The Hindu Business Line : Oil complex in correction mode

Mumbai June 10 Though the long-term bullish trend for soyabean, refined soya oil and mustardseed futures remains intact, trading pattern remained mixed during the week.

Refined soya oil futures on NCDEX, which tracks palm oil futures prices in Bursa Malaysian derivatives and futures market, closed almost flat at Rs 485 a 10 kg on Friday against Rs 483 on Monday. However, it tested an intra-day high of Rs 488 on Friday.

Palm oil futures in the Malaysian futures market slumped by over 10 per cent to 2399 Malaysian ringgits (MYR) a tonne on Friday from Wednesday's close of 2678 MYR.

Palm oil September futures came under the grips of the bears from Thursday after China slowed down its imports from Malaysia. Between January and May, China's palm oil imports from Malaysia and Indonesia jumped 27 per cent to 1.6 million tonnes.

"Refined soya oil futures on NCDEX had increased sharply in the last couple of weeks and a correction was due. It may drop a bit in the near term," said Mr Harish Gallipali, head of research, Karvy Comtrade. NCDEX recorded a trade volume of Rs 1,807.83 crore for refined soya oil during the week.

Soyabean

Soyabean futures on NCDEX turned weak towards the end of week due to fall in demand from millers. Opening strongly at Rs 1,534 a quintal it lost Rs 10 to close at Rs 1,524 on Monday and remained range-bound to finish at Rs 1,515 on Friday.

The downward trend appears to have triggered by news that soymeal exports to South-East Asian countries had fallen to 1.1 lakh tonnes in May 2007 against 1.4 lakh tonnes last year, said a trader.

Being a kharif crop, soyabean sowing will begin towards the end of June. Given the higher price realisation last year, traders estimate the cultivable area to go up by 7-8 per cent to 77 lakh hectares this year.

Soyabean recorded a turnover of Rs 310 crore on the exchange this week.

Mustard

Mustard seed June futures were on a correction mode after a recent rally. From Rs 403 (20 kg) on May 21, June contracts rose to Rs 426 on June 6 before ending flat at Rs 421 the weekend.

Production this year is expected to be lower by over 10 per cent at 60.2 lakh tonnes against 67.7 lakh tonnes last year.

"Futures prices on NCDEX were initially looking up, but it turned weak due to the bearish sentiment in international markets. Prices may be between Rs 418 and Rs 425 in the coming week," Mr Galipalli said.

Mustard seed registered a turnover of Rs 793 crore for the week.