Agri markets traded higher despite some profit booking during the middle of the week. Erratic monsoon in most parts of India is creating apprehensions of crop damage. Excess rains in many parts of South, North-East and Central India, along with floods in parts of Gujarat are keeping sentiment firm for agri commodity prices. Again low rains in many areas of North-West India are reportedly unfavourable for the crop sown there.

We are witnessing continuous rise in Guar prices (as per our earlier report). Chana, too, has shown moderate recovery from these lower levels. Spices, that have been relatively stable over last few months, on lack of demand – now have started rising strongly. Demand, on the export front, has reportedly started rising for Spices. Oil complex has been very volatile, but the overall view remains firm.

Soybean found some resistance after trading in green till noon on July 23. In coming sessions, upside will remain capped despite strength in edible oils. This is because of significant increase in sowing area versus last year. Monsoon performance has been quite satisfactory till now. The actual rainfall received in the country for the week ending July 16 is reported at 338.3 mm against normal of 308.4 mm.

There has been an increase in 10 percent of Kharif sowing area during the period from 01.06.2020 to 16.07.2020. Oilseeds 154.95 lakh hectare area against 110.09 lakh hectare area last year i.e. area coverage increased by 40.75 percent. Soybean planted area as per current data indicates a significant jump to 109 lakh hectares versus 79 lakh hectares area covered previous year corresponding period. Demand in poultry product is showing improvement slowly and one has to observe to whether demand for poultry products is able to favour prices to sustain above Rs 4,000 per quintal in longer run. The egg market is stabilizing slowly and as per market views it will take few more months for situation to improve for the poultry product business.

The July month’s USDA reports conveyed that the US old-crop ending stocks were estimated at 620 million bushels versus the trade’s expectation of 585 million and the USDA’s June estimate of 585 million. For 2020/2021, the US soybean ending stocks were estimated at 425 million bushels versus the trade’s expectations of 424 million bushels and the USDA’s June estimate of 395 million. For soybeans, the world data saw increased production from Brazil, a negative surprise. There was actually no surprises, with the USDA accounting for the June stocks and acreage reports in today’s WASDE release. Of note is the projected decline in soybean stocks of almost 200 million bushels from this season to next, which leaves little margin for yield declines this year.

The weekly price outlook for soybean remains marginally positive as per existing factors. As seen on the short term or daily charts, August soybean may trade with upward bias unless fails to stay above Rs 3,750 per quintal for at least couple of hours. Weekly trading range seems between Rs 3,700-3,875 per quintal.