Mumbai (commoditiescontrol) - Oilseed market traded lower this week on selling pressure at higher level.
MUSTARD SEED:
Mustard seed witnessed downtrend in spot and futures market this week, while prices of by-products also continues to remain under pressure on low demand.
Mustard seed prices dropped nearly 1.10 percent this week in benchmark Jaipur market of Rajasthan, on account of lack of demand at higher level.
Long term out-look for mustard seed seen dismal as production is expected at 69.25 lakh tonnes, according to MOPA association, and the same is higher than market expectation of 65-67 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 41-42 percent due to favorable weather condition after good monsoon season last year.
However rains occured in Jaipur region in last couple of days but it has not damaged standing mustard crop but is likely to delay harvesting activity.
Harvesting is going on in full swing and around 30-40 percent of the mustard has been harvested and by 25th March harvesting will get completed.
Mustard seed prices may remain under pressure in coming weeks as arrivals are likely to rise, whereas demand for mustard oil continues to remain low at higher level so crushers are not willing to procure mustard seed at higher level.
Mustard oil prices are still trading Rs 6/kg premium to refined soy oil so most of the retail demand has shifted to soy oil and consumers are ready to pay only Rs 3-4/kg premium for mustard oil.
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.
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.
Demand for the other by-product mustard cake is 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 $226 per tonne FAS kandla in international markets against $216 Hamburg ex. Mill(Apr) which is in disparity of $10.
Mustard seed prices have declined this week Rs 40 at Rs 3,840/100Kg in Jaipur market, while mustard oil Kacchi Gani prices dropped Rs 10 at Rs 725/10kg this week. Mustard cake prices were stable.
In futures market this week, mustard seed prices most active April contract dropped 1.8 percent on the National Commodity & Derivatives Exchange Ltd (NCDEX), while forward May contract was lower 0.76 percent.
In coming week, mustard seed prices likely to be volatile with negative sentiment as arrivals are expected to rise while demand continues to laggard.
SOYBEAN:
A steady movement was witnessed in soybean market this week largely due to limited demand at current level.
Soybean prices were steady at Rs 2,850-2,950/100Kg in benchmark Indore market of Madhya Pradesh.
In addition to it, soybean meal declined on subdued demand from local poultry farms.
Demand from poultry farmers is not able to sustain at higher level as poultry farmers profit margin declines if they procure soymeal at higher level.
Soybean meal prices dropped by Rs 400 this week in Indore market to trade at Rs 23,000 per tonne.
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.
The USDA raised its estimates above analyst expectations on Thursday, and caught traders off guard by indicating a decline in US soybean exports and growing domestic stockpiles. But some analysts dispute the USDA's pessimistic view.
According to analyst, soybean meal demand may remain under pressure due to new arrivals of Maize, 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 of soybean meal should icrease 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 71.60 LT crop still available with all segments of market, which is large enough to meet any demand of the ongoing season.
In futures market, Soybean most active March contract was marginal down by 4.15 percent while forward April contract was down by 3.70 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)
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