Soybean to trade lower on poor export demand

Fundamental Analysis

NCDEX Soybean futures moved in a narrow range amidst lackluster demand of soybeans due to poor export demand of soy meal. However, soybean futures ended slightly higher on Saturday on account of lower stock of soybean.

Soybean (NCDEX Aug contract) prices opened the week at Rs 2550/quintal initially fell sharply on account of lower export demand of soy meal from global livestock industry.

However, it could not sustain at lower levels and prices moved slightly higher after making a low of 2462 levels and finally managed to close at 2490 levels on account of short covering, value buying, lower stock of soybean and delayed monsoon in major growing areas also provided support to bulls in the market.

Oil meal exports declined to 1,97,593 metric tonnes in June 2009, down 33% as compared to 2,95,204 metric tonnes in June 2008.

Technical Analysis

Prices (NCDEX Aug Contract) closed lower at Rs.2490.00 per quintal on Saturday; its high of the day was 25180.00 and touched a low of 2482.00 levels.

Prices closed below its 10 Days & its 20 Days EMA. 14-Days RSI is at 38.25.

Outlook

Soybean prices are expected to trade lower on account of poor export demand of soy meal from global livestock industry for short term. For medium term, prices are expected to move northwards on account of lower stock of soybean and monsoon rains is weak at the start of soybean planting season, which is delaying planting 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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