Soybean had ended the week on a positive note. Market was supported in last few days mainly because of positive trade advises from overseas edible oil markets, in addition to tightening inventory situation in the country.
The benchmark contract August soybean ended with Rs.162 gain week on week at NCDEX. Limited quantity of soybean lying at accredited warehouses of NCDEX also favored the price rise.
Soyabean Spot Prices
At Indore, soybean of NCDEX specified grades are currently available between 7550-7575/qtl. Over last week the spot prices have appreciated by 50 rupees on a quintal.
At Kota, soybean spot prices were mostly stable with traded offers fluctuating between Rs.7425-7450/qtl. On the other hand Soybean at Nagpur appreciated by Rs. 50/qtl with offers between Rs.7760-7775/qtl.
Reason for upward trend
Slower pace of sowing was another factor in keeping the upward trend intact in the derivatives market. The southwest monsoon had entered into a weak phase mid-June, as per media reports, although some signs of revival have been observed in the past few days. Government reports indicate that the weakening of rains has impacted the sowing of crops in Maharashtra, Gujarat, Rajasthan, Haryana and Punjab. During the week ended July 09, area sown under soybean was lagging behind last year’s area by nearly 11.05 per cent.
Below is the supply and demand statistics of India’s soybean as estimated by the SOPA (Soybean Processor Association of India):
The estimations indicate that we may observe the net supplies, including previous year’s carry forwarded stock of 5.16 lakh tonnes, getting utilsed completely this year. Therefore, the tight supply situation may continue till end of September i.e. till the closing of this marketing season. It implies that as long as the production prospects of this year will be lower, chances for sharp rise in the price levels shall remain high.
Global cues for soya oil and palm oil are also optimistic from pricing perspective. Therefore the trades are most likely to be positively biased in coming days. Speaking in context to the futures market, August soybean at NCDEX will maintain the upward trend unless fails to sustain above the 7250 level.
