October 22, 2010

India's refined soyoil futures may dip on weak global cues

NCDEX refined soyoil is likely to move down on weak global markets and likely profit taking at higher levels.

The benchmark November soyoil contract ended the last session higher by 1.10% at INR533.9 (US$11.98) after hitting the high of INR534.5 (US$12) per 10 kg. The open interest slumped 4.7% to 142,750 tonnes from 149,470 tonnes, indicating short covering and volume traded dipped to 167,370 tonnes from 170,870 tonnes on the previous day.

The contract closed well above the short term, long term EMA's, indicating short term and long-term trend is firm, and the 14-day RSI ended at 72.75, indicating the contract is at overbought zone.

Technically, correction is due in the counter and the counter is likely to have support at INR532.3 (US$11.95) and at INR528 (US$11.85). Meanwhile, the contract has resistance at INR535 (US$12.01) and at INR538 (US$12.08) per 10 kg.

US November Soy finished down 10 1/2 at 1201 1/2, 22 off the high and equal to the low. January Soy closed down 10 3/4 at 1213. This was equal to the low and 22 off the high. December Soymeal closed down 4.4 at 333.4. This was 0.5 up from the low and 6.8 off the high. December Soy Oil finished down 0.23 at 48.24, 0.71 off the high and 0.14 up from the low. November soy made a new two-year high overnight but sold off into the start of the day session and closed sharply lower on the session and near the lows of the day.

The market pushed into a series of new lows during the day session with a final new low recorded prior to the close. Traders also credited the selling in soy to profit taking after yesterday's dollar-induced rally.

Argentine soy prices soared this week on strong gains overseas and solid demand from Chinese buyers for Argentine soyoil.