Indian Soy Complex To Trade Range Bound - Weekly 24th June

MUMBAI (Commodities Control)

SOYBEAN

Soybean prices in most of the spot markets closed higher on account of improved demand from processors.

Prices at the benchmark Indore market during the week gained by Rs 20 to trade at Rs 2,860/100kg.

Total arrivals during the week, were reported to be higher at 1 to 1.05 lakh bags as farmers liquidated the stock of soybean in moderate quantities as they require money for the sowing of khariff crop.


Thanks to the early onset of the monsoon this year, sowing of kharif crops started on a brisk note.

Soybean sowing progress is higher by 87.87 percent over last year but it is too early to predict that this year total soybean acreage for 2017-18 will be higher or lower than last year.

Most of the farmers in Madhya Pradesh have chosen to sow soybean crop over pulses and cotton crop which is against the market expectation and it is considered as bearish news for soybean prices.

Last week, the Centre approved increases in the minimum support price (MSP) in the range of 5-8% for the 2017-18 kharif crop.

Indian government has increased the minimum support price (MSP) for 2017-18 soybean crop by Rs 275/100kg to Rs 3,050/100kg and also the cost of production is less in soybean so this might be one of the reason that farmers have chosen soybean crop over cotton and pulses.



Soybean prices last traded at Rs 2,870-2,900/100Kg in benchmark Indore market of Madhya Pradesh unchanged a week ago.

In futures market, Soybean most active July contract during the week was up by 0.31 percent at Rs 2,830/100kg on the National Commodity & Derivatives Exchange Ltd (NCDEX).

SOYMEAL

Soymeal at the benchmark Indore markets declined by Rs 300 to trade at Rs 23,200 per tonne during the week amid poor demand by poultry feed manufacturers in week ending 24 June.

Most of the poultry feed manufacturers have covered their near term requirement so they are procuring the commodity in very less quantities which has weighed on soymeal prices.

However consumption of soymeal is likely to increase in coming days as most of the poultry farmers are increasing the placement of chicks in anticipation that broiler chicken demand will increase in July month as the temperatures will drop across India due to monsoon and end consumers like to consume chicken in such atmosphere.

Price of broiler chicken has declined by Rs 7 to trade at Rs 80/kg at benchmark Delhi market in week ending 24th June due to lower demand.

Indian Soymeal is priced at $383 per tonne FAS Kandla Vs $343 Argentina CIF Rotterdam (June) as of June 23, 2017. The difference between the two origin is $40 per tonne unchanged over previous session.

Indian soymeal is trading at a premium of $40 compared to Argentine soymeal which is on higher side so India can not get bulk export orders of soymeal.

Overseas buyers are ready to pay premium of $10 for Indian soymeal as it is non-genetically modified whereas Argentine soymeal is genetically modified.

SOYOIL

A bearish trend followed in refined soy oil in benchmark Indore market of Madhya Pradesh on account of poor demand. Soy oil at benchmark Indore market declined by Rs 5 to trade at Rs 625/10kg during the week.

Due to slow progress of monsoon the retail demand of soy oil has not increased as per traders expectation so they opted to stay away from the market activity.

Refined soy oil prices will also get support in near-term as rival mustard oil Kacchi Ghani is still trading at a premium of Rs 7/Kg versus soy oil.

Soy oil prices prices were lower by USD 26 to trade at 791 per tonne in dollar terms (CNF) at Kandla port and also declined by Rs 10 to trade at Rs 575/10kg.

There is very limited trading activity in physical trade as most of the traders are busy in clearing their old stock before the roll out of GST in July amid less clarity on GST implimentation.

In futures market, soy oil most active July contract on the National Commodity & Derivatives Exchange Ltd (NCDEX) ends down by 2.5 percent at Rs 624.95/10kg.

NEXT WEEK:

Soybeans in the Local markets is likely to trade range bound in coming week due to the restricted farmers selling keeping the supplies tight whereas improving soybean acreage and higher supplies at good prices will cap the gains. (By Commoditiescontrol Bureau; +91-22-40015516)