AGRI COMMODITY MARKET OUTLOOK REPORT : 28/12/2017
NCDEX Soybean futures continue to trade higher on Wednesday due to short covering on firm demand from the physical market as supplies have been diminishing. The arrivals have been lower during first 25 days of December compared to last year. As per, Agmarknet, 6.22 lakh tonnes of soybean arrived in physical market in December (1-25) against close to 7.6 lt last year for the same time period.
SOPA increased its meal exports estimates for 2017/18 due to increased export incentives by 2% to 7% by government for all meals. Soymeal exports from the country in 2017-18 (Oct-Sep) are seen rising to around 20 lakh tn from previous estimate of 15 lakh tn due to a recent rise in export incentives.
US Soybean fell from a 1-1/2-week high on Wednesday, pressurized by profit booking by the market participants. Both Argentina and Brazil received crop-friendly rainfall over the weekend but conditions in parts of Argentina, the No. 3 soy producer after the United States and Brazil, could remain dry for the next week before another chance of precipitation.
Export inspections of US soybeans for the week that ended 12/21 came in at 1.283 mt dropped 28.43% from last week and is 25.42% lower than this time last year. Chinese imports of soybeans totaled 8.684 mt during November, which is 10.83% larger than November 2016.
Soybean futures are expected to trade sideways on reports that mills have sufficient stocks which slow their purchase. However, higher incentives for oil meal export, improved estimates for meal exports and slow arrivals of soybean in physical market will support soybean prices in coming months.
Mustard futures expected to trade sideways due to mixed fundamentals good physical demand coupled with higher stocks with the oil mills. There is an anticipation of good physical uptake by oil mills on expectation of good winter demand may keep prices supported above 4000 levels.
REFINED SOY OIL :
We expect Ref Soy oil to trade sideways to down due to higher stocks, good domestic crushing and stronger rupees. Moreover, cut in base import prices making the imports cheaper. Improve in domestic demand and stockists buying may support prices from these levels.
CPO (Crude Palm Oil) :
CPO futures may trade lower tracking weak international palm oil prices and cut in base import prices by the government for second half of December.
Chana futures may trade sideways to down on technical corrections and reports of higher acreage in the country. However, government withdrew custom duty exemption on chana coupled with states offering bonus on pulses will support prices. Recently, Chana trading at one year lows due to higher stocks with the traders.
Cotton futures are expected trade sideways to higher due to firm International prices. Moreover, good exports demand from neighboring countries and lower than expected production in the country may keep prices supported at higher levels. Improved arrivals in coming weeks may see some corrections in prices.