Soy complex seen strong, mustard weak

MARKET OUTLOOK

Soy complex futures are expected to move up next week on the National Commodity and Derivatives Exchange taking cues from crude oil price trends, analysts said on Monday.

Mustard futures are expected trade weak on profit booking. Trading activities are expected to be thin amid New Year holidays.

REFINED SOYOIL
Soyoil futures are expected to gain mirroring trends in crude oil, which are seen moving up on the back of geopolitical tensions. Analysts, however, do not rule out the possibility of a mild correction in soyoil futures earlier in the week.

Prices are expected go up after initial correction as overall short-term sentiment for soyoil is still bullish.

A firm trend in crude oil augurs well for soyoil prices on expectations of higher offtake.

High crude oil prices have already driven palm oil prices to record levels. On Monday, New York Mercantile Exchange crude oil prices ranged $96-$97 a barrel.

"If crude breaches its earlier record level on political tensions in Pakistan, arising due to the assassination of Benazir Bhutto, then soyoil might touch fresh new highs," said another Mumbai-based analyst.

Malaysian crude palm oil futures are expected to remain above 3,000 ringgits (Rs 35,430 ) per 1 tn, reflecting strong sentiment of soy complex.

Benchmark March contract in Bursa Malaysia quoted at 3,127 ringgits (Rs 36,930) in mid-session, up 30 ringgits from previous close.

Domestic prices will continue to track trends in palm oil. At 5:50 pm on the NCDEX, January soyoil contract quoted Rs 558.6 per 10 kg, up Rs 6.8 from Thursday.

Analysts recommended buying the most-active January contract at Rs 552-553, with a target of Rs 563, and stop-loss below Rs 550.

SOYBEAN
Soybean futures are expected to display a firm trend on Chinese demand ahead of festival season in February, coinciding with the new lunar year.

Receding bird flu outbreak threat will also extend buying support in soymeal, used as poultry feed.

Demand from domestic poultry industry will also support buying. Globally, soybean futures are expected to trade firm due to projected dry weather conditions over Brazil and Argentina.

At 5:50 pm, NCDEX February soybean quoted Rs 2,073 per 100 kg, up Rs 41. Buying is recommended at Rs 2,030-2,035 in the February contract, with a target of Rs 2,075 and stop-loss below Rs 2,010.

MUSTARD
NCDEX mustard futures are expected come down from their current levels in the week ahead.

Profit booking is likely in mustard seed, as fundamentals remain weak on high inventories, said a Delhi-based analyst.

Pressure to clear old stocks ahead of new harvest season that starts February would continue to keep prices in check in cash markets. At 5:51 pm, the most-active February contract was at Rs 479.1 per 20 kg, up Rs 12.35 from close Thursday.

Selling is recommended at Rs 475-477 in the February contract, with a target of Rs 470 and stop-loss beyond Rs 482 rupees.