Futures contracts of all components of the edible oil basket on the domestic exchanges rose. Soybean contract on National Commodity & Derivatives Exchange settled higher because a delayed monsoon has hit sowing in key growing areas. Sowing is lagging in Madhya Pradesh, and Maharashtra, the top growers of the oilseed.
As of Jul 8, area under soybean fell 69% on year to 850,000 ha in Madhya Pradesh, and declined 93% on year to 90,500 ha in Maharashtra. Gains in key soybean contracts on Chicago Board of Trade also buoyed prices on NCDEX. Reports of lower sowing and a resultant smaller crop in the US, the top soybean producer, jacked up prices.
Soybean futures saw moderate 3 to 5 cent gains in most contracts. Nearby July soybean meal was up $2.50/ton, with soy oil up 10 points. The monthly WASDE from USDA showed 18/19 soybean ending stocks down 20 mbu from June at 1.05 bbu. Most of that was an increase to residual use.
Production for 2019 was slashed by 305 mbu to 3.845 bbu this morning. That came via the drop in acreage shown on June 28 and a 1 bpa reduction to yield at 48.5 bpa. New crop carryout is back below the 1 bbu mark, being trimmed by 250 mbu to 795. World ending stocks saw very few adjustments for 18/19 to 112.98 MMT (+0.18), with new crop down a sharp 8.13 to 104.53 MMT primarily on the US cut.
This morning’s USDA Export Sales report tallied old crop soybean sales at 132,163 MT for the week of 7/4. That was a 9-week low and down 16.7% yr/yr. New crop sales totaled 129,500 MT for that week.