Ref. Soyaoil on NCDEX settled down by -0.16% at 716.95 tracking weakness in spot demand and on supply worries. 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. 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. According to National Oilseed Processors Association (NOPA), U. S. December soybean crush fell marginally to 160.176 million bushels from 160.752 million bushels in November. Crush of soybean in December 2015 was 157.711 million bushels. Production of soy oil in U. S. in December fell to 1.861 billion lbs from 1.856 billion lbs in November 2016. At the Indore spot market in Madhya Pradesh, soyoil was steady at 724.9 Rupees per 10 kgs. Technically now Ref. Soya oil is getting support at 714 and below same could see a test of 710 level, And resistance is now likely to be seen at 720, a move above could see prices testing 722.

Trading Ideas

# Ref. Soya oil trading range for the day is 710-722.

# Ref soyoil prices ended with losses tracking weakness in spot demand and on supply worries.

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

# 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.

# At the Indore spot market in Madhya Pradesh, soyoil was steady at 724.9 Rupees per 10 kgs.