Soybean rises on shortcovering, fresh buying

Fundamental Analysis

March soybean futures ended in green on short covering and fresh buying at lower levels on Monday.

Traders are looking for US ending stocks to be lowered by nearly 30 million bushels from last month's total of 245 million.

Traders are also bracing for a possible increase in Brazil's soybean crop beyond last month's total of 65 million tonnes.

As per USDA’s weekly export inspections for soybeans came at 39.6 million bushels versus 43.6 million last week. This was the third straight decline from the previous week's total. Total inspections to-date stand at 71.2% of the USDA's projected export total for the marketing year versus a 5-year average of 58.1%. Traders indicate that the market is expecting export demand for soybeans to start to slow ahead of the Lunar New Year in China this weekend.

Technical Analysis

Prices closed above its 10 Day & below its 20 Day EMA. 14-Day RSI is at 42.95, which is in neutral zone.

Daily MACD entered in positive territory, which indicates positive market sentiments.

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

Outlook

Soybean prices are expected to trade higher on firm overseas market (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

Explore CommodityOnline Mobile Services