Soyabean Gains Tracking Global Cues.

NCDEX February futures traded sharply higher and breached contract’s high and touched a high of Rs 2512/qtl as firm global market sentiments on concern of dry weather in Argentina, which is third largest producer of soybean in the world. Lower domestic stock of soybean as sharp rise in soy meal exports and declining arrivals in major mandis are also provided support to the bulls.

USDA’s Monthly Supply and Demand Report -: The Supply/Demand report showed US ending stocks were pegged at 140 million bushels, down 25 million from last month. World ending stocks were pegged at 58.28 million tonnes as compared with 60.12 million tonnes last month.

Argentina production was pegged at 50.50 million tonnes vs. 52 million tonnes last month but many traders see the Argentina production potential already below this level. US crop production came in at 3.329 billion bushels, down 46 million from last month which was considered supportive since traders were expecting a decline of just a few million bushels.

Mustard Seed

NCDEX April RM seed futures surged sharply higher to 2.83 per cent on Monday as compared to previous trading session due to short covering and fresh buying from stockists at lower levels. Higher exports of country’s rape seed meal are also added bullish market sentiments.

Higher prices of other oilseeds and edible oils are also provided support to the bulls.

Exports: India’s rapeseed meal exports in the month of December 2010 stood at 110237 million tonnes (up 114 %) as compared to 51402 million tonnes in the month of December 2009.

However, record high production estimates of RM seed this year as compared to last year may cap higher side for long term. As per latest data released by Ministry of Agriculture (January 13, 2011), the total sowing acreage of rape/mustard seed stood at 71.12 lakh hectares against 64.08 lakh hectares reported last year during the same period. Total rabi area under oilseeds, is reported higher at 89.40 lakh hectare against 87.30 lakh hectare last year.

Refined Soy oil

Spot as well as futures rose 0.67 per cent on Monday as compared to previous trading session on global shortage of edible oil coupled with robust demand.

Malaysian Palm Oil Exports:

As per SGS (a cargo surveyor), exports of Malaysian palm oil products for January 1-15 rose 3.7 percent to 568,535 tonnes from 548,372 tonnes shipped during December 1-15.

Outlook

Soybean prices are expected to trade higher due to bullish USDA’s monthly and supply report as sharp decline in US ending stocks and concern of Argentina’s dry weather.

Mustard seed prices are expected to trade slightly higher due to sharp rise in RM Seed meal exports in the month of December and higher prices of other oilseeds and edible oils.

Source : commodityonline.com