Soybean futures may trade higher today, says Angel

Angel Commodities' report on agri commodities

Soybean

Soybean futures traded on a positive note on Wednesday tracking gains on the CBOT, increased demand from the millers and fears of crop damage due to rains in the soy belts and settled 1.74% higher. However, soy meal export demand continues to remain weak.

According to Ministry of Agriculture soybean planting as on 9th October is reported at 11.02 mn ha compared to 12.22 mn ha last year. CCEA has kept the MSP of soybean unchanged at Rs. 2500-2560/qtl.

The Ministry of Agriculture in its 1th Advance Estimates, projected 2014-15 soybean output at 11.82 mn tn as against 11.99 mn tn in 2012-13. Soy meal exports in Sept ’14 have declined 99.5% to 868 tn from 173,381 tn in August ’13.

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CBOT Soybean traded on a positive note on Wednesday on strong export demand and tracking bullish soy meal prices which gained on tight supplies and settled 3.47% higher.. Prices declined last month on good crop conditions and expectations of record output. Harvest is 70% complete compared to 53% last week and 75% last year.

The USDA monthly crop report in October forecast 2014-15 output at 3.927 bn bsh against 3.289 bn bsh last year while end stocks are forecast at 450 mn bsh against 475 mn bsh forecast in September. The report forecast Brazil output at 94 mn tn against of 87.5 mn tn last year and Argentina output at 55 mn tn against 54 mn tn last year.

According to NOPA, soybean crushing in September was reported at 99.97 mn bsh, against 110.633 mn bsh in August.

According to the government of Brazil, soy output in 2014 - 15 is expected between 90-96 mn tns. Sowing is 10% complete till 20th October. Rains have been reported in parts of Brazil over the weekend. In Argentina, the area covered under soy bean is may increase marginally from 20 mn ha last year.

Outlook

Soybean futures are expected to trade higher today. Overnight gains on the CBOT, crops concerns, soy oil demand and delayed harvest may continue to support prices. However, arrival pressure and weak meal exports may cap sharp gains.

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