Weekly Edible Oil Outlook: CPO, soyoil seen lower on new COVID fear

Informist, Wednesday, Dec 1, 2021

By S. Anirudh Iyer

NEW DELHI – Futures contracts of components in the edible oil basket on the National Commodity and Derivatives Exchange and Multi Commodity Exchange of India are likely to trade lower this week, analysts said. 

* Recent developments regarding the discovery of a new variant of COVID-19 have led to fears over a fall in demand for CRUDE PALM OIL on the MCX and REFINED SOYOIL on the NCDEX, which is likely to weigh on prices. 

* Also, weakness in crude oil contracts is likely to result in a decline in prices of edible oil as they are used to manufacture biofuels. 

* Moderna Inc’s Chief Executive Officer Stephane Bancel said the existing vaccines would not be as effective in tackling the Omicron variant as they have been with other variants, according to media reports. 

* However, symptoms linked to the Omicron variant have been described as “extremely mild” by the South African doctor who first raised alarm over the new strain.

* SOYBEAN contracts in domestic markets are likely to trade lower tracking cues from international markets, analysts said. Harvesting of the oilseed in the US is nearing its end, while prospects of the crop in Brazil are bullish, which may cap any sharp rise in prices. 

* The US and Brazil are two of the world’s largest producers of the oilseed. 

* MUSTARD contracts are likely to remain lower this week as area under the crop so far in the 2021-22 (Jul-Jun) rabi season is 28% higher on year at 7.2 mln ha, which may subsequently lead to a rise in output. 

The following table details the support and resistance levels for the upcoming five to six sessions, and prices of the contracts as of 1431 IST:

Price

(In RUPEES)

Soybean (Jan)100NCDEX5,8606,8206,320Refined Soyoil (Dec)10NCDEX1,1601,2401,196Crude palm oil (Dec)10MCX1,0601,1401,097.2Mustard (Dec)100NCDEX——8,000

End

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Edited by Snigdha Kuttikat

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