January 20, 2009

US soy gained almost 2 percent to 3 percent in the last trading session as bullish cues from the domestic spot and international futures continued to support prices, according to NCDEX statistics.

The bullishness in the commodity is likely to continue further as there is no change in the fundamental factors in this week.

Following USDA's report last week, analysts thought that fundamentals could support a downside risk to the prices.

However, looking at the South American weather and its damaging impact on the local soy crop, there was a need to re-look at the situation.

Damage to Argentina's soy crop caused by drought conditions might be much worse than what USDA predicted earlier that week.

It was forecasted that more than half of the area planted with soy in Argentina would not get downpours until January 27, which could be too late for farmers, the report said.

Analysts at Kotak Commodity feel that soy for the February contract could test Rp2,350 (US$48).