Spot Soybean To Trade Steady To Weak Next Week

MUMBAI(Commoditiescontrol):

International Market

Chicago Board of Trade soybean futures jumped 1.7 percent on Friday, their fourth straight day of gains, on expectations that the United States will boost its share of the soymeal export market due to harvest shortfalls in Argentina, traders said.

CBOT July soybean futures ended up 16-3/4 cents at $10.56-1/4 a bushel. Soymeal futures were 2.8 percent higher and hit their highest since March 2.

Soybean prices continued to steer clear of modestly lower price levels where a dangerous minefield of momentum triggers await.

On the cash market, bids for soymeal shipped by barge to exporters at the U.S. Gulf firmed early on Friday. Premiums for soymeal loaded on ocean-going vessels also were strong.

It is the meal leading the rally. There is just a feeling that the drought in Argentina will cut back on their meal processing. That tightness has not been resolved.

Domestic Soybean Market Recap

Soybean price in the benchmark Indore market declined by Rs 75 to trade at Rs 3,700/100kg during the week ending 21st April.



Total crop arrivals during the week were reported at 0.6 lakh bags to 1 lakh bags, unchanged from a week ago.

Domestic soybean market continued to remain under pressure for the second straight week due to sluggish demand of soybean from crushers in spot market.

As per traders, demand of soybean from crushers has declined during the week due to slow offtake of soymeal in domestic as well as international markets.

Amid poor demand of soymeal, millers have been compelled to sell soymeal at lower price level which has affected their crush margin. Soybean crushing disparity has widened to Rs 170/tonne from Rs 80 last week which kept the bearish momentum intact.

Till last week farmers and stockists were reluctant to liquidate the stock of soybean as they were expecting higher prices of around Rs 4,000/100kg but now it seems that soybean prices are unlikely to recover sharply from current level, given the weak fundamentals.

There is high possibility that if demand of soybean from crushers does not improve in coming week then we may see some panic selling by stockists.

From current scenario, it seems that soybean price of Rs 4,000 is a distant dream so farmers and traders are running out of time.

In futures market, Soybean most active May contract during the week on the National Commodity & Derivatives Exchange Ltd (NCDEX) ended down by 3.67% at Rs 3,622/100kg.

SOYMEAL

Soymeal at the benchmark Indore market during the week declined by Rs 1000 to trade at Rs 29,500 per tonne on sluggish demand from poultry feed manufacturers at higher price level.

Traders are reporting that demand of soymeal from poultry feed manufacturers has declined as poultry farmers are gradually reducing the placement of chicks. From April onwards summer season starts and conumption of broiler chicken declines which leads to slow placement of chicks.

As far as intenational soymeal market is concerned, Indian soymeal is tentatively priced at $485 per tonne CIF Rotterdam vs $445 Argentina CIF Rotterdam (April) as on April 28, 2018. India Soybean Meal is now at premium of $40/MT in international market compared to $53 last week.

As rupee has depriciated considerably since last two weeks so soymeal price of Indian origin has decreased which may attract foreign buyers.

Overseas buyers are ready to pay premium of around $10-15/tonne for Indian soymeal which is non genetically modified whereas the Argentine soymeal is genetically modified.

SOYOIL

Refined soy oil in benchmark Indore market of Madhya Pradesh during the week declined by Rs 2 to trade at Rs 764/10kg amid sluggish demand at higher price level.

CBOT soy oil futures declined by nearly 2.62% during the week to end at 30.73 c/lb on account of higher soy oil stock in U.S. due to higher crushing of soybean seed.

In domestic market both futures and spot market traded in line with international markets. Further the demand of soy oil in domestic market is very bleak which triggered selling pressure on soy oil futures.

Soy Oil April futures on National Commodity & Derivatives Exchange Ltd (NCDEX) ended up by 1.82% at Rs 762.50/10kg.

The only factor which is bullish for the soy oil is depreciating rupee. The rupee was a bundle of nerves as it sank 24 paise to a 13-month low of 66.93 against the US dollar, hit by rising crude prices and fiscal deficit worries.

It breached the 66.50 level for the first time since March 14, 2017. Weaker rupee makes the import of edible oil costlier.

Soy oil Degum price during the week ending April 28, declined by $15 to trade at 792 per tonne in dollar terms (CNF) whereas it declined by Rs 6 to trade at Rs 710/10kg in rupees term at Kandla port.

NEXT WEEK: Domestic Soybean prices are likely to trade lower on sluggish local demand from millers. However fall will be limited on account of slow supply.

(By Commoditiescontrol Bureau; +91-22- 40015516)