Fundamental Analysis

April soybean futures ended lower on weak overseas market and poor export demand of soy meal on Monday.

Better global production of Soybean and lower exports of Soy meal may pressurize the prices of Soybean complex in the short term.

Net sales for soybeans came in at a negative 115,800 tonnes for the current marketing year and 65,100 for next year for a total of minus 50,700 tonnes. As of March 4th, cumulative soybean sales stand at 92.5% of the USDA forecast for 2009/2010 versus a 5 year average of 83.3%. Sales need to average 111,000 tonnes each week to reach the USDA forecast. Net meal sales came in at 1,900 tonnes for the current marketing year and 300 for next year for a total of 2,200. Cumulative meal sales stand at 81.2% of the USDA forecast for 2009/2010 versus a 5 year average of 59.0%. Sales need to average 60,000 tonnes each week to reach the USDA forecast.

Technical Analysis

Prices closed below its 10 Day and below its 20 Day EMA, which indicates bearish market sentiments.

14-Day RSI is at 30 and is trading in the oversold region.

Daily MACD turned in negative territory.

Outlook

Soybean prices are expected to bounce back due to short coverings and firm international prices in the intraday but bearish fundamentals may cap the upside. Further, in the long term perspective, soybean prices are expected to trade lower on poor export demand of domestic soy meal and favorable weather in Argentina for soy bean crop. Globally soybean production is estimated higher as compared to last year also in favour of bears in the market.

Courtesy: Angel Commodities

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