Indian oilseeds, soyoil rise on thin supply, global cues

(Reuters) – Indian oilseeds and soyoil futures rose on Monday following gains in overseas prices and thin supplies in local spot markets, though a strong rupee capped the upside.

U.S. soybean futures rose for a second session on Monday, extending two-day gains to more than 1 percent, as dry weather in Argentina threatens production.

Malaysian palm oil futures rose, stretching gains into a third straight day as the ringgit’s poor performance stoked demand from overseas buyers.

At 0844 GMT, the key January soybean contract on the National Commodity and Derivatives Exchange was up 0.49 percent at 3,892.50 rupees ($62.64) per 100 kg, while the January soyoil jumped 0.6 percent to 700.10 rupees per 10 kg.

“Soybean supplies are falling in spot markets. Farmers are not interested in selling beans at lower levels,” said Faiyaz Hudani, associate vice-president, research, at Kotak Commodity Services Ltd.

“The market is keenly watching the weather in south America. Any drop in soybean output there would increase demand for Indian soymeal.”

High temperatures and a lack of rain forecast for the coming days in Argentina’s farm belt will hurt the 2013/14 soy crop, the agriculture ministry said on Friday.

A strong rupee makes edible oil imports cheaper, and trims returns of oilmeal exporters. The rupee rose on Monday.

The rapeseed contract for January was up 0.25 percent at 3,682 rupees per 100 kg.

Indian farmers had cultivated rapeseed on 6.75 million hectares as on Dec. 19, compared with 6.36 million hectares a year earlier.

At the Indore spot market in Madhya Pradesh state, soybeans rose 41 rupees to 3,965 rupees per 100 kg, while soyoil jumped 7.70 rupees to 699.65 rupees per 10 kg. At Jaipur in Rajasthan state, rapeseed edged up 36 rupees to 3,686 rupees.

India’s soybean production in 2013/14 could fall by nearly 14 percent from a year ago to 9.5 million tonnes due to crop damage, an executive with the country’s top soybean processor said.