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NCDEX Soybean Falls Sharply Amid Lack of Fresh Positive Cues

6 Feb 2019 7:18 pm
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Mumbai (Commoditiescontrol) – NCDEX soybean fell sharply in today’s session with lack of any fresh positive developments at domestic as well global front. NCDEX benchmark contract after touching a low of INR 3744, finally closed at INR 3755, down by 59 points from previous close.

The demand from millers and crushers also remained subdued in domestic market with ongoing lean season of soybean. The prices in physical markets also fell significantly in today’s session with absence of buyers to purchase at present higher levels. Meal export demand remained silent from past couple of weeks as most of the crushers realized Iranian demand has been shifted to Brazil front due to significant price discounts. Soybean prices in Indore market was observed near 3880 (vs. 3910 previous session), while Kota was trading near 3794 (vs. 3838) and Nagpur was at 3838 (Vs. 3888).

At global front, CBOT soybean trading were relatively thin for second straight overnight session as investors evened positions ahead of U.S. Department of Agriculture key crop data due on Friday, including quarterly stocks reports that were delayed last month by partial government shutdown. Soybean prices appear to have already factored in large Chinese purchase announcements from last two session. Moreover, Chinese purchase for ‘5 million tons’ from United States looks more to be a sign of ‘good feel gestures’ rather than actual demand. Moving ahead, as Brazil harvest is in its full pace demand from China is likely to shift from US to Brazil which will add on more weakness to global sentiments.

At other nation’s front, Brazilian state research group Deral reports that the soybean harvest in Paraná is now 25% complete, with most of the crop in average or good condition. The country’s second-largest soybean producing state is expected to harvest about 617 million bushels this season.

Malaysian and Dalian markets shall resume tomorrow after long holiday session on account of Lunar Year celebrations. Meanwhile, GAPKI-Indonesia Palm Association, in its latest report, pegged Dec palm oil stocks at 3.26 million tons, much down from market anticipation of 3.65 million tons and Nov stocks of 3.89 million tons. Exports in 2018 climb to more than 34m tons last year vs 32.1m tons on y-o-y basis.

In the meantime, Mr. Dorab Mistry has once again given positive outlook for Malaysian palm market in GlobeOil conference held in Delhi. Mr. Mistry stated palm prices in Malaysia, the world’s second-biggest producer, may climb to 2,400 ringgit a ton by the end of March if the Malaysian currency remains at current levels. With GAPKI report of fall in Indonesian stocks and positive outlook by leading market analyst, tomorrow palm oil session might resume with positive bias.

Moving ahead, though overall fundamentals looks bearish for soybean in near term, prices might take slight support in tomorrow’s session from Malaysian palm market. Also expected short coverings at today’s lower level shall also provide strength in coming 1-2 days sessions.

(By Commoditiescontrol Bureau)

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