Commodity Trade Mantra

Soybeans & Soyoil to Rise despite larger Soybeans Production

Soybeans & Soyoil to Rise despite larger Soybeans Production
Soybeans & Soyoil to Rise despite larger Soybeans Production

CBOT Soybeans March Futures are trading nearly unchanged midday on light profit taking and positioning ahead of Friday’s USDA report. There were reports yesterday that Soybeans cargo’s were sold to China out of South America for next spring which is seen as a negative to price direction and suggests Soybeans buyers are beginning to shift away from the US border for cheaper cargo’s elsewhere. The USDA announced this morning that US exporters sold 120,000 tonnes of optional origin Soybeans to China for 2013/14 delivery. The Brazilian government agency CONAB raised their 2012/13 Soybeans crop production estimate to 82.68 million tonnes vs. 82.6 in December. The USDA is currently projecting 81 million tonnes and some private analysts are estimating production near 85 million tonnes. The trade expects the USDA to raise their current Soybeans estimate to 82.75 million tonnes on Friday. Argentina Soybeans production is estimated at 54.75 million tonnes vs. current USDA estimates of 55 million tonnes.

Soybeans & Soyoil Futures may rise on Improvised Demand:

Soyoil futures have been showing strength & a positive trend on India’s National Commodity and Derivatives Exchange -NCDEX as a result of fresh buying support and winter season demand. NCDEX Soyoil futures were up by 0.82 percent at Rs.701.80 per 10 kg for February contract today. The Soyoil up trend can be expected to gain strong momentum in the coming days. There has been a significant fall in the import of vegetable oils by India for November 2012 – according to the data released by the Solvent Extractors Association of India (SEA).

Crude Palm Oil – CPO and RBD Palmolien imports have declined. On the other hand, a slight rise in import of Soyoil has been observed. Higher Soyoil imports and improved Soybeans crops in South America have been expected to pressurize Soyoil prices in the domestic and the international Commodity Markets. A rise in the supply of Soybeans has been observed in Madhya Pradesh from 0.9 lakh bags to 1.2 lakh bags. However, Refined Soy Oil futures are expected to maintain a positive trend for the longer term on improved demand. Palm oil demand may rise significantly on duty free export from Malaysia which may have some negative impact on Soyoil prices in India. India imports over half of its edible oil requirements. Bumper Soybeans production estimates in the country are likely to keep NCDEX Soybeans and Soyoil market traders in the short positions. As per latest release from Malaysian Palm Oil Board , Malaysia’s December crude palm oil output declined by 5.90% from November to 1.78 million metric tonnes. The December end palm oil stocks augmented by 2.60% to 2.63 million tonnes. As per latest release from China’s General Administration of Customs, the total December edible oil imports in China increased by 53% from the same month in last year and 22% from November to 1.12 million metric tonnes. While the total imports during January to December reported at 8.44 million tonnes, up 29% from the last year in the same month.

NCDEX Chana Prices may strengthen on Crop Damage:


NCDEX Chana Prices dropped further on short selling triggered by expectation of the arrivals during March period. Chana arrivals are likely to be peak during March-April and prices may drop during that period. The NCDEX Chana benchmark March contract dipped to 3522 & ended the day at Rs 3540, down Rs 34 or 0.95% from last close. According to the Ministry of Agriculture crop report, the total domestic Chana production in 2012 was reported at 76.60 lakh tonnes, down almost 5.26 % from 2011. This was mainly due to weak sowing acreage along with some crop damage in Maharashtra and Rajasthan. While overall pulses output is expected to fall by 5.26% to 17.29 million tonnes against 18.24 million tonnes in 2010-11. Moreover, steady prices of Chana in international market also made imported Chana costlier in domestic market as the spot prices of Australian Chana in Indian market were trading in the range of Rs 5200-5400 per quintal in 2012 before correcting to Rs 3800 per quintal at the end of the year. The arrivals of Chana are maintaining their weak tone amid a severe wave of cold in Delhi and nearby regions. The arrivals in Lawrence road mandi totaled 25 trucks today as well. Chana is planted in India during Rabi season i.e. in the months of September to November and is harvested in February, March and April. The maturity period of desi type Chana is 95-105 days and of Kabuli type Chana is 100-110 days. The peak arrival period begins from March-April at the major trading centers of the country. The April NCDEX Chana contract jumped Rs 107 from the contract low lead by strong buying support and eased from the high on profit taking. Chana futures slumped near the support zone of around two weeks low at Rs 3522 and ended the day at Rs 3540, down Rs 34 or 0.95% from last close. The open interest added 5,840 tonnes to 62,770 tonnes, indicating short selling. Agro Commodities Trading in NCDEX witnessed sharp declines in most commodities for the last few sessions.

NCDEX Coriander prices may remain high for long term as far as present market conditions are concerned, as lower temperature in major coriander seed growing areas is a major concern for coriander growers as it harms the flowering of coriander crop. Coriander acreage has significantly declined from 25 to 30% against last year’s total sown area. Coriander sowing got late as a result of late harvesting of the kharif coriander crop. NCDEX Pepper futures are up for a second day on short covering and fresh demand from North India. A rise in the production estimates of pepper in Indonesia and Sri Lanka and cheaper availability of pepper in the international market are proving to be a drag on pepper prices in India. Quality issues in the ware house regarding pepper have also caused downward movement in the futures. The export demand may support India’s Pepper Futures Prices for both medium and long term.

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  • The production of commercial soybean oil is complicated. The technical production of soy bean oil with gas clicks is not much used because it’s costly and gives reduced results in. Soybean oil is normally created by removal with chemicals.

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