Free Fall continues in Indian Soy oil Market

India Soy oil Market Update:

As described Yesterday, Indian Soy oil market is falling freely towards 589 level…. May be by tomorrow.

Daily and Weekly charts are very bearish.

Physical market was also dull today with slack demand.

CBOT soy oil also seems quite weak.

Traders should manage their positions according. 

NCDEX Soy Oil Feb Contract: 9.35 PM IST trades at 607.55 Level.

NCDEX Soy Oil Feb Contract: Weekly Chart

Soy oil closes in RED in Indian Futures Market

As predicted today, Finally Indian Soy oil Futures Market closes with a bearish note tonight. The NCDEX Soy oil Feb contract close at  at 611.20 (-1.92% from previous day close). 

The weakness is likely to continue tomorrow as well.

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Technical Levels for NCDEX Soy oil Feb contract for 29.01.2015

597 then 589 are the next support and market will get resistance 615 then 622 levels.

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The soy oil at the CBOT close in RED tonight.

Soy oil unable to sustain on higher levels in Indian Market

As mentioned in the earlier post, soy oil futures are finding it difficult to sustain on higher levels despite the improved physical market demand.
Yesterday market witnessed sharp recovery but it was mainly due to short covering after a significant fall during past few days.

It is expected that if NCDEX Feb contract slips again below 615 level then market may correct to new recent low. Thus those maintaining buy positions should think again if 615 level is breached.

If 615 is broken and tonight market close below it, then 605 may be seen. If 615 does not break, then market may again recover.

However possibility of downward movement is high.

Today Soy oil Feb Contract made a high of 628.50 but could not sustain and fresh selling pressure dragged prices down. Right now market trade at 619 level.

Soy oil prices expected to further slip in Indian Market

As predicted during past week on 21 January 2015 in this blog, the Indian soy oil futures prices fell to the level near 615 from 637 on poor demand and weak international market cues.

The situation has yet not improved. Some more correction is expected on first few days of this week. The market may further correct to the level near 605.

• The import of edible oil in India has seen increment during past two months as the Indian traders anticipated well in advance that import duty on the edible oils may be increased.
•  The major exporters of palm oil i.e. Indonesia and Malaysia successfully exported palm oil to Indian to reduce their burgeoning stocks.
• Drastic price fall in the crude oil also reduced the demand of CPO in to bio diesel.
• The pace of domestic oilseed crush was remain low due to slack export demand of oil meal.
• As per the data released by the Solvent Extractors’ Association of India, the import of Vegetable oils (edible & non-edible) for the month of November, 2014 is reported at 1,189,934 tons compared to 944,309 tons in November, 2013, consisting of 1,149,131 tons of edible oils and 40,803 tons of non-edible oils i.e. up by 26%.
• Please note that the edible oil stock position on the Port is also comfortable.
• The SEA of India data shows that the current stock of edible oils as on 1^st Dec., 2014 at various ports is estimated at 860,000 tons (CPO 555,000 tons, RBD Palmolein 80,000 tons, Degummed Soybean Oil 60,000 tons, Crude Sunflower Oil 130,000 tons and 35,000 tons of Rapeseed (Canola) Oil and about 1,100,000 tons in pipelines.
• Total stock, both at ports and in pipelines increased to 1,960,000 tons from 1,860,000 tons in Nov.’14 and 1,470,000 tons in Dec.’13.

 

Source: seaofindia.com

All these factors have significantly contributed to the current price fall in the edible oil prices in India which may continue for next couple of days during this week.

Sowing and Harvesting Seasons of Indian Agricultural Commodities

Trading Cycles are mostly influenced by the growing and harvesting seasons of a particular commodity. Here a crop calendar is provided for the commodities which are traded in the Indian futures market.

There are three main seasons.

1. Kharif Season = June -------- September
2. Rabi Season    =  October ------Jan
3. Zaid Season    = February ----May


Major Kharif Season Crops :

Soybean,  Cotton, Castorseed, Turmeric, Chilli, Guarseed,& Maize, Potato

Major Rabi Season Crops:

Wheat,, Chana, RMseed, Barley, Jeera, Dhaniya, Pepper, Potato

Major Zaid Season Crops:

Mentha,

Annual crop [12-18 month crop]:

Sugarcane

Perennial Crop:

Cardamom

AP: Andhra Pradesh, MP: Madhya Pradesh, Raj: Rajasthan, UP: Uttar Pradesh, MH: Maharashtra, Guj: Gujarat, Kar: Karnataka, Ker: Kerala, TN: Tamil Nadu, HP: Himachal Pradesh, Har: Haryana, WB: West Bengal, Bir: Bihar, Punj: Punjab Or: Orissa

Rabi Oilseeds Production in India may fall short of Set Targets for 2014-15

The government of India has put a target of 111.70 lakh tons of oilseeds production from Rabi season for 2014-15 which seems hard to achieve as the oilseeds sown area under rabi season is 8.30% less as compared to last year. As per the latest government estimates, the sowing area under total oilseeds is at 76.91 lakh hectares as compared to 83.87 lakh hectares last year.

Keeping in mind the overall price situation in the Indian and world market, the supply of edible oils is comfortable to meet the consumption demand. Further the drastic fall in the crude oil has also added to the bearish undertone of the market.

However India is a net importer of edible oils to meet its domestic consumption demand, the current downside in oilseeds prices seems limited. However short term correction may continue for some more days. From March onward the oilseeds prices may start witnessing upside movement.

Soybean looks bearish during this week

Soybean also seems weak during this week. Today market closed at Rs. 3390/quintal in Indian futures market.
The prices may correct to the level near Rs. 3275/quintal this week. Thus short term correction is expected.

Soy oil and Soybean looks weak in short term in Indian maket

For the last three days soy complex market is witnessing weakness due to subdued demand in the physical markets in India.

Now from February on wards winter season will end and spring season will start which will result in to increase in demand of more palm oil than soy oil.

It is expected that soy oil which is trading currently at Rs. 637/10 kg level may fall to the level near Rs. 615/10 kg in short term.

However keeping in mind the Rabi season oilseeds sown area which has reduced significantly, not much downside is expected.