June 8, 2010

 

Indian soy futures on negative row amid selling pressure

 

 

India's soy futures opened the week on a negative note extending its previous week-end's weakness on extended selling pressure backed by weak fundamental factors and tracking weak global market.

 

An improvement in arrivals to the spot market also had a bearish impact on the spot as well as futures prices. Moreover, market reacted very positively to the bearish soy meal export data released by the Soy Processors' Association of India.

 

Meanwhile, favourable condition for progress of monsoon was also one of the factors for fall in the prices.

 

The active July contract NCDEX soy futures made an intraday low of Rs.1914.50 per quintal from a high of Rs.1937.50 per quintal and settled at Rs.1926 per quintal.

 

The soy futures are expected to open flat and likely to trade slightly positive tracking firm global market during initial hours, but, later likely to resume downtrend based on bearish fundamental factors

 

In order to clear-off the soy stock, farmers are bringing more produce to the spot market, which is resulting into supply pressure in the spot market.

 

According to the Solvent Extractors' Association of India, oilmeal exports in May declined by 2.66% to 173,604 tonnes against 178,350 tonnes in the same period a year ago.

 

Soymeal exports in May fell 21% to 60,575 tonnes from 77,018 tonnes in the corresponding period a year ago.

 

The open interest in July contract fell by 0.74% to 134,330 tonnes from 133,340 tonnes and volume surged by 91% to 32,930 tonnes from 17,210 tonnes.

 

The rise in volume and open interest along with fall in price is indicating further weakness in the prices.

 

On global front, CBOT soy futures traded in a very thin range and ended almost flat in absence of fresh fundamental triggers in the market According to National Agriculture Statistics Service division of USDA, 84% of the soy planting has been done as on 6th June against 76% in the same period a year ago and 66% of the sown crop has emerged against 52% in the same period a year ago.