Mumbai (commoditiescontrol) - Oilseed market traded higher this week on lower level buying interest.
MUSTARD SEED:
Mustard seed prices traded firm during the week ending 25th March 2017, mainly due to local oil millers and big companies buying.
During the week arrivals ranged between 2.50 lakh bags to 6.50 lakh bags.
Mustard seed prices gained by nearly three percent this week in benchmark Jaipur market of Rajasthan, on improving demand from crushers due to higher sales of mustard oil and mustard oil cake.
As the prices of mustard seed have rallied more than that of mustard oil and mustard oil cake which has caused the crushing disparity to widen weak on weak so demand for mustard seed may decline in coming days.
Long term out-look for mustard seed seen dismal as production is expected at 69.25 lakh tonnes, according to MOPA association, and the same is higher than market expectation of 65-67 lakh tonnes. Last year production was 55 lakh tonnes.
Apart from big production size, new crop seen better than expected and oil content is said to be 41-42 percent due to favorable weather condition after good monsoon season last year.
However rains in Rajasthan occured in mid March which has affected the crop in Jaipur region a little bit which was bullish factor for this week.
Harvesting is going on in full swing and around 50-60 percent of the mustard has been harvested and by 31st March harvesting will get completed.
Mustard seed prices may trade higher in coming week as most of the mandies will be close on account of financial year ending so arrivals will be less which will boost prices.
Mustard oil prices are still trading Rs 12/kg premium to refined soy oil so most of the retail demand has shifted to soy oil and consumers are ready to pay only Rs 3-4/kg premium for mustard oil.
In addition to it, blending of mustard oil likely to improve in coming weeks as other oil like palm and canola are available at cheaper rates and seen more profitable in adulateration.
Demand for the other by-product mustard cake is has improved from local cattle feed manufacturer due to higher price gap with soybean meal. Mustard cake prices has gained by Rs 20 to Rs 1855/100kg.
Currently price gap between mustard meal and soybean meal in local markets is around Rs 8,800 per tonnes, while prices were trading at $232 per tonne FAS kandla in international markets against $218 Hamburg ex. Mill(Apr) which is in disparity of $10.
Mustard seed prices have gained this week by Rs 105 at Rs 4,105/100Kg in Jaipur market, while mustard oil Kacchi Gani prices gained to Rs 10 at Rs 775/10kg this week.
In futures market this week, mustard seed prices most active April contract gained by 4 percent on the National Commodity & Derivatives Exchange Ltd (NCDEX), while forward May contract was lower 0.76 percent.
In coming week, mustard seed prices likely to trade on higher side as most of the mandies will be close for financial year ending providing support to the prices.
SOYBEAN:
Soy bean prices during the week ending 25th March traded with positive bias.
Surge in prices could be attributed to reduced arrivals at the spot markets due to slow farmer selling.
However going forward in medium term prices are unlikely to sustain at higher levels as the demand for soy beans from processors is subdued.
Demand from processors is just to meet the immediate requirement due to negative crush margins.
Soybean prices were gained by Rs 50 at Rs 2,900-3,000/100Kg in benchmark Indore market of Madhya Pradesh.
In addition to it, soybean meal gained on account of improving demand from poultry feed manufacturer.
Soybean meal prices gained by Rs 500 this week in Indore market to trade at Rs 24,000 per tonne.
Upside for soybean seen limited as this year production seen higher than demand, which may continue to pressure on prices on most of the year.
According to analyst, soybean meal demand may remain under pressure due to new arrivals of Maize, which is also a substitute for poultry feed.
In export market, demand for soybean meal is not picking as expected and limiting crushing capacity and price movement of raw material.
The analyst said, export demand soybean meal should triple for rest of the season to support prices of raw material, which may not materialized.
In a cautious note, the analyst said, if soybean meal demand do not improves from domestic and export market, then a big amount of raw material will be carry-forward to next year.
The only risk to downward momentum in prices is emerging concerns regarding resurgence of El Nino Weather phenomena this season.
In futures market, Soybean most active March contract was marginal down by 0.51 percent while forward April contract was down by 0.36 percent on the National Commodity & Derivatives Exchange Ltd (NCDEX).
NEXT WEEK: Outlook for oilseed market will focus only on demand for by-products.
(By Commoditiescontrol Bureau; +91-22-40015516)
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