Ref.Soya oil on NCDEX settled down -1.81% at 704 on expectation of higher supply from global market. Moreover, expectation of higher output during the current rabi season were also dragged the prices. Last week, the Solvent Extractors' Association of India (SEA) has raised its estimate for soybean output to 11 million tons in 2016-17 (Jul-Jun) from its previous forecast of 10.6 million tonnes. According to USDA weekly export sales report, net sales of 7,300 tons for 2016-17 down by 77% from the previous week and 72% from the prior 4-week average. As per WASDE report, around 10.16 million tons is the estimated production figure for 2016-17 which is up by 0.5% on month while the ending stock is estimated to be around 750,000 million tons which was 700,000 tons in Dec-16. Market participants are focusing on development in Argentina, where soybean crops are under stress due to adverse weather in last one month, threatening soy oil supply in near-term. Soyoil price gap with other oil has narrowed, due to which demand is getting equally divided within oil complex. Currently soy oil is trading at $37 per ton at premium with rival sunflower oil, while price gap with palm and soy oil is $42. Generally, sunflower oil trades in premium to soy oil, while price gap with palm oil stays at $80-90. Technically market is under fresh selling as market has witnessed gain in open interest by 4.88% to settled at 40600 while prices down -12.95 rupees, now Ref.Soya oil is getting support at 701 and below same could see a test of 698 level, And resistance is now likely to be seen at 709, a move above could see prices testing 714.

Trading Ideas:

Ref.Soya oil trading range for the day is 698-714.

Ref soyoil prices dropped on expectation of higher supply from global market.

Moreover, expectation of higher output during the current rabi season were also dragged the prices.

According to USDA weekly export sales report, net sales of 7,300 tons for 2016-17 down by 77% from the previous week.

At the Indore spot market in Madhya Pradesh, soyoil was steady at 719.35 Rupees per 10 kgs.