Soybean futures gained during last week while towards closing it erased steep gains and managed to close the week in green.
At CBOT prices declined by 2.5% owing to higher stock pile projections in USDA report. Soybean stocks projection in U.S increased by 3.5% higher than same period last year which kept the prices under pressure at CBOT. Indian market experienced the same effect while intensity of fall was lower.
Spot prices fell from `2500/quintal during the beginning of the week to `2430/quintal towards the end of the week. Like wise arrivals also declined to 1.6 lakh bags compared to 3.5 lakh bags during beginning of the week.
Weather conditions over Latin American regions recovered a tad which kept the prices in international markets lower and had same minimal impact on the Indian markets also. Soy meal weekly exports from U.S remained very mixed which had least impact on prices last week.
Outlook:
Soybean prices might initially remain lower during next week owing to the effect of weather conditions recovering across Latin American regions. Good showers forecasted during this weekend might also further keep prices under pressure.
USDA has projected soy bean stocks higher by 3.5% compared to same period during last year. Crushing has also marginally declined by 10 million bushels which might result in higher stocks of soybean. Exports are also declined by 25 million tons which might keep prices under pressure.
However down side can be limited as long term fundamentals are still supportive for prices. Global soybean production is still lower at 257 million tons down by 2.2 million tons with major decline reported from Argentina by 1.5 million tons.
Despite that buying of soybean during last week was reported to be robust in U.S from unknown destinations which could be china. This might also support prices to recover from lower levels.
In domestic markets initially prices might remain under pressure due to increasing arrivals while demand for edible oil might help prices to bounce back from lower levels.
Arrivals are also gradually declining across spot markets which might limit down fall in prices to trend to reverse. Crushing margins are reported to increase which might also help the prices to gain.
Courtesy: Karvy Commtrade Ltd.
