Soyabean futures witnessed a volatile move in the past week. After falling sharply in the initial part of the week, the prices reversed sharply higher recovering all the loss made during the week.
A rally in international soyabean prices driven by heightening crop concerns in Argentina — as a result of drier weather conditions — and renewed buying by crushers helped soyabean futures close on a positive note on the NCDEX. The contract was up 3 per cent last week.
Lower than expected production estimates from the Soybean Processors’ Association (SOPA) last week also supported the prices. SOPA cut its soyabean production estimated for India to 83.5 lakh tonnes from 91.5 lakh tones. According to the latest SOPA estimates, the total supply of soyabean for 2017-18 is pegged at 96.5 lakh tonnes including carryover stock of 13 lakh tonnes.
In the upcoming week, soyabean futures contract can remain range-bound. There is a possibility of some correction in the prices on the back of costlier soyameal exports and tumbling margin for crushers in line with surging soyabean prices.
However, a weaker production outlook for India and the world for 2017-18 may restrict the excessive losses. The USDA trimmed its world production forecast to 346.92 million tonnes against 348.57 million tonnes last month, lower by 1.3 per cent year-on-year.
Lower yield prospects in Argentina due to adverse weather condition for crop development is likely to keep global prices higher in the coming days. Lower crop size in Argentina is likely to impact the global soyameal availability adversely as Argentina is the largest soyameal exporter.