Dealing room Check

Soyabean still in bear grip



NCDEX soyabean futures continued its bearish run for the third consecutive week, falling over 2 per cent to ₹2,900 per quintal. During the week, the soyabean futures contract touched a five-week low of ₹2,893 per quintal. The decline in prices can be attributed to subdued demand (amid moderate rise in supply) and weaker cues from overseas market.

Further, favourable monsoon forecasts too dragged down soyabean futures. According to the USDA’s report on first estimates for 2017-18, India’s soyabean production is expected to be 11.5 million tonnes approximately.

On the international front, CBOT Soybean futures also traded weak during the week on account of estimates of higher global production for 2016-17. This is according to the world supply and demand report released by USDA on May 2017. However, the decline is limited on lower production forecast for the coming season (2017-18). According to the report, for 2016-17 global production of soybean is increasing by 2.1 per cent to 348.03 million tonnes, while for 2017-18, it is estimated to be down by 1.2 per cent year-on-year to 344.67 million tonnes.

Outlook

In the coming week the Indian soyabean futures contract is likely to trade lower on weak demand in domestic market. India’s soybean exports could be affected due to stiff competitions from US and South America. This in turn would have an impact on the demand from oil millers which may weigh on the prices in the near term.

The writer is Head – Commodity Research, Karvy Comtrade

c:set var="prUrl" value="https://premium.thehindubusinessline.com" />

Read further by subscribing to

The Hindu Businessline

What You'll Get

  • Web + Mobile

    Access exclusive content of the Hindu Businessline across desktops, tablet and mobile device.


  • Exclusive portfolio stories and investment advice

    Gain exclusive market insights from the Hindu Businessline's research desk.


  • Ad free experience

    Experience cleaner site with zero ads and faster load times.


  • Personalised dashboard

    Customize your preference and get a personalized recommendation of stories based on your intrest.

Related

This article is closed for comments.
Please Email the Editor