January 30, 2012

India's soy prices to trade slightly down

On cues from declined weekly export sales data, India's soy prices might trade slightly lower as unexpected fall in Soya exports is likely to have negative impact on prices.

However soy output in Rio Grande do Sul, Brazil's southernmost state will be lower than previously forecast after a 13 week drought harmed crops might limit huge losses at CBOT. Lower production estimates in Argentina have decreased to 48.9 million tonnes compared to 52 million tonnes during last year. Due to humidity few cases of crop rust are reported in Mato grosso regions where harvest has started which might affect crop quality and in turn supports the prices.

IGC has released grains production estimate where global soy production is still lower at 257 million tonnes down by 2.2 million tonnes with major drop attributed from South American regions. Therefore Indian futures might open on lower note taking cues from lower international market. However overall trend might remain range bound in absences of lack of active trade participation in Indian market. Fresh export orders for oil bean or meal might be absent due to Chinese New Year holidays. Buyers in domestic markets are also closely watching weather development over South American regions and buying very limitedly.