NCDEX soybean falls on weak soymeal exports

Futures contracts of all components of the edible oil basket declined on domestic exchanges. The most active March contract of soybean fell over 2% on the National Commodity and Derivatives Exchange due to a sharp fall in soymeal exports.

In January, soymeal exports slumped to 6,107 tn from 86,378 a year ago. Gains in key soybean contracts on Chicago Board of Trade, however, cushioned any steep fall on the domestic exchange.

Soybean rose on the American bourse on hope that export from the US to China will improve after the latter cuts import tariffs on the oilseed to 5% from 10%, effective Feb. 14. The US is the world’s largest producer of soybean while China is the leading importer.

Soybean futures found room for more gains on Friday, with the front month contracts moving fractionally to a penny higher. March bean futures gained 9 1/2 cents from last Friday’s close to this one.

Soy meal futures closed $1.10/ton higher, but it was not enough to offset the weekly declines, which left March futures $1.70/ton lower for the week. Soy oil futures were down by 27 cents at the closing bell, but only reduced the weekly gain to $1.30. In the latest Commitment of Traders report, managed money was 31,403 contracts more net short in soybeans, with speculative net new selling up 35,692 wk/wk.

Soybean meal spec traders were more net short with 8,817 long positions closed and 15,791 short positions opened on the week. Bean oil spec funds were less net long in the CoT report, with managed money OI dropping 28,519 contracts week/week. Analysts surveyed ahead of the February WASDE report pegged soybean carryout at 448 mbu. That is an anticipated reduction of 27 mbu vs. the January WASDE forecast.

Stocks will be much tighter than last year, when soybean carryout was a record high 909 mbu. If the analyst estimates are realized soybean ending stocks would be 10.14% above the 5-year average (of 407 mbu). The World soybean carryout on the other hand is anticipated to be higher than the previous estimate with traders on average expecting a 97.3 MMT carryover, compared to 96.7 MMT.