Mumbai (commoditiescontrol) - Oilseed market traded higher this week on buying interest at lower level.
MUSTARD SEED:
Mustard seed witnessed uptrend in spot and futures market this week, while prices of by-products continues to remain under pressure on low demand.
Mustard seed prices gained nearly 2 percent this week in benchmark Jaipur market of Rajasthan, as prices nears Minimum Support Price (MSP) on previous week.
Market participants covered some position ahead of Mustard seed conference at weekend on expectations of any kind of positive annoucement to support prices.
However, long term out-look for mustard seed seen dismal as production is expected 79 lakh tonnes, according to Ministry of Agriculture, and the same is higher than market expectation of 65-70 lakh tonnes. Last year production was 55 lakh tonnes.
Apart from big production size, new crop seen better than expected and oil content is said to be 40-42 percent due to favorable weather condition after good monsoon season last year.
Mustard seed prices may remain under pressure in coming weeks as arrivals are likely to rise, whereas demand for mustard oil continues to trade higher in the complex and keeping millers away from big buying of raw material.
Mustard oil prices are still trading Rs 7/kg premium to refined soy oil and stealling most of the the demand.
In addition to it, blending of mustard oil likely to improve in coming weeks as other oil like palm and canola are available at cheaper rates and seen more profitable in adulateration.
According to analyst, if blending proportion increases due to price gap, then crushing of mustard seed will slow and directly will impact on demand and prices of raw material.
Canola oil stock at various port of the country have risen to 11,133 tonne as on Feb 27., against 5,965 tonnes on Feb 20. The rise in rival oil is also seen negative, as blending with rise due to high price gap with mustard oil.
Canola oil was last quoted at Rs 632/10kg at Kandla port, while mustard oil Kacchi gani is trading around Rs 730 at Jaipur market.
Demand for the other by-product mustard cake was as per requirement from local cattle feed manufacturer due to low price gap with soybean meal, which is also diverting buyers to other cheap available sources.
Currently price gap between mustard meal and soybean meal in local markets is around Rs 8,400 per tonnes, while prices were trading at $228 per tonne FAS kandla in international markets against $216 Hamburg ex. Mill(Mar) which is in disparity of $12.
Mustard seed prices have recovered this week Rs 75 at Rs 3,925/100Kg in Jaipur market, while mustard oil Kacchi Gani prices dropped Rs 5/10kg this week. Mustard cake prices were stable.
In futures market this week, mustard seed prices most active April contract soared 3.8 percent on the National Commodity & Derivatives Exchange Ltd (NCDEX), while forward May contract was higher 4 percent.
In another news, mustard seed sowing areas in Rajasthan have witnessed some hailstorm earlier this week, pausing harvseting in some areas and raising concern about production size.
However, its too early to estimate about impact on crop size after recent weather behaviour, but the news will support prices in near-term.
In coming week, mustard seed prices likely to be volatile with negative sentiment as prices are trading near Minimum Support Price(MSP) and arrivals are expected to rise while demand continues to laggard.
SOYBEAN:
A positive movement was witnessed in soybean market this week largely due to low level buying in the complex.
Soybean prices were up Rs 100/100Kg in benchmark Indore market of Madhya Pradesh, after prices traded near Minimum Support Price (MSP) last week.
In addition to it, soybean meal also gained along with soybean prices on improved demand from local poultry farms, due to low prices.
Soybean meal prices soared 3.5 percent or Rs 800 this week in Indore market to trade at Rs 23,400 per tonne.
However, upside for soybean seen limited as this year production seen higher than demand, which may continue to pressure on prices on most of the year.
India likely to produce 141 lakh tonnes of soybean in crop year 2016-17 against last year 85 lakh tonnes, said Ministry of Agriculture in its second advance estimate for oilseed production.
The estimate is too large for the country to digest as the market was expecting soybean output around 115 lakh tonnes, whereas demand is inconsistant and resurfaces on every fall in prices.
Further to it, global markets are also witnessing volatility as improving weather condition for crops in South America is pressuring priecs, while slow harvesting and transportation in Brazil due to rains is supporting prices.
U.S soybean futures were higher 1.3 percent this week, while soybean meal dropped 0.8 percent.
There is also uncertainity about bio-diesel mandate in United States in 2017, due to which market may see volatility in near-term.
In domestic market, demand and direction for soybean is not clear due to high production amid inconsitant demand for soybean meal.
According to analyst, soybean meal demand may remain under pressure due to new arrivals of Maize and Wheat, which is also a substitute for poultry feed.
In export market, demand for soybean meal is not picking as expected and limiting crushing capacity and price movement of raw material.
The analyst said, export demand soybean meal should triple for rest of the season to support prices of raw material, which may not materialized.
In a cautious note, the analyst said, if soybean meal demand do not improves from domestic and export market, then a big amount of raw material will be carry-forward to next year.
Nearly 100LT crop still available with all segments of market, which is large enough to meet any demand till new crop arrivals stars in Sept-Oct.
In another news, Australian weather bureau has warned about rising chances of revisit of dry weather pattern El-Nino in 2017., which might trigger some concern about sowing and crop development.
But, El-Niño return in 2017 is totally depends on timing. If dryness starts early in monsoon season, there is a possibility of sowing and crop development for next season.
In futures market, Soybean most active March contract was marginal up by 0.2 percent while forward April contract was higher by 0.78 percent on the National Commodity & Derivatives Exchange Ltd (NCDEX) this week.
NEXT WEEK: Outlook for oilseed market will focus only on demand for by-products.
(By Commoditiescontrol Bureau; +91-22-40015516)
0 Comments 
Post Comment 
