NEW DELHI (Commoditiescontrol) -
International Market Recap
US soybean futures fell over 7 percent during the week ended June 15 as China laid out plans for tariffs on American exports of the crop.
Chicago Board of Trade soybean futures for July delivery on Friday settled at USD 9.05-1/2 a bushel, down 21-3/4 cents. Prices for the front-month contract bottomed out at USD 9.03 a bushel, the lowest since June 23.
While July soybean meal closed at USD 338.90, down USD 4.30 and July soybean oil at USD 29.50, down USD 0.64.
Soybean futures have fallen for nine of the last 10 sessions as the rhetoric between China and the United States over trade has heated up. Prices for the November contract have shed more than USD 1 a bushel since the start of the month, threatening farmers’ profitability on this fall’s harvest.
Prices have fallen over 15 percent from highs in March, when concern about the potential duties began to intensify.
China ended months of speculation that it would start levying duties against American soybeans, among other products, in retaliation for US duties on USD 50 billion worth of its goods.
The US is "provoking the trade war," China's Foreign Ministry spokesman Lu Kang said Friday. Starting next month, China will levy duties on USD 34 billion of US products including agricultural goods like soybeans, pork, chicken and seafood.
China is the largest buyer of US soybeans, consuming around two-thirds of all exports. American farmers have increased acreage in recent years in large part to meet seemingly insatiable demand from Chinese hog farmers and others.
The prospect of ceding more business to Brazil, which is well placed to lap up whatever market share the US loses, has pressured the soybean trade in recent months.
Domestic Market Recap
Spot soybean ruled weak at major markets in the country during the week due to limited buying support from crushers.
Spot soybean quoted lower by Rs 50 at Rs 3,400-3,500/100kg at the Indore market, while refined soy oil was down Rs 10 to Rs 735/10kg. While, soybean oil cake remained steady at 29,500 per tonne.
Crushers are buying soybean in low quantity due to expectations that prices going forward will decline on prospects of better acreage this season amid good monsoon forecast.
However, slow progress of monsoon may provide some good support to the prices in the near-term.
Soybean fundamentals are balanced at present. Demand in soy oil and soybean meal is weak which is putting pressure, but poor stock and slow monsoon are supportive for soybean.
The possibility of rise at least in the near-term can’t be ruled out, said a trader from Indore. But sharp rise is unlikely due to expectation of higher sowing under soybean this season, he added.
As per the latest Agriculture Ministry data, the area under soybean was at 0.5 lakh hectare as on June 15, up from 0.32 lakh hectare during the same period a year ago.
Meanwhile, in a bid to protect the interest of domestic oilseeds growers and processors, the government on Thursday, June 14 raised import duty on crude soybean oil from 30 percent to 35 percent, while that on refined soybean oil from 35 per cent to 45 percent.
In March, the government had raised the import duty on crude palm oils from 30 percent to 44 percent, while that on refined palm oils to 54 percent from 40 percent. But the customs duty on non-palm crude and refined edible oils was kept unchanged.
A soybean crushers said, "It's a welcome move by the government, but its impact will take time as the country is heavily rely on imports to meet domestic demand.”
In May, soybean oil import recorded positive growth month-on-month of 49.81 percent to 3.97 lakh tonnes, the Solvent Extractors' Association of India (SEA) said in its latest report.
On derivatives, soybean July futures fell by Rs 39 to Rs 3,470/100kg on the National Commodity & Derivatives Exchange Ltd (NCDEX).
(By Commoditiescontrol Bureau)
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