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SOYBEAN

NCDEX Soybean future initially traded higher during the month of May due to increased demand in the domestic market with the effects of the supply tightness. However, prices fell majorly in the second of May due to lockdown situation in various states which eventually nearly nullified the auctions in the APMC Markets. The CONAB data has forecasted Brazil soybean production at 135.13 million tonnes of soybean in 2020-21, higher than 133.81 million tonnes from February month forecast. It is also kept higher against 124.85 million tonnes in last year, but then prices are not found correction. By 20th May, NCDEX Soybean futures has closed at Rs.7031/quintal, similar compared to Rs.7107/quintal by 30th April.

Fundamentally for the coming month, we are expecting NCDEX Soybean Futures to trade bearish with forecasts of higher monsoon in the major states of Madhya Pradesh, Maharashtra and Rajasthan during the upcoming monsoon season. Based on the recent IMD report; all India monsoon for the year 2021 is expected to be around 98% to 102% of normal. Moreover, monsoon in India is expected to be on time which will be an added factor, As per SEA recent report, India’s Apr 2021 soymeal exports increased by 53% to 39,705 metric tonnes compared to 25,940 metric tonnes in the same period last year. Lockdown restrictions has been lifted in various states of India now and heavy supplies has been witnessed in the Indore market. As per recent USDA report, Soybean production in the world is likely to increase by 6% to 386 million tonnes in next marketing season (September- 2021- August 2020) in expectation of higher crop size in US and India. Total crop size in India may stand higher by 750,000 tonnes to 11.2 Million tonnes against 10.45 Million tonnes in this season. Overall, we expect a bearish trend in NCDEX Soybean prices in the month ahead.

On the daily chart, NCDEX SOYBEAN (Jun) future has given a breakdown of Symmetrical Triangle Pattern with large Bearish Engulfing candlesticks pattern, which indicates bearish movement in the near future. However, the price has taken support of prior demand zone & also the RSI indicator |s at oversold zone which indicates slightly recovery inthe counter. In addition, the price has settled below 21 Exponential Moving Averages, which confirms bearish momentum in the near future. Hence, based on above technical structure, we are recommending sell on rise strategy in NCDEX Soybean (June) future, so one can initiate a short position in NCDEX Soybean (June) future around 7200 or a rise in the price till 7300 levels can be used as selling opportunity for the downside target of 6700. However, the bearish view will be negated if NCDEX Soybean (Jun) future close above the resistancel level of 7600.

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