SUN FLOWER OIL MARKET
Mdex opened slight firmer with feb at 4844 +3 but by lunch we already had made highs of RM 4916 only to settle lunch at RM 4882+41. Profit taking and much lower bean oil weighed on sentiments and immediately after lunch we say selling pressure. At the time of writing this report we are download for Feb at RM 4788 -53 or 1%. Palm will remain range bound for feb and will keep finding resistance over RM 4900 to 5000 and will find good supports between RM 4600-4700 and for AMJ one can buy at RM 4100 and sell prices over RM 4700. Please note that next palm could make a higher high hence what ever you sell pls target profit booking in corrections and we won’t suggest to go short for long-term gains below RM 5000 even for AMJ. Exports are higher and stocks are lower overall but if we compare 1-10 Nov vs 1-10 Dec we indeed have lower exports which looking at current demand we can expect will recover in the rest of the month. Lower export numbers are partially also because of ship waiting to load and this should not be considered as a trend for the month. We will see palm trying to trade lower today and this should be considered again a buy if it closes below RM 4700 for Feb. MCX India Dec 1106 and Jan 1091 have reached in buy zone and we will request traders in India to continue to buy with a stop loss of 1071 for both the months one can sell back the long made now at 1130 or higher.
Bean oil settled lower again with Dec 57.04-75 and Jan 57.10 -76 with the prospects of higher south American (Brazil) crop and lower EPA mandates for current year the market is further pressured with Bean Dec at 55.74-130, Jan 55.05 -50 . We repeat that 54.00 will be a strong support and prices should not fall below 54.00 and any correction around those levels could be bought for Dec Jan however for March and May one could wait for prices to touch 51.00. Over all we have seen the highs of this year and market will not play largely in this range , with covid variants popping in most of the countries , increased infections , we could see countries consuming more soft oil and thus we will see this support of 51.00. Any strong rally in bean oil will only come after Jan 2022 and in First half we could expect prices to largely attempt strong rally to make new highs. Lets see USDA also today and though we don’t expect a surprise but most of the correction is already priced in and we could mostly see neutral reaction. Indicative offers for India CNF Dec 1410, Jan 1390, Feb 1355 and March 1290. These prices are well above our flat price support of USD 1250 and for months like DJF we will continue to trade higher however for March and forward months prices should be significantly lower. With 51.00 board as target for MJJ and Basis under 150 we could target a flat price of FOB USD 1090-1130 for MJJ and around here we should find very strong buying support. NCDEX India Dec 1204 -8 and Feb 1185 -9.9 will correct little more and could test 1150 for Jan and Feb.
