India soybean erases gains; large-scale sowing seen

Jun 30 2009 2:55PM

MUMBAI, June 30 (Reuters) - Indian soybean futures erased early gains and fell on Tuesday afternoon on expectation of large-scale oilseeds sowing in the coming days and tracking weakness in Malaysian palm oil futures, analysts said.

At 2:30 p.m, the August soybean contract on the National Commodity and Derivatives Exchange was down 0.38 percent at 2,514 rupees per 100 kg, extending its over 2 percent loss in the last two sessions.

The August rapeseed futures fell 0.14 percent to 541.3 rupees per 20 kg.

Spot soybean prices in the central city of Indore was steady at 23,700 rupees per tonne.

Monsoon rains have covered most parts of Maharashtra and Madhya Pradesh states, according to the weather department, leading to expectations that farmers will now begin sowing the seeds in the coming days.

Soybean cultivation has been delayed by almost a fortnight in Maharashtra, the second biggest producer, and by at least a week in Madhya Pradesh, the largest producer, due to poor rains.

Weakness in Malaysian palm oil market also weighed.

At 2:33 p.m, the benchmark September palm oil futures contract on Bursa Malaysia Derivatives Exchange was down 1.72 percent at 2,223 ringgit a tonne.

Local soybean prices are often influenced by Malaysian palm, which is used as a substitute for soyoil, made by crushing the oilseed.