Soy futures plunged on Monday (July 26) due to strong selling pressure as brought about by active rainfall across key soy-growing regions of India.

Weak trend in overseas market also resulted into sharp fall in the prices. Concern of yield loss due to hot and dry weather condition that prevailed till last week has been erased following good rainfall.

Investors and traders sold soy futures anticipating fall in demand at these higher levels. Rise in acreage under soy cultivation was also one of the reasons. The soy futures are expected to trade lower during the day on extended selling pressure backed by bearish fundamentals.

An improvement in weather condition is boosting the crop prospect of soy in major production region. According to Indian Meteorological Department, the country has been receiving good amount of rainfall, which is boosting the agricultural activity.

Soy sowing is done in around 95% of the normal area and it is likely to be completed by end of this week. Standing crop is performing well following active rainfall across central and north India.

According to Union Ministry of Agriculture, soy is sown in an area of 80.28 lakh hectares against 81.53 lakh hectares sown in the same period last year. Active rainfall across key soy growing regions would boost the standing crop and ease yield loss concern.

The fall in open interest and rise in volume along with fall in price is indicating further weakness during the day. The CBOT soy futures tumbled to two week's low on improved crop outlook on favourable weather condition. The active August contract CBOT soy futures tested an intraday low of US$9.93 per bushel from a high of US$10.14 per bushel.