March 11, 2013

Indian soy reaches highest level in over five months

In line with overseas markets, and on lack of supplies, Indian soy futures rose more than 2% to their highest level in more than five months.

Chicago soy edged higher, rising for four out of five sessions as the market was underpinned by strong demand and expectations the US government will tighten its supply outlook.

Soy supplies have been falling from the key producing regions of Madhya Pradesh and Maharashtra, as farmers are unwilling to sell produce, expecting a price rise.

At 0818 GMT, the most-active soy contract for April delivery on the National Commodity and Derivatives Exchange (NCDEX) was 2.30% higher at INR3,495 (US$64) per 100 kilogrammes, after hitting a high of INR3,507.5 (US$64.40), a level last seen on September 22, 2012.

Buying is advised in soy at INR3,400-3,420 (US$62.43-62.80), for a target of INR3,600 (US$66.10), with a stop loss below INR3,300 (US$60.60), said Aurobinda Prasad, head of research, Karvy Comtrade.

The rapeseed contract for April delivery was 0.70% higher at INR3,431 (US$63) per 100 kilogrammes. Soyoil contract for April delivery was 0.79% higher at INR679.70 (US$12.48) per 10 kilogrammes.

India's rapeseed output is expected to surge by a fifth this year due to favourable weather conditions, helping the world's biggest vegetable oil importer boost local supplies by 400,000 tonnes.

At the Indore spot market in Madhya Pradesh, soyoil edged INR2.35 (US$0.04) higher to INR685.65 (US$12.59) per 10 kilogrammes, while soy was up INR40 (US$0.73) at INR3,513 (US$64.52) per 100 kilogramme. Rapeseed in Jaipur fell INR22.60 (US$0.42) to INR3,525 (US$64.74) per 100 kilogrammes. India's soymeal exports fell 6.2% in February from a month ago, due to lower crushing as farmers hold back stocks on hopes of better prices.