Soy oil prices fell sharply and breached contract low on account of weak overseas market and lower demand at retail ends on Wednesday.
CBOT May Soybean oil futures ended lower at 38.31cents/pound on Wednesday, down 0.36 cents/pound as compared to previous close.
The benchmark May contract on National Board of Trade (NBOT) Exchange, soybean oil ended lower at Rs 449.30/10 Kg on Wednesday, down Rs 5.20/10 Kg as compared to previous day.
The USDA’s weekly export sales were released on Thursday. Net oil sales came in at 13,000 tonnes for the current marketing year and 800 for the next marketing year for a total of 13,800. Cumulative soybean oil sales stand at 76.4% of the USDA forecast for 2009/2010 versus a 5 year average of 51.6%.
Technical Analysis
Prices closed below its 10 day & its 20 day EMA, which indicates bearish market sentiments.
14-Day RSI is at 34.00, which is below neutral zone.
Outlook
Refined soy oil futures are expected to trade lower on account of weak overseas market and lower demand at retail ends (for short term). In the long term perspective, higher import of edible oils during the first 4 month of oil marketing year as compared to last year during the same period. Huge stock of imported edible oil and decision of continue to import of crude edible oil at 0% also in favor of bears in the market.
