Soybean

Argentina soybean crop is seen at 57 million metric tonne in 2017-18 (Apr-Mar), down 1.4% on year. Argentina produced 57.8 million metric tonne of the oilseed in 2016-17. The fall in production is attributed to excess rains during Aug-Sep that not only affected winter crop, but is also expected to delay the sowing of soybean now.

Futures contracts of soybean on CBOT were down in electronic trade after hitting three-month high of $10.0325 a bushel. The fall in prices of the oilseed were due to strength in the dollar against the euro. The most-active November contract of soybean on CBOT was at $9.9475 per bushel, down 0.6%.

Prices of soybean fell in the key wholesale market of Indore due to a rise in arrivals. Poor demand for domestic soyoil, a derivative of soybean, has also hit demand for the oilseed, further weighing on the prices.

Futures contracts of the most components in the edible oil basket, barring mustard, traded higher on domestic exchanges owing to firm demand in physical markets. Soybean futures on the National Commodity and Derivatives Exchange rose 0.4% due to a rise in demand by crushers ahead of the five-day Diwali holidays. Soybean prices also rose on reports that the government was likely to procure the oilseed in Maharashtra and Rajasthan to help farmers.

Soybean production in Brazil during 2017-18 is seen at 106-108 million metric tonne and is likely to account for about 89% of the total crops produced in the country. Brazil produced 114 million metric tonne of soybean in 2016-17. Soybean acreage in Brazil is seen at 34.5 million-35.2 million hactare in 2017-18, nearly 3% higher than the previous crop.

China imported 8.11 million metric tonne of soybean in September, up 12.8% on year. The country’s import of soybean during the first nine months of this year was also up 15.5% on year at 71.45 million metric tonne. The USDA expects the country to import about 95 million metric tonne of soybean in 2017-2018, up from 92.5 million metric tonne in 2016-2017. The most-active November contract of soybean on the CBOT was at $9.94 per bushel, up 0.2% from the previous close.

Prices of soybean in Washim, a key market in Maharashtra, were unavailable, as the market was shut due to heavy rains.

Prices of soybean rose in the benchmark market of Indore due to value buying and a rise in demand from oilseed crushers ahead of Diwali. Futures contracts of soybean on the NCDEX also rose. The most active November contract traded at 2,923 rupees per 100 kg, up 0.4% from the previous close.

Futures contracts of the key components of the edible oil basket traded higher on domestic exchanges tailing gains in global markets. Prices had fallen after the US Department of Agriculture said 61% of the country’s soybean crop was in good-to-excellent condition compared with 60% a week ago.

The State Marketing Federation of Maharashtra has sent a proposal to Nafed regarding opening 88 procurement centres in 23 districts of the state for the purchase of soybean under MSP. Soybean is expected to be procured at these centres from October 25. Moong and urad be procured under MSP from October 18. Registrations for cotton procurement commence from October 15. Around 10 lakh quintals of soybean is expected to be purchased from farmers at these centres.

Futures contracts of key components of the edible oil basket, barring soybean, traded lower on domestic exchanges due to tepid demand in spot markets. Prices had been on a decline over the last eight trading sessions due to expectations of higher new-crop arrivals. Refined soyoil contracts on NCDEX and crude palm oil on MCX fell due to sluggish purchases from bulk buyers as most have replenished their inventories ahead of Diwali

Futures contracts of soybean on the CBOT rose after the USDA said that the crop was in a better condition than a week ago. November contract of soybean on CBOT was at $9.64 per bushel, down 0.2% from the previous close.

Brazil’s soybean crop is seen at 107 million metric tonne in 2017-18 (Feb-Jan), down 6% on year. Brazil produced 114 million metric tonne of the oilseed in 2016-17. The fall in production is attributed to likely lower yields this time in the South American country. The USDA arm is currently using average yields for its forecast that are much lower than the record high yields of the previous season. Soybean acreage in Brazil is seen at 34.7 million ha in 2017-18, up from 34.0 million ha last year. Exports of the 2017-18 soybean crop are forecast at 64 million metric tonne, about 1.5% lower on year. Lower exportable supply due to smaller crop and higher domestic consumption of soymeal and soyoil is the key reason for a likely drop in overseas shipments from Brazil.

Prices of soybean fell in the benchmark market of Indore, Madhya Pradesh, due to rise in supply. Weakness in spot prices also weighed on the futures. The most-active November soybean contract on NCDEX was down 0.1% from the previous close.

Futures contracts of key components of the edible oil basket traded mixed, with soybean and mustard ending lower and refined soyoil and crude palm oil trading higher on domestic exchanges. After hitting a three-month low of 2,841 rupees per 100 kg during the day, futures contracts of soybean on the National Commodity and Derivatives Exchange closed 2.2% lower due to higher supply of the new crop in Madhya Pradesh and Maharashtra.

After moong and urad, the Maharashtra government plans to procure soybean from farmers in the state. The procurement will be through National Agricultural Cooperative Marketing Federation of India from Oct 18. Currently, prices of the commodity are below the minimum support price of 3,050 rupees per 100 kg, including a bonus of 200 rupees. The state government proposes to procure 350,000 tonne of the oilseed through around 125 centres across 23 districts.

From Saturday, the National Agricultural Cooperative Marketing Federation of India started procuring soybean sown during the 2017-18 (Jul-Jun) kharif season in Rajasthan. The procurement is being carried out at 13 centers in Kota, Jhalawar, Bundi and Baran districts under the price support scheme.

The Soybean Processors Association of India has estimated 2017-18 (Oct-Sep) soybean output at 9.15 million tonne, down from 11.49 million tonne a year ago. Soybean production fell in the country primarily because of a decline in yield and low acreage in key growing states of Madhya Pradesh and Maharashtra. The association pegged the yield in Madhya Pradesh this year at 905 kg per ha, down from 1,058 kg per ha a year ago. In Maharashtra, the yield was seen at 925 kg per ha against 1,102 kg per ha in the previous year. The oilseed’s production in Madhya Pradesh was estimated at 4.54 million tonne, down from 5.72 million tonne a year ago. Soybean crop in Maharashtra was pegged at 3.19 million tonne compared with 3.95 million tonne last year.

Prices of soybean fell in the key wholesale market of Indore due to poor demand. Demand from oil millers is low due to poor quality of most arrivals. On the NCDEX, the most active November soybean contract was down 0.1% from the previous close.

The futures contracts of crude palm oil on Bursa Malaysia Derivatives rose tracking gains in CBOT soy oil futures. The most-active December crude palm oil contract on the Malaysian bourse was at 2,740 ringgits (42,326 rupees) per tonne, up 10 ringgits from the previous close. Crude palm oil is used as a substitute for soy oil, and typically their prices move in tandem. A stronger Malaysian ringgit against dollar, however, checked major gains in crude palm oil futures, as it makes exports of palm oil unattractive for domestic sellers. The investors are waiting for data on crude palm oil production, inventories and exports in September, that is expected to be released this week by the Malaysian Palm Oil Board.