.5 as the demand surged at the spot market against limited supplies from the major producing belts. Prices also seen supported on prospects of seasonally lower output of the tropical oil as well as a dry spell in soy-growing Brazil that would potentially squeeze global edible oil supplies. A survey showed that Malaysian palm oil production last month likely fell to 1.52 million tonnes, down 8.8 percent from December as trees enter a resting period which results in smaller yields. The poll also showed that end-stocks are expected to ease for the first time in seven months, although sluggish export demand would curb a steeper fall and likely keep inventories in the second-largest producer little changed at 1.98 million tonnes. Further, firming trends in the global markets and on speculation that demand may improve as dry weather hurt soybean output prospects in South America too supported the commodity prices. Malaysia Jan 1-20 palm oil exports dropped 15% on month to 748,303 tons, data release by Intertek showed. India crude palm oil imports in December jumped 8.7% on year to 691,740 tons compared to 636,113 tons a year earlier, data release from the Solvent Extractors Association (SEA) of India. India total edible oil imports in 2014-15 to record of 11 million tons on improved demand from the world's top edible oil consumer. Technically market is under short covering as market has witnessed drop in open interest by -11.14% to settled at 2712 while prices up 7.3 rupee, now CPO is getting support at 540.2 and below same could see a test of 535.9 level, And resistance is now likely to be seen at 547.9, a move above could see prices testing 551.3.

Trading Ideas:

CPO trading range for the day is 535.8-551.2.

Crude palm oil ended higher as the demand surged at the spot market against limited supplies from the major producing belts.

A survey showed that Malaysian palm oil production last month likely fell to 1.52 million tonnes, down 8.8 percent from December

Technically market is under short covering as market has witnessed drop in open interest by -11.14% to settled at 2712

Crude palm oil prices in spot market gained by 8.10 and settled at 543.30 rupees.