Soybean may trade lower on improved monsoon

Fundamental Analysis
Soybean (NCDEX October Contract) futures opened firm on account of firm closing of soybean futures at CBOT. However, prices fell sharply after making a low of 1997 levels, it managed to close at 2014 levels on Wednesday.

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.2014.00 per quintal on Wednesday; its high of the day was 2079.00 levels and touched a low of 1997.00 levels.

Prices closed below its 10 Days & its 20 Days EMA. 14-Days RSI is at 31.42.

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, lower export demand of soy meal and higher sowing acreage this year till date as compared to last year and globally soybean production is estimated higher as compared to last year also in favour of bears in the market.

Courtesy: Angel Commodities