NEW DELHI (Commoditiescontrol) -
International Market Recap
US soybean futures gained over 3 percent during the week ended July 20, supported by a slight decline in the condition of crop and better-than-expected export sales report.
The most-active soybean contract on the Chicago Board Of Trade (CBOT) moved higher by 30.5 cents, or 3.66 percent, to USD 8.6475 a bushel. The winning streak lasted five sessions in a row, though the prices are still at very low level and gains are being capped by an escalating US China trade war.
The United States and China have slapped tariffs on USD 34 billion of each other's imports and US President Donald Trump on Friday said he was ready to slap tariffs on all USD 500 billion of imported Chinese goods.
Market observers have noticed the widening spreads between US and Brazil export prices, with Brazilian soybeans being currently priced nearly 24 percent higher than US soybeans. That's probably the key reason that US soybean sales jumped 59 percent week to week to 252,300 metric tonnes, according to USDA data. Still, that's 22 percent down from the prior four-week average.
USDA during the week pegged the soybean crop condition at 69 percent good/excellent, below a week ago of 71 percent, giving additional support to the soybean futures.
Meanwhile, the Commodity Futures Trading Commission's weekly commitments of traders report also showed that non-commercial traders, a category that includes hedge funds, increased their net short position in CBOT soybeans.
Domestic Recap
Spot soybean traded weak at key markets of Madhya Pradesh and Maharashtra during the week due to slow demand and rise in sowing areas.
Spot soybean at the benchmark Indore market was at Rs 3,400-3,500/100kg versus Rs 3,450-3,550 due to poor buying from crushers due to fag end crushing season.
The falling price of soy oil and average enquiries in soybean meal have prompted crushers to procure soybean only as per near term requirements, however most of soybean crushing plants have shut their operations for seasonal maintanance work to prepare themselves for next season 2018-19 (Oct-Sept), said a trader from Indore.
Similarly, refined soy oil dropped to Rs 746/10kg from Rs 760 at the key Indore market due to weak local demand. Soybean meal also ruled weak by Rs 500 at Rs 29,000 per tonne.
Slow demand in soybean meal prompted crushers to avoid bulk buying, said a trader from Indore. Demand in soymeal is likely to decline ahead as the Hindu holy month of ‘Shravan’ has started from July 23, he added.
Soybean meal is widely used in feed product in poultry industry and consumption of poultry products usually decline in Shravan month, he noted.
Further export demand for soybean meal is said to be sluggish as Indian soybean is uncompetitive in the international market, he added.
However sharp fall in soybean is unlikely due to tight stock positions, he said.
Meanwhile, as per the latest Agriculture Ministry data, among oilseeds, soybean acreage was up 10.91 percent at 93.87 lakh heactare till July 20 from 84.64 lakh hectare during the same period last year.
On futures, soybean October futures however quoted higher at Rs 3,390/100kg as against last week closing of Rs 3,319/100kg on the National Commodity & Derivatives Exchange Ltd (NCDEX).
(By Commoditiescontrol Bureau)
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