MUMBAI (Commodity Online): Widespread monsoon showers were seen in the parts of Madhya Pradesh, a major soybean growing area of India during last two days. This provided some relief to the growing crop.
Physical market sentiments turned bearish due to improved production prospects. Futures market prices also fell during the past three days on lack of buying support. International sentiments largely have remained positive.
As per the latest USDA supply-demand report, the world soybean production is expected to remain near 242.07 MMT as against the 2008-09 figure of 210.62 MMT. Thus the estimates for 2009-10 are much higher. The ending stocks are expected to remain near 50.32 MMT vs 41 MMT last year.
Thus this situation seems comfortable from production point of view. On our domestic front, as per 4th advance estimates of production released from GoI, country produced 10.153 MMT soybeans during 2008-09 and It is expecting 9.901 MMT this year.
Trading platform that even a 5 year old can trade. Join now Here there is a caution that the country is facing one of the worst droughts this year and kharif crop production is expected to badly hit due to this drought. Although rains were sufficient enough during the soybean sowing time however moisture level during the development stage would also decide the yield of the crop.
Thus traders have to keep an eye on the ext one month weather development. The recent experience has shown that in coming days no respite may be there form this hot weather.
Thus it seems that general trend in the agri commodities will remain positive and particularly oilseeds would be more vulnerable to any further adverse news regarding production cut or bad weather whether in India or abroad. Prices are expected to see some correction. But buying on dips may prove beneficial.
Courtesy: Religare Commodities
