July 16, 2010

Rain shortfall raises India's soy future prices

Deficit rainfall in major parts of Madhya Pradesh coupled with bullish cues from international markets lead the prices of soy future to gain more than Rs30 per quintal in last two days.

As per latest release by Ministry of Agriculture, the total soy sowing acreage in Madhya Pradesh was down 30% to 14.30 lakh hectares so far in the current year due to deficit rainfall of around 45-50% in major sowing districts of Madhya Pradesh such as Dewas, Indore and Rewa. However, the total sowing acreage of soya bean at all India level gained almost 8% to reach 34.6 lakh hectares.

Bullish nodes from international market also bolstered the domestic prices of soy. The CBOT Soy prices were closed at its highest level since May 4 on Wednesday.

August soy regained 2 1/2 cents to close at US$9.97 3/4. August meal was up US$1.30 to close at US$298.30. August soy oil was up 9 points to close at 38.11 cents. New-crop November soy added 7 1/2 cents to close at US$9.62.

China released trade data for June over the weekend. Among the statistics was news that China imported 6.2 million tonnes of beans in June. Chinese sources also released estimates for imports for July-September. China's total soy imports for its 2009-10 crop year will total between 49 million tonnes and 50 million tonnes. That would be up from the current forecast by USDA at 48 million tonnes. It is also more than 10 million tonnes greater than what USDA was forecasting last year at this time.

Consequently, the future prices of NCDEX August contract swelled by Rs30 oer quintal in last two trading days and were quoting at Rs1960 per quintal.