Soybean likely to stay firm on fresh arrivals

Soybean arrivals in the mandis of Madhya Pradesh are steady, with 48-50 lakh tonne inflow since October. The oil year runs from October to September.

According to Rajesh Agarwal, spokesperson of the Soybean Processors Association of India (Sopa), arrivals are 5 lakh tonne higher over last year. Of this, about 34 lakh tonne has been crushed and the rest is lying with crushing plants and stockists.

Thus far in 2006-07, 18-19 lakh tonne of soybean meal has been exported, which is again 4 lakh tonne higher over the corresponding period last year.

Export realisation per tonne has moved up by 20 per cent since September (from $200 per tonne, fob, to $240) and exporters have huge orders in hand, he said.

Domestic consumption demand is steady and, coupled, with export demand, will keep prices firm.

"Owing to a shortage and higher corn prices, huge areas of land are likely to be diverted from soybean to corn in the US, world's largest soybean producer and this factor is helping a rally in soybean prices," he added.

In the domestic market, soybean meal prices have gone up from Rs 8,850 per tonne (ex-factory) in September to Rs 10,000 now.

Bloomberg adds: March soybean futures on the Chicago Board of Trade jumped to an 18-month high at $7.4750 a bushel on speculation that demand for biofuels and food may exceed global supply.

US farmers are expected to scale back soybean acreage and plant more corn to benefit from rising demand for ethanol. US corn acreage will increase 15 percent after prices reached a 10- year high last month and soybean acreage will fall 11 percent, the Professional Farmers of America newsletter said on February 2.

Farmers will plant 90.14 million acres of corn this spring, compared with 78.33 million last year, to capitalise on prices that rose 81 percent last year, primarily on ethanol demand, Pro Farmer said. Some 66.9 million acres of soybean will be planted, down from 75.52 million.