Soybean to trade higher on short covering

Fundamental Analysis

NCDEX Aug Soybean futures opened sharply higher on global cues on Wednesday.

India has completed sowing 80% of its crop area in major growing areas.

As per USDA’s monthly Supply & Demand Report, the US oilseed ending stocks for 2009-10 are projected at 8 million tonnes, up 1.1 million tonnes from last month. Oilseed production is projected at 96.30 million tonnes, up 1.18 million tonnes. Soybean production is projected at 3.26 billion bushels, up 65 million bushels due to increased harvested area.

Global oilseed production for 2009-10 in increased 2 million tonnes to a record 423.4 million tonnes. Soybean production is projected at record 243.7 million tonnes, up 2.1 million tonne mainly due to higher production of US.

Technical Analysis

Prices (NCDEX Aug Contract) closed higher at Rs.2305.00 per quintal on Tuesday; its high of the day was 2318.00 and touched a low of 2280.00 levels.

Prices closed below its 10 Days & its 20 Days EMA. 14-Days RSI is at 32.11.

Outlook

Soybean prices are expected to trade slightly higher on short covering and on account of lower stock of soybean and weak monsoon rains in major producing states. However, for long term, prices are expected to move southwards owing to higher sowing acreage estimates for this year as compared to last year on account of better realization to farmers as compared to other crops. Globally soybean production is estimated higher as compared to last year may provide support to bears.

Courtesy: Angel Commodities

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