Crude Palm Oil settled flat as investors expected disappointing output of the tropical oil in July would prevent a sudden rise in stocks in the world's second-biggest producer of the edible oil. Palm oil inventories in Malaysia eased to a 2-year low of 1.65 million tonnes in June as demand during the Muslim holy month of Ramadan propped up exports and helped offset a rise in output. Demand has since tapered off and exports have dropped about 14 percent in the July 1-20 period from a month ago. But traders say daily average shipments are still healthy and they will watch export data to gauge demand strength. Investors expect July's output to miss initial estimates as plantation workers get shorter hours during Ramadan. World palm oil production may increase 4.4 percent to a 58.2 mn tons when compared to the previous season amid higher than expected palm oil production from Indonesia and Malaysia, the Oil World said on July 16. However, palm oil reserves in Malaysia fell 37 percent to 1.65 mn tons in June from a record in December, according to the data released by the palm oil board. Technically market is under long liquidation as market has witnessed drop in open interest by -3.48% to settled at 1914 while prices down -0.5 rupee, now CPO is getting support at 500 and below same could see a test of 497.7 level, And resistance is now likely to be seen at 504.7, a move above could see prices testing 507.1.

Trading Ideas:

CPO trading range for the day is 497.8-507.2.

Crude palm oil settled flat as investors expected disappointing output of the tropical oil in July would prevent a sudden rise in stocks

Palm oil inventories in Malaysia eased to a 2-year low of 1.65 million tonnes in June

Demand has since tapered off and exports have dropped about 14% in the July 1-20 period from a month ago.

Crude palm oil prices in spot market gained by Rs 0.30 and settled at 501.30 rupees.