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Weekly Edible Oil Outlook: Most contracts seen lower; CPO rangebound

Informist, Wednesday, Oct 13, 2021

 

By S. Anirudh Iyer

 

NEW DELHI – Futures contracts of most components in the edible oil basket on the National Commodity and Derivatives Exchange and Multi Commodity Exchange of India are likely to trade lower for the next one week, analysts said. 

 

* Prices are likely to come under pressure as data from Solvent Extractors Association showed that edible oil imports in September increased nearly 63% on year to 1.7 mln tn, which may weigh on sentiment. 

 

* Also, imposition of stockholding limits on edible oil and oilseed traders till March is likely to weigh on SOYBEAN and REFINED SOYOIL contracts on NCDEX. 

 

* The government imposed stockholding limits in a move to check a rise in prices ahead of the festival season. 

 

* Also, soybean contracts may come under pressure as the Soybean Processors Association has estimated output in 2021-22 (Jul-Jun) nearly 14% higher on year at 11.8 mln tn. 

 

* MUSTARD contracts are likely to trade lower as the Securities and Exchange Board of India has ordered NCDEX to not allow build-up of any fresh positions in existing contracts, which may weigh on prices. 

 

* CRUDE PALM OIL contracts are likely to be rangebound as concerns over an increase in supply in domestic markets may offset gains due to strength in parent contracts on the Bursa Malaysia Derivative. 

 

* Prices on the BMD are likely to be supported because of concerns over output following labour shortage in Malaysia, the world's second-largest producer of the edible oil. 

 

* Firm demand for the CPO ahead of the festival season may limit a sharp fall in prices. 

 

The following table details the support and resistance levels for the upcoming five to six sessions, and prices of the contracts as of 1430 IST:

 

ContractUNIT(in kg)EXCHANGESUPPORT (in rupees)RESISTANCE(in rupees)

Price

(In RUPEES)

Soybean (Nov)100NCDEX5,0005,6805,354
Refined Soyoil (Nov)10NCDEX1,2401,3801,294
Crude palm oil (Oct)10MCX1,0801,1801,135
Mustard (Nov)100NCDEX7,8008,6008,255

 

End

 

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Edited by Vandana Hingorani

 

 

Cogencis news is now Informist. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.

 

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