Indian Soybean Rangebound Amid Tight Supplies, Weak Overseas Markets

In Indian grain mandis (spot markets), soybean prices started the week higher than the previous week on low supplies and gains in overseas markets. Cold weather and lower than expected prices were behind the tight supplies in Indian markets. Also, Rabi harvesting of early sown chickpea (chana) and wedding season kept farmers busy from bringing their produce to the market.

Overseas markets were up on weather worries in South America. South American countries Brazil and Argentina are second and third largest producers of soybean in the world after USA. In Indian grain mandi auctions, soybean prices started the week in Rs 2400-2440 per 100 kg range. Grain mandis witnessed increased arrivals by mid-week as the weekly supply got spread to just three days due to holidays.

Mandis were closed on Monday for Amavasya, on Thursday for Indian Republic Day and on Saturday for Basant Panchmi. New moon day is called Amavasya in India and many grain markets remain closed on this day. Goddess Saraswati is worshipped on Basant Panchmi, which is fifth day of on Indian month Magh (January-February), a holiday in many grain markets in India.

Soybean prices in spot markets started declining from mid-week on rupee appreciation against the US dollar. Reports of ban on Indian oilmeal imports by China also adversely affected the Indian market. China is fourth-largest oilmeal importer of Indian oilmeal. By week-end, prices were in Rs 2360-2420 per 100 kg range in mandis.

In Indore, plant delivery prices also opened higher than previous week at Rs 2500-2530 per 100 kg and closed the week tad down at Rs 2490-2520 per 100 kg range. Indore is soybean trade hub of India.
In all, soybean in spot markets opened the week higher and closed slightly higher than previous week.
 
Arrivals:  Indore, soybean trade hub of India, started the week with arrivals of 7,000 bags (100 kg each).  Across Madhya Pradesh, biggest soybean producing state in India, arrivals in the beginning of the week were 125,000 bags. Arrivals in Rajasthan and Maharashtra started the week with 80,000 and 40,000 bags respectively. Total arrivals were lower compared with the week before. Average daily arrivals in Indore were around 4,300 bags compared with 5,000 bags last week and 87,000 bags in Madhya Pradesh compared with 124,000 bags last week. 

Outlook (23-28 January, 2012):  Traders feel the prices may remain range bound in Rs 2380-2450 per 100 kg range this week due to  tight supplies and weak overseas markets. Prices may remain weak in the beginning 2-3 days of the week and then show some appreciation. Wedding season and Rabi harvest may keep the farmers busy this week too, which means tight supplies ahead. Overseas markets may remain weak on easing weather worries in South America and increased stocks of palm oil in Malaysia. www.soybeanwatch.com