Mumbai - Indian vegetable oilseeds and oil complex were trading sharply down Thursday affected by the limit-down losses in the US soy market on account of heavy fund liquidation. The domestic futures are also tracking the losses in the global markets despite the festival demand for edible oils in the physical markets picking up.

The comment by a senior Government official that India is considering a duty cut on palm oil to keep a lid on prices and increasing supplies is also adding to weakness in the domestic markets. He said that the decision would be taken in 3-4 days and did not say whether a duty cut on soy oil is also being considered. India has a 45% import duty on crude palm and 40% on soy oil.

The Malaysian palm oil futures is closed today on account of a public holiday. The US soy complex closed limit down on Wednesday night and is trading sharply down in current electronic trading too. May soybean and May soy oil on e-CBOT are quoting lower by 43 points and 178 points respectively.

The liquidity concerns of funds led to very heavy losses in the energy markets too overnight and they are trading down currently too with April crude oil on the New York Mercantile Exchange trading lower at $ 102.09 a barrel.

The uncertainties of the U.S. economy, the tightening of bank credit for hedge funds as well as a firmer U.S. dollar have led to broad-based selling across commodities in general. The weakness is more pronounced in edible oils due to the upcoming South American soy crop and subsequent easing of supplies.

However, market participants and industry experts are of the opinion that the currently fundamentals have taken a back seat, with the liquidation by funds due to problems in the financial markets and liquidity concerns being the dominant force.

The domestic markets are tracking the fall in the global markets. Stockists, wholesalers, importers in the physical markets are deeply in the red. With festival demand now picking up on account of Holi, sellers are trying their best to reduce the fall in the physical markets. This is minimizing the fall in the domestic futures market. The market had opened close to the 3% circuit filter, but has slightly recovered now.

The most active April soybean contract at National Commodity Derivatives Exchange [NCDEX] at 10.50 hours is trading lower at Rs 2,102.50 [- 47.00] per 100 kg with 25,320 tonnes traded.

At NCDEX the soy oil April contract is trading lower at Rs. 621.30 [- 15.30] per 10 kg with 18,130 tonnes traded. The April contract at NBOT is limit down at Rs. 621.00 [- 15.00] while the same contract at Multi Commodity Exchange of India Ltd [MCX] is trading lower at Rs. 621.30 [- 15.30] per 10 kg with 18,130 tonnes traded.

The US soy complex closed limit down on Wednesday night as speculative funds continued to lighten their heavy buildup of long positions in the market. Limit-down losses were seen across all major CBOT grain and soy futures with sharp losses booked in crude oil and metal markets as well. Fundamentals are currently being ignored and players are waiting for the March 31, US Department of Agricultures planting and stock report for fundamentals to again play a major role in price determination.

May soybeans settled 50 cents lower at $12.57, July soybeans finished 50 cents lower at $12.72 and November soybeans ended 50 cents lower at $11.90. May soymeal settled $19.80 lower at $330.50 per short ton. May soy oil finished 200 points lower at 56.40 cents per pound.

Crude Palm Oil [CPO] at the Bursa Malaysia Derivatives [BMD] closed lower on Thursday with benchmark June contract settling at MYR 3,352.00 [- 98.00] a tonne. [MYR=Malaysian Ringitt]

MUSTARD SEED

Mustard seed futures is trading lower affected by the heavy losses in the domestic soy complex and in the global edible oil markets. The duty cut talks, huge arrivals and lowering of quotes by buyers in the physical market on fear of further fall in prices are also affecting the market sentiments.

Most active mustard seed May futures on NCDEX is trading lower at Rs. 548.60 [- 13.25] per 20 kg with 49,260 tonnes traded.

The regional platforms are down with the active May 08 contract at Sirsa and Hapur quoting at Rs. 498.40 [- 7.90] and Rs. 563.70 [- 6.00] per 20 kg respectively.

CASTOR SEED

Castor seed futures is trading lower affected by the losses in the domestic edible oil markets. The holiday mood has gripped the markets and players are in no mood to take up fresh risks leading to closing of positions.

Most active castor seed April futures on NCDEX is trading lower at Rs. 529.50 [- 5.80] per 20 kg with 320 tonnes traded.