Soybean likely to trade lower on improved monsoon

Fundamental Analysis
Soybean (NCDEX October Contract) futures closed lower on revival of monsoon rain in major growing region of soybean like Madhya Pradesh and Maharashtra.

As on September 03, 2009, Domestic kharif oilseeds area has been covered 162.81 lakh ha against 175.19 lakh ha during corresponding period a year ago.

The area under soybean is reported down at 94.96 lh against 95.38 lakh hectare a year ago, groundnut at 41.61 lakh hectare vs 50.89 lakh hectare in the corresponding period last year, sunflower sowing is reported at 4.57 lakh hectare against 5.10 lakh hectare, sesamum at 13.77 lakh hectare versus 13.88 lakh hectare last year, niger 1.60 lakh hectare against 3.14 lakh hectare and the sowing of castor seed is reported at 6.30 lakh hectare compared to 6.80 lakh hectare in the corresponding period last year.

Technical Analysis
Prices (NCDEX October Contract) closed lower at Rs.1959 per quintal on Saturday; its high of the day was 2002.00 levels and touched a low of 1942.00 levels.

Prices closed below its 10 Days & its 20 Days EMA. 14-Days RSI is at 28.15.

Prices are likely to trade down with short-term and support and resistance as follows:

Outlook
Soybean prices are expected to trade lower on account of improved monsoon rains and lower export demand of soy meal. Globally soybean production is estimated higher as compared to last year also in favour of bears in the market.

Courtesy: Angel Commodities