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| Soybean hits upper circuit on global cues, fresh buying |
| Dilip Kumar Jha / Mumbai Aug 04, 2009, 00:15 IST |
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Has gained 10.45 per cent on NCDEX since July 29.
Soybean breached the upper circuit on the National Commodity & Derivatives Exchange (NCDEX) today following firm international guidance and fresh festival buying by traders and speculators amid concern that the government may impose Customs duty on crude edible oil which will result in the commodity becoming costlier.
The contract for delivery in August rose 3.85 per cent to close at Rs 2,362 per quintal. The major edible oilseed has recorded a 10.45 per cent rise since July 29. Experts, however, believe that the commodity is getting support only from the international market. According to Rajesh Agrawal, co-ordinator and spokesperson of the Indore-based Soybean Processors’ Association (SOPA), the acreage under soybean has recovered and achieved the last year’s level of 95 lakh hectare (ha) with the revival of monsoon in late July. So far, the climate is good for the next crop with the condition of sprouts very encouraging.
The crop situation is reported to be normal across the country, including Maharashtra, where deficient rainfall has been recorded this year. But, the final output would depend on the follow-up rainfall in August and September, Agrawal said.
In the US too, the crop is reported to be normal, but a sudden spurt in Chinese demand has pushed the prices to nine-month high on the Chicago Board of Trade on Monday with contracts for delivery in November rising 3.72 per cent to close at $10.18 a bushel. The US soy futures surged nearly 7 per cent to hit a two-week high on Thursday following the biggest one-day purchase of US soy in more than a year by China, according to a report by the US Agriculture Department (USDA).
The USDA further said that the US exporters sold 1.92 million tonnes to China, with 1.8 million tonnes set for delivery in the marketing year beginning September 1. The shipment of soybean jumped 36 per cent to 954,543 tonnes in the week ended July 23 from the previous week, it added. The agency has forecast exports at 1.26 billion bushels for the full year, up 8.5 per cent from last year.
The trigger is purely based on speculation as the supply remains over one lakh tonne higher today than last year on bumper crop in the previous season. Despite a lean season, arrivals are estimated around 70,000-80,000 bags (1 bag=100 kg), over 20,000-30,000 bags higher than at the same time in the previous year. Surprisingly, since farmers held their stocks in anticipation of higher prices, arrivals were expected to continue for the next two months, said Agrawal.
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