Soybean Weakens on Production Estimates

November Soybean futures traded lower on account of weak overseas market and higher production estimates of domestic soybean coupled with arrival pressure. Arrivals were around 5 lakh bags in major mandis of Madhya Pradesh, 3 lakh bags in Maharashtra and 2 lakh bags in Rajasthan. The Soybean Processors Association of India (SOPA) revised soybean production in 2011-12 to 11.93 million tonnes against earlier estimate of 11.65 million tonnes. The slow pace of US exports and favorable weather in South America also provided support to the bears. US soybean exports declined to 37.4 million tonnes, down 1.1 million tonnes as compared to previous week. Brazil crop expectation is as record high as 75 million tonnes.

As per USDA’s weekly export inspections came in at 41.15 million bushels which was in line with trade expectations and compares with an average of 27.8 million necessary each week to reach the USDA projection. For the weekly crop update, traders see harvest near 80- 85% complete as compared with 69% last week. With better weather in Brazil, some analysts are increasing their production outlook to a record high above 75 million tonnes from 74.3 million this past season.

Mustard Seed

NCDEX November RM Seed futures traded slightly lower on account of lower prices of vegetable oil and other oilseeds as arrival pressure of kharif oilseeds. In an expectation of higher sowing acreage of RM seed this year as compared to last year also added bearish market sentiments. Rabi Oilseed area in Haryana to increase to 6 lakh hectares (lh) as compared to 5.04 lakh hectares in 2010.

Increased MSP of RM Seed also provided support to the prices. MSP of RM Seed increased from Rs1850 to Rs2500/quintal to protect the farmers and boost the oilseed production as India imports edible oil about 50% of its total requirement.

Refine Soy Oil

NCDEX November Refined Soy oil futures traded lower due to weak overseas market as weak global market sentiments on Monday. Edible Oil imports for the month of September were slightly down by 6.7 percent compared to last year at 8.79 lakh tonnes, while that of refined palm oil increased to 1.43 lakh tonnes as compared to 0.93 lakh tonnes last year. The total vegetable oil output from domestic sources is estimated around 75 lakh tonnes as compared to a sustained production of 65-68 lakh tonnes over the past last few years.

Malaysian Palm Oil Exports

As per Intertek Agri Services (a cargo surveyor), Malaysia’s palm oil exports in the month of October increased to 1.65 million tonnes, up 8.5% as compared to previous month.