June 28, 2010

Indian soy futures stage strong rally on bullish factors

India's soy futures staged a strong rally on Saturday (Jun 26) extending Friday's (Jun 25) gains on follow through buying supported by bullish fundamental factors.

Slower pace of soy sowing in major growing areas due to lack-lustre monsoon activity led the soy futures to show a sharp rise on Saturday. There was no active rainfall in central India during the week, which raised the concern over sowing progress.

Positive trend in CBOT soy market on Friday also supported the Indian market.

The active July contract NCDEX soy futures tested an intraday high of INR1936 (US$41.8) per quintal from a low of INR1910 (US$41.3) per quintal and settled at INR1927.50 (US$41.6) per quintal, gaining by 0.84%.

Lull in monsoon activity is leading to slower pace of kharif soy sowing in major growing areas. As a result of poor monsoon activity, the sowing activity was affected during the week.

According to Union Agriculture Ministry, area brought under soy cultivation was 1.048 lakh hectares so far against 1.630 lakh hectares in the same period last year. If the monsoon is not revived quickly, further delay in active sowing is expected in central India.