2015 outlook: Indian Soybean and Soy oil Futures Market

Year 2015 is entering with a positive note in the indian oilseeds and edible oil market.

• Rabi Season oilseeds sowing is lagging behind from the previous year and weather is also not very much conducive due to excessive cold in north India, the production is expected to remain low of the rabi oilseeds crops. 
• The indian government has increased the import duty on crude and refined edible oils which has resulted into increased parity prices. Thus sharp price rise is seen in the past few days. 
• The Indian Rupee has seen depreciation against US dollar which has also supported the bulls.
• The domestic demand has seen gradual improvement which is likely to continue in medium term.

Thus we expect that both soybean and soy oil will see bullish trend in the Indian futures market in the medium term.

Buy Soy oil NCDEX in the range of 650-655 Target 755 Stop loss 591

Buy Soybean NCDEX in the range of 3350-3375 Target 4950 Stop loss 2870

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Indian Soybean market looks still weak, rebound likely in soy oil

• In India, weakness continue to prevails  in Soybean and soy oil market on bearish global cues.
• During past 10 days many parts of the soybean growing belt in Madhya Pradesh, Maharashtra and Rajasthan have seen monsoon showers giving relief to the farmers.
• The  oil meal demand continues to remain subdued these days in domestic market due to availability of green fodder during monsoon period.
• Further, the export demand of oilmeal is also expected to remain weak in  future due to tough  competition from other international players as the soybean production at world level is expected to  be good enough to meet the demand.
• Thus we expect that down trend in soybean is still not over and some more decline in  near future is due
• However time to time some bounce back may be seen due to short covering  by the sellers.
• So far as soy oil is concerned, In  India the demand is likely to pick up very soon and it will remain good  till winter season. "Deepawali" a festival of light in India , will be celebrated during  October this yea r. this remains usually a month of very high consumption due to festive demand.
• Thus we expect that the decline in soy oil will be limited, and one should utilize the dips to make buy positions. In India, increased demand should bring prices up to certain extend despite the weak international market sentiments. 

Soybean continues to remain weak in Indian Market

 Monsoon has remained quite better in central and north-west India. The sowing activities have also picked up for oilseeds in Madhy Pradesh and Rajasthan states of India. Further the concerns of drought are almost over.

This has put the bearish impact on the market.

Further the oil meal exports figures are also discouraging for the Indian traders.

As per the latest data released by the SEA of India, the exports of oilmeals have fallen drastically.

The following statistics is provided by SEA of India.

• The total export of oilmeals during April-July 2014 is reported at 721,577 tons compared to 1,038,819 tons i.e. down by 31%. 
• In July 2014 export of oilmeals is reported at 115,094 tons compared to 182,133 tons in July 2013 i.e. down by 37%.
• Export of soybean meal greatly reduced in last 3 months due to high cost of soybean in local market lead to total disparity for soybean meal in international market. 
• However share of rapeseed meal has increased from 267,461 to 408,410 in last 4 months.

International market also remains in the grip of bears. 

We continue to see Indian market falling in near future in the absence of fresh buying interest.

As stated earlier in the past post, the soybean may find support in medium term near Rs. 2900-3200 in the Indian Futures Market (NCDEX) by September 14. [ current market prices in the futures market are 3560]

Indian soy oil Futures: WEEKLY OUTLOOK

• During past week (21-27 July 2014), soy oil market witnessed a sideways movement in the Indian futures market. In fact Soy oil prices on CBOT fell by more than 1%, Indian Rupee against US Dollars appreciated by around 0.63% but despite that Indian soy oil August futures market prices appreciated by around 0.11%.

• Please note that CBOT soy oil August Contract prices on monthly basis have fallen by nearly 10%. However till 27 July, Indian futures market maintains almost the same levels as were seen during 1 July 2014.

• In fact delayed monsoon and fear of deficit rains did not allow soy oil market to fall in the line with international market. As of now some improvement is seen in the monsoon progress and major soybean growing state i.e. Madhya Pradesh (MP) of India has witness good monsoon rains.

• The sowing progress of soybean is satisfactory in MP however in other important states it is still running behind the previous year’s figures.

• The availability of the soy oil from the local soy seed will be limited during next two months and the months of September and October are the months of increased consumption demand in India as a string of festivals starts from October.

• Thus India will have to rely on the imported oil to great extent. In the light of the fact that US is going to witness huge soybean crop this year, the soy oil supply in the world market is likely to remain comfortable and not much upside in CBOT soy oil is expected.

• From Indian market point of view, other important factor to watch will be the USDINR movement as the cost of imported oil depend upon the value of Indian rupee with respect to the US dollar.

Weekly Outlook:

Thus we expect that even though world market is having good soy oil supply, the increased demand in the Indian market will not allow soy oil prices to fall much in near future. Rather we expect that sideways to positive movement in the soy oil market in India may be seen in short to medium term.

SOY OIL AUGUST CONTRACT AT NCDEX (TECHNICAL LEVELS FOR WEEK 29 JULY TO 2 AUGUST)

SUPPORT 1 = 677      SUPPORT 2  = 674       RESISTANT 1 = 689      RESISTANCE 2 = 695

WEEKLY TREND SEEMS POSITIVE.

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Edited on 28 July 2014 at 9.50 AM IST

CBOT soy oil trades firm.... Indian market is likely to open up as discussed above.....

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Edible oil complex trade firm in Indian market

 On the very first day of the week starting 21 july, the edible oil complex (soyoil, soybean, mustard seed) trades firm in Indian futures and physical market ignoring the CBOT soy complex trend.

As written last week, the edible oil demand improves in India it is expected to remain firm in medium term thus keeping prices in upward trend for soy oil.


Recent good spell of monsoon rains in vast part of the country has improved market sentiments. Thus buyers have become active.

We expect soy oil prices to cross 700 level during this week in the Indian futures market. [current price is 685 at 14.56 IST].

Soy oil likely to gain 3 % by next week in Indian Futures Market

• Indian soy oil market trades firm on fresh buying support in the Indian Futures Market (NCDEX).

• Demand in the physical market improves due to ongoing “Ramzan” month.

• Further sowing of soybean is also delayed by around 15 days in India thus the new crop arrival will start during October month.

• It is expected that the soy oil prices may increase by more than 3 % during next week.

• NCDEX Soy oil August contract may reach at the level of Rs. 701 per 10 kg by next week. [Current level is 679 at 20.00 IST]

Sugar seems Up in Indian Market in Medium Term

For the last three weeks, a sideways movement is seen in the Indian sugar futures market. In fact some recovery is seen from the lower levels. 

Monsoon still remains weak in the major sugar growing belt like Maharashtra and UP. Please note that sugarcane is water intensive crop and if major short fall is seen in the monsoon rains in these states, then the production may decline significantly. 

Some preliminary assessment about the Indian sugar Production is made by the Indian Sugar Mills Association (ISMA). Some important points are quoted here.

• As per the latest Release from the Indian Sugar Mills Association, the total estimated sugarcane acreage of the country in 2014-15 sugar season would be around 52.30 lakh ha, which is about 2% less than last year.

• The preliminary estimates of Indian Sugar Mills Association (ISMA) for sugar production in 2014-15 sugar season, works out to around 253 lakh tons of sugar.  This would be about 4% higher than the estimated sugar production of around 243 lakh tons in June 2013-14 sugar season.

• With an estimated opening balance of sugar of around 75 lakh tons, as on 1^stOctober, 2014 for the next sugar season and sugar production as estimated above, there will more than sufficient sugar to take care of domestic requirement, of around 245 lakh tons next year.

It is seen that there has been substantial change in the final sugar production estimates almost every year from their preliminary estimates. 

In the light of the current weather conditions it is more likely that the production may be revised downward substantially from it's current estimates in India.

This will give definitely give bullish impetus to the Indian sugar market.

We expect prices of sugar to increase up to Rs. 3500 per quintal in the next 2-3 months. Downward movement seems limited to Rs. 2950 to 3000.

Soy oil in India: Latest on Trend

A tug of war is seen in the Indian soy oil market.. on the one hand traders feel bullish sentiments should prevail in India as the  very less rains are causing concerns for the new Kharif season crops which include soybean also..... on the other hand ample supply at the world level does not allow Indian market to go up....

Despite substantial fall in the soy oil at CBOT, India soy oil market is stable right now indicating that most of the traders are not bearish in the market.

Let see how market ends by tonight!

Indian Soybean market Trend: 11 July 2014

Some recovery is seen in the Indian soybean market due to short covering on current levels. However due to lack of good demand market is likely to fall again in the short term.
NCDEX Soybean October contract is likely to trade in the range of 3737-3637. Selling on high levels may result in to gains.



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Edited at 13.40 IST
Latest data from a trade body in India shows very very slow progress of soybean sowing. as per the data released by SEA of India, the soybean sowing till 10 july is only 7.86 lakh ha vs 83.50 Lakh ha during same period last year.

This news has immediately sparked the Indian soybean market. it seems that right now Indian market is guided by the domestic sentiments rather than the international market sentiments. It is to be seen whether this rally will sustain or not ?

Weakness to continue in Soybean in India in near future

Indian farmers are still waiting for monsoon rains to bless their farm land and anxiety is increasing day by day with the passage of time. Barring some rains in few patches, wide spread rains in vast part of the country are still lacking.----------

This condition must logically give to the bullish impetus to the soybean market in India. However this is not happening.

Two reasons are behind it.....
1. Our oilmeal exports have declined substantially during recent past leading to slack demand.
2. The soybean crop conditions in the US are believed to be good enough to result in to big production.

Both of these factors are pressurizing the market sentiments at CBOT as well as in the Indian market.

It is expected that the same trend will continue in short to medium term.

Soybean may find support in medium term near Rs. 2900-3200 in the Indian Futures Market (NCDEX) by September 14.