Edible oil prices remained lower with limited fall in comparison to soybean. Drop in exports of palm oil during first 20 days by 14% to 799210 tons v/s 933553 tons compared to same period last month triggered down fall. Inactive buying from Pakistan and China for Malaysian palm oil kept prices lower.
Spot prices declined from `685/10kg to `670/10kg and stabilized at `675/10kg towards closing of the week. Higher stocks of other edible oils at ports also kept prices under pressure. Demand for edible oil also remained very slack post festive season.
Soy oil exports sales from U.S increased to 18.7 tons compared to 1.1 tons in the previous week which also limited the down fall in prices. Decline in crude oil prices also affected prices of the soy oil and palm oil which substantiated the prices of edible oils to decline.
Outlook:
Edible oil prices might remain on loosing spree in the week ahead. Absence of the Chinese buyers for palm oil and soy bean, might affect the prices. Chinese Lunar New Year holidays from 23 might result in weaker demand for the oilseed complex which might keep prices under pressure.
Weak exports of soybean projected might keep prices under pressure. Higher port wise stocks of edible oils for the month of the January are reported due to the weak domestic demand. NOPA crush report has reported higher oil stocks in us which are negative for prices.
In domestic markets buyers are looking forward for development in weather scenario and performance of the rupee which would be deciding factors for the imports during February- May which is peak importing period for soy oil.
Technical Analysis:
Price has been trade in the range of $52.67-$50.00 levels in CBOT platform on last week. Closing of the candle stick is suggesting limited downside momentum in coming session.
Principle of Fibonacci retracement states that prices are witnessing immediate crucial support at $50.00 which is 50% of the range $38.70-$61.33 levels.
Incase on beach and sustained trade below might test recent low of $48.70 for near term from technical end crucial support is seen at $47.30 levels which 61.8% of the above mentioned Fibonacci retracement levels. If prices breach and sustained below might resumes previous short term bearish rally.
Higher side immediate resistance is seen at $51.20 which is weekly 8 EMA level and next resistance is seems to be abound $52.65 levels which is Fibonacci retracement of 23.6% and also this level is matching with medium term weekly moving average (21).
Momentum indicator RSI-14 is supporting prices to trade limited down side by treading at 0.410 levels. Overall expecting prices to trade down side and recommended to sell at higher levels.
Courtesy: Karvy Commtrade Ltd.
