Mumbai (Commoditiescontrol):
International Market
CBOT soybean futures eased on Friday but posted a weekly rise after rallying on signs of strong demand for U.S. supplies, despite a trade dispute with top importer China.
The Chicago Board Of Trade most-active soybean contract settled at $8.43.30 a bushel by the end of the overnight session, up 1.5 percent on week on week basis.
Earlier, soybean futures falls to 10-year low amid ongoing trade tensions between United states and China.
Soybeans had hit a near 10-year low of $8.12 a bushel on Tuesday, as the projection of record US soy harvest and uncertainty over a China-U.S. tariff war pressuring the prices to tumble.
On one hand United states exports has severely dented as around 70 percent of United States soybean crop traditionally exported to China but it is not the case this year.
China have covered positions up to September month with actively buying beans from Brazil but still short by a huge margin.
China is also seeking for alternate source for protein to feed the rapidly increasing domestic pig and poultry industry to reduce it’s dependency from US Soymeal.
Domestic Soybean Market Recap
Soybean prices at the benchmark Indore market remained steady to higher throughout the week. The prices seen in the range of Rs. 3200 – 3400 per quintal with good demand for crush amid weakness in Indian Rupee.
Arrivals for new crop also reported in the market. There is a moisture of around 18-20 % in new soybean seed which results in lower oil extraction rate, thus the prices are on lower side at Rs. 3100 – 3150 per quintal.
“Farmers are not selling the bean actively in the wake of relatively lower prices and hoping for government buying at minimum support prices.”, an Indore based trader says.
The demand for local soy oil is improving as the landed cost for imported oils is going up with depreciating Indian Rupee and higher import duties.
The festival demand is likely to support soy oil prices for coming months unless international veg oil prices go further down, a Mumbai based analyst says.
Meanwhile, Indian government officials and trade participants are trying to negotiate a deal to lift ban on import of Indian soymeal and rapeseed meal by China amid the US-China trade tensions, which may be a welcome move for domestic oilseed crushers.
China is looking for alternate sources to feed the booming pig and poultry industry to lower the dependency on US soymeal and if India gets a chance to fill the gap, it will be a boost to domestic industry.
Soybean prices are likely to stay in higher range in the next week amid festival demand for soy oil and enquiries for soymeal from local poultry industry.
(By Commoditiescontrol Bureau)
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