Refined Soy Oil expected to trade lower

2009-10-08 12:20:50

Refined Soybean Oil (November contract) futures opened higher in tandem overseas market. However, prices could not sustain higher level after making a high of Rs 433 per 10 Kg in the morning hours and prices fell sharply an hour before closing the market due to huge stock of edible oil and lower demand at retail ends.

Strong INR against US dollar in favour of importers of edible oils, which caps upside limit and provided support to bears in the market on Wednesday.

The benchmark November contract on NBOT Exchange (Indore), Ref Soy oil futures closed lower Rs 4.20 at Rs 424.80/10 Kg on Wednesday, from its high of the day (432.10) and touched a low of MYR 424.50/10 kg.

CBOT December soybean oil futures ended lower at 34.04/cents/pounds on Wednesday, down 0.22 cents/pounds as compared to previous close.

Technical Analysis

Ref Soy Oil Prices (NCDEX November Contract) closed lower at 424.90 per 10 Kg on Wednesday; its high of the day was 433.00 levels and touched a low 424.90 level.

Prices closed below its 10 days and above its 20 days EMA. 14-Days RSI is at 36.47.

Outlook

Refined soy oil futures are expected to trade lower on account of strong INR against US Dollar, which is in favour of importers of edible oils. Huge stock of imported edible oil in first 10 months of current oil marketing year as compared to last year during the same period and decision of continue to import of crude edible oil at 0% also in favor of bears in the market.