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Soybean futures (October) is likely to trade with a downside bias & remain below 3300 levels. The crushers are not getting the parity as demand for soymeal is not as expected; hence they are crushing only 60-70% of their capacity. Mustard futures (Oct) is expected to face resistance near 4300 levels. The recent surge has turned the crush margin to negative of Rs.-53 per quintal. The demand for mustard cake has dried up sighting a steep rise in mustard cake prices. Until few days back, the domestic edible oils were decoupling against soy oil on CBOT and palm oil in Bursa Malaysia Derivatives. The reason of this occurrence was an all-time low Rupee against dollar, making import commodities pricier. But, now when the Indian Rupee has started to depreciate, the veg oil futures on the domestic bourse are expected to witness a long pending correction. Higher year-over-year global production of both soy and palm oil has put downward pressure on prices of both oils. Moreover, the environment of reduced edible oil demand is dragging down soy oil as well as palm oil prices on the international bourse. The latest statistics showed that Malaysia palm oil stockpiles in August rose 12.4% from a month earlier to 2.49 million tonnes, while production gained 7.9% to 1.62 million tonnes. Meanwhile,USDA reported that U.S soybean oil ending stocks for 2018-19 were estimated higher by 100 million to 2.166 billion lb. Based on this analysis, soy oil futures (Oct) is expected to plunge towards 725 levels, CPO futures (Sept) might witness a sideways to down trend in the range of 592-600 levels.
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