MUMBAI(CommoditiesControl) SOYBEAN: Soybean prices dropped during the week as processors were away from heavy buying, however, once the spot prices touched Rs 2,980/100 kg crushers were attracted to add some stock at lower prices. Soybean crushing is in disparity, keeping them sidelined from buying at higher levels. Arrivals during the week, were reported to be lower at 1.10 to 1.25 lakh bags on farmer’s reluctance to sell at prevailing levels and anticipating better prices at Rs 3200/100kgs for the crop. Soybean prices last traded at Rs 2,900-2,980/100Kg in benchmark Indore market of Madhya Pradesh against Rs 2,960-3,070 a week ago. In futures market, Soybean most active June contract during the week was down by 2.24 percent at Rs 2,835/100kg on the National Commodity & Derivatives Exchange Ltd (NCDEX). On 16th May soybean futures marked a fresh five month low of Rs 2,793/100kg on account of selling pressure by traders following subdued cues of spot market. Soymeal Soymeal prices in the local markets dropped by Rs 1,300 to trade at Rs 23,700 per tonne amid low buying by poultry feed manufacturers in week ending 20th May. Poultry feed manufacturer are procuring soymeal from the market as per requirement as there is very less demand from poultry farmers. Due to high temperatures most of the chicks die quickly at initial stages so poultry farmers have reduced the placement of chicks by 15-20 percent. Price of broiler chicken were steady at Rs 115/kg at benchmark Delhi market in week ending 20th May on account of limited demand. As per market participant the ban on alcohol had taken a toll on sale and consumption of chicken. The industry had recorded a 40 per cent dip in consumption due to the ban. Most of the poultry farmers are incurring profit of around 5-10 percent as the broiler chicken prices in May has gained by nearly 10-12 percent across the country.Even though poultry industry is in profit but demand of soymeal continues to remain weak as poultry farmers are placing less chicks. As per market participant animal feed produced by U.S. ethanol plants (known as dried distillers' grains or DDGs) is replacing even more corn and soybean meal in livestock and poultry feed rations than previously thought which has reduced the demand of soymeal all over the world. Protein content of corn-DDGS is about 28/30%, while in wheat-DDGS is around 33/35%. Fat is about 4% in corn, and 2/2,5% in wheat, oil content of corn-DDGS is over 10%. On the other hand Soymeal on the European meals and feeds market was offered sharply lower on Friday. It tracked a steep fall in CBOT soymeal futures at the previous close after a plunge in the Brazilian real sparked concerns that the weaker currency could prompt Brazilian farmers to sell more soybeans. Although prices went down substantially buyers were still holding back, waiting for the market to hit a solid bottom. South American soymeal was mostly offered between $2 and $7 a tonne down from Thursday, tracking a weak CBOT soymeal futures close the day before. Bids were scarce and no deals were reported. The competitiveness of Indian soymeal in the world market has deteriorated pronouncedly in recent weeks. The premium of Indian export prices versus Argentine origin widened to USD 30-35 per tonne from 20-25 compared to month ago so most of the market participant are expecting that India will receive less export orders in coming days. The summer season changing consumption pattern, losses on raising broiler chickens and lower export demand, will keep the meal prices on check. Soy oil A positive trend followed in refined soy oil in benchmark Indore market of Madhya Pradesh on improved demand ahead of Ramadan festival. Soy oil at benchmark Indore market gained by Rs 10 to trade at Rs 632/10kg. Refined soy oil prices will also get support in near-term as rival mustard oil Kacchi Ghani is trading at a premium of Rs 8.5/Kg versus soy oil. The import of soy oil has become costlier as Indian rupee has depreciated sharply in recent times so most of the importers have slowed down their bulk purchases which is likely to create tight supply of soy oil in near term due to which sharp fall in soy oil is negated.
Indian government increased Tariff value for imported soy oil on 15-May-2017 by USD 13 to 793 per tonne. Soy oil prices prices were higher by USD 25 to trade at 812 per tonne in dollar terms (CNF) at Kandla port and also gained by Rs 10 to trade at Rs 593/10kg. CBOT soy oil futures ends up this week. Soybean oil futures for July delivery, the most actively traded contract, rose 1.23% to 33.04 cents per pound at the Chicago Board of Trade which also improved the physical market sentiment. In futures market, soy oil most active May contract on the National Commodity & Derivatives Exchange Ltd (NCDEX) was up 0.79 percent this week, while forward June contract was also higher 0.95 percent. NEXT WEEK: Indian soybean is likely to trade range bound next week as poor demand at higher level will weigh on soybean prices whereas slow farmer selling will provide support to soybean at lower level.
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