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Wednesday, February 14, 2007

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Oil Seeds

Feb 6 2007 4:10PM
6th Feb 2007 Oil Seeds Report

REFINED SOY OIL

FUNDAMENTALS

Today, spot prices of refined soy oil remained mixed on lack of demand. Demand for soymeal remained steady domestically and at ports continuing its bullish tone. Poor parity for soy oil aided bearishness. While strong BMD futures influenced sentiments in Mumbai market, Rajkot market was easy on availability of cheaper substitutes. Crude soy oil CIF prices remained unchanged at $685/tonne for February shipment on Monday. Soy oil prices are not finding support at the current levels, in view of cheaper cotton seed oil and forthcoming rapeseed crop.

TUG-OF-WAR: Bulls vs. Bears

No.	Pressure Point	Favours
1.	Bullish BMD	Bulls
2.	Supportive weather conditions for beans arrivals	Bears

SPOT MARKET PRICES: (Rs/qtl)

Grade	Center	05.02.07	03.02.07	Change
Refined	Mumbai	446	443	+3
Refined	Indore	429	430	-1
Refined	Kota	436	436	0
Refined	Rajkot	450	453	-3

TECHNICALS

Refined soy oil candlestick chart is showing weakness due to the long dark candle. The prices closed between 9-days but 18-days EMA, indicating subdued sentiments. However, the fact that prices have managed to remain above the 9-day EMA indicates that the recent rally is still intact. A drop below the 9-day EMA might indicate that the short term trend has turned bearish.

WEATHER

Mainly clear weather in most of soybeans growing areas would facilitate arrivals

TRADE RECOMMENDATION

Contract	Call	Entry	T1	T2	SL	S2	S1	PCP	R1	R2
NCDEX-Ma	SELL	465	463	462	465	457	460	465.2	470	473

SOYABEANS

FUNDAMENTALS

Weaker soy oil with steady soymeal demand domestically and at ports was reflected in soybeans in the spot market. Arrivals significantly improved in Maharashtra by 20,000 bags to 60,000 bags but aggressive buying supported bullishness. In Rajasthan, soybeans prices dropped as stockists anticipated start of mustard harvest in few parts in state. Globally soybean prices are expected to be easy following ample stocks and good crop in South America.

TUG-OF-WAR: Bulls vs. Bears

No.	Pressure Point	Favours
1.	Arrivals improved in Maharashtra	Bears
2.	Bullish BMD	Bulls

SPOT MARKET PRICES: (Rs/qtl)

Centre	Market	05.02.07	03.02.07	Change
Indore	Plant	1430-1460	1430-1450	0
Indore	Mandi	1360-1400	1390-1410	-30
Maharashtra	Plant	1480	1480	0
Maharashtra	Mandi	1450-1460	1440-1460	+10

TECHNICALS

Soybean charts are showing hesitation at higher levels; however, close above the 9-day and 18-day EMA shows that firmness is intact. Stochastic is positive in neutral region, MACD is showing some increase in bullish momentum. The prices are likely to recover further.

WEATHER

Mainly dry weather in major growing areas would facilitate beans arrivals.

TRADE RECOMMENDATION

Contract	Call	Entry	T1	T2	SL	S2	S1	PCP	R1	R2
NCDEX-Mar	BUY	1446	1456	1460	1441	1438	1443	1450.25	1460	1464

MUSTARD SEED

FUNDAMENTALS

Today, NAFED did not change mustard seed prices and it stayed at Rs 1760/qtl for Jaipur region and for rest of the centres it remained at Rs 1710/qtl [For seeds stocked during 2005-06 season]. Reports of start of harvest in few parts of Rajasthan induced bearishness. Arrivals declined by approximately 5,000 bags in Jaipur region but poor buying interest from millers/crushers kept prices range bound. Weather is supportive for harvest and the prices are expected to be steady to easy on improved availability in the coming days.

TUG-OF-WAR: Bulls vs. Bears

No.	Pressure Point	Favours
1.	Nafed kept unchanged mustard seeds prices	Neither
2.	Harvest begin in the Rajasthan	Bears
3.	Arrivals declined in Jaipur	Bulls

SPOT MARKET PRICES: (Rs/qtl)

Markets	Grade	05.02.07	03.02.07	Change
Jaipur	Conditioned	1870-1875	1870-1875	0
Alwar	Conditioned	1770-1780	1770-1780	0
Delhi	Conditioned	1930	1910-1915	+20

TECHNICALS

Mustard charts are showing some weakness as seen by close below the short term EMAs. Stochastic oscillator is positive and is about to enter overbought region. Whereas MACD is showing some increase in bullish momentum. The prices are likely to remain on the softer side.

WEATHER

Mainly dry weather over Rajasthan would be supportive for harvesting.

TRADE RECOMMENDATION

Contract	Call	Entry	T1	T2	SL	S2	S1	PCP	R1	R2
NCDEX-Guar Seed-Feb.	SELL	< 371.5	368	-	374	366	367	370.7	374	376

DISCLAIMER
This report is prepared exclusively for Reliance Commodities by Indian Rural Market Products Pvt Ltd (IRMPL). The information and opinions contained in the document have been compiled from sources believed to be reliable. IRMPL does not warrant its accuracy, completeness and correctness. Use of data and information contained in this report is at your own risk. This document is not, and should not be construed as, an offer to sell or solicitation to buy any commodities. IRMPL and its affiliates and/or their officers, directors and employees may have positions in any commodities mentioned in this document (or in any related investment) and may from time to time add to or dispose of any such commodities (or investment).

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