Soybean futures (May) is giving a lower closing since past two weeks & hence the short covering may face resistance near 3750 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) is likely to face resistance near 3810 & the upside may remain
capped. The absence of demand for mustard meal from China & sluggish buying by
NAFED is weighing on the sentiments. Soy oil futures (May) is likely trade sideways
in the range of 738-746 levels. On the spot markets, weak availability and improved
demand lifted soy oil. CPO futures (May) will remain trapped in the range of 539-
546 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. On the
international market, Malaysian palm oil futures recouped earlier losses to close
flat at the end of the trading day, helped by gains in the U.S. soyoil and on prospects
of improving export demand.
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