Soybean futures in NCDEX ended up on Tuesday tracking overseas gains in edible oil and oilseeds, which rose on tracking buoyant financial markets supported by government intervention, the gains in prices were supported by a pick-up in the demand for the oilseed from the millers, Prices in the spot market in Indore rose 5.76 percent to 15,600 rupees a tonne.

However, the gains were limited as arrivals in the spot markets rose. From last few days new crop arrivals are gained momentum. Arrivals in Madhya Pradesh and Maharashtra markets stand at about 500,000 bags of about 90 kg each.

Soybean prices (new) in the Nagpur Agriculture Produce and Marketing Committee APMC) today showed weak tendency on lack of demand from local traders amid good arrival from producing region. High moisture content (About 17 per cent) Soya arrival, no takers to soymeal and reports about further fall in Madhya Pradesh Soya mandi also affected sentiment.

Brazil is likely to harvest 60.0 million tonnes of soybeans in the 2008/09 season in early 2009, 300,000 tonnes less than in 2007/08, Argentina's 2008/09 soybean crop in early 2009 at 49-to-50 million tonnes against 50-to-51 million tonnes forecast in August and well up from 47.0 million tonnes harvested in early 2008. Dry weather has prevented Argentine farmers planting the wheat and sunflowers they had intended and instead more have turned to soybeans.

Influencing Factors:

Moderate spot market
Short covering
New crop arrivals started
Increasing Chinese Imports
Supply greater than demand
Higher Price movements in DCE
Lower energy prices
India is likely to produce a record soybean crop of about 10-12 million tonnes
The government imported around 169,000 tons of edible oil over the last few months
The government has banned export of edible oil for one year to check rising domestic prices and control inflation. The ban will be in place till March 16, 2009.

Technical Outlook

Technically Soy Bean October closed below 9 day EMA and 21 day EMA.

Today’s Recommendation

NCDEX Soy Bean October buy above 1703, SL below 1685, Targets 1715, 1728, 1735

Courtesy: JRG Wealth Management