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soybean Q2 2013 [rice Analysis

soybean Q2 2013 [rice Analysis

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Published by Pramod Mane
soybean Q2 2013 [rice Analysis
soybean Q2 2013 [rice Analysis

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Published by: Pramod Mane on Apr 15, 2013
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12/12/2013

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April 15, 2013MARKET SNAP:Indian Soybean prices rose by12 percent during Q1 of 2013, albeitglobal soybean prices on CBOThaven’t shown any significant movement. Expect domestic prices to extend rally through Q2 of 2013.Indian Soybean growers are reluctant to sell beans as they are having sanguinefeeling about rates.Previous year market saw Rs 5000 per quintal rate and most of the sellers believeprices would ride to Rs5000 level this year too.Soybean prices gain in domestic market seemsparadoxical, given the global and domestic demand-supply scenario of soybean.But two thingscould vindicatethe recent rally, first better demand forIndian origin soyameal and second,delay in soybean shipment from SouthAmerican countries.Historically, domestic prices usually rally during first half of calendar year and correction happen duringlater half, so expect history to repeatthis year too.Currently soybean in Indore spot market trading around Rs 4025per quintal.Yellow Soybean Meal forExportat kandla is trading at Rs 3625a quintal (FOB $660 /MT for Iran and SEA). Refined soya oil sellingat Rs 723per 10 kg. NCDEX front month contract is trading at Rs 4000a quintal.CBOT soybean for May deliveryistrading at $14.10per bushel (around $ 518/MT).U.S. (gulf coast)offering soybean around $544 per MT for Asia on FOB basis, while Brazil selling at $ 510 per MT FOB forMay delivery.If CBOT stays near $14 a bushel while Indore spot moves above Rs 4100 a quintal,thenIndian soybean market could come under import parityfor soya bean.
Q2
Soybean Report  
 
SUPPLY
DomesticSupply:
Indian soybean production estimated to stand around12.67 million tons during 2012-13. A3.78 percent gain in production compared to last year.Lucrative prices during previous yeardiverted farmers to soybean.Madhya Pradesh, the largest soybean producing state seen rise of 6percent in production.
GlobalSupply:
Last yeardrought hammered U.S. soybean output from 84.19to 82.06Million MT. SouthAmerican countries expected to harvest record soybean, Brazilian farmers would harvest 83.5 MMTcompared to 66.5 MMT while, Argentina would produce 51.5 MMT compared 40.1 MMT. Globallysoybean production could total 269MMT for 2012-13 against last year 240 MMT. World soybeanbeginning stock depleted to 55 MMT from last year’s70.11 MMT.For the coming year soybean production in U.S.A is expected to rise given the rise in estimatedyieldeven though there is not much changeexpectedin area under soybeanwhich could be around 76million Acre. Global soybean production is raisedby USDA, supported by larger crops in Paraguay andUruguay.
Soybean Meal:
Out of total global production 230 MMT of bean expected to crushwhich will produce181 MMT of meal.India could crush10.76million MT bean during 2012-13 to produce around 8.6MMTof meal.
Soybean Oil:
India estimated to produce 2.14compared to last year 1.76MMT of oil while global soy oilproduction will stand around 43 MMT.
010002000300040005000600070008000
MPMaharashtraRajasthanAPKarnatakaChhattisgarhGujarat
Soybean Production in '000 MT
2011-122012-13E
 
DEMAND:Global soybean consumption estimated to riseby 3 percentin 2012-13 and wouldtotal 263 MMTcompared to last year 255 MMT. Previous years higher prices reduced demand for soybean and divertedmany users to find substitutes. Given the fall in the prices from the peak to current level of $14 a bushelwill attract some buying and also restocking in importing countries.Indian soya meal consumption estimated to rise to 4 MMT compared to last year 3.5 MMT. The soya oilconsumption is expected to be around 3.3 MMT. Demand from meal importing SEA countries alsolooking bright.Overall demand for soybean in domestic as well as global market seems to be movingupside after last year setback.TRADE:Global soybean import export trade quantity estimated to be around 96 MMTduring 2012-13. Brazil, USand Argentina exports 36.7,36 and 10.3 MMT of soybean respectively. These three countries contributealmost 85 percent of global export. China is the largest importer of Soybean with 61 MMT contributionswhile EU union stands second with 11.8 MMT. Mexico estimated to import around 3.7 MMT of soybean,while rest of import goes to SEA and Middle East countries.
Indian meal Export:
Export of Indian soya meal estimated to be 4.5 MMT as per USDA (Oct-Sep), whileSEA of India says Export of meal is 3.4 MMT during April 2012 to March 2013. Indian mealenjoys thedemand in SEA countries because of its non GM crop and quality. Indian exporters are offering SoyaMeal around $ 710 per MT on FOB basis for SEA and Iran destinations.
Indian Oil Import:
India is estimated to import around 1.15 Million MTof soya oil compared to 1.17Million MT last year.Domestic Crush Margin:Given soybean price at Rs 4100 per quintal, Soya Oil at Rs 723 per 10 kg, soya meal Rs 36250 per MT andconversion cost Rs 1200 per metric ton; crush margin will be Rs-343per MT. All prices are for Indorelocation.GLOBAL BALANCE SHEET:
2012-13E World India U.S.A Brazil Argentina China
Beginning Stock55.134.611.665.2015.92Production269.6012.6082.0583.5051.5012.60Import95.481.150.500.040.0161.00Total Supply420.2113.7587.1685.2056.7789.52Consumption 269.007.5047.0722.5525.1063.69Export97.864.5036.7440.2510.450.00Ending Stock62.631.753.3522.4021.2212.39

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