Soybean Futures Ends In Red On Profit Taking

Soybean futures ended in red on account of profit taking after continuous rise in the last two trading sessions. India’s lower oil meal exports figures in the month of January also added bearish market sentiments.

As per Solvent Extractors' Association of India, India's oil-meal exports in January fell 42% on month and 14% on year to 549,716 tonnes.

However, the country's cumulative oil-meal exports during Apr-Jan were nearly 17% higher than a year ago at 4.42 million tonnes. India's soymeal exports fell 40% on month and 17% on year to 474,993 tonnnes in January but the cumulative exports during Apr-Jan, rose to 3.02 million tonnes from 2.89 mln tn
a year ago. Japan, Vietnam, and South Korea were the major importers of Indian oil-meal during Apr-Jan.

China was also one of the key importers during Apr-Dec, but the country has banned oilmeal imports from India since January 01,2012 due to malachite green contamination found in Indian rapeseed meal.

However, for long term perspective, soybean prices are expected to trade higher on account of lower production estimates of oilseeds and there is an expectation of lower global ending stocks in the USDA’s monthly supply & demand report which will release on February 09, 2012 (Friday) due to lower production estimates of South America (Argentina and Brazil) .

On Friday, analytical firm Informa Economics cut its forecast for Argentina's 2011/12 soybean production to 46.5 million tonnes from 51 million. It lowered its forecast of Brazil's soybean crop to 70 million tonnes, from 72 million previously. Brazil produced a record 75.3 million tonnes of soybeans last season and is expected to harvest 71.5 million tonnes this year, according to its agriculture ministry.

NCDEX April RM Seed ended lower on account of profit taking after yesterday’s sharp rise and fresh arrivals of rape/mustard seed also added bearish market sentiments. However, for long term perspective, RM seed is expected to trade higher as lower sowing acreage of RM Seed this year as compared to last year. According to Ministry of Agriculture, as on February 03, 2012, total oilseeds output is likely to fall 6% to 30.53 million tonnes in the current crop as compared to last year in corresponding period. Mustard output, the most crucial of rabi oilseeds, is also seen 8.5% lower on year at 7.5 mln tons.

Refined Soy Oil: NCDEX March refined soy oil futures ended lower on account of profit taking after continuous rise in the last three trading sessions. BMD CPO futures were remained closed on account of Thaipusam Day. Malaysia, the world's No. 2 palm oil producer has set its duty-free export quota for crude palm oil at 3.6 million metric tons for the year ahead after several weeks of delay.

Malaysia's issuance of the duty-free export quota could boost palm oil exports from the country in February as exporters rush to fulfil export contracts and slow a build-up in end-month palm oil stocks.

Imported crude soy-oil price were quoted higher at Rs 62,500/tonnes on Tuesday as compared to Rs 62,000/tonnes on Monday. Imported CPO price were quoted higher at Rs 51,800/tonnes on Tuesday as compared to Rs 51,700/tonnes on Monday.

Outlook:

Oilseed complex are expected to trade higher on account of improved demand of edible oil coupled with lower production estimates of oilseeds. Weakness in INR against US dollar are also in favour of the bulls as edible oil imports would be expensive and oilmeal exporters would get more return on oil meal exports.