Mumbai - Indian vegetable oilseeds and oil complex were trading down affected by the heavy losses in the global markets Monday. The weak physical markets due to lack of buying interest, the strong mustard seed arrivals and the persisting duty cut talks are also adding to the weakness in the domestic markets.

Malaysian palm oil futures has ended the morning session sharply down affected by Fridays and current losses in US soy market and non-inspiring March 1-15 export figures. Active May CBOT soybean and soy oil had closed limit down on Friday and the losses are continuing currently too with May soy oil quoting down by 106 points on e-CBOT.

US soy oil has moved below the psychologically significant 60 cents a pound level and is currently trading at 59.62 cents a pound. This is leading to significant sell-off in the other international bourses, affecting sentiments in India too. Traders are reporting that with the South American soybean harvest fast progressing funds are liquidating positions in soy oil and investing them in crude oil. Expectation of increased sowing by US soy farmers in the approaching season, because of the record-high prices seen this year, is also adding to the weakness in the US soy markets.

The strong correlation between US soy oil and crude oil has recently been sharply eroded with soy oil actually falling while crude oil rose sharply by $ 10 to $ 110 a barrel. Today, also further gains have been reported in crude oil with April contract at NYMES rising to $ 111.06 a barrel.

The domestic markets are seeing very strong losses despite, heavy losses being seen on Saturday too in response to the limit-down closing in the US soy markets. The anticipation of further weakness in the global markets is keeping buyers away despite the Holi demand from consumers expected to pick up soon.

The most active April soybean contract at National Commodity Derivatives Exchange [NCDEX] at 10.55 hours is trading lower at Rs 2,165.00 [- 55.00] per 100 kg with 35,550 tonnes traded.

At NCDEX the soy oil April contract is trading lower at Rs. 653.20 [- 9.80] per 10 kg with 15,570 tonnes traded. The April contract at NBOT is down at Rs. 655.00 [- 9.10] while the same contract at Multi Commodity Exchange of India Ltd [MCX] is trading lower at Rs. 655.65 [- 12.25] per 10 kg with 1,350 tonnes traded.

Crude Palm Oil [CPO] at the Bursa Malaysia Derivatives [BMD] has ended the morning session sharply lower affected by the heavy losses in the US soy market and slower growth of exports. While, March 1-15 exports have shown only a 10% monthly increase, last week, Intertek had estimated exports during March 1-10 to be up 54% on month. Traders have reported that though demand exists, buyers are cautious, anticipating an easing of prices in the near term

Malaysias palm oil exports during the first 15 days of March are estimated at 6,64,446 tonnes, up 10% on the month by cargo surveyor Intertek Agri Services. The estimates are close to market expectations of around 657,000 tons.

The benchmark May contract has ended the morning session down at MYR 3,525.00 [- 164.00] a tonne with 6,356 lots traded. [MYR=Malaysian Ringitt][1 lot=25 tonnes]

The US soy complex witnessed sharp losses on Friday night with active May soybeans and soy oil closing limit down by 50 and 200 points respectively. The demand in the cash market was reported to have fallen down ahead of the influx of soybean from Brazil into the global market. Heavy profit-booking was also seen with the crash in the equity markets leading to enhanced fear of slowing down of the economy.

May soybeans closed limit down, 50 cents lower, at $13.52 3/4 per bushel, and November soybeans fell 41 1/2 cents at $12.79. May soyoil ended limit down, or 200 points lower, at 60.56 cents per pound. May soymeal ended down $12.20 at $343.80 per short ton.

MUSTARD SEED

Mustard seed futures is trading sharply lower with all contracts at NCDEX hitting the first circuit filter of 3% within in an hour of trading. The strong arrivals, losses in the domestic soy complex and global edible oil markets are driving down the markets. Strong arrival of above 1.25 lakh bags has been reported from Rajasthan. The arrivals from other states have also commenced slowly and would pick up strongly from next week. The pre-Holi mustard oil demand and correction in prices have improved the buying interest from crushing units but the buyers are keeping their quotes low, which is pressurizing the futures market to also move down.

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. 568.15 [- 17.55] per 20 kg with 55,720 tonnes traded.

The regional platforms are down with the active May 08 contract at Sirsa and Hapur quoting at Rs. 517.00 [- 1.40] and Rs. 576.50 [- 5.80] per 20 kg respectively.

CASTOR SEED