Free Fall Continues in Soy oil, Palm Oil and Soybean in Indian Market

On Tuesday morning, Indian vegetable oil complex trades with a negative note due to poor buying interest in the physical markets.

What we mentioned in the earlier posts that market seems heading towards a significant fall in near future seems true.

Confidence is lacking among the buyers while sellers are quite active in the market.

CPO and soybean also looks very weak.

We repeat the technical levels that might be seen in the Indian soyoil futures market in near future.

Current level is 576.

India: NCDEX Soy oil April Contract

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

NCDEX SoybeanApril Contract

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

Soy oil remains volatile ahead of the Union Budget in Indian Market

Weak global cues of soy oil and crude oil keeps Indian market sentiments subdued in physical as well as futures markets.

Physical markets traders however opine that sooner or later prices are bound to improve with the start of summer in north India after Holi Festival.

They seems downside limited in India market.

Union Budget in India is also scheduled next week on 28th Feb.

Oilseeds industry in India is in favor of gradual increase in the import duty on the refined edible oil. This is to be seen what happens in Budget.

Thus market will remain more speculative and will  follow less demand and supply fundamentals. 

A cautious trade is advised amidst high volatility.

NCDEX Soy oil April Contract

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.