July 1, 2013

India's soy futures drop amid weak exports

Amid weak exports demand for soymeal, Indian soy futures fell for a sixth straight session, due to a pick-up in sowing and ample rainfall in central India.

Soyoil and rapeseed also fell following losses in the world market and on sluggish demand from stockists in spot markets.

The benchmark Malaysian palm oil contract was down 1.22% at MYR2,350/tonne (US$744), while US soy rose 0.2% to US$15.37-1/4 per bushel.

"The weather is very favourable for soy sowing. Farmers secured higher returns in 2012. Obviously, they will increase the area this year," said Subhranil Dey, an analyst with SMC Comtrade.

The central state of Madhya Pradesh is the country's top soy producer, followed by the western state of Maharashtra. Both states have received more than normal rainfall so far in June, weather department data showed.

The key July soyoil contract on the National Commodity and Derivatives Exchange was down 0.09% at INR684.30 (US$11.55) per 10 kilogrammes (kg), after falling to INR675.5 (US$11.40) in the previous session, the lowest level since March 21.

The key July soy contract was down 0.75% at INR3,645 (US$61.50) per 100 kg, after falling to INR3,607 (US$61) in the previous session, the lowest level since March 23.

"The July soy contract can drop to INR3,500 (US$59) if it breaks a support of INR3,600 (US$61)," Dey said.

Indian farmers are expected to increase soy planting in 2013-14, boosted by a rally in prices. India's refined palm oil imports hit a record high in May by jumping 47.5% from April, pushing total purchases of the tropical oil up for the first time since January on lower prices and tight domestic supplies.