Indian Soy oil Market seems heading towards steep fall

It appears that Indian soy oil market is likely to fall significantly from current levels as physical market demand is not improving amidst weak global cues.

Poor soymeal export data of India also discouraged the soy industry in India. Earlier, no announcement on the import duty increase on edible oils in the Union Budget disappointed the industry.

Buyers are waiting for more correction to take place in the market then they can start fresh buying.

Indian soy oil importers seems continuously hedging their positions in the futures market. At the same time buyers restrains themselves for big buying.

Technical Chart pattern also suggest a fresh fall in the soy oil market in near future.

The following technical levels seems valid in the next week starting 9-14 March 2015.

Current Trading Price of Soy oil April Contract at NCDEX is 580.55

India: NCDEX Soy oil April Contract

S1: 548    S2: 530                   R1: 602           R2: 620

Be Ready for Sharp Movement in Soy oil in Indian Market in near future

With no change in the duty structure in the Union Budget  on edible oils, market will now start following fresh demand and supply fundamentals in Indian market.

International crude oil prices have also shown some improvement in short term.

In India, the central and northern parts which are the major oilseeds producing states, have received widespread rains which may delay the Rabi oilseeds crop arrivals a little bit delay particularly the Mustard seed crop.

With the start of summer season, demand is likely to pick up gradually.

Please note that for the past 7-8 days soy oil market moves in range of 10-12 rupees with no clear direction.

Right now Soy oil April Contract at NCDEX trades at   593.75.

As discussed earlier, there are signs of some improvement in the physical market demand. But there is still some skepticism over long term outlook in the light of amply world edible oil supplies.

This is the very reason why speculators are a little bit quite and waiting for some clear trend to emerge to make their fresh bet.

The chart pattern suggest that in the next couple of days some clarity must come in the market about the medium term.

The downside seems limited from current levels.

On Daily Chart of Soy oil April Contract at NCDEX following technical levels seems valid for next couple of days.

Support = 585  Resistance 1 = 596  Resistance 2 =604.
A closing above 597 will lead the market towards 604.