Oil and Oilseed Investment Report from Kotak Commodity

A report has just been issued by Kotak Commodity, tracing the progress of Oil and Oilseeds. The general outlook for the oil commodity seems rather weak, as supplies are beginning to approach overstock levels, and arrival pressures boil over. Weakened cues from foreign markets have also contributed to the commodity’s passive state. Investors have been advised to stay on the short side of the commodity complex.

Dull activity and a sluggish market caused a relatively weak trading day for Indian soybeans yesterday, despite a drastic reduction in production rates suggesting otherwise.

Soybean futures in the U.S. have fallen to their lowest levels in more than six weeks. The drastic drop in commodity futures is explained by investors rallying to sell off stocks as a way to boost prices. Not even the crude oil sector has been spared, as investments continue to be unwound in favor of others.

Pressure stemming from the seasonal harvests and concerns over falling demand in the middle of a dwindling economy have caused sellers to flock to the markets.

Reports show that soy commodities for November fell 17.5 cents and now sit at $13.20 for every half a bushel. Fresh crop arrivals and a dipping domestic demand put a crimp in trading for the commodity.

On the whole, this year’s numbers for Indian soy bean production have risen drastically, with total supplies currently estimated at more than 10.5 million tons. In contrast, the commodity’s figures from last year show only 9.69 million tons. Such an increase in production is largely attributed to larger acreage in the region.

As for soybean, the commodity output for India is expected to pass the 10 million ton mark if the region’s monsoons do not affect the area too strongly. Oilseed production will also see a rise, as the nation’s harvesting acreage grew considerably over the year.

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