India: Soybeans Gain on Improved Demand, Tight Supplies

Indian soybean prices were up Tuesday on multiple supporting factors like improved demand, tight supplies and currency movements, said traders. Traders said fresh soymeal export demand from Vietnam and Iran is the reason behind improved buying in domestic markets. Soybean is the basic raw material for soymeal. India is one of the biggest suppliers of soymeal to the Southeast Asian countries.

Supplies in the domestic markets are on decline as farmers are concentrating more on Rabi crops like chana and wheat. Tuesday, farmers delivered around 3,000 bags of 100 kg each to Indore compared with 4,000 bags on Monday. Across, Madhya Pradesh, arrivals were 80,000 bags.

Also, analysts feel currency movements and fear of low global supplies are pushing up the prices. “Rupee depreciation against the US dollar and fear of major crop loss in Brazil are making the domestic markets sentiment bullish,” said Badruddin Khan, assistant vice-president, research at Angel Commodities.

Brazil is no.2 in soybean production in the world after USA.

At 11:03 AM, the rupee was at 49.95/96 to the dollar, after dropping to 50.04, lowest since January 25, down from Monday's close of 49.835/845.
Strong US dollar means expensive soyoil imports in the coming days, added Khan. Experts feel India will import more soyoil in the coming days to fulfill its local demand.

This week, soyoil demand is likely to show improvement due to festive buying for Holi. Soybean is the basic raw material for soyoil.
Tuesday, soybean prices in Indore mandi auction ranged between Rs 2550-2625 per 100 kg. At Sanyogita Ganj mandi, highest prices (for good quality) were seen around Rs 2640-2650 per 100 kg.  Sanyogita Ganj is the biggest grain mandi in Indore. Indore is soybean trade hub of the country.

Plant delivery prices were higher at Rs 2690-2720 per 100 kg.