Mumbai - Indian vegetable oilseeds and oil complex were trading sharply lower with heavy selling pressure being seen Saturday. Huge overnight losses in US soy market, temporary halting of road-blocks in Argentina, rise in inflation and anticipation of cut in duty on soy oil are supporting the weakness in the Indian markets today.

The US soy markets closed sharply lower overnight with active May soy oil falling by its new lower limit of 250 points. Soybean and soymeal also made huge losses with heavy liquidation seen ahead of the US Department of Agricultures 2008 U.S. prospective planting and quarterly grain stocks report scheduled to be released on Monday. The huge overnight loss in US soy complex overnight is prompting the domestic market too to exit long positions.

Argentina farm groups have temporarily stopped the road-block and have begun negotiations with the Government. An end to the strike would allow for movement of agricultural commodities and cut demand that was diverted to the U.S. This would add to the current bearishness in the global markets, when they re-open on Monday.

The speculation is also strong in the domestic markets again about the duty cut in soy oil too with inflation accelerating to a 13-month high of 6.68%, which too is adding to the selling pressure. Traders are anticipating that the announcement would be made in the beginning of April.

The price rise in edible oils have become a major worry for the Govt. of India with Finance Minister, Mr. Chidambaram commenting that cost of imported edible oils having risen by three times since 2004. To contain prices, last month Govt. cut the duty on imported oils for the fifth time in 15 months. However, soy oil was not included in the duty reduction, which is being demanded by the industry now.

Domestic soybean is also making sharp losses affected by the weakness in US soy market with the selling pressure in domestic soy oil adding to the bearish sentiments.

The most active May soybean contract at National Commodity Derivatives Exchange [NCDEX] at 10.45 hours is trading lower at Rs 2,125.00 [- 42.00] per 100 kg with 20,410 tonnes traded.

At NCDEX the soy oil April contract is trading lower at Rs. 596.40 [- 15.25] per 10 kg with 19,770 tonnes traded. The April contract at National Board of Trade [NBOT] has hit limit down at Rs. 598.70 [- 15.00] per 10 kg, while the same contract at Multi Commodity Exchange of India Ltd [MCX] is trading lower at Rs. 596.65 [- 15.15] per 10 kg with 4,950 tonnes traded.

The US soy complex plunged on Friday, falling on nervous selling ahead of Mondays key planting intentions report and end-of-month and quarter position squaring. Analysts are estimating huge increase in 2008 soy acreage to above 70 million acres against last years 63.8 million acres.

May soybeans settled 60 cents lower at $12.67 1/4, July soybeans finished 57 1/2 cents lower at $12.85 and November soybeans ended 49 cents lower at $11.59 1/2. May soymeal settled $6.50 lower at $342.30 per short ton. May soy oil finished 250 points lower at 54.98 cents per pound.

Crude Palm Oil [CPO] at the Bursa Malaysia Derivatives [BMD] closed sharply lower on Friday with benchmark June contract settling at MYR 3,550.00 [- 90.00] a tonne. [MYR=Malaysian Ringitt]

MUSTARD SEED

Mustard seed futures is trading sharply lower with speculative selling and long liquidation seen in response to the losses in domestic soy complex and in the US soy market. The sharp rise in inflation has also supported the markets anticipation for a cut in duty on soy oil soon.

Most active mustard seed May futures on NCDEX is trading lower at Rs. 552.70 [- 13.70] per 20 kg with 32,290 tonnes traded.

The regional platforms are down with the active May 08 contract at Sirsa and Hapur quoting at Rs. 504.60 [- 5.20] and Rs 566.80 [- 7.00] per 20 kg.

CASTOR SEED

Castor seed futures is trading lower with the heavy losses in the edible oil markets, increasing the selling pressure in this counter too. However, the low arrivals and closure of physical markets are keeping the activity very light.

Most active castor seed May futures on NCDEX is trading lower at Rs. 523.40 [- 7.30] per 20 kg with 40 tonnes traded.