Oilseeds plunge on weak sentiments
10 Sep 2008 5:17 pm
Mumbai - Indian vegetable oilseed futures closed sharply down with heavy selling seen from late noon with players worried over further losses in the domestic markets once the khariff arrivals strengthen. The weakness in global edible oil, energy markets, negative price outlooks and dull demand added to the selling pressure.
The Malaysian palm oil futures closed down at a fresh one year low, with players worried over fall in exports and weak price outlooks. The US soy complex was making losses throughout the electronic session with December soy oil and November soybean quoting down by 31 point and 3.25 cents on e-CBOT when the Indian markets closed.
The energy markets significantly reduced early gains as electronic session progressed with October crude oil at New York Mercantile Exchange trading up by $ 0.13 at $ 103.39 a barrel at 17.00 hours IST.
Indian oilseed futures closed sharply down with heavy liquidation and short-selling seen across all the contracts in anticipation of further losses when the peak arrivals season commence from mid-October. The losses in global edible oil, energy markets and bearish price outlooks added to the selling pressure.
The domestic oilseed markets were trading negatively in a range-bound manner till noon with some short-covering of earlier losses and early recovery in crude oil limiting the losses, despite an overall bearish tone. However, anticipation of further losses in the medium term pushed the market into a selling spree from late noon, which caused the market to settle sharply down.
The overall picture turned highly bearish with huge supply boost expected in the coming months. US, India and China are expected to produce bumper soybean crops this season. Mr. Dorab Mistry speaking at a vegetable oil conference in Singapore said that uniformly good weather was a rare but fortunate occurrence and as long as that remained, the price outlook must remain somewhat bearish.
The demand for new Indian soymeal has fallen with buyers keeping away in anticipation of a further price fall. The forward sales for new crop soymeal were reported to be less than half of what was sold at the same time last year. Players were fearing that prices could fall from current level of $ 380-400 a tonne to around $ 300 a tonne.
Meanwhile, the weak domestic sentiments of a normal khariff oilseed crop, picking up of new arrivals, release of old stocks by stockists, high stocks of imported palm oil at ports and the approaching peak harvest season were continuing to pressurize the cash and future markets. The domestic industry is expecting this year’s khariff output to exceed last year’s due to improvement in area and current good condition of the crops.
The October soybean contract at National Commodity Derivatives Exchange [NCDEX] closed lower at Rs. 2,023.00 [- 71.50] per 100 kg with 1,52,290 tonnes traded. The October contract at National Board of Trade [NBOT] ended down at Rs. 2,026.00 [- 67.00] per 100 kg.
October CPO at Multi Commodity Exchange of India closed lower at Rs. 342.30 [- 7.30] per 10 kg with 14,980 tonnes traded.
Crude Palm Oil [CPO] futures on Bursa Malaysia Derivatives [BMD] closed down at a new one-year low pressurized by fall in exports and bearish price outlooks. However, the 6.5% monthly drop in stock levels to a four-month low of 1.85 million tonnes helped the market to minimize losses.
Mr. Dorab Mistry said CPO futures might find support at MYR 2,200 a tonne on a fresh demand to make biodiesel. However, he said that high cycle of palm production could continue for two more months. He added that in first half of November, the combined stocks of Malaysia and Indonesia might exceed 5 million tonnes.
Earlier, Mr. James Fry too opined that palm oil prices were likely to hover around $700 per tonne until February next year as the demand for biofuels would support prices.
Malaysia’s palm oil exports for the September 1-10 period fell 2.3% on month to 3,92,467 tonnes as estimated by cargo surveyor SGS (Malaysia) Bhd. The numbers were below market expectations of around 4,18,000 tonnes and also lower than an estimate of 4,00,977 tonnes by another cargo surveyor, Intertek Agri Services.
The benchmark November contract closed down at MYR 2,329.00 [- 25.00] a tonne with 12,649 lots traded. [MYR=Malaysian Ringitt]
The US soy complex closed mixed on Tuesday with soybean, soymeal settling moderately up. However, losses in crude oil pushed soy oil to an eight-month low. The USDA would be releasing its September Supply Demand Reports on Friday. September soybeans settled 14 1/2 cents higher at $11.94 1/2 and November soybeans ended 15 cents higher at $11.92. December soybean meal settled $1.30 higher at $328.30 per short ton. December soy oil finished 35 points higher at 49.24 cents per pound.
MUSTARD SEED
Mustard seed futures closed sharply down with heavy selling seen in on account of selling pressure in cash markets and expectation of domestic prices crashing further.. Traders are expecting further fall in prices when the peak khariff arrival and crushing season commences from late October.
Most active mustard seed November futures on NCDEX closed lower at Rs. 549.00 [- 14.35] per 20 kg with 1,46,360 tonnes traded. The regional markets ended down with November contract at Hapur settling at Rs. 633.20 [- 2.00] per 100 kg.
CASTOR SEED
Castor seed futures closed down pressurized by the weak cash markets and persistence of soft tone in edible oilseeds. The strong improvement in acreage and expectation of increase in production over previous year levels was also keeping the sentiments negative.
Most active castor seed October futures on NCDEX closed lower at Rs. 616.90 [- 3.20] per 20 kg with 3,810 tonnes traded.
The regional markets closed down with December contract at Rajkot settling at Rs. 2,998.00 [- 20.00] per 100 kg.
