22/06/2012 (ForexPro) - CPO trading range for the day is 535.07-562.07. Market is looking to take support at 543.3, a break below could see a test of 534.9 and resistance is now likely to be seen at 556.8, a move above could see prices testing 561.9. In yesterday's trading session crude palm oil has touched the low of 540 after opening at 540, and finally settled at 551.7.

Crude palm oil yesterday traded with the positive node and settled 2.47% up at 551.7 on expectations of higher demand as dry U.S. weather could damage the soybean crop further, tightening global edible oil supply.

BMD CPO futures closed higher on Tuesday on expectations of increased demand due to concerns that dry weather in US could damage the standing soybean crop.

Commodities Shows Mixed Trend Ahead Of FOMC Meeting
European equities are trading on a mixed note ahead of the Fed policy meeting today. Asian markets closed on a positive note today and US stock futures are trading on a flat note today. Spot gold prices declined around 0.4 percent in today’s trading session. However, weakness in the US Dollar Index (DX) cushioned  further fall in gold prices.

The yellow metal touched an intraday low of $1609/oz and hovered around $1611/oz till 5:00pm IST today. On the MCX, gold August contract declined around 0.2 percent and was trading around Rs.30,155/10 gm today. Taking cues from fall in gold prices coupled with mixed performance in base metals, spot silver prices declined around 0.1 percent today. However, weakness in the DX restricted further downside in silver prices.

The white metal touched an intraday low of $28.23/oz and was trading around $28.37/oz today. In the domestic markets, prices declined around 0.1 percent and hovered around Rs.54,408/kg till 5:00pm IST today. However, depreciation in the Indian Rupee cushioned further fall in prices.

The base metals pack traded on a mixed note in today’s trading session. Copper the leader of the base metals declined by 0.5 percent and touched a low of $7,553/tonne. However, further downside in prices was prevented on the back of decline in LME copper inventories around 0.5 percent which stood at 250,350 tonnes.  

Nymex crude oil prices traded on a flat note on the back of less than expected decline in US crude oil inventories. However, weakness in the DX coupled with expectations of quantitative easing from Fed policymakers prevented sharp fall in prices.

Crude oil prices touched an intra-day low of $83.48/bbl and hovered around $84.02/bbl till 5:00pm IST today. In the domestic bourses, prices gained around 0.2 percent on account of depreciation in Indian rupee and was trading around Rs.4,760/bbl today.

The US Energy Department (EIA) is scheduled to release its weekly inventories report today at 8:00pm IST and US crude oil inventories is expected to decline by 1.1 million barrels for the week ending on 15th June 2012. 

Gasoline stocks are expected to rise by 0.8 million barrels whereas distillate inventories are also expected to gain by 0.8 million barrels for the same period.

In the evening session, we expect precious metals, base metals and crude oil prices to trade with a sideways bias awaiting Federal Reserve interest rate decisions. If the decision is favorable, then can lead to upside in the markets else might witness a downside pressure in the commodities. In case of crude oil prices might witness an upside on the back of expectations of decline in the US crude oil inventories.