Knowledge Byte: IMPULSE RISE IN SOYBEAN PRICES | Swastika Blog - Share Market Updates, Latest News and Expert's Tips | Swastika Investmart Ltd (Swastika Investmart) Swastika

Knowledge Byte: IMPULSE RISE IN SOYBEAN PRICES

Soybean is one of the primary commodities which is traded on NCDEX. These days vast blow has been viewed in its prices as trading around its all period high. It is because of the lack of supply in the physical market and the increase in demand.

Another reason is monsoon stipulations as excess rainfall has been seen within more than a few soybean producing states like Maharashtra where the sowing has been affected badly because of delay in monsoon the sowing in Madhya Pradesh also got affected.

But looking at the contemporary situation, it is anticipated to have good sowing in Madhya Pradesh in the near term because of ongoing monsoon conditions namely as each of these states makes a contribution in accordance with around 89% in the quantity produced.

 

WORLDWIDE SOYBEAN PRODUCTION (ACTUAL & FORECASTED)

Year US Brazil Argentina China India
2021-2022  119.884 144 52 19 11.2
2020-2021 112.549 137 47 19.6 10.45
2019-2020 96.667 128.5 48.8 18.1 9.3
2018-2019 120.515 119.7 55.3 15.967 10.93
2017-2018 120.065 123.4 37.8 15.283 8.35

 

As per SOPA, the worldwide soybean production has been increased over the years and the 2021-2022 forecast has also been increased compared to the last few years.

Last year the prices surged because of the buying done from China’s end as because of fear of coronavirus cases China was continuously buying it to meet its domestic demand in future but as it got sufficient supply, the correction was seen in the prices of soybean.

In addition to this, soybean was used as feed for the cattle in the cattle industry and poultry farms but now it has been substituted with wheat and rice which also led to the low import of it. Since China is the biggest importer of Soybean and Soy complex so any action from their end has direct on the prices of soybean worldwide.

 

India’s Major Soyabean Producing States

 As in the past few days or last week, multiple times circuit has been seen in the prices of soybean, SOPA said that it is completely taken over by the speculators, the end-users of soybean or soybean meal like poultry industry/aquaculture are extremely suffering because of such speculation activities.

To support its claim, SOPA said, “In the last seven trading sessions, the soybean futures contract on NCDEX has gone up by 21.77% and the upper circuit had to be applied 4 times.” In addition to this SOPA also said that there is no physical stock in NCDEX warehouses and the demand and supply for oil in the year 2020-2021 were slightly tight.

 “To curtail speculation, we request to increase margin money from current 25% to 50% for lean season contracts and that the circuit limit in lean season should be reduced to 2% a day, “said SOPA in a release.

But recently it came into the news that the exchange denied the SOPA request, as per the NCDEX there is no speculation and prices are trading fairly as there is non-availability of the soybean in the physical market and demand is increasing rapidly. So we can say that in the near term some more upside view can be seen in the prices of soybean.

To know more about commodities, go for Swastika Investmart.

Swastika is a renowned stock broker that offers outstanding stock trading services at affordable brokerage rates. Contact us to learn more.

Leave a Reply

Your email address will not be published. Required fields are marked *