Indian soy oil Futures: WEEKLY OUTLOOK

• During past week (21-27 July 2014), soy oil market witnessed a sideways movement in the Indian futures market. In fact Soy oil prices on CBOT fell by more than 1%, Indian Rupee against US Dollars appreciated by around 0.63% but despite that Indian soy oil August futures market prices appreciated by around 0.11%.

• Please note that CBOT soy oil August Contract prices on monthly basis have fallen by nearly 10%. However till 27 July, Indian futures market maintains almost the same levels as were seen during 1 July 2014.

• In fact delayed monsoon and fear of deficit rains did not allow soy oil market to fall in the line with international market. As of now some improvement is seen in the monsoon progress and major soybean growing state i.e. Madhya Pradesh (MP) of India has witness good monsoon rains.

• The sowing progress of soybean is satisfactory in MP however in other important states it is still running behind the previous year’s figures.

• The availability of the soy oil from the local soy seed will be limited during next two months and the months of September and October are the months of increased consumption demand in India as a string of festivals starts from October.

• Thus India will have to rely on the imported oil to great extent. In the light of the fact that US is going to witness huge soybean crop this year, the soy oil supply in the world market is likely to remain comfortable and not much upside in CBOT soy oil is expected.

• From Indian market point of view, other important factor to watch will be the USDINR movement as the cost of imported oil depend upon the value of Indian rupee with respect to the US dollar.

Weekly Outlook:

Thus we expect that even though world market is having good soy oil supply, the increased demand in the Indian market will not allow soy oil prices to fall much in near future. Rather we expect that sideways to positive movement in the soy oil market in India may be seen in short to medium term.

SOY OIL AUGUST CONTRACT AT NCDEX (TECHNICAL LEVELS FOR WEEK 29 JULY TO 2 AUGUST)

SUPPORT 1 = 677      SUPPORT 2  = 674       RESISTANT 1 = 689      RESISTANCE 2 = 695

WEEKLY TREND SEEMS POSITIVE.

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Edited on 28 July 2014 at 9.50 AM IST

CBOT soy oil trades firm.... Indian market is likely to open up as discussed above.....

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