Mumbai - Indian vegetable oilseeds and oil complex were trading sharply down tracking the heavy losses in the global edible oils markets Wednesday. However, the losses in soybean are comparatively limited due to positive USDA report and lack of sellers in the physical markets in anticipation of future gains.

Malaysian palm oil futures has ended the morning session down with rumours of China releasing Government edible oil reserves intensifying. The US soy complex had closed overnight, but is trading sharply down currently with May soy oil on e-CBOT quoting down by 150 points. The energy markets maintained the record high levels Thursday night too with the April crude oil contract on New York Mercantile Exchange closing at $ 108.75 a barrel.

The rumours of China planning to release stocks from its edible oil reserves to ease the rising prices has intensified, which sparked off a fresh selling bout in the global edible oil markets. The global markets had moved into a sharp corrective phase last week with the selling triggered off by the same rumours. The international markets had been able to recover only yesterday after losing heavily in the previous week, when selling again commenced.

The United States Department of Agriculture released its month World Agriculture Supply Demand reports Tuesday night, which showed a further tightening of US soybean balance sheet and confirmation of strong export demand.

Projected U.S. soybean ending stocks for 2007/08 are reduced 20 million bushels to 140 million this month, the lowest since 2003/04. Soybean exports are raised 20 million bushels to 1,025 million reflecting strong sales, especially to China, and reduced soybean exports from Brazil. U.S. soybean oil production has been increased and the projected use for bio-diesel has been sharply reduced by 600 million pounds. Soybean oil exports are raised sharply to 2,400 million pounds this month from 1,950 million pounds in February reflecting strong sales and shipments through February. Stocks are also projected higher.

Global oilseed production for 2007/08 is projected at 390.1 million tons, down 0.2 million tons from last month. Global soybean production is reduced 0.2 million tons to 219.8 million. Soybean production for Brazil is projected at a record 61 million tons, up 0.5 million from last month. Global rapeseed production is reduced 0.9 million tons to 47.6 million mainly due to lower output in China resulting from lower yields. Argentina soybean production for 2006/07 is raised to 48.8 million tons, up 1.6 million.

The most active April soybean contract at National Commodity Derivatives Exchange [NCDEX] at 10.55 hours is trading lower at Rs 2,225.50 [- 15.50] per 100 kg with 47,590 tonnes traded.

At NCDEX the soy oil April contract is trading lower at Rs. 681.95 [- 12.35] per 10 kg with 27,590 tonnes traded. The April contract at NBOT is up at Rs. 679.80 [+ 2.30] while the same contract at Multi Commodity Exchange of India Ltd [MCX] is trading lower at Rs. 681.95 [- 12.35] per 10 kg with 12,780 tonnes traded.

Crude Palm Oil [CPO] at the Bursa Malaysia Derivatives [BMD] has ended the morning session sharply down with the rumours regarding China triggering a fresh sell-off. The losses in US soy complex in electronic trading are also supporting the losses.

The benchmark May CPO contract has ended the morning session lower at MYR 3,731.00 [- 104.00] a tonne with 6,601 lots traded. [MYR=Malaysian Ringitt][1 lot=25 tonnes]

The US soy complex closed up on Tuesday night supported by a stop to the long-liquidation and fundamentally positive USDA report. The sharp gains in US crude oil and limit up gains in US wheat market also supported the gains.

March soybeans ended 4 1/2 cents higher at $13.92 1/2, May soybeans settled 1 1/4 cent higher at $14.07 3/4, July soybeans finished 3 cents higher at $14.23 1/2 and November soybeans ended 15 1/4 cents higher at $13.15 1/4. May soymeal settled $7.50 lower at $350.80 per short ton. May soyoil finished 105 points higher at 63.19 cents per pound.

MUSTARD SEED

Mustard seed futures is trading sharply down with the market sentiments affected by the sharp losses in domestic soy complex and in the global markets. The high volatility is reported to have reduced the buying interest in the physical market despite the smaller crop size and limited stock availability. The prices quoted by the buyers are also sharply down from the rates quoted in the futures market, with the market not sure about the future direction. At the same time, the current arrivals in Rajasthan are reported to be around 1 lakh bags.

India's rapeseed production is estimated to fall to 5.09 million tonnes from last years 6.02 million tonnes due to a decline in cultivated area and unfavorable weather by Central Organization of Oil Industry and Trade.

Most active mustard seed May futures on NCDEX is trading lower at Rs. 615.50 [- 13.00] per 20 kg with 40,350 tonnes traded.

The regional platforms are down with the active May 08 contract at Sirsa and Hapur quoting at Rs. 523.30 [- 0.70] and Rs. 587.00 [- 0.30] per 20 kg respectively.