CPO settled flat at 432.50 once recovered on concerns about unfavorable weather in comparative oil-producing countries and as traders cited nervousness in an oversold market. Also floods in India, the world's fifth-biggest producer of soybeans, also supported sentiment for palm oil. Further, lower arrivals from the major producing areas too supported crude oil prices. Prices also seen supported tracking firmness in overseas prices as the government's move to exempt the commodity from export taxes buoyed expectations of a recovery in exports.

Malaysia slashed palm oil export tax for September and October to promote exports and reduce the stockpiles. Crude palm oil imports by India & subcontinent jumped to 502,599 tons in August compared to 367,895 tons a month earlier, data release by Intertek showed. Stockpiles in Malaysia, the world's No. 2 producer of the tropical oil, stood at 1.68 million tonnes at the end of July, and are expected to hit a seven-month high at end-August as production outstrips global demand from key consumers.

Production in Malaysia may reach a record 19.7 million tons to 19.9 million tons, while Indonesia's output may total an all-time high of 30.5 million tons or more this year. India's Palm oil imports are cut 200,000 tons to 8.6 million on weaker than expected purchases. Palm also slumped as demand for biofuels missed expectations, forecasts for an El Nino weather pattern, which can disrupt supplies, were scaled back, and the ringgit strengthened. Global ending stockpiles of palm oil will increase 10 percent to 8.7 million tons in 2014-2015, according to a forecast from the USDA. Technically market is under short covering and getting support at 431.3 and below same could see a test of 428.5 level, And resistance is now likely to be seen at 435.8, a move above could see prices testing 437.5.

Trading Ideas:

CPO trading range for the day is 427.8-437.4.

CPO gained on concerns about unfavorable weather in comparative oil-producing countries

Floods in India, the world's fifth-biggest producer of soybeans, also supported sentiment for palm oil.

Supported seen as the government's move to exempt the commodity from export taxes buoyed expectations of a recovery in exports.

Global ending stockpiles of palm oil will increase 10% to 8.7mtns in 2014-2015, according to a forecast from the USDA.