India soybean, soyoil extend gains on monsoon forecast

Jun 25 2009 7:05PM

MUMBAI, June 25 (Reuters) - Indian soybean and soyoil futures ended up for second day on Thursday tracking firm spot prices as traders bought anticipating supplies may get affected on a below-normal monsoon forecast, analysts said.

Sharp gains in Malaysian palm oil also supported prices.

The new-crop October soybean futures touched a life-high of 2,407 rupees per 100 kg in early trade.

Soybean spot prices in Indore, a hub, rose 2.6 percent to 23,900 rupees per tonne as demand surged, while soyoil prices in Indore, a hub for trade in the commodity, rose 0.88 percent to 45,700 rupees per tonne.

Earth Sciences Minister Prithviraj Chavan told a news conference on Wednesday that the 2009 monsoon rainfall would be 93 percent of the long-term average, lower than an earlier forecast of 96 percent.

Monsoon rains are crucial for sowing of kharif crops including soybean.

The western state of Maharashtra, the second largest domestic soybean producer, may face erosion in acreage and poor yield if rains are delayed beyond first week of July, a senior government official said.

Strong Malaysian palm oil futures also supported prices.

The benchmark September palm oil futures on Bursa Malaysia Derivatives Exchange ended up 3.82 percent at 2,336 ringgit a tonne as traders bet more orders from India after government said monsoon rains could be below normal.

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