NEW DELHI (Commoditiescontrol) -
International Market Recap
Chicago Board of Trade (CBOT) soybean futures gained nearly 2 percent during the week ended August 3 amid worries about an escalating trade war between the United States and China.
CBOT November soybean contract ended the week 1.9 percent higher at USD 9.02-1/4 per bushel.
Soybean futures saw significant ups and downs this week. Hopes that Washington and Beijing could go back to the negotiating table pushed up prices up to 6-week highs during the first two sessions. However, escalating tensions with more tariffs being announced against each other dragged down the oil seeds. Short-covering on Friday managed to drive up the soybean futures, which ended this week in the positive territory.
Meanwhile, China proposed retaliatory tariffs on USD 60 billion worth of US goods on Friday, casting doubt on prospects of talks with Washington to solve their bitter trade conflict.
The market participants are awaiting the USDA monthly supply and demand report which is due to be released on Friday.
Domestic Recap
Soybean prices remained steady at the benchmark Indore market during the week despite an upside in futures trade, in line with a rise in US futures.
Soybean prices quoted unchnaged at Rs 3,400-3,500/100kg. While, soybean meal moved higher by Rs 500 at Rs 28,500 per tonne. However, refined soy oil slipped by Rs 2 at Rs 748/15kg.
Trade activities were sluggish as the market opened on Tuesday after being closed since July 25. The market was closed on July 25-26 due to the nation-wide truckers' strike. While it remained closed from July 27 to July 30 owing to the state-wide strike called by the local trade associations. Traders on Monday decided to call off their strike after the government's assurance to look into their demands.
Offloading of mustard seed stock by Nafed also restricted upside move in spot markets. The National Agricultural Cooperative Marketing Federation has started selling the oilseed in Rajasthan from Friday, August 3 through NCDEX e Markets Limited (NeML) e auction platform.
The federation had procured the oilseed under the price support scheme in 2017-18 (July-June). Nafed had procured 873,004.90 tonnes of the commodity at MSP of Rs 4,000/100kg across the country in the rabi season, while its procurement in Rajasthan was at 471,614.16 tonnes as of Jun 25.
As per trader, India soybean meal at present is uncompetitive in the international market, but intensifying US-China trade war and increase in export incentives from 7 percent to 10 percent under the Merchandise Export from India Scheme (MEIS) may support its competitiveness in the coming days.
Meanwhile, among kharif oilseeds, soybean acreage was up 10.62 percent at 109.50 lakh heactare till August 3 from 98.99 lakh hectare during the same period last year, as per the latest Agriculture Ministry data.
As far as domestic supply is concerned, soybean stock in the country is now limited and that is also being held by stockists and they are eying to sell it at higher level. The new soybean crop will arrive only by October and the available stock is insufficient to cater demand.
Carry over stock of soybean for next season is likely to fall to multi year-low as per balance sheet drawn by Soybean Processors Association of India (SOPA).
According to SOPA, the total availability of soybean this season 2017-18 (Oct-Sept) was estimated at 96.50 lakh tonnes, including 13 lakh tonnes of opening stock and 83.50 lakh tonnes of production. The market surplus was pegged at 84.50 lakh tonnes after excluding 12 lakh tonnes as retained by farmers for sowing.
The estimated crushing number for the season stood 80 lakh tonnes, while 1.50 lakh tonnes will used as direct consumption and 2 lakh tonnes will exported to ASEAN countries and thus the ending stock this season is estimated at just 1 lakh tonnes.
The balance sheet suggests that if soybean meal demand from both export and domestic fronts sustain then there is higher possibility of good rise in prices ahead, however upside may be capped by sowing, which is expected to increase this season due to increase in MSP by 11.44 percent to Rs 3,399/100kg.
On NCDEX, soybean October futures gained by Rs 47 to Rs 3,412/100kg.
(By Commoditiescontrol Bureau)
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