MUMBAI (Commoditiescontrol) -Soybean prices during the week which ended on December 1, 2017 rose 1% at Rs 3,000/100kg at the benchmark Indore market of Madhya Pradesh due to improved buying from crushers amid dwindling supply and firm cues from futures. Other hand, refined soy oil and soybean meal was tad down on subdued demand.
Soybean daily arrivals earlier last month on November 1 peaked to 8.5 lakh bags (100kg each), however, it dropped to 5.5 lakh bags on December 1. On average, the weekly arrivals dropped to 5.44 lakh bags from 6.34 lakh bags a week ago.
The lower arrivals in the spot market may be due to rising prices, which have prompted farmers to hold their stocks with anticipations of more rise as government in the recent times has taken various measures to increase farmer’s income.
For a instance, earlier last month centre had rose import duty of edible oils in order to encourage domestic crushing, so that farmers can get better rates for their produce.
Also, there are reports that government is likely to double the incentive on export of oilmeals to 10% to support domestic oilseed prices. Currently, Oilmeal prices are competitive in the global market and may boost Indian exports.
Soybean prices have surged more than 7% in November month and further, sharp rise in prices is unlikely, as far export of soybean meal didn't revive.
According to traders, soybean crushing during first two month (Oct-Nov) of new season 2017-18 is expected to be around 15.28 lakh tonnes and stocks with farmers and crushers likely to be at 78.11 lakh tonnes with the availability of 93.39 lakh tonnes.
The Soybean Processors Association of India (SOPA) estimated 2017-18 soybean crop at 91.46 lakh tonnes, and including 13.93 lakh tonnes of carry over. The total availability comes around 105.39 lakh tonnes, out of which 12 lakh tonnes is expected to retained by farmers for sowing.
Soybean prices next week is expected to trade steady to positive amid lower supply and expectations of improvement in soybean meal demand from overseas. Indian Soybean meal at present is slightly costlier compared with Argentina.
SOYBEAN MEAL
Soybean Meal prices during the week was tad up at Rs 22,500 per tonne at the key Indore market amid rising trend in soybean and good domestic demand from local poultry feed manufacturers for the commodity in domestic market. Primarily because they have increased the placement of chicks for upcoming peak winter demand of broiler chicken across India.
The consumption of broiler chicken will go up during the winter season so poultry farmers are likely to place more chicks which will boost soymeal demand.
As far as soymeal export demand is concerned, there is rumor in the market that government will raise export subsidy in the form of incentive for DOC to 10% from current 5% to improve export demand.
Indian Soymeal was priced at $402 per tonne CIF Kandla Vs $375 Argentina CIF Rotterdam (November) as on December 1, 2017. At present, the difference between the two is at $27 per tonnes, but if it narrows to $10, then demand for Indian soybean meal may improve as it is non-genetic, whereas Argentina produce is genetically modified (GM).
If Indian government decided to give subsidy of 10% on export of soymeal then Indian CIF price will drop to $361 which is lower than Argentine soymeal CIF $375. So, overseas buyer may show interest in bulk purchases.
SOYOIL
Refined soy oil in benchmark Indore market of Madhya Pradesh during the week gained marginally to trade at Rs 725/10kg against Rs 726 a week ago due to steady domestic demand. Soy Oil prices during the month of November rose nearly 7% due to steep hike in edible oils import duty.
Indian government hiked import duty on soy oil from 17.50% to 30%.
As per traders, demand of soy oil in domestic market is limited, and prices may trade around current level next week. However, buyers are not interested in purchasing the commodity at such higher prices.
Even though import duty on soy oil has increased but, soy oil imports for the full year is expected to remain higher than last year as local soybean seed supplies are limited, which will not be able to meet the soy oil demand. International Soybean Market Recap
Futures Month
CBOT Soybean Futures Price
01.12.2017
Week Ago
Month Ago
Change over Prev. Month %
24.11.2017
01.11.2017
Jan-18
993.60
992.40
991.20
0.24%
US Soybean for January delivery rose a tad this week at $992.40 a bushel against $993.60 a week ago. The rise in prices were mainly attributed to concern about dry weather in Argentina.
The market attention has been slowly shifting to South America, where a growing crop is just emerging and planting is finishing up.
The weather in next few months will determine what kind of crop yield will occur in South America, and that will impact price direction of most grains during that time.
U.S. soybean processors crushed 176M bushels of oilseed in October, up from 145M in September and steady with a year earlier, according to the USDA. Stocks of soybean oil at the end of October fell to 1.3B pounds from 1.4B a month earlier, also below the same time last year.
Brazilian soybean farmers are almost done with their planting tasks for the 2017-2018 season. They have finished 92% of the work as of November 30, according to agricultural consultancy AgRural. That's ahead of the 90% finished on the same date a year ago and the 87% average for the past five years, the group said. Farmers were able to make up for early delays in planting related to a lack of precipitation during October in adherence to steady rain in November, said AgRural, which has estimated a crop of 110.2 million metric sons for the season. The consultancy will update its forecast for the crop next week.
(By Commoditiescontrol Bureau; +91-22-40015533)
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Soybean daily arrivals earlier last month on November 1 peaked to 8.5 lakh bags (100kg each), however, it dropped to 5.5 lakh bags on December 1. On average, the weekly arrivals dropped to 5.44 lakh bags from 6.34 lakh bags a week ago.
