CPO settled down -0.33% at 548.50 as weak demand as well as higher stocks at the ports weighed on prices. Industry regulator the Malaysian Palm Oil Board on Monday reported that palm oil stocks fell to 1.93 million tonnes at end-January, due to seasonally slowing output which typically produces smaller yields. Traders, however, said stockpiles will have to fall more quickly in order to lift prices higher. Market players were expecting tighter supplies of soybeans due to dry weather in major producing countries, which could lift soyoil prices and channel demand to rival palm oil instead. A poll showed that palm prices are expected to climb for a second straight year and would likely average at 2,700 ringgit in 2014, as strong demand from the biofuel industry soaks up supplies and curbs exports from top producers Indonesia and Malaysia. In Malaysia palm oil production in the January and February month slows seasonally as the tress goes on rest from December which will result to lower yields. 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. Technically market is under long liquidation as market has witnessed drop in open interest by -20.04% to settled at 1492 while prices down -1.8 rupee, now CPO is getting support at 546.5 and below same could see a test of 544.4 level, And resistance is now likely to be seen at 550.2, a move above could see prices testing 551.8.

Trading Ideas:

CPO trading range for the day is 544.3-551.7.

CPO ended with losses on account of subdued spot market demand along with increased arrivals from the major producing belts.

Industry regulator the Malaysian Palm Oil Board reported that palm oil stocks fell to 1.93 million tonnes at end-January

Prices downside was limited boosted by an industry report showing that stockpiles in the No. 2 producer have eased for the first time since June.

Crude palm oil prices in spot market gained by 0.40 and settled at 549.30 rupees.