Mumbai (Commoditiescontrol) – Indian soybean market witnessed sharp upside bounce during last week with very poor availability of stock in cash market along with rise in crushers demand with improving meal prices. Moreover, firmness in global palm and soya market also supported the overall trend. At the end, benchmark April’19 soybean futures prices settled at INR 3781, up by almost 100 points (2.7) compare to last week close of INR 3681 per quintal. On similar lines, soy oil market prices also increased during previous week and finally settled at INR 744, almost up by 2% compared to previous week close price.
Meanwhile, India’s June-September monsoon, which delivers more than 70 percent of the country’s annual rainfall, is likely to be below normal this year as the El Nino weather pattern may impact rain. India has a 55 percent chance of a below-normal monsoon, 30 percent probability of normal showers and a 15 percent chance of a drought. June is likely to have a “very sluggish start” and deficit rains are likely to spill into July, adding that the second half of the season would see better rainfall. Showers are expected to be 77 percent of the long-term average in June, 91 percent in July, 102 percent in August and 99 percent in September.
Weak monsoon shall impact kharif crop production and yield this year including soybean and groundnut crop, which were observed higher last year. Lower crop prediction for Kharif oilseeds shall support the overall price trend in the days ahead..png)
As per market sources, demand for soymeal has improved at lower levels which is one again giving support to physical market prices. The meal prices in Indore market has increased by almost 9 % from INR 30500 per MT to INR 33200 per MT in a period of one month. Moreover, there is very less stock available for soybean in market and thus crushers are buying actively to meet their regular requirements. During last week session, all India soybean average daily arrivals were only 1.5 lakh tons in which MP accounted for 50 thousand bags, Maharashtra – 50 thousand bags, Rajasthan – 10 thousand bags while rest India contributing 5 thousand bags only. Due to poor arrivals and gradually improving meal demand, physical market prices for bean was also observed on higher side.
At global front, China's official news agency says US-Chinese trade talks "achieved new progress" in Washington this week and remaining issues will be handled through "various effective means." The terse statement by Xinhua on Saturday did not say where or when further discussions will happen. White House press secretary Sarah Sanders said in a statement Friday that "significant work remains" and the two sides would be in continuous contact. On other hand, Trump indicated yesterday that a U.S.-China trade deal is not yet ready but expects a “monumental deal” to be finalized within the next month or so. China and the US are working to end a standoff that has shaken financial markets and darkened the outlook for the world economy. Ongoing ambiguity over US-Sino trade relation shall keep global veg oil markets in a mixed mood.
Moreover, ahead of next week’s USDA WASDE report, analysts expect the agency to slightly raise its production estimates for the 2018/19 Argentinian soybean crop to 2.034 billion bushels. In contrast, analysts expect USDA’s next production estimate for the 2018/19 Brazilian soybean crop to move slightly lower, to 4.269 billion bushels.
Soybean harvest reaches 83.1% of the area according to the SAFRAS & Mercado survey, with data collected up to April 5th. There was an increase of 7.6 percentage points in the comparison with the week when the harvest was 75.5%. The work is advanced in relation to the same period last year (78.7%), also against the average for the period 77.4%.
Moving forward, rise in crushing demand, lower stocks availability in domestics markets and positive cues from global front shall support overall veg oilseed industry in coming couple of weeks.
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