Crude palm Oil settled flat tracking weakness in spot demand and on expectation of higher supply. Prices of the oil will be down on expectation of higher supply from Malaysia and Indonesia, the world's top palm oil producer. However, sharp fall in the prices will be cushion by higher demand from export market. Indonesia's crude palm oil (CPO) output likely fell slightly in December, ending a seven-month run of gains. CPO production in the South-East Asian nation likely eased to 3.22 million tons in December from 3.31 million tons in November, according to the median estimate in a survey. Malaysia palm oil exports during Jan 1-25 rose 9% compared to a month earlier on strong demand from Middle East, data showed. Malaysia palm oil exports climbed to 924,282 tons during Jan 1-25 compared to 845,441 tons for the same period a month ago, DowJones reported citing data from Intertek, a private surveyor. Middle East's palm oil import from Malaysia during Jan 1-25 spurted by 99.71% to 85,976 tons as compared to 43,050 tons in same period a month ago. China’s imports plunged 24 percent to 4.48 million metric tons in 2016, the lowest since 2005, as benchmark futures surged 25 percent after El Nino squeezed supplies in Indonesia and Malaysia. Technically market is under short covering as market has witnessed drop in open interest by -6.59% to settled at 2224, now CPO is getting support at 585.7 and below same could see a test of 584.3 level, And resistance is now likely to be seen at 588.2, a move above could see prices testing 589.3.

Trading Ideas:

CPO trading range for the day is 584.3-589.3.

Crude palm Oil settled flat tracking weakness in spot demand and on expectation of higher supply.

Prices of the oil will be down on expectation of higher supply from Malaysia and Indonesia.

Indonesia's crude palm oil (CPO) output likely fell slightly in December, ending a seven-month run of gains.

Crude palm oil prices in spot market dropped by 3.40 rupees and settled at 586.90 rupees.