Jun 23 2009 6:42PM
MUMBAI, June 23 (Reuters) - Indian soybean futures erased most of its early losses and ended slightly up on Tuesday tracking sharp gains in Malaysian palm oil market, but weak spot demand weighed on sentiment, analysts said.
Soyoil prices ended up after touching new lows tracking sharp gains in Malaysian palm oil and steady spot market.
Traders in the spot market deferred soybean purchases as the advancing monsoon rains boosted prospects of higher supplies and pushed down prices, an Indore-based dealer said.
Soybean spot prices in Indore, a hub, fell 1.7 percent to 23,200 rupees per tonne, while soyoil prices rose 0.23 percent to 44,500 rupees per tonne.
India's annual monsoon rains, crucial for soybean cultivation, is expected to advance over more parts of Maharashtra, the country's second largest soybean producer.
"Conditions are favourable for further advance of monsoon over some parts of Gujarat, some more parts of Maharashtra including Mumbai, remaining parts of Karnataka during next 1-2 days," the weather department said on Tuesday afternoon.
Karnataka and Gujarat grow other oilseeds like groundnut, whose supplies also influence soybean prices.
Expectations of higher acreage also weighed on the soybean markets. India's soybean acreage may touch 10 million hectares this sowing season on better returns than most competing crops, experts said.
A firm Malaysian palm supported prices.
The benchmark September palm oil futures on Bursa Malaysia Derivatives Exchange ended up 5.98 percent at 2,286 ringgit a tonne.
Soybean is crushed to make soyoil, which competes with palm oil. Their prices often move in tandem.
As per latest government figures, oilseeds, including soybean, were sown over 0.41 million hectares, down over 17.5 percent from 0.5 million hectares sown in the corresponding period last year.
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