MUMBAI (Commoditiescontrol) - Soybean prices exhibited subdued tone this week (Dec 11-16) due to lackluster demand in soybean meal and bearish tone on soy oil despite of dwindling soybean supply in the spot market.
Soybean prices in the benchmark Indore market during the week ending 16th December closed down by Rs 25 at Rs 3,025/100kg on account of weak demand from crushers. Soybean price dropped below MSP of Rs 3,050 after trading above in the previous week.
Total new crop arrivals during the week, were reported at 3.8 to 4.8 lakh bags against 4 to 4.5 a week ago.
Arrivals are still below market expectation which has raised the question on SOPA’s soybean production estimate of 90 lakh tonnes. According to traders, at current situation supply of soybean in the market should have been around 9.50-10 lakh bags so in coming week if arrival does not increase to 5-6 lakh bags then we may not see any major fall in soybean price.
As of now, traders are anticipating that soybean production can be around 80-85 lakh tonnes due to the following reason:
Yield have declined by nearly 10%-15% in key producing regions of Indore, Ujjain districts of Madhya Pradesh and 15-25% in Amravati, Yavatmal and Akola districts of Maharashtra.
Lower yield was attributed to heavy rain which caused water logging in the field when crop was in maturing stage and also the quality of crop is inferior as compared to last year.
Further the focus of the traders will be on arrival in Madhya Pradesh as Bhavantar Bhugtan Yojana ended on December 15.
Demand of soybean from millers have declined considerably due to sluggish sales of soymeal in international market.
SOYMEAL
Soymeal at the benchmark Indore market traded down by Rs 100 to trade at Rs 23,000 per tonne amid poor demand of soymeal in international market whereas demand from poultry feed manufacturers for the commodity in domestic market is gradually improving primarily because they have increased the placement of chicks for upcoming peak winter demand of broiler chicken across India.
Price of broiler chicken in benchmark Delhi market traded steady during the week at Rs 95/kg.
Indian Soymeal was priced at $388 per tonne FAS Kandla Vs $375 Argentina CIF Rotterdam (December) as of December 15, 2017.
India Soybean Meal is now in disparity of $13/MT in international market compared to Argentine soymeal.
The Indian rupee on Friday hit a three-month high of 64.01 against the US dollar as a result of which export of Indian commodities has become costlier so soymeal price in international market has increased.
SOYOIL
Refined soy oil in benchmark Indore market of Madhya Pradesh during the week declined by Rs 5 to trade at Rs 715/10kg on account of poor demand.
As per traders, demand of soy oil in domestic market is weak which has dragged soy oil prices. Soy oil stock at port has increased to 2,11,149 as of 11 December vs 2,05,581 on 4 December which is likely to keep the bearish tone intact.
Soy oil Degum price declined by $7 to trade at 840 per tonne in dollar terms (CNF) and also it plunged by Rs 3 to trade at Rs 682/10kg in rupees term at Kandla port.
Sun oil price in CIF term was trading at a discount of $35 to soy oil. Due to which, importers will try to import more of sun oil as it is considered as premium oil.
Other hand, CBOT soy oil futures ended down by 1.36% at 967.25 c/lb on increased selling amid forecasts for much-needed rains in Argentina. Rains expected this weekend in Argentina's main soy and corn growing areas will provide some relief to drought-stricken parts of the country's central farm belt.
In futures market, Soy Oil most active November contract during the week on the National Commodity & Derivatives Exchange Ltd (NCDEX) ended up by 0.82% at Rs 729.35/10kg.
NEXT WEEK: Soybean prices are likely to trade sideways on account of steady supply where as demand from millers is likely to remain sluggish due to weak export demand of soymeal.
(By Commoditiescontrol Bureau; +91-22- 40015516)
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