International Market US soybean futures fell on Friday on disappointment that trade talks between Washington and Beijing did not make more progress toward a deal to resolve a mounting trade dispute that has crimped crop sales to China.
Traders had hoped that a meeting in Beijing this week of government officials from the two countries would result in a deal protecting US agricultural goods from Chinese tariffs, but China's official news agency said significant differences still remained at the close of negotiations on Friday.
Worries that China would make good on its promise to impose 25% tariffs on US soybeans pulled prices for the oilseeds lower, as did signs that the ongoing dispute is putting a damper on soybean shipments from the US to its biggest buyer.
Soybean futures for delivery in July sank 1.6 percent to USD 10.36 3/4 a bushel at the Chicago Board of Trade. While, May Soybean Meal closed at USD 394.40, down USD 4 and May Soybean Oil closed at USD 30.56, down USD 0.02.
Over the past decade, fast-rising demand from China has fuelled a sharp rise in production of US soybeans, which are set to overtake corn as the country's most widely planted crop for the first time in 35 years.
Soybeans were the most valuable US agricultural export to China last year, worth USD 12 billion, and US government data shows China purchases 62 percent of American soy exports.
Prices rose 1 percent on Thursday "on unfounded rumors" that China and the United States had struck a trade deal, after China last month threatened a 25 percent tariff against American soybeans as part of a trade conflict with Washington.
US soybean sales to China over the last four weeks are down 10 percent from this time a year ago, according to US trade figures - a blow to US farm country, which helped boost US President Donald Trump into office in the 2016 election.
Domestic Recap
A steady tone was observed in spot soybean and meal prices at the key markets across the country during the week, while lacklustre demand continued to weigh on refined soy oil prices.
Spot soybean prices at the benchmark Indore market were priced at Rs 3,500-3,725/100kg as against Rs 3,500-3,700 last week. On the other hand, refined soy oil fell by another Rs 22 at Rs 750/10kg, compared to Rs 772/10kg last week.
Soybean meal priced a tad up at Rs 30,000 per tonne versus 29,900 per tonne last week.
Soybean plant rates priced at Rs 3,650-3,725/100kg against 3,600-3,725 last week in Madhya Pradesh, while in Maharashtra it was around Rs 3,675-3,830 versus 3,675-3,870.
Demand in soybean is very poor due to slow sales in soybean meal, said a trader from Dhulia. Export demand is dull at present, however with falling prices Indian prices are getting competitive in the international market and have raised prospects of export ahead, he added.
Soybean prices are expected to trade sluggish ahead as most buyers will do need-based buying as sowing will start from next month onwards with forecast of good monsoon, he noted. The acreage under soybean is expected to be better than last year, he said.
The positive and supportive factor for soybean is dwindling daily supply in the spot market, which may prevent sharp losses, but overall outlook is not impressive ahead, he said.
Soybean crush parity was at Rs 190 (+) per tonne as against Rs 253 (+) last week.
On derivatives, soybean June futures ended the week higher Rs 33 at Rs 3,712/100kg, against at Rs 3,679/100kg last week on the National Commodity & Derivatives Exchange Ltd (NCDEX).
(By Commoditiescontrol Bureau)
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