Ref. Soya oil yesterday settled up 0.38% at 679.95 on concerns heavy rainfall in the top producing Madhya Pradesh state may damage the crop. Traders fear that the impact of higher sown area may be nullified by the crop damage in many areas or poor heath of the crop. Demand is better due to festivals and supply is low but major support is from currency movements. Arrivals were down due to rains and low participation from sellers due to Rakshabandhan festival. There has been a good spurt in kharif oilseeds sowing with the acreage spurting by 37% to 149.82 lakh hectares. The demand for soybeans from local solvent extractors is steady ahead of the festive season. However, the local prices have not gained much in last one year on a persistent up tick in imported edible oil. Import of vegetable oils from India jumped by 12% during the November 2012 and June 2013 period at 71.45 lakh tonnes, according to a latest update from Solvent Extractor's Association. Soybean production is likely to increase 7 to 10% and expected to put further pressure on the soy oil prices to certain extent. This year, new soybean supply is expected reach market in September, a month advance, as result of early sowing. At the Indore spot market in Madhya Pradesh, soyoil was steady at 692 rupees per 10 kgs. Technically market is under short covering as market has witnessed drop in open interest by -1.42% to settled at 64070 while prices up 2.55 rupee, now Ref. Soya oil is getting support at 672.6 and below same could see a test of 665.3 level, And resistance is now likely to be seen at 686.6, a move above could see prices testing 693.3.

Trading Ideas:

Ref. Soya oil trading range for the day is 666-694.

Ref soyoil ended with tracking weakness in spot demand amid profit booking.

Import of vegetable oils from India jumped by 12% during the November 2012 and June 2013 period at 71.45 lakh tonnes

The impact of higher sown area may be nullified by the crop damage in many areas or poor heath of the crop.

At the Indore spot market in Madhya Pradesh, soyoil was steady at 692.45 rupees per 10 kgs.