Soybean

Soybean contracts on NCDEX hit the 3% lower circuit, tailing losses on CBOT and due to weak demand from crushers. The most-active May futures were down 3% at 3,611 rupees per 100 kg. Arrivals were steady in Madhya Pradesh and also unchanged in Maharashtra.

Soybean seed shortage is estimated at 9,317 tn in 2018-19 (Jul-Jun) kharif season owing to lower crop in key growing states. Against the requirement of 290,976 tn soybean seed, the country is likely to have 281,659 tn seeds available this year. Untimely rains in Madhya Pradesh, Maharashtra and Telangana during the harvesting season hit the crop, which will result in lower availability of seeds this year. Madhya Pradesh and Maharashtra are the leading growers of the oilseed.

Brazilian soybean exports in April are set to hit 10.99 million mt, breaking the previous record reached in May 2017. Brazil exported 7.4 million mt of soybeans during the first three weeks leading up to April 20, at an average of 495,700 mt per working day, customs data shows, faster than the daily average of 419,700 mt during last month, when a total of 8.81 million mt was exported. Daily rate is set to increase to 593,000 mt during April’s final week as an additional 3.56 million mt of Brazilian soybeans is lined up to leave Brazil by April 30. About 734,000 mt of soybeans are scheduled to leave the port of Paranagua between April 23 to April 30, with 978,000 mt to leave Santos and 556,500 mt to depart from Rio Grande over the same week.

Soybean oil production by Ukraine’s large and medium-sized crushers amounted to 17.3 KMT in February 2018. This is down 9% from the previous month (19.1 KMT) but up 19% from February 2017 (14.5 KMT). Overall, 98 KMT of soybean oil was produced earlier in the 2017/18 season (September-February) – its output increased 23% on the year and set a new record for this period.

Global soybean output in 2017/18 is trimmed by a further 2m t, to 339m t, a 2% y/y decline, as a cut for Argentina is only partly offset by an upgrade for Brazil. While several producers will cut big crops, the y/y decline is linked to an anticipated plunge in output in Argentina, where adverse weather has limited area and yield potential. The 2018/19 global outturn is placed fractionally higher than before, at 355m t, up by 16m y/y. And with total use cut slightly, inventories are lifted to 40m t, marginally lower y/y. With global uptake set to advance to a new peak on gains in Asia, carryovers are seen contracting by 14% y/y, to 41m t. Much of the decline will likely be due to the major exporters, seen down by more than one-fifth, to 18.0m t, as accumulation in the USA contrasts with a heavy contraction in Argentina. Trade could rise by 3% y/y, to a high of 152m t. Due to tentative expectations for area gains in leading producers, world production may recover in 2018/19. The prediction for trade is reduced from before but, at 157m t, is still up by 5m y/y and a new peak.

Soybean output in Brazil is seen at 115 mln tn in 2018-19 (Feb-Jan), down 500,000 tn from a year ago. Brazil produced a record 115.5 mln tn of the oilseed in 2017-18. The department sees sowing area of the oilseed in Brazil at 35.8 mln ha in 2018-19, up from 35.0 mln ha in 2017-18. Despite the record sowing area, production may decline in 2018-19 due to lower yields. Brazil is likely to export 67 mln tn soybean in 2018-19 against a record 69 mln tn a year ago. Production of soyoil in Brazil is seen at a record 8.5 mln tn in 2018-19 because of rise in biodiesel blending and recovery in the domestic economy. Soyoil production was 8.4 mln tn in 2017-18.

Prices of soybean are expected to top 4,000 rupees per 100 kg, a level last seen two years ago, in a month due to high probability of China buying Indian soymeal, coupled with shrinking arrivals in physical markets. Currently, soybean prices at the key market of Indore are around 3,700 rupees per 100 kg. With US-China trade relations uncertain, in all probability, China may have to look to other markets to fulfil its demand for soybean.

Soybean prices were down in Akola, a key market for the oilseed, because of lower demand from crushers for meal. The most active soybean futures were down 1% at 3,721 rupees per 100 kg tracking sharp fall in the soybean contracts on CBOT.

Soybean prices were slightly up in Akola due to bargain buying by oilseed crushers. The most active soybean contracts were slightly up tracking gains in the spot. However sharp gains were capped because of weakness in the soybean contracts on CBOT.

Output of soybean in the country is likely to increase to 14.0 mln tn in 2018-19 (Jul-Jun) kharif season compared with 11.7 mln tn last year as more area is expected to come under the crop following forecast of normal monsoon. Soybean production will rise if monsoon arrives on time. Normal duration and distribution of rains in key growing areas may also boost the yield of the crop.

Soybean contracts on NCDEX down because of forecast of normal monsoon by the IMD and tracking overnight weakness in benchmark contracts on CBOT. Soybean, accounting for the bulk of India’s oilseed production, is a kharif crop and its productivity depends largely on the spread and distribution of the south west monsoon rainfall.

Argentina and Brazil may fill China’s soybean needs if China imposes a 25% tariff on U.S. soybean exports. The impact depends on what happens during negotiations. It is so hard to say, This is what is going to happen. There are so many other moving parts. This is a disagreement between the U.S. and China, but it has amifications for Argentina and Brazil.

The National Commodity and Derivatives Exchange on Tuesday marked 6,510 tn soybean, 2,230 tn mustard, and 2,050 tn of cottonseed oilcake for staggered delivery in the April contract. The exchange also marked 1,950 tn wheat, 1,330 tn castor, 830 tn guar seed, 440 tn coriander, 380 tn chana, 375 tn jeera, 370 tn barley, 315 tn guar gum, and 55 tn turmeric for staggered delivery in the same contract. The April series of these commodities will expire on Apr 20.

Soybean prices in Indore rose due to demand from oil millers. Gains in soybean contracts on the CBOT are also seen supporting domestic prices.

Prices of soybean fell in Indore, Madhya Pradesh, due to subdued demand from crushers. Arrivals in Madhya Pradesh and Maharashtra remained unchanged. The most active May soybean contracts on the NCDEX was down 0.77%.

Futures contracts of crude palm oil on the Bursa Malaysia Derivatives were slightly down tracking overnight weakness in soyoil contracts on CBOT. The most-active June futures were down 7 ringgits to 2,424 ringgits (40,800 rupees) per tn.

Demand for ‘specialised’ beans, such as organic, certified or plain non-GM beans, are expected to rise as consumers want to verify the sustainability of food production and to be able to track its origin. The biggest increase in demand is coming out of the EU which will, in the long-term, rely heavily on imports of non-GM beans, especially if less rapeseed meal could be sourced due to increased demand for biofuels. About 350 million mt of soybeans are traded annually, but just 14% are not genetically modified (GM), as major producing countries in the America’s use up to 95% of genetically modified seed.

Soybean prices rose in Indore, Madhya Pradesh due to a fall in arrivals and improved demand from oil millers. The most active May soybean contracts on the NCDEX was up 0.7%.