Ref. Soya oil on NCDEX settled up 0.55% at 655.7 on short covering tracking firmness in spot demand amid supply worries. Prospects of higher soybean and rm seed output kept oil prices down in the domestic market. In addition to this, expectation of higher production from Argentina, the world's biggest oil producer, also kept oil down. Argentina's Soyoil production is seen rising to 8.725 million tons as compared to 8.6 million tons in 2106-17 as per the USDA's WASDE report. On the domestic front, the availability of more domestic soya oil on the back of ample soyabean supplies is dragging down the prices of soya oil derivatives. As per USDA, in 2016-17, soya oil production in India is expected to be around 1.62 million tonnes (mt), up 55 per cent from the previous year. Moreover the overall supplies are seen rising by 2 per cent compared to last year. However, the imports of soya oil are likely to decline by 11 per cent to 3.8 mt. The carryover stock from 2015-16 is estimated to be around 0.531 mt, which is the highest till date. Meanwhile, the landed cost of imported soya oil is also seen declining on the back of the ongoing harvest in South America. The harvesting of rabi mustard crops has also started in major growing regions on the expectation of a bigger crop compared to the last two years. Technically market is under fresh buying as market has witnessed gain in open interest by 0.31% to settled at 57440 while prices up 3.6 rupees, now Ref. Soya oil is getting support at 654 and below same could see a test of 653 level, And resistance is now likely to be seen at 657, a move above could see prices testing 659.

Trading Ideas:

# Ref. Soya oil trading range for the day is 652-658.

# Ref soyoil prices ended with gains on short covering tracking firmness in spot demand amid supply worries.

# Prospects of higher soybean and rm seed output kept oil prices down in the domestic market.

# Argentina's Soyoil production is seen rising to 8.725 million tons as compared to 8.6 million tons in 2106-17 as per the USDA's report.

# At the Indore spot market in Madhya Pradesh, soyoil was steady at 662 Rupees per 10 kgs.