Soybean arrivals continues to be lacklustre

Fundamental Analysis

Soybean (NCDEX January Contract) futures closed higher on account of thin arrivals in physical market.

Firm soybean futures at CBOT also added bullish market sentiments.

The USDA’s Weekly export sales for soybean came at 1.349 million tonnes as compared with expectations of less than 1.0 million. Cumulative soybean sales stand at 73.3% of the USDA forecast for the season vs. 49.0% as the 5-year average. Sales need to average just 227,000 tonnes in soybeans each week to reach the USDA forecast.

Meal sales were 357,500 tonnes for the 09/10 season to drive cumulative meal sales to 51.3% of the USDA forecast for versus a 5 year average of 34.2%. Sales need to average 94,000 tonnes each week to reach the USDA forecast.

Technical Analysis

Prices (NCDEX December Contract) closed higher at Rs.2435.00 per quintal on Monday; its high of the day was 2449.00 levels and touched a low of 2409.00 levels.

Prices closed above its 10 Day & above its 20 Day EMA. 14-Day RSI is at 78.56, which is in overbought zone.

Outlook

Soybean prices are expected to trade slightly higher on account of lower arrivals in physical market (for short term). However, in the long term it is expected to trade lower on account of harvesting pressure and lower export demand of domestic soy meal. Globally soybean production is estimated higher as compared to last year also in favour of bears in the market. Brazil's Conab, which is a division of their Department of Agriculture, raised its soybean estimate slightly to 63.05 million tonnes versus an estimate of 62.8 million tonnes last month.

Courtesy: Angel Commodities

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