Mumbai - Indian vegetable oilseeds and oil complex were trading significantly higher, with the active soybean contract crossing Rs 2000 per quintal mark Saturday. Strong gains in the US soy complex and US crude oil overnight were supporting the positive sentiments.

The global prices have been surging again recently as a result of strong demand, long-term supply concerns and weather problems. The active February crude oil contract at the New York Mercantile Exchange also sharply rose to $ 93 a barrel overnight. These are supporting the gains in the Indian market.

The peak khariff arrival season is over, with daily all-India soybean arrivals now averaging around 4 lakh bags. [1 bag = 90-100 kg] Increased imports of edible oils can now be expected, for which the price disparity between domestic and edible oil prices would have to narrow down. This is resulting in the strong gains in the domestic markets currently.

The strong demand for soymeal in the global and domestic markets is also highly favouring the gains in soybean. Winter is normally the peak demand period for animal feed, resulting in the global soymeal prices rising sharply. The sharp rise in global wheat prices has shifted some feed wheat demand also to soymeal.

The Malaysian palm oil futures closed higher on Friday and even briefly crossed MYR 3,000 a tonne as the heavy rains and flooding is expected to result in an output reduction of 20%.

The most active February soybean contract at National Commodity Derivatives Exchange [NCDEX] at 10.20 hours is trading higher at Rs 2,003.50 [+ 22.00] per 100 kg with 29,350 tonnes traded.

At NCDEX the soy oil January contract is trading higher at Rs. 549.70 [+ 2.65] per 10 kg with 4,600 tonnes traded. The January contract at the National Board of Trade is up at Rs. 549.50 [+ 2.10] per 10 kg, while the same month contract at the Multi Commodity Exchange of India Ltd [MCX] is trading higher at Rs. 549.30 [+ 2.50] per 10 kg with 1,080 tonnes traded.

Soy complex at the Chicago Board of Trade closed sharply higher, with soy oil soaring to new contract highs as a result of strong underlying demand and speculative buying. The expansion of the renewable fuel standard in the new U.S. energy bill has raised the bar for bio-fuel production as well as increasing the long-term demand for corn and soy oil.

January soybeans settled 16 3/4 cents higher at $11.77 1/2 and March soybeans ended 16 1/4 cents higher at $11.96. January soymeal settled $3.10 higher at $328.20 per short ton. January soyoil finished 52 points higher at 47.15 cents per pound.

The active March 08 Crude Palm Oil [CPO] contract at the Bursa Malaysia Derivatives [BMD] touched a high of MYR 3,001 a tonne and closed higher at MYR 2,992.00 [+ 30.00] a tonne on Friday.

MUSTARD SEED

Mustard seed futures is trading higher supported by the strong gains in the domestic soy complex. The market is also short covering yesterdays losses, with the sustained gains in soy market, preventing mustard seed from moving down. However, increased selling pressure from stockists can be expected as the prices move up.

The lagging acreage, decrease in crop size and delay in arrival of new crop are keeping the long-term sentiments in mustard seed positive. The industry participants are estimating the crop size to be in the range of 5 5.3 million tonnes against, 5.8 million tonnes produced last year. The crop is expected to arrive in huge quantities only from March, as the sowing was delayed this year, due to the poor soil moisture. Traders are expecting mustard seed to make strong gains in January and February.

Most active mustard seed February futures on NCDEX is trading higher at Rs. 476.60 [+ 1.10] per 20 kg with 4,880 tonnes traded.

The regional platforms are trading higher with the active February 08 contract at Sirsa and Hapur quoting at Rs 450.50 [+ 1.90] and Rs 502.50 [+ 2.30] per 20 kg respectively.

CASTOR SEED

Castor seed futures is trading higher in thin trading supported by the tight stock scenario, lesser than expected arrivals and strong buying by exporters. The participants are buying with the aim to book profits at the next opportunity. With the prospects of increasing arrivals and non-confirmation of any heavy export deals sustained gains are not expected by the market currently.

The January castor seed futures on NCDEX is trading higher at Rs. 427.80 [+ 0.50] per 20 kg with 60 tonnes traded.