Commodity Online
Weak fundamentals for soybean is being mildly offset by drought conditions in Argentina which could provide some support for the oilseeds complex.
Soybean futures prices had weakened in CBOT on Friday on weak demand amidst Eurozone debt worries and soybean March contract had fallen to $11.965 a bushel.
Arrival of rains from Monday would be critical for the soybean crop in Argentina. Recent forecasts have called for rain in the coming days in Argentina, a major producer of soybeans and corn. The rain could mitigate damage to the crops, resulting in less of a supply pinch than analysts had feared.
The Agriculture Ministry in Argentina is closely monitoring the drought situation which is not uniform across the country with some regions experiencing heavy rains.
Tracking global trends, soybean futures at India’s National Commodities and Derivatives Exchange (NCDEX) fell, with soyoil January contract declining 2.33% to Rs 716.40 per 10 kg while soybean January contract fell 1.9% to Rs 2466 per 100 kg.
On Monday trade, NCDEX soybean traded up 1.05% at Rs 2492.50 while Ref Soyoil rose 1.53% to Rs 727.35.
Oilseed seed complex are expected to trade lower on weak overseas market as bearish USDA’s weekly export sales report which is released on Friday, there is possibility of further corrections at prevailing prices. However, for long term perspectives, oilseed complex are expected to trade higher on account of tight supply due to lower production estimates and ending stocks of Malaysian palm oil for 2012 coupled with dry weather concern in Argentina are in favour of the bulls. Lower production estimates of RM Seed for this year as compared to last year due to lower sowing acreage coupled with crop damage talk of RM Seed due to frost in Rajasthan and Haryana are also in favour of the bulls, according to Angel Commodities.
