MUMBAI (Commodities Control) :
International Soybean Market Recap
CBOT soybean futures on Friday rose, hitting a 1-week high of $9.77 a bushel in March contract and gave weekly close of $9.60 up by 0.74% as weather concern continues in Argentina which is likely to affect the production of soybean crop drastically.
Due to disappointing Argentine crop conditions and dry weather forecast, Buenos Aries Grain Exchange estimated that only 53% of the soybean crop can be rated good or excellent with 27% of their soybean soil moisture being rated short.
The most concerned areas are northern Argentina, northern Buenos Aires, central Santa Fe, and northern Cordoba. In northern Buenos Aires province for example, they still need to plant approximately 20% of their soybeans. The region of northern Buenos Aires has not received a rain greater than 2 inches since October and the last two rains in December were both about 0.8 inches and not enough to recharge the soil moisture.
The head of the crop estimation department of the Buenos Aires Grain Exchange feels that approximately 40% of the soybean acreage in Argentina needs rain especially in northern Buenos Aires, central Santa Fe, and northern Cordoba. This is in addition to the northern part of the country where farmers still need to plant about 20,00,000 hectares of soybeans.
There is still time to plant soybeans in northern Argentina because the planting window in northern Argentina extends until mid of January. According the Buenos Aires Grain Exchange, as of late last week, about 82% soybeans planted in Argentina .
However, the rally of soybeans got limited by the disappointing U.S. export sales. According to official data released on Friday, for the week ending December 28, the export sales of soybeans were less than expected.
Domestic Soybean Market Recap
Soybean prices in the benchmark Indore market during the week ending January 6, closed up by Rs 150 at Rs 3,200/100kg. Soybean price managed to trade above MSP for fourth consecutive week on declining arrival.
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Total new crop arrivals during the week were reported at 1.85 to 3.25 lakh bags against 4.3 to 3.4 a week ago.
Arrivals have declined as most of the farmers have become reserved sellers as they are anticipating higher prices in near term. Farmers of Madhya Pradesh are holding good quality soybean as they have liquidates the inferior quality soybean in Bhavantar Bhugtan Yojana which closed in December.
Further, millers are also not getting the required quantity of soybean seed from the market yards which also supporting soybean prices. Daily crushing requirement by millers is 30,000 tonnes whereas they are able to procure around 28,000 tonnes.
SOYMEAL
Soymeal at the benchmark Indore market gained by Rs 700 to trade at Rs 24,500 per tonne on improved demand from local poultry feed manufacturers for the commodity in domestic market.
Local poultry demand has improved during the week as the demand for broiler chicken has improved due to ongoing winter season.
However, the demand in international market has declined. India exported around 1,68,865 tonnes of soymeal in December 2017 lower than 2,07,630 tonnes in November and 2,41,250 in December 2016.
Indian soymeal is tentatively priced at CIF $402 per tonne vs $370 Argentina CIF Rotterdam (January) as on January 6, 2017. India Soybean Meal is now in disparity of $32/MT in international market compared to Argentine soymeal which indicates that export demand of Indian soymeal may decline from January on wards. Overseas buyer are ready to pay premium of only $10 for Indian soymeal as it is non-genetically modified whereas Argentine soymeal is genetically modified.
SOYOIL
Refined soy oil in benchmark Indore market of Madhya Pradesh during the week gained by Rs 20 to trade at Rs 735/10kg amid improved demand for the upcoming Makar Sankranti Festival.
In addition to CBOT soy oil futures gained by nearly 1.44% during the week which kept the bullish momentum intact in domestic market.
Soy oil Degum price during the week ended on January 6, declined by $26 to trade at 831 per tonne in dollar terms (CNF) whereas it gained by Rs 13 to trade at Rs 695/10kg in rupees term at Kandla port.
Sun oil price in CIF term was trading at a discount of $26 to soy oil. Due to which, importers will try to import more of sun oil as it is considered as premium oil.
In futures market, Soy Oil most active February contract during the week on the National Commodity & Derivatives Exchange Ltd (NCDEX) ended down by 2.06% at Rs 742.35/10kg.
NEXT WEEK: Soybean prices are likely to trade higher next week on account of declining arrival.
(By Commoditiescontrol Bureau; +91-22- 40015516)
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