Indian soybeans hit over 20-month high on poor monsoon forecast

(Reuters) – Indian soybean futures jumped 3 percent on Friday to their highest in more than 20 months on concerns that production of the oilseed may drop in the next season if the country receives lower rainfall, three dealers said.

India is likely to witness below-average rainfall in 2014, the government’s weather office said on Thursday, if El Nino hits the June-September monsoon season.

Soybean is cultivated mainly on rainfed areas in India from June onwards and harvesting starts from end September.

At 0711 GMT, the key April soybean contract was up 2.60 percent at 4,630 rupees ($75.83) per 100 kg on the National Commodity and Derivatives Exchange, after rising to 4,651 rupees earlier in the day, the highest level since Aug. 10, 2012.

“Soybean supplies are limited due to a drop in this year’s production. If we get poor rainfall, then again we will see a fall in the next year’s production,” said a dealer based in Indore in central Indian state of Madhya Pradesh. ($1 = 61.0550 Indian Rupees)