CPO settled up 0.46% at 529.4, on late short covering after prices dropped due to fall in demand in the spot market. Further, ample inventories in the physical market on increased supplies from the major producing belts too added pressure.

Downside also seen limited on fear that El Nino phenomenon in Malaysia and Indonesia may hamper palm oil output from the world's two biggest palm oil producers. More weather pattern support an El Nino event have emerged in the recent weeks and is likely to occur in September. Exports of Malaysian palm oil products in June increased 5.8% to 1,391,942 tonnes from 1,315,952 tonnes shipped in May. Malaysia has cut export tax for July to 5% from 5.5% while Indonesia has cut export tax to 10.5% from 12%.

Palm oil purchases by China, the second-biggest buyer, may decline by about 11 percent this year as economic expansion slows and banks tighten lending to commodity importers. Palm oil imports by India, the world's biggest buyer, declined after refiners bought more soybean and sunflower oils amid record global supplies. Shipments of crude and refined palm oils slid 14 percent to 647,756 metric tons last month from a year earlier, the Solvent Extractors' Association of India said.

Malaysia, the world's second-largest palm grower, has lowered its crude palm oil export tax for July to 5 percent, a government circular showed, the first cut after three months. Technically market is under short covering as market has witnessed drop in open interest by -4.01% to settled at 4021 while prices up 2.4 rupee, now CPO is getting support at 525.6 and below same could see a test of 521.9 level, And resistance is now likely to be seen at 531.4, a move above could see prices testing 533.5.

CPO trading range for the day is 521.9-533.5.

Crude palm oil settled up on late short covering after prices dropped due to fall in demand in the spot market.

Ample inventories in the physical market on increased supplies from the major producing belts too added pressure.

Downside also seen limited on fear that El Nino phenomenon in Malaysia and Indonesia may hamper palm oil output.

Crude palm oil prices in spot market gained by 2.30 and settled at 531.10 rupees.

BUY CPO JULY @ 527.50 SL 524.50 TGT 529.80-533.MCX