Fundamental Analysis

April soybean futures ended slightly higher on short covering on Thursday.

The USDA’s weekly Export Sales report for soybeans showed major cancellations from China and from unknown destinations.

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 36.91, which is in neutral zone.

Daily MACD is in positive territory.

Outlook
Soybean prices are expected to trade lower on weak overseas owing to export order cancellation of US soybean (for short term). 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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