Oilseed prices firm up as fears of output fall loom large

MUMBAI: Prices of vegetable oilseeds ��� soyabean, mustard seed and castor seed ��� are moving up, tracking firm global trends and on fears of low oilseed acreage in Maharashtra, Gujarat and Andhra Pradesh. Soyabean moved up Rs 12 per quintal to Rs 2,754 in Indore spot market, mustard seed moved up Rs 30 a quintal to Rs 3,295 at Jaipur mandi and castor seed moved up to Rs 625 per 20 kg from Rs 612 the previous day in Gujarat mandi.

Soyabean prices are tracking high crude palm oil futures, which closed RM 26 up at Malaysian Ringgit 3,550. Low stocks and reports of low acreage in Maharashtra are also supporting prices. However, the overall soybean acreage in the country is up due to an increase in cultivation in Madhya Pradesh. Rajesh Agrawal of the Indore-based Soybean Processors Association said there can be a drop in overall oilseed production this year if there are no rains in Maharashtra over the next few days.

Insufficient rainfall in key oilseed growing areas has affected the acreage. According to the latest data released by the agriculture ministry on July 11, soybean acreage in Maharashtra is down almost seven lakh hectares (lh) at 11 lh. The groundnut acreage is 24.56 lh, compared with 26 lh by this time last year. In castor seeds, the acreage is down especially in Andhra Pradesh and Gujarat.

On the futures counter at NCDEX most of the castor seed contracts hit the upper circuit. Castor seed August contract closed up 3.8% at Rs 646 per 20 kg, soybean August contract closed 1% up at Rs 2,732 per quintal and mustard seed September contract closed up 1.3% at Rs 683 per 20 kg. Mustard seed contracts affected by low stocks as well.
Research analyst Badruddin from Angel Commodities is bullish on castor seed and soybean. ���Soybean can further show an upside and the first resistance may come at Rs 2,750,��� he said.

Global rally in oilseed and oil prices has been triggered by movement in crude oil prices, which have reached $146 per barrel levels. High crude oil prices raise concerns that edible oil may be diverted to make biofuel.

Amol Tilak from Kotak Commodities said further protests in Argentina could affect palm oil supply as the government there wants to impose an export tax on palm oil products. He added that though the bad weather in the US mid west region is getting normal, it has already affected the soybean crop.