Soybean prices expected to open slightly higher

Fundamental Analysis
NCDEX Aug Soybean futures closed fell sharply lower on good monsoon rain in major producing states like Madhya Pradesh and Maharashtra and lower export demand of soy meal also provided support to bears in the market. However, prices recovered on short covering and managed to close at 2170 levels.

Production estimates of soybean are about 90 lakh tonnes this year, if rain will be good in August.

USDA’s Weekly Export Sales figures released on Thursday and it was supportive for soybean, net export sales for soybean 702,000 metric tonnes.

As of July 16, cumulative soybean sales stand at 101.4% of the USDA’s forecast for 2008-09 versus 5 years average of 99.9%. Net export sales of meal were 192,700 tonnes. Sales need to average 110,000 tonnes each week to reach the USDA’s forecast.

Technical Analysis
Prices (NCDEX Aug Contract) closed mildly higher at Rs.2170.00 per quintal on Tuesday; its high of the day was 2180.00 levels and touched a low of 2137.50 levels.
Prices closed below its 10 Days & its 20 Days EMA. 14-Days RSI is at 25.00. Prices are likely to trade down with short-term and support and resistance as follows:

Outlook
Soybean prices are expected to open slightly higher on firm overseas market for short term. For medium term, soybeans are expected to trade lower on revivals of monsoon rains in major producing states like Madhya Pradesh and Maharashtra. Lower export demands of soy meal are also in favour of bears. Globally soybean production is estimated higher as compared to last year may provide support to bears.

Courtesy: Angel Commodities