India Soybean Ends Higher on Rising Demand

November Soybean futures ended higher on improved demand from stockists and solvent extractors in anticipation of export order of soy meal in coming month and improved demand of edible oil ahead of winter/marriage season demand. Argentina soybean crushing plant workers managed to halt crushing activities at major plants in Rosario, according to union leaders.

In Brazil soybean planting of 2011 12 season is 41% complete compared to 28% last year. Brazilian soybean growers have sold 31% of the 2011 12 crop in forward business. The EU'S imports of soy meal will continue to rise this year and are forecast at 23.6 million tons, up 2.6% from 2010-11. As per USDA’s weekly export sales report released on November 03, 2011, export sales for soybeans came in at just 209,700 tonnes which was well below trade expectations.

As of October 27th, cumulative soybean sales stand at 49.5% of the USDA forecast for 2011/2012 (current) marketing year versus a 5 year average of 54.3%. Sales of 427,000 metric tonnes are needed each week to reach the USDA forecast. Net meal sales came in at 220,800 metric tonnes which was a bit higher than expected and compares with 101,000 tonnes needed each week to reach the USDA forecast. Net oil sales came in at just 700 metric tonnes, well below expectations.

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. Arrivals were around 5 lakh bags in major mandis of Madhya Pradesh, 3 lakh bags in Maharashtra and 2 lakh bags in Rajasthan (1 bags=100 Kg).

Mustard Seed

NCDEX November RM Seed futures ended higher in tandem with higher prices of vegetable oil and other oilseeds. Dry weather in EU ahead of the harvest has hit EU's rapeseed production, which estimates at a four-year low of 18.8 million tons in 2011-12, down 7.4% on year. EU's rapeseed imports may rise 19% to 3.1 million tons this year on top of an 18% increase in 2010-11. Increased demand from the EU comes as global rapeseed production is forecast to fall by nearly 2.0 million tons to a three-year low of 58 million tons.

Increased MSP of RM Seed is also in favour of the bulls. 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 higher due to firm BMD CPO futures as La Nina impacts. Improved demand of edible oil on winter/marriage season demand also added bullish market sentiments. La Nina events usually result in above-average rainfall in Southeast Asia and could slow harvesting progress in Malaysia and Indonesia, which together produce 90% of the world's palm oil. 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.