Soybean futures (June) is expected to test 3760 on the higher side, taking support near 3710 levels.
The demand is catching pace on the spot markets supported by
lower level buying & expectation of higher buying from millers owing to positive
gross crush margin of Rs.586 per ton. The upswing momentum in domestic
soybean prices & a weaker rupee against dollar may act as a catalyst to drive up the
soy oil futures (June) towards 748-750 levels. Despite the bearishness prevailing
over the soy oil price on CBOT, due to prolonged trade war & crashing oil prices, the
domestic market wouldn’t be impacted due to surging demand. On the contrary,
CPO futures (June) is expected to descend further towards 500, if breaks 510
levels. In the international market, the fundamentals are showing a projection of
decline in demand of palm oil as the European Union’s publication of limits on the
use of the tropical oil in biofuels that will restrict the types of biofuels from palm oil
that may be counted toward the EU renewable-energy goals, will come into force
on June 10. Moreover, the US-China trade war is adding to the headaches to the
palm oil industry & the stand-off is weighing on prices. The analysis highlights that
Malaysian Palm oil prices have fallen nearly 36% since U.S. President Donald
Trump took office in early 2017. The outlook of mustard futures (June) is bullish as
it has the potential to test 3960, hence lower level buying is recommended in this
oilseed. On the spot, at present the demand is firm from crushing plants as the
arrivals are shrinking because the peak supply season is coming to an end.
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