Last week, the Soybean market in Solapur, Maharashtra experienced a price drop, starting at Rs. 5,300 per quintal on 4 September 2023, and closing the week on 8 September 2023 at Rs. 5,210 per quintal. This decline of Rs. 90 per quintal was primarily attributed to low Soybean demand. The preceding week had witnessed favorable rainfall in major Soybean-producing regions leading to a bumper crop. Let’s explore the current market scenario.

Price Decrease Due To Abundant Supply

The recent drop in Soybean prices can be attributed to the favourable weather conditions that prevailed in key Soybean-producing regions. Despite the good rainfall in producer states during the previous week, the market struggled due to a lack of buyers. This led to a reduction in buying prices by Rs.100-150 per quintal. Farmers and traders found themselves facing lower returns on their Soybeans.

For instance, in Maharashtra prices declined from Rs.5,350 per quintal to Rs. 5,150 per quintal, while in Madhya Pradesh, prices dropped by around Rs. 100 per quintal to reach approximately Rs. 5,075 per quintal.

Crop Status

Recent rains since 3 September 2023 have provided much-needed relief to Soybean crops in most regions. These rains have been a lifeline for the Soybean crops, aiding in their development. However, it’s important to note that some areas are still lacking sufficient rainfall, especially in the early stages of crop growth. September 2023 is a critical month for crop development, and meteorologists will closely monitor the weather to ensure that the crops receive the necessary conditions for growth.

Silver Lining For Late-Sown Crops

Late-sown varieties of Soybeans, which typically require over 100 days to mature, are expected to benefit significantly from the recent rainfall. Farmers who wisely chose these varieties are now seeing the potential for a successful harvest. This rainfall is very beneficial and will help in giving good weight to the seeds. This sentiment is echoed by many farmers who opted for late-maturing Soybean varieties.

Trouble Looms For Early-Sown Varieties

Early sown Soybean varieties have borne the brunt of the dry spell, and the recent rainfall may have come too late to salvage them. Farmers estimate that more than 40-50% of the early sown Soybean crops in Madhya Pradesh have suffered damage and are unlikely to recover.

Changing Landscape In Madhya Pradesh

Madhya Pradesh is a significant contributor to India’s Soybean production, with farmers sowing Soybeans on around 52-54 lakh hectares of land. Soybean, Cotton, and Maize are the primary Kharif sown crops in the state. The recent weather fluctuations, including the extended dry spell followed by heavy rainfall, are reshaping the agricultural landscape in MP.

Diversification Into Horticulture Crops

As farmers face the grim reality of damaged early sown Soybean crops, many are exploring alternative options. Some are turning to horticulture crops, such as Garlic, Peas, and other vegetables, which are better suited to the current weather conditions. This shift towards diversification may provide a safeguard against the unpredictability of the monsoon in the future.

Market Outlook

The momentum within the Soybean market highly depends on weather conditions, and current expectations are for continued rain in production states over the next 2-3 days. Given the existing stocks and demand, there is no anticipation of a significant Soybean price increase. However, pressure may build up as the new crop arrives, which is expected around 10 October 2023-15 October 2023.

This leaves ample time for the crop to mature, and any weakness in prices might prompt stockists to sell off their stocks. With substantial forward stocks and this year’s production, it’s not advisable to anticipate prices reaching Rs. 7000-8000 per quintal. Due to factors like cheap imported edible Oils and a slowdown in trade, Soybean prices are likely to hover between Rs.6000-6100 per quintal at most. This range reflects the market’s stability despite recent fluctuations.

OFB’s Insight

The recent Soybean price drop in Maharashtra and Madhya Pradesh can be attributed to anticipation of surplus supply resulting from favourable weather conditions. While the condition of the Soybean crop has improved in most regions, the upcoming weeks will be crucial. If the weather turns unfavourable in the coming weeks, there is hope for a recovery from the lower price.