NEW DELHI (Commoditiescontrol) -
International Market Recap
Chicago Board of Trade (CBOT) soybean futures slid for a fifth straight session on Friday and registered the steepest weekly decline in 10 months as favourable US crop weather and concerns over slowing export trade amid uncertainty of US trade policy weighed on prices.
China, the top buyer of US soybeans, has been active in booking Brazilian soybeans for July and August, amid unsolved trade issues with Washington.
Chicago Board of Trade July soybeans fell 5 cents to USD 9.69-1/4 a bushel after hitting USD 9.62-1/2, the contract's lowest point since Aug. 21. The contract was down 5.1 percent in the week. While Jul 18 soybean meal closed at USD 357.80 and Jul 18 soybean oil at USD 30.52.
Weather conditions across the Midwest were improving, with rain forecast over the next 10 days. That was due to aid the growing soybean crops, and reduce dry patches. The lack of a significant weather threat weighed down prices. Though it was early in the season, traders wagered that conditions were conducive to high yields and large supplies.
Also on traders' minds was the G7 summit, which starts Friday. The summit came at a tense time, with the US, Canada and France exchanging barbs over trade. Those and other countries have implemented or threatened tariffs, with American agricultural exports in particular a target.
Some traders wanted to take money off the table ahead of the summit, analysts said, thinking that recent events make what they consider the worst case scenario for farmers more likely: An end to the North American Free Trade Agreement, which could endanger corn exports to Mexico, and Chinese tariffs on US soybeans.
Investors are turning their attention toward next Tuesday's monthly crop forecasts from the US Department of Agriculture.
Domestic Market Recap
Soybean continued to trade sluggish at major markets in the country during the week due to weak demand from crushers amid poor sales in soybean meal and weak tone in soy oil.
Spot soybean dropped by Rs 50 to Rs 3,350-3,550/100kg at the benchmark Indore market of Madhya Pradesh. Similarly, refined soy oil extended losses by Rs 5 to Rs 745/10kg. Soybean meal prices were however steady at Rs 29,500 per tonne.
According to industry body higher import of soy oil from overseas has hurt domestic industry and thus government should increase import duty in a bid to curb import to provide better returns to farmers so they can cultivate more soybean.
There were reports that government is considering to raise import duty on soft oils (soy, sun and canola), but no official announcement has been made by the government so far.
Soybean meal export during the month of May dropped 39 percent to 41,452 tonnes versus 68,264 tonnes a month ago, according to Solvent Extractors' Association of India (SEA). Soybean meal export during the April-May also fell by 36 percent to 91,957 tonnes as against 143,699 tonnes same period last year, said SEA.
Indian soybean meal CNF Rotterdam tentatively priced at USD 458 per tonne versus USD 415 to Argentine origin. Indian soybean meal is in disparity of USD 43 per tonne and less attractive for overseas buyers.
Domestic demand for soybean meal is normal, but not as strong as required to support soybean, said a trader from Indore. Further market sentiment is weak due to better acreage prospects this season, he added. As per the latest Agriculture Ministry data, the area under soybean was at 0.17 lakh hectare, up from 0.13 lakh hectare during the same period a year ago.
Good monsoon forecast has also hurt market sentiments, he noted.
On futures, the most-active July soybean contract during the week fell by Rs 65 to Rs 3,509/100kg on the National Commodity & Derivatives Exchange Ltd (NCDEX).
(By Commoditiescontrol Bureau)
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