Published on 25/04/2017 12:06:02 PM | Source: Angel Commodities pvt Ltd

We expect Soybean prices to trade sideways - Angel Commodities

Posted in | #NCDEX #Commodity Tips #Angel Broking Pvt Ltd


Agri-Fundamentals

Soybean

Soybean May futures corrected on Monday due to profit booking at higher levels but the trend is higher as supplies are diminishing and demand for crushing is intact due to encouraging soy meal exports. As per Agmarknet, arrivals of soybean during Apr 1-20 is 1,75,634 tonnes while during in Mar it was about 2,09,993 tonnes during same time frame. As per latest SEA data, Soymeal exports from the country jumped by 137% to 916,306 tonnes in 2016/17 Vs 387,298 tonnes during last financial year 2015/16, however, m/m the exports have declined to 107,059 tonnes in Mar compared to 207,977 tonnes in Feb 2017.

CBOT soybean futures closed up on Monday on short-covering and as a weaker U.S. dollar raised hopes for fresh export sales from the US. The USDA said soybean planting was 6 percent complete, well ahead of market forecasts. US Soybean inspections also above trade estimates at 634,877 tonnes. There was an added pressure on soybean prices earlier due wet weather in the U.S. Midwest, which could boost soybean acreage if corn planting is delayed.

 

Refine Soy Oil

Refined soy oil futures were traded flat on Monday due to good supplies and steady demand. The prices have been trading in a range since one month on good supplies. As per SEA data, soy oil imports for March down more that 28.5% Y/Y to 2.3 lt and down 8.7 lt m/m. Meanwhile, government lowered base import price for the fifth consecutive fortnight for crude soyoil by $14 to $770 per tonnes for second half of April.

 

Crude Palm oil

CPO Futures on MCX continue its positive trend on Monday expecting firm trend in the Malaysia futures. The prices have rebound in the last three trading session last week tracking international price surge. Moreover, government lowered the base import price of CPO by $22 to $725 per tonnes for 2nd half of April, their 5th consecutive fortnightly decline in base import price.

Malaysian palm oil futures was closed on Monday but the prices closed higher for a second consecutive session on Friday supported by stronger demand ahead of Ramadan and technical correction after sharp falls earlier this week. Palm oil exports between April 1-20 had come in weaker than expected, with traders forecasting stronger gains on the month ahead of Ramadan. Data from industry regulator showed that Malaysia palm oil output in March rose 16.3% on month while market also forecast rising output data from the Indonesia.

 

Outlook

We expect Soybean prices to trade sideways on expectation of balanced demand supply at current prices. There is diminishing supplies and good demand from the crushers. The prices of Ref Soy oil and CPO may trade sideways to positive on adequate supplies and cheap imports but increasing domestic demand may keep prices supported. 

 

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