June 1, 2010

US soy futures in red on profit booking

US July soy futures ended in red on account of profit booking after sharp rise in the last week.

The USDA's weekly export sales were below trade expectations for soy and meal. Net sales for soy came in at 175,400 tonnes for the current marketing year and 120,000 for next year for a total of 295,400. Old crop sales need to average 88,000 tonnes each week to reach the USDA forecast.

Net meal sales came in at 47,400 tonnes for the current marketing year and 24,000 for next year for a total of 71,400. Old crop sales need to average 86,000 tonnes each week to reach the USDA forecast. The Census Bureau released its monthly crush report for April on May 26, 2010.

The total amount of soy crushed was pegged at 136.5 million bushels, nearly a million and a half bushels below trade expectations.

Prices closed above its 10 Day and its 20 Day EMA, which indicates bullish market sentiments. 14-Day RSI is at 62.72, which is in neutral region.

Meanwhile, analysts expect soy prices to trade range bound with weak sentiments on account of lower demand from solvent extractors and ahead of sowing season. Better carry over stock of soy this year as compared to last year is also in favour of bears.

However, in the long term perspective, soy prices are expected to trade lower on higher global soy production estimate this year as compared to last year. Decline in domestic oil meal export this year as compared to last year are also in favour of bears.