NCDEX Soybean short term bearish, target 2838/2795: Kotak
The 14-period RSI is below the support line and continues to tread lower indicating bearish momentum over the medium term.
October 07, 2014 14:55
As per our previous recommendation dated 05th September 2014 of going Short on NCDEX Soybean , our first target of Rs. 3000 has achieved.
Hence, in our view, profits on short positions (as per our previous recommendation) should be booked at the current levels and fresh short positions should be initiated on rise. The medium-term price trend still looks bearish and the downside move is now likely to extend further towards the previous low at Rs.2838/2795. The 14-period RSI is below the support line and continues to tread lower indicating bearish momentum over the medium term.
Bearish trend will continue for maize and soya.
Corn, Soybean Prices Fall
U.S. corn and soybean prices tumbled Friday, after government forecasters predicted harvests will be even larger than the record levels previously expected.
The closely watched monthly crop report from the U.S. Agriculture Department said domestic farmers will harvest a record 14.475 billion bushels of corn for the current 2014-15 crop year, up from last month’s forecast of 14.395 billion—although the increase was less than what analysts had anticipated. The USDA also said corn yields would reach an all-time high of 174.2 bushels an acre, topping last month’s estimate of 171.7 bushels an acre.
Analysts surveyed by The Wall Street Journal had expected the USDA to peg corn production at 14.523 billion bushels on yields of 174.7 bushels an acre.
The report comes as the nation’s harvest swings into full gear following months of near-perfect weather throughout the U.S. Farm Belt that has fueled expectations for bumper crops. The prospect that U.S. farmers will reap a huge harvest just a year after collecting the largest corn crop in history and the third-largest soybean crop has in recent months pushed prices to more than four-year lows.
Soybean prices also slid, after the government estimated soybean production at 3.927 billion bushels on yields of 47.1 bushels an acre, both records. Soybean futures for November delivery fell 19.5 cents, or 2.1%, to $9.2250 a bushel.
Analysts had expected the USDA to boost its forecast for soybean output to 3.977 billion bushels on yields of 47.6 bushels an acre. Though soybean yields undershot expectations, some said the sheer size of the crop was still impressive.
“I don’t think it should be lost on the crowd that these are still huge yields,” said Kurt Koester, president of AgriSource Inc., a brokerage and grain marketer based in West Des Moines, Iowa.
The crop report caught some analysts off guard because it also reduced the estimate for the number of corn acres that will be harvested this fall to 83.1 million, down from its 83.8 million forecast in September.
“The USDA surprised us by not coming within the trade averages and with their downward revision of harvested area,” said Terry Reilly, an analyst at brokerage Futures International in Chicago. But the fact remains, he said, that the markets are “seeing residual pressure from ample global supplies.”
The government said U.S. stockpiles of corn at the end of the 2014-15 season on Aug. 31, 2015, will total 2.081 billion bushels, up from 2.002 billion estimated in September. World-wide, inventories of corn for the 2013-14 season totaled 173 million metric tons, the USDA estimated, down slightly from the previous estimate of 173.1 million, while reserves the following year will jump to 190.6 million.
Market watchers anticipated the USDA would raise production estimates for both corn and soybeans following a series of government reports that showed plants in prime health after more rainfall than normal in key farm states such as Iowa and Illinois in September. Mostly mild temperatures also aided late-maturing crops.
The USDA cut its estimate for harvested soybean acres to 83.4 million, lower than last month’s estimate of 84.1 million. The trimmed numbers suggest that some acres seeded last spring were abandoned during the growing season due to adverse conditions such as flooding or hail damage.
Wheat prices rose after the USDA forecast smaller-than-expected U.S. and global stockpiles. Contracts for December delivery of wheat rose 5.25 cents, or 1.1%, to $4.9850 a bushel.
The USDA projected domestic inventories of wheat at the end of the 2014-15 season next May 31 would total 654 million bushels, down from its September estimate of 698 million bushels. Analysts had projected 704 million bushels.
—Jacob Bunge and Tennille Tracy contributed to this article.