CPO settled down -1.36% at 528 as weakness in overnight soy markets dragged, and as traders turned cautious ahead of a key industry report. 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 may decline by about 11% this year as economic expansion slows and banks tighten lending to commodity importers.

Palm oil imports by India, declined after refiners bought more soybean and sunflower oils amid record global supplies. Shipments of crude and refined palm oils slid 14% to 647,756mts last month from a year earlier, the SEA of India said. Fitch Ratings says that the global crude palm oil (CPO) price will increase only modestly despite the likely onset of the El Nino weather pattern this year and recent military action at Iraq. Fitch expects the narrowing price spread between CPO and soybean oil and the lack of growth in demand for biodiesel in Indonesia to restrain upward trends in CPO prices. Climatologists estimate that an El Nino pattern may develop by September, a little later than the initial estimate for July-August.

Between January and May 2014, average CPO prices increased by 5% from a year earlier, partly reflecting market anticipation of the El Nino pattern. Technically market is under long liquidation as market has witnessed drop in open interest by -14.15% to settled at 3057 while prices down -7.3 rupee, now CPO is getting support at 524.6 and below same could see a test of 521.2 level, And resistance is now likely to be seen at 533.8, a move above could see prices testing 539.6.

Trading Ideas:

CPO trading range for the day is 521.2-539.6.

Crude palm oil prices dropped as weakness in overnight soy markets dragged, and as traders turned cautious ahead of a key industry report.

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%.

Crude palm oil prices in spot market dropped by 1.30 and settled at 535.80 rupees.