Weekly Soybean and Soymeal

Market Monitor
Dec 11th, 2023

Soybean and Soymeal

Bullish Factors Bearish Factors
  Higher Seasonal production
 Soymeal exports viability.
 Negative crushing margins.
 Strong soymeal price.
 Demand rationing at higher price
 Seasonal demand from feed sector.
 Weak soy oil price.

Overall Weekly Trend – Sideways

Market Driving Factors

Price Forecast
2-3 Weeks 2-4 Months
Commodity Location Unit
Support Resistance Price Outlook Support Resistance Price Outlook
Soybean Indore INR/Qtl 4950 5450 Bullish 4500 6000 Bullish
INR/
Soymeal Indore 46,500 50,000 Bullish 44,000 55,000 Bullish
MT

Fundamental Analysis and Insights

 Weekly Soybean (Indore) price traded positive due to strength in soymeal price and decline in daily
arrivals pace. However, further gains would be limited as soybean crushing margins turns into
disparity.
 Weekly Soymeal (Indore) prices jumped by Rs. 1500 to Rs. 42000 per Mt due to seasonal rise in
production of poultry’s products. From last 14 days Argentinean soymeal price continues traded
positive as dry conditions may reduce the soybean planted area. The 2022-23 soybeans in Argentina
were 29% planted as of late last week compared to 48% last year and 50% average. This represents an
advance of 9.6% for the week.
 Currently Indian soybean FOB is trading at 530 USD/Mt against Argentina’s origin FOB of 535 USD/Mt.
Now, Indian soymeal price marginal discount over Argentina origin. As per source, soymeal export
sales of around 1 lac MT in Nov month largely to neighbouring countries with Vietnam the biggest
destination.
 Weekly Soy oil (Solvent Indore) prices plummet by Rs. 30-35 to 1180 per 10 kg due to weak demand.
On the other hand, domestic cotton oil and rice bran oil traded wide discount over soy oil price.
 As of 10 Dec 2022 Area covered under Oil Seeds is reported at 95.19 Lac Hac Vs 87.65 Lac Hac. Area
covered under mustard is reported at 87.95 Lac Hac Vs 80.78 Lac Hac.
 Soybean crushing margins turns into disparity as cost of production increase in larger proportion
than product realization. Negative crushing would interrupt the crushing pace and processors buying
activity.

On the international front:

 The USDA's monthly supply and demand report was mostly in line with market expectations. US
soybean ending stocks for 2022/23 came in at 5.99 Mln MT versus an average expectation of 6.48.
This was unchanged from the November report.
 World soybean ending stocks came in at 102.71 million tonnes versus an average expectation of
102.30 million and 102.17 million in November.
 Brazil and Argentina Soybean production kept unchanged at 152 Mln MT and 49.50 Mln MT
respectively.
 The 2022/23 Brazil soybeans were 91% planted as of late last week compared to 94% last year and
88.2% average according to AgRural.
 Conab lowered the 2022/23 Brazilian corn estimate 0.57 million tons to 125.82 million and they left the
2022/23 Brazilian soybean estimate unchanged at 153.47 million tons.
 US Soybean export inspections for the week ending December 1 came in at 1,721,828 metric tonnes
from trade expectations for 1.1-2.4 million tonnes. Cumulative inspections year-to-date are 21,175,728
metric tonnes which is 10.9% below last year. This is 38.0% of the USDA's forecast for the 2022-23
marketing year versus the five year average of 39.5%.
 The Buenos Aires Grains Exchange indicated that if dry conditions are not reversed soon, part of the
soybean planted area may not get complete. Planted area is expected to reach 16.7 million hectors
but only 37.1% has been planted.
 Abiove estimated Brazil's 2022/23 Soybean Output at 153.5 Mln MT Versus 127.9 Mln MT in 2021/22.
 US weekly export sales report showed that for the week ending December 1, net soybean sales came
in at 1,716,221 tonnes (traders expected 600,000 to 1.45 million) for the current marketing year and
30,000 for the next marketing year for a total of 1,746,221. Cumulative soybean sales have reached
69.8% of the USDA forecast for the 2022/2023 marketing year versus a 5 year average of 65.5%.

Summing up, Indian Soybean prices are expected to trade sideways for the next 1-2 weeks. Tight
supply and strong meal prices supported the soybean price. While, Negative crush margins and
higher seasonal production limit the further gains.

Technical Analysis – Soybean

 Soybean NCDEX Spot prices
remained firm during
concluded week and settled
at INR 5093 mark mostly
unchanged from previous
week.
 Bearish momentum from
previous few weeks
diminished substantially
with prices hovering around
20week EMA, while the
demand seen during Oct-
Nov’23 remains intact
 On the broader front, a
sideways range – INR 4900-
5800 levels is evident on
higher timeframes, while
the potential V formation recovery in place recently suggests bullish momentum towards INR 5800
levels in medium term.
 The stochastic oscillator has eased towards neutral region inferring any further downside to remain
short lived while the 26 week EMA is seen to flatten and prices holding above the same shall validate
a potential positive turnaround.
 Henceforth, prices likely to hold firm above INR 4880-4900 levels amidst sideways bias in
forthcoming weeks while resumption of demand is likely resulting in an uptrend towards INR 5800
levels and higher.

Concisely, Soybean prices likely to drift higher towards INR 5450-5550 levels with any weakness to find
support around INR 4850 levels in forthcoming weeks.
 Technical Analysis - Soymeal

 Soy Meal Indore prices remained

firm and settled on positive note
at INR 48,000/ton registering
minor gains of INR 500/ton from
previous week.
 Prices are attempting to push
lower as a test of the potential V
formation recovery as seen during
past month, any
consolidation/range build up here
on shall validate previous positive
turnaround inferring bullish
sentiments.
 On broader front, sellers have
failed to breach INR 45,000 levels
on multiple attempts indicating a
transition towards an uptrend; the
sideways range INR 45,000-50,000 underway suggests the same.
 Momentum indicator- Stochastic oscillator has eased lower in neutral region from overstretched
thresholds suggesting any further weakness to remain short lived while the 26 week EMA is seen to
flatten and prices holding above the same shall validate a potential positive turnaround.
 Henceforth, prices likely to hold above INR 46,500 levels on immediate front and subsequently the
renewed buying interest seen lately is likely to continue towards INR 53,500-55,000 levels with any
weakness to find support around INR 47,500-48,000 levels in medium term.

Concisely, Soymeal spot prices likely to drift higher towards INR 49,500-50,000 levels with any further
weakness to find support around INR 46,500 levels bearing positive bias in forthcoming weeks.

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