CPO yesterday settled up 0.52% at 503 as worries about a sharp rise in output receded and on hopes end-stocks in the world's No. 2 producer may have shrunk again in July due to resilient export demand. Global stocks of palm oil remain relatively low when compared to historical levels, however prices may remain at current levels in the medium term due to the higher stocks of palm oil in Malaysia and Indonesia at the beginning of the year. Although current stock levels have drawn down to their lowest levels since March 2011, forward prices remain depressed due to the expectations of large oilseed crops and the usual palm peak season in the second half of the year. The supply and demand fundamentals however in the global vegetable oils sector generally remain tight and unforeseen negative weather events could impact global yields and therefore pricing. The Malaysian Palm Oil Board will issue official July data on Aug. 14. Exports of Malaysian palm oil products from July 1 to 25 fell 7 percent to 1,085,392 tons when compared to 1,167,266 tons shipped during June 1 to 25 period, as per industry sources. Indonesia has set export tax for palm oil at 10.5% for August, unchanged from July's 10.5%. Technically market is under short covering as market has witnessed drop in open interest by -2.56% to settled at 5138 while prices up 2.6 rupee, now CPO is getting support at 501.1 and below same could see a test of 499.3 level, And resistance is now likely to be seen at 505.3, a move above could see prices testing 507.7.

Trading Ideas:

CPO trading range for the day is 499.4-507.8.

CPO settled up as worries about a sharp rise in output receded and on hopes end-stocks supported prices.

Exports of Malaysian palm oil products from July 1 to 25 fell 7 percent to 1,085,392 tons

Technically market is under short covering as market has witnessed drop in open interest by -2.56% to settled at 5138

Crude palm oil prices in spot market gained by Rs 1.80 and settled at 508.30 rupees.