Soybean

Quarantine pests have been revealed 20 times over the last one and a half months and 127 times since the beginning of 2017 against 91 times in 2016. So, the situation is much worse this year. If Brazil takes no measures, Ros Selkhoz Nadzor impose a provisional ban on Brazilian soybean imports.

The soybean planting in the country is still delayed and reached 63.5% of the estimated surface of 44.7 million acres. The half of the remaining area is expected to be planted in the coming two weeks if the weather helps. In the case of corn, the works have advanced to 45.3% of the total surface of 13.3 million acres. The weather has been a worry for crops in the Northern provinces of Chaco and Salta.

Brazilian farmers are expected to produce 114.57 million tonnes of soybeans in the 2017/18 crop cycle. The figure represents a slight downward adjustment from an October estimate of 114.7 million tonnes, although it would still be an all-time record for Brazil. The estimate was revised after small adjustments in soy’s estimated planted area this season, but it does not change the overall trend as farmers increasingly switched from corn to soy in this crop cycle. Safras forecasts a 5 percent rise in Brazil’s soy planted area to 35.49 million hectares (87.7 million acres) this crop.

The bullishness in soybean is set to sustain and prices may rise by another 15% by end January due to shrinking supplies as the government topped up the import duty hike in crude and refined soy oil with export sops for soymeal. Currently, soybean prices are hovering at 3,000-3,050 rupees per 100 kg. The hike in import duty–to 30% from 17.5% for crude soyoil and to 35% from 20% for refined soyoil–led to a correction in soybean prices to an extent by restricting supplies. The export incentive on soymeal gave a further fillip.

Prices of soybean in Indore fell, tracking weakness in CBOT soybean contracts. CBOT soybean contracts were down as favourable weather in Argentina, the third-largest producer of the oilseed in the world, has addressed worries of lower sowing.

Ukraine’s large and medium-sized crushers produced 15.7 KMT of soybean oil in October 2017, or 36.5% more than in the previous month (11.5 KMT) and up 33% from October 2016 (11.8 KMT). Overall soybean oil production during the first two months of the current 2017/18 season amounted to 27.2 KMT against 19.8 KMT a year ago.

Soybean prices were unchanged in the key wholesale market of Indore but are likely to rise in the coming days as supplies are falling.

Futures contracts of soybean fell on the CBOT, after the USDA raised its estimate for US soybean ending stocks for 2017-18 to 12.12 million metric tonne from its earlier estimate of 11.57 million metric tonne. Prices also fell due to a forecast of favourable weather conditions in Brazil and Argentina. The most-active January contract of soybean on the CBOT hit near one-month low of $9.74 per bushel. The January contract was at $9.7450 per bushel, down 0.5% from the previous close.

A plant for clarification and packaging of soybean oil be built in the city of Blagoveshchensk, Amur region. The presentation of the plant, which is projected to release 50 MMT of the product a day, held on December 20. Its annual production capacity is estimated at 15 KMT of soybean oil that is equivalent to 15 Ml one-liter bottles. The facility currently produces 200 MT of products a day, processing up to 70 KMT of soybeans a year. Its output includes some 10 KMT of oil and 50 KMT of meal from non-GMO raw material.

Brazilian producers are finishing up soybean planting. Planting reached 96% of the estimated area for the 2017/2018 harvest, up from 95% last year and 93% on average for five years

Brazilian agriculture supply agency Conab has slightly cut its forecast for the country’s 2017-18 corn crop by 120,000 mt compared with its November estimate and increased the soybean crop forecast by 1.6 million mt. Brazil harvest 92.22 million mt of corn in 2017-18, down from 92.34 million mt in the November report and a record of 97.84 million mt in 2016-17.

Futures contracts of soybean fell on the NCDEX tailing weakness in the soy futures on the CBOT. Global prices of the commodity were down as recent rains in Argentina, after a dry spell, is favourable for crops. The most active January contract on the NCDEX was down 0.7%.

Futures contracts of all constituents of the edible oil basket declined on domestic exchanges. Soybean futures extended losses from the previous session on the National Commodity and Derivatives Exchange due to subdued purchases by crushing plants. The commodity was sold in key Indore market, down 20 rupees. Strength in the bellwether soybean contract on Chicago Board of Trade, however, cushioned any sharp fall in prices on the domestic bourse.

Ruchi Soya Ltd plans to scale up its soybean crushing business and improve its capacity utilisation after the government hiked export incentive on soymeal. India’s soymeal exports in 2017-18 (Oct-Sep) would rise to around 2 mln tn from the previous estimate of 1.5 mln tn due to the export incentives. The company’s crushing operations at key plants in Manglia near Indore in Madhya Pradesh, Nagpur and Washim in Maharashtra, and Kota in Rajasthan, have risen by 30-40% as compared to the first half of the current year. The total capacity of 10 units of the company is 3.72 mln tn. In the last two years, only 15% of the capacity was utilised. With an increase in crushing operations, the capacity utilisation is also expected to rise 30-35% in the current year. Shares of the company were down 2.2% at 19.80 rupees on the National Stock Exchange.

Soybean oil net export sales increased to 21,029 mt for the reporting week ended November 30, from 11,585 mt the week prior. Weekly physical exports for soybean oil decreased by 28,559 mt to 2,152 mt. The top countries to which the US sold current marketing year soybean oil last week were South Korea at 8,000 mt, Cuba at 7,600 mt and Nicaragua at 4,000 mt. The top weekly physical soybean oil export destinations were Mexico at 1,589 mt, Canada at 477 mt, and Trinidad and Tobago at 66 mt.

Prices of soybean in Indore rose due to lower arrivals of the oilseed in the spot market. Improved demand from crushers due to rising soymeal exports is also seen supporting prices. The most-active January contract of soybean was, however, down 21 rupees on the NCDEX.

Futures contracts of soybean were down on lower demand for the US crop in October. The most-active January soybean contract on CBOT was at $9.99 per bushel, down 0.4% from the previous close. Sharp downside in prices is unlikely as the crop in Argentina may be hit due to dry weather.

Futures contracts of soyoil on the CBOT hit a near two-month low of 32.93 cents per pound. Tracking losses in crude palm oil contracts on the Bursa Malaysia Derivatives. Prices of crude palm oil and soyoil typically move in tandem, as they are used as substitutes for each other. The most-active January contract of soyoil on the CBOT was at 32.95 cents per pound, down 0.7% from the previous close.

Soybean prices in Indore rose due to increase in the incentive on export of soymeal by 2 percentage points to 7% under the Merchandise Export Incentive Scheme. Futures contracts of soybean on NCDEX traded up following the increase in export incentives on soymeal. The most-active January contract traded up 0.4% from previous close.

Futures contracts of soybean rose on the CBOT due to concerns over dry weather conditions in Argentina. The most-active January soybean contract on CBOT was at $10.1150 per bushel, up 0.3% from the previous close.