MUMBAI (commoditiescontrol) - Mustard seed traded weak due to poor demand for by-products whereas soybean traded flat during the week ending April 8, 2017.
MUSTARD SEED:
Mustard seed prices during the start of the week rallied due to poor supply as many markets were closed for financial year-end holiday. However supply later on increased during the week pressured mustard seed prices followed by subdued demand for by-products.
Mustard seed price during the week dropped by Rs 40 to last trade at Rs 3,960/100kg in benchmark Jaipur market of Rajasthan.
During the week daily arrivals ranged between 3.45 lakh bags to 6.55 lakh bags.
As of now, crushers are facing huge disparity in crushing of mustard seed due to poor realization of mustard by-products, so they are not sourcing the commodity in bulk quantity at current level.
Farmers are busy in marketing of wheat crop so they are not able to bring the mustard seed in market yards in bulk quantities and it may take another 10-15 days for the supply of mustard seed to increase.
Demand of mustard Kachhi Ghani oil is likely is weak and likely to remain so in near future as most of the retail demand has been now shifted to soy oil as mustard oil is trading at a premium of Rs 11/10kg.
At the same time summer season has also started so the core consumption of mustard oil will also decline as people don’t prefer to eat fried foods.
In addition to it, blending of mustard oil likely to improve in coming weeks as other oil like palm are available at cheaper rates and seen more profitable in adulteration.
Long-term outlook for mustard seed seen dismal as India's mustard output in 2016-17 is estimated at 72 lakh tonnes (including 1.2 lakh tonnes of taramira and toria), up from 58 lakh tonnes a year ago due to better yield amid favorable weather.
The availability of mustard seed for the season 2016-17 is larger than demand and thus prices are unlikely to witness any major upside.
Apart from big production size, new crop quality is seen better than expected and oil content. New mustard seed crop oil content is said to be around 41-42 percent.
Demand for the other by-product mustard cake has improved from local cattle feed manufacturers due to higher price gap with cottonseed oilcake.
Also due to disparity in crushing of mustard seed crushers are crushing seed as per requirement which has resulted in limited availability of mustard cake. Mustard cake prices are likely to witness sharp fall in the coming weeks in case demand didn't picked up.
On futures, May contract mustard seed declined by 1.60 percent this week on the National Commodity & Derivatives Exchange Ltd (NCDEX), while forward May contract was lower 1.20 percent.
In coming week, mustard seed prices likely to trade on lower side due to weak demand of mustard oil and mustard oil cake.
SOYBEAN:
Soybean ended this week on flat note mainly due to limited demand. Slow farmers selling also helped prices to trade in tight range during the week.
Soybean priced between Rs 2,900-2,975/100kg in benchmark Indore market of Madhya Pradesh, while soybean meal was flat at Rs 24,000 per tonne.
In coming week soybean prices are likely to track mustard seed prices as the peak supply season of mustard seed has started.
Soybean prices in medium term unlikely to record any major upside due to larger crop and lower than expected soymeal demand. Export of soybean meal has improved this season, but lower than market expectations as big soybean crop size will offset improvement in soybean meal export.
India's soybean meal exports during the month of March improved to 107,059 tonne against 26,658 tonne same period year ago. Apr-March (2016-2017) soy meal exports totaled at 9,16,306 tonne versus 3,87,298 tonne last year.
India soymeal is priced at $400 per tonne FAS Kandla Vs $365 Argentina CIF Rotterdam (Apr) as of April 7, 2017. The difference between the two origins is $35 per tonne.
India soy meal is in the disparity of $35 compared with Argentine and the parity has been drastically reduced in last two month from a high of $40 due to appreciation of rupee and trade experts believe that India soy meal should be in parity of at least $10 then only overseas buyer will buy soy meal from India.
Price of broiler chicken declined by Rs 5 to Rs 96/kg during the week on account of poor demand at the higher level despite of poor supply of broiler chicken.
Supply of broiler chicken has dropped in last one month due to low placement of chick due to sharply nearly 60 percent rise in chick rates, which has slowed down chick placements by poultry farmers.
Soybean meal being widely used as feed by poultry industry and reduction in demand from there directly impact meal prices.
In coming months the demand for broiler chicken is likely to decline as most of the consumers don’t prefer eating non-veg during the summer season.
According to an analyst, soybean meal demand may remain under pressure as poultry farmers are incurring losses on the sales of broiler chicken, so demand of soy meal is likely to remain subdued from poultry sector.
On derivatives, soybean for May delivery edged lower by 0.65 percent at Rs 2,298/100kg, while forward June contract was down by 0.75 percent at Rs 3,005/100kg on the National Commodity & Derivatives Exchange Ltd (NCDEX).
NEXT WEEK: Outlook for oilseed market will focus only on demand for by-products and arrivals.
(By Commoditiescontrol Bureau; +91-22-40015516)
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