NCDEX February soybean futures traded higher

Soybean: NCDEX February soybean futures traded higher on account of firm overseas market and improved demand in physical market. Government of India imposed 2.5% import duty on crude edible oils from zero percent to protect domestic crushing industry and in the interest of oilseed growers also provided support to oilseed price. According to US Department of Agriculture’s weekly export sales report, Net weekly export sales for soybeans came in at 1,608,800 tonnes for the current marketing year and 180,000 for the next marketing year for a total of 1,788,800. The USDA also reported that US exporters sold 240,000 tonnes of soybeans to an unknown destination for the 2013/14 crop year. Sales of only 117,000 tonnes are needed each week to reach the USDA forecast. Net meal sales came in at 236,100 tonnes for the current marketing year and 9,000 for the next marketing year for a total of 245,100 tonnes. Sales of 45,000 tonnes are needed each week to reach the USDA forecast. Net oil sales came in at 12,900 tonnes for the current marketing year and sales of 8,000 tonnes are needed each week to reach the USDA forecast. Strong demand from international buyers continues to add support to the market but an expected record crop in Brazil could limit gains long term. A private analyst in Brazil raised their production forecast for Brazil to 84 million tonnes, up 900,000 tonnes from their prior estimate and vs. the USDA forecast of 82.5 million tonnes. According to World Agricultural Supply and Demand Estimates (WASDE), US Department of Agriculture, U.S. oilseed production for 2012/13 is estimated at 92.7 million tons, up 1.4 million tons from last month. Soybean production is estimated at 3.015 billion bushels, up 44 million bushels based on increased yields and harvested area. The soybean yield is estimated at 39.6 bushels per acre, up 0.3 bushels from the previous estimate. Global oilseed production for 2012/13 is projected at a record 465.8 million tons, up 2.8 million due to increases for soybeans, cottonseed, peanuts, and sunflower seed. Global soybean production is projected at 269.4 million tons, up 1.7 million with gains in the United States and Brazil only partly offset by a lower projection for Argentina. The Brazil soybean crop is increased 1.5 million tons to a record 82.5 million reflecting record area and improving yield prospects. The Argentina soybean crop is projected at 54 million tons, down 1 million mainly due to lower projected area resulting from excessive moisture throughout much of the central growing area. Global oilseed ending stocks are projected at 66.6 million tons, down 0.3 million from last month as reduced soybean stocks in Argentina and China are only partly offset by higher stocks in Brazil and the United States. Outlook for this week: NCDEX February soybean is expected to trade slightly higher on account of firm overseas market and improved demand from stockists in domestic market and farmers are holding their stocks and not ready to sell at lower prices. However, record high production estimates of Brazil may restrict sharp rise in soybean price. NCDEX February soybean shall find a support at 3160/3105 levels and Resistance 3280/3325 levels. Recommendation for this week: Buy NCDEX February soybean between 3160-3170, SL-3100 and Target 3280/3320.