Soybean futures (May) is giving a lower closing since past two weeks & this bearishness is likely to get continued till 3650 levels.
The market participants are turning more bearish in this oilseed due to hopes of higher production in 2019-20 (Jul-Jun)
following forecast of "near normal" monsoon. Secondly, the decline in soybean prices on Chicago Board of Trade is weighing on
sentiments. The two countries have tentatively scheduled a fresh round of face-to-face trade talks, with negotiators aiming to hold
a signing ceremony in late May or early June. Mustard futures (May) has breached the major support level near 3755 & observing
selling pressure because of sustaining supply of last season crop and lukewarm demand from oil millers. In days to come, the
counter would probably come down to test 3730-3700 levels owing to prevailing weakness in overall oilseed complex. Moreover,
the absence of demand for mustard meal from China & sluggish buying by NAFED is weighing on the sentiments. Soy oil futures
(May) is likely to consolidate in the range of 724-730 levels, CPO futures (May) will remain trapped in the range of 545-551 levels.
The rising vegetable oil imports are creating a supply pressure & have forced the oilseed crushing units and edible oil refineries to
reduce their operating capacity steadily to below the sustainable level of 30%. There is less demand for the domestically produced
oils, since the imported refined oil is cheaper. The share of refined oil in the overall import in March has sequentially risen steadily
to & with profit margins narrowing for processing of CPO in domestic refineries, Indian processing units are focusing on import of
more refined oil than crude oil.
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