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SOYBEAN

NCDEX Soybean future traded mixed during the month of June due to increased demand in the domestic market with the effects of the supply tightness. However, prices fell in the initial week of June due to timely monsoon in the central states of India; which has improved the sowing prospects of soybean and other kharif commodities, bring a sentimental decline in agriculture commodities. According to the Solvent Extractors' Association of India, India's soybean area is expected to rise 9.9% on year to a record high of 13.3 million hectares in the crop year ending June 2021-22. By 21st June, NCDEX Soybean futures has closed at Rs.6894/quintal, similar compared to Rs.6873/quintal by 31st May.

Fundamentally for the coming month, we are expecting NCDEX Soybean Futures to trade bearish with forecasts of higher sowing acreage in the major states of Madhya Pradesh, Maharashtra and Rajasthan during the ongoing monsoon season. Based on the recent MD report; all India monsoon for the year 2021 is expected to be above normal in the central regions of India. Moreover, monsoon in India is scattered timely which will be an added factor for the yield of the soybean crop. Reports of crop switch from Guar seed to Soybean is expected to be witnessed in Rajasthan state which will also boost Soybean sowing acreage. Although, the demand for Refined Soy oil in India and Soymeal exports to the global buyers remain high, we expect the overall trend in prices of soybean to remain bearish, Elsewhere, in the United States, the progressive planting of Soybean to have increased on a weekly basis to 94% up from 92% same period last year and up from 5-year average of 88%. Further, the US soybean flower emerged by 86%, up from 79% same period last season and up from 5-year average of 74%. In the latest WASDE monthly, reports of higher opening and closing stocks of Soybean would add pressure in the global soybean prices as well.

NCDEX Soybean (July) future has been trading in a Sideways Trend for the last couple of days. The price has reversed from the prior demand zone and settled above the 100 Exponential Moving Averages, which is supportive for the bullish momentum. In addition, an oscillator Stochastic is also supportive for the long position with positive crossover. Furthermore, a momentum indicator RSI (14) reading is above 50 levels, which suggests a bullish move for the near term. Hence, based on above technical structure one can initiate a long position in NCDEX Soybean (July) future at CMP 7143 or a fall in the price till 7000 levels can be used as buying opportunity for the upside target of 7900. However, the bullish view will be negated if NCDEX Soybean (July) future close below the support level of 6700.

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