Soybean prices have trended upwards since November 2020 and as compared with the November end levels, mandi offers of MP and Maharashtra have appreciated by Rs.550-600 on a quintal roughly.The poultry industry has revived in recent months and India has started exporting soymeal quite comfortably now.
According to the Soybean Processors Association of India (SOPA), soybean meal exports have jumped nearly six fold to 3.36 lakh tonne during January in response to robust demand form the global trading centres. In January 2020, soybean meal exports stood at 58,000 tonne. Global cues remain positive for the Soy complex markets i.e. Soybean, Soymeal and Soy oil. Soybean Stocks in the US are seen tightening to a 7-Year low as per the latest USDA (US Department of Agriculture)release, and the Department has raised its forecast of 2020/21 soybean exports by 20 million bushels this month to a record 2.25 billion.
For US soybean oil, the Agriculture Department has raised its forecast of the 2020/21 average price by 1.5 cents per pound to 40 cents, taking in account the price boom observed in January 2021. Consumption for US soybean oil in 2020/21 is forecast up by 100 million pounds this month to 23.3 billion on account of higher demand by biodiesel producers. (This forecast is based on a higher December crush). One important factor indicating a bullish (Upward) price scenario for global soybean oil prices will be the ongoing recovery in crude oil prices, which highly influences the commodity through the biofuels market.
South American new season arrivals have begun, but this is not increasing any negative impact over global prices. This is because farmers of Brazil have already sold most of the crop in forward sales. Besides, there has been a delay in Brazilian harvest due to adverse weather related conditions during the crop growth stage, in addition to untimely rains. Harvesting of the first of Brazil’s 2020/21 soybean crop is now underway, but (largely due to late planting) progress is behind its usual schedule. Only 4 percent of Brazil’s soybean harvest was completed by February 4, compared with 16 percent last year. Brazil’s slow start is extending the U.S. shipping season by several weeks.Being the sole supplier of soybeans to the US, any continuation of Brazil’s delays could exert further upward pressure on U.S. soybean prices. Also, the US soybean supplies are decreasing rapidly due to healthy pace of exports and domestic consumption.
In Argentina, most farmers are holding their produce since last two months in anticipation of devaluation of the nation’s currency. Argentina mostly crushes soybean for exporting soy oil and soymeal to the world,while Brazil mostly exports soybean. In Argentina, sowing of the 2020/21 soybean crop is now complete and a majority of the crop has progressed into the flowering stage of development. Conditions for some of the soybean growing regions have stabilized after above-average January rainfall. The Argentine Agriculture Ministry reports that a high percentage of soybean crops are currently in good to very good condition. USDA leaves its forecasts of 2020/21 Argentine soybean production and exports unchanged at 48 million and 7 million tons, respectively.
World’s soybean supply and demand forecasts for 2020-21 in the latest USDA release,include higher exports and lower ending stocks. Global exports are raised 0.6 million tons to 169.7 million on higher exports from the United States and Russia. Higher imports for Argentina are partially offset by reductions for the EU-27+UK, Canada, and Bangladesh. Global soybean stocks are reduced 1.0 million tons to 83.4 million as lower stocks in the United States and Brazil more than offset higher stocks in Argentina. Soybean in India as well as other leading markets has rallied on the upward side since November 2020, and current fundamentals still convey that there is scope of further appreciation in the global price levels in near future. Therefore Indian growers have a decent opportunity to increase their returns this year, if they continue holding their produce for next few weeks or months.
