Protein Life. Lightning Speed. Inaugural Issue June 2013

Transcription

1 Protein Life Lightning Speed Inaugural Issue June 2013

2 2 LETTER FROM THE EDITOR Dear Readers, It gives us immense pleasure to communicate with esteemed members of CLFMA through this Trade bulletin. We are thankful to Dr. Dinesh Bhosale, Chairman of the CLFMA & Dr. P. E. Vijay Anand, Director - India Feed and Meal Program, USSEC for giving us an opportunity to write for CLFMA members. We have endeavored to deliver the best information based on various researches & development works connected to the Soy Industry in the past.. However, this Trade bulletin is our first attempt to deliver useful information and we will strive to do our best in the issues to come. We have made efforts to cover all aspects of soy in this issue and shall attempt to cover more about protein feed ingredients, corporate profiles and current affairs in future issues. We hope these trade bulletins will prove beneficial to the Feed Industry as a whole. We are grateful to our Editorial Board & Research Team who contributed a lot to make this issue reach all of you. Good luck and happy reading! Atul G. Mundhra

3 3 FROM OUR DESK.. Firstly, I would like to congratulate Shri Atul Mundhra Ji for coming out with this brilliant idea of introducing this monthly Trade bulletin for the Indian Oilseed & Feed Industry. Today we are in the age of Information at the Speed of Light and there is nothing better than sharing all the Information & Knowledge amidst the Trade Fraternity. As the old saying goes Knowledge shared is Knowledge Grown. There are a number of daily market information being exchanged in the trade on s & messages, but to a great surprise, none them really focuses or covers the Domestic Feed Industry in greater detail and accuracy. Although we call all extractions as just by-products of the Oilseed but in the literal sense it is not just a by-product but indeed an equally important component of the Oilseed. Therefore extraction which are normally in a higher volume percentage are fit to be termed as co-products. As they say you need both your legs to walk and here too you need the complete knowledge of both Oil & Extractions to evaluate the Oilseed Industry right and not the least the Feed Industry as well. More than 65% of Our Total Oil-Meals & Oil-Extraction Production is being domestically consumed by the Feed Industry and yet we are more driven by the Export Markets only because the Importance of Domestic Feed Industry is highly subdued. They have been simply price takers following lack of regular & timely information. In other words it is better put as Accurate Information. In light of the above, we certainly feel it is a very good task being undertaken by Shri Atul Ji to set a system created to flow regular & periodical information of Oilseed & Feeds with greater focus towards the Indian Feed Industry. This is a great step taken forward to merge the Oilseed Industry with the Feed Industry and create a platform for greater interaction between the two fraternities. It is good to recognize both these sectors because the are completely dependent on each other. On this note, we welcome this first edition of the monthly Protein Life trade bulletin and hope this proves fruitful to all in the Oilseed & Feed Industry. CA Nikhil Daga Member of Editorial Board Chairman, Salasar Group

4 4 SOY MEAL HIGH PROTEIN FEED Soymeal is a highest protein feed ingredient, consumed across the world. Indian Soymeal has a premium quality amongst other countries which is why India exports almost 50% of the produced meal & equivalent portion is consumed in domestic feed industry. A variety of meal products are available in India viz. 46, 48, 50 & 52% protein contents depending upon the requirement of buyers. Variants of Soy Meal Protein 46% Protein 48% Hi-pro 50% Super Hi-pro 52% Indian Soya Crop Arrival Estimate

5 5 SUPPLY & DEMAND SCENARIO Factors Influencing Soymeal Prices Crush margin & parities between meal, oil and seed Weather at the time of Soya crop production at all producing centers, domestic and international Exchange rate (USD/INR) Government policies such as Minimum Support Price (MSP) for seed, import duty on oil & export incentives on meal and stock limits Price of other competitive feed crops like Maize, Jowar, Bajra & other oil meals Disease affecting poultry and cattle like bird flu Demand of Soymeal from Foreign Countries and Domestic Poultry & feed Industry International soy price movement at CBOT, being the major international reference market Any other natural calamities beyond human control Forecast of Soya production around the world through USDA monthly Report Shipping freight & logistic operations

6 KEY INDICATORS Commodity CBOT Soymeal July, 2013 (Old Crop) CBOT Soymeal Nov, 2013 (New Crop) NCDEX Soybean July, 2013 ACE Soymeal June, 2013 Soymeal Spot (Ex- Indore) Soymeal Spot (Ex- Nagpur) Previous Close High Low Close Monthly Change (%) Dollar INR (Spot) Market Updates Indian Soymeal Prices dropped considerably during May 13 as South American Supplies hit the Destinations at a huge discount to Indian Markets inspite of sudden spurt in CBOT Meal prices by 8 %. Indian Markets traded almost USD 150 PMT above South American Markets following which India lost its Export Competitiveness save aside Iranian Markets Soybean Crushing Margins have been negative in M.P. and Maharashtra throughout the month, however, there has been some improvement in Maharashtra since past few days following increased Soybean Arrivals Domestic Demand of Soymeal and Other Oil-Meals were down by almost 15 % due to lower placement by the Poultry Industry on account of disparity Indian Soybean Crushing was on expected line around 450,000 Mts with Rajasthan, Maharashtra and Eastern M.P. catering to the Demand from the Domestic Feed Industry and Neighboring Countries while Western & Central M.P. servicing the Export Sector. Soybean arrival in Maharashtra picked-up during the second half of May after prolong strike on local tax issues in M.P. Farmers are still holding their produce and wanting to wait in anticipation of better prices ahead May 13 End Port Stock is estimated at around 150,000 Mts. In the beginning of June 13, Fresh Demand for Exports has emerged for prompt shipment from European Destinations and Iran which may result in higher exports in June of 160,000 Mts as compared to 98,000 Mts in May. Sudden spike in CBOT Meal following US Nearby Tightness, sharp depreciating Indian currency combined with Drop in Soybean Prices might bring some competitiveness back in Indian Soymeal in the Export Sector Indian South West Monsoon appears to be on time and progressing well thus far but some caution is required as the Japanese Weather Agency has just issued a revised Indian Monsoon Forecast showing some irregular breaks in the Monsoon after the 1 st Spell. Moreover, Soya Region in India has the tendency to follow Japanese Forecasts following which Farmers may retain with them a large carry-over this year 6

7 7 TRENDS USD : INR Price Trend Courtesy by NCDEX Courtesy by NCDEX

8 8 GUEST SPEAKS.. Soya meal The soya meal is extracted from the soya bean, regarded as an important crop throughout the world. Soya meal is regarded as the best vegetable protein food source and accounts for over 65% of the world's protein requirements. Trade scenario The most popular vegeterian protein source in the world, the annual worldwide soya meal production is around 132 million tonnes. The major producers of the soya meals in the world are United States, China, Brazil and India million tons is per year annual trade in India and most of the soya beans are used for production of soya meal in India. It is exported on a large scale. India is one of the major exporters of soya meal. Over two thirds of the soya meal is exported to various parts of the world. Soya meal accounts for a sizeable chunk of over 84% of total oilseed meal exports from the country. In Asia, Iran, South Korea, Thailand, Philippines and Japan a major importer of soya meal from India. India, does not import any soya meals as domestic requirements are easily met. The major trading centers for soy in India include Indore and Ujjain in Madhya Pradesh, Nagpur in Maharashtra and Kota in Rajasthan. Soya is a heavily traded commodity and the Chicago (CBOT) is known as the largest soya futures market in the world. Record 2013 South American production, coupled with slower than expected exports and crush, will lead to record soybean supplies at the height of the US harvest in October. When combined with a forecast record U.S. crop, global soybean supplies could be 30 million tons greater than last year, far exceeding expected demand. Larger Soybean Supplies and Lower Prices Forecast for 2013/14 These supplies would lead to significant stock rebuilding in exporting countries. However, abundant global supplies would also be expected to exert downward pressure on prices. November Chicago Board of Trade (CBOT) contract prices are currently down sharply from year-ago levels. With 5 months to go until harvest, the soybean price will ultimately depend on the size of the U.S. crop, China s demand for beans, and global demand for soybean meal. OVERVIEW For 2013/14, prevailing competitive prices are expected to boost global soybean production to a record level. Global import demand is forecast to rise driven by China, the EU, and Indonesia. Global trade for soybean meal and oil expands. U.S. soybean production is forecast at a record, and exports are expected to rise. U.S. season average farm price is projected at $10.50/bushel. For 2012/13, global soybean production is down with smaller crops in Argentina and the EU. Global trade is lower as China s imports are impacted by delays from South America. Global soybean meal imports are up led by stronger demand in several Asian countries. Global imports for soybean oil are also up slightly. The season-average U.S. farm price remains at a record $14.30/bushel. Continue

9 9 2013/14 TRADE OUTLOOK Global soybean meal trade is forecast to expand driven by demand in the EU and several Asian countries. EU imports are forecast at 20.8 million tons, up 800,000 tons; Indonesia at 3.6 million, up 100,000 tons; Thailand at 3.2 million, up 200,000 tons; Japan at 2.3 million, up 100,000 tons; and the Philippine at 2.1 million, up 100,000 tons. Table 08: Soybean Meal: World Supply and Distribution Thousand Metric Tons 2008/ / / / /13 May 2013/14 Production 151, , , , , ,719 Imports 51,582 53,060 56,510 57,225 56,844 59,137 Exports 52,851 55,607 58,555 58,327 58,871 61,557 Domestic Consumption 152, , , , , ,778 Ending Stocks 4,729 6,548 8,785 9,697 9,329 9,850 Technical outlook - Soya meal Soy Meal CBOT - Weekly Technical Chart Soyameal CBOT Daily Chart On the basis of daily and weekly chart of soymeal on CME it has rallied from $390 to $450 in 8 weeks and facing resistance at $453. Two consecutive closes above $453 will see further upside rally till $461 and then $467. $467 act as a major hurdle for Soy-meal, on weekly chart at CME it is forming double top at $465 which will be strong hurdle for this commodity in days to come. Three consecutive closes + weekly close above $467 will see a fresh kind of rally, else it could test its support level again of $441 and $427. At Present $441 and $427 act as major support for Soy-meal. Weekly close below $427 will see free fall in Soy-meal till $405-$397 and then to $385. Looking to the fundamental side which are not supporting at this stage for further upside rally in Soy-meal as world wide demand is shrinking as compared to last year. Looking to the Indian pricing as we are not having active participation in this commodity at both the exchanges on which commodity is listed for trading i.e. NCDEX and ACE. But looking to the CME chart and global trade scenario trader can sell soy-meal below $450 with strict stop loss of $467 for downside target of $441-$427. If CME is able to close below $427 on weekly basis then short position can be hold till $405. In Indian Market... Soy-meal has support at and Resistance at Manoj Kumar Jain President, Commodities & Forex IndiaNivesh Commodities Pvt. Limited

10 10 READER S PAGE 1v 2v 3v 4v 1h 3h 5v 2h 4h 6v Horizontal: 1. Name of a High Protein Content Oil Seed (8) 2. Processing Method of Various Raw Material (7) 3. An Association of Feed Manufacturers for Compound Feed to Live Stock (5) 4. Currency of United States (Short Name) (3) Vertical: 1. Short Name of a Department which presents WASDE (World Agriculture Supply & Demand Estimate) every month (4) 2. A Specification content of Soybean Meal (3) 3. To Examine Something (7) 4. Code of Indian Rupee (3) 5. Name of a Feed Ingredient (4) 6. Insects of crop (5) Editorial Board Dr. P.E. Vijay Anand CA Nikhil Daga Atul G Mundhra Strategy & Invention: CA Naynesh B Gandhi Designed by : Nikhil Parwal Highlights of Next Issue Guest Editor: Dr. Davish Jain Monthly Soy S&D Spot light on Indian Maize by Amit Sachdev India representative of US Grains Council Disclaimer : All views & information present in this Bulletin are personal intelligence of Atul Mundhra & Associates & Author of the articles therein further none of the view or information recommends to buy or sell anything, even if it causes any kind of loss arising out of believing in the views or information expressed here, we will not be liable for that. Reproduction or transmission of any content of this Bulletin without editor s permission is strictly prohibited. Corporate Address: Atul Mundhra & Associates AgroFeeds 79, Shri Nagar Main, Indore (MP) Contact us: Ph.: / 27, Fax: atulcorp@ymail.com