NCDEX Soybean Weighs Down On Profit Taking: April 17, 2012

NCDEX soybean futures traded lower on account of profit taking after sharp rise in the last week. Increased initial margin on soybean also added bearish market sentiments.

Initial margin has been increased to 10% on the entire edible oil complex on all running contracts with effect from April 12, 2012. Lower demand of soybean due to slower growth of Chinese economy growing at slower pace which may reduce demand as China is the largest consumer of Soybean in the global market.

Last week, oil and oilseed traders were on strike against the Food Safety Act. The strike was called off on Friday after assurances of relief from Chief Minister of Madhya Pradesh.

However, soybean prices are expected to trade firm in the medium to long-term on account of lower global ending stocks.

Arrivals in major mandis were 35000 bags in Madhya Pradesh, 30,000 bags in Maharashtra and 8000 bags in Rajasthan (1 bag=100 kg). As per WASDE (USDA), global oilseed production for 2011/12 is projected at 440.6 million tons, down 5.2 million from last month.

Brazil soybean production is forecast at 66 million tons, down 2.5 million from last month as warm temperatures. Global soybean ending stocks are projected at 55.5 million tons, down 1.8 million from last month, and down 13.6 million tons from last year.

NCDEX RM Seed Declines On Fresh Arrivals

NCDEX May Mustard Seed futures fell sharply lower and hit lower limit of 3% on account of profit taking after gains in the last week.

Fresh arrivals and losses in edible oil and other oilseeds also added bearish market sentiments. As per COOIT, the country's rapeseed output is estimated to drop by 12.6 percent to 6.03 million tonnes in the year to June 2012.

The overall rabi (November-March) oilseed crop for 2011-12 is estimated to fall to 8.79 million tonnes from 9.87 million tonnes last year, with a drop in sown area from 9.72 million hectares last year to 9.07 million ha this time.

RM seed meal shipments during the finance year 2011-12 (Apr-Mar) were 1,171,895 tonnes (value Rs. 1028.30 cr), up by 25 per cent from 9,36,238 tonnes (value Rs. 972.73 cr) a year ago.