Soybean

Domestic Market Commentary:
Soybean (NCDEX April contract) futures moved in a range of Rs 2031.00 to 2095.50 a quintal in the last week. It has improved slightly as compared to the previous week on account of short covering only after continuous fall during the last 3 months. April Contract made a high of Rs 2570 a quintal on November 26, 2009 and declined sharply to touch a low of Rs 2011 a quintal on February 26, 2010. The fall of about 22% in the prices was witnessed due to poor export demand of domestic soy meal and higher global oilseeds production estimates for this year. This factor added to bearish market sentiments. As per the Solvent Extractors' Association of India, India's oil-meal exports in the first 11 months of the fiscal year (April 2009 - February 2010) declined to 30.00 lakh tonnes from 50.84 lakh tonnes a year earlier (down by 41%). Higher import of edible oil also favoured to the bears. The Solvent Extractors' Association of India has compiled the import data of vegetable oils (edible oils) for the first 3 month of edible oil marketing year (November 2009 - January 2010). It was reported at 23.02 lakh tonnes as compared to 20.95 lakh tonnes during same period last year (up by 10%).
International Market:
A Chinese official said on March 05, 2010, that China expects to decrease soybean acreage again this year and in the coming years China may import more soybeans to meet their domestic requirement. The Buenos Aires Grains Exchange left its estimate of the Argentine soybean crop unchanged at 52 million tones this week. The USDA will release their supply/demand report on March 10, 2010 and traders are expecting lower estimate of 2009/10 ending stocks to below 200 million bushels near 195 million in that report. Ending stocks lowered to 210 million bushels in February from 245 the prior month. In Census Bureau soybean oil stocks for January came at 3.224 billion pounds, up from 3.110 at the end of December. The USDA's weekly export sales released on March 04, 2010, revealed that export data was about in line with trade expectations. China cancelled 141,100 tonnes soybean import order from USA. Net weekly export sales for soybeans were totalled at 370,400 tonnes. As of February 25, cumulative soybean sales stand at 94.2% of the USDA forecast for 2009/2010 versus a 5 year average of 81.7%. Net meal sales were totalled at 88,900 tonnes. Cumulative meal sales stand at 82.7% of the USDA forecast for 2009/2010 versus a 5 year average of 57.1%. Net oil sales were totalled at 15,900 tonnes. Cumulative soybean oil sales stand at 74.9% of the USDA forecast for 2009/2010 versus a 5 year average of 47.3%.
Outlook:
In the coming week, soybean prices are expected to trade slightly higher on account of short covering after a continuous fall during the last 3 months. NCDEX April contract shall find a strong support at 2010/1980 levels and resistance at 2100/2140 levels for the coming week.
Technical Indicators:
On daily charts, prices closed below its 10 Day EMA (2059.40) and its 20 Day EMA (2071.60). Daily MACD-Histogram is in positive territory and 14-Day RSI is at 41.74, which is in neutral zone.