Soybean trades up on short covering

The NCDEX soybean futures traded on a positive note on Tuesday due to short covering on previous decline. Investors and traders covered their short positions ahead of IMD’s monsoon forecast report.
Smart recovery in international market also rendered support to the Indian market. However, spot markets remained under pressure due to poor off-take of the produce from end-users.
Outlook
The soybean futures are expected to trade on a positive note on extended short covering and taking cues from firm international market. CBOT soybean futures recovered from its recent decline on short covering.
However, gains are limited due to shift in demand for the produce. In later hours of the day, market might resume downtrend as underlying fundamental factors are bearish for the market.
Projection of normal monsoon might have a negative impact on the market. The Indian Meteorological Department has projected 98% of LPA rainfall for the 2011. Despite of limited supply of produce across major spot markets, the demand for soybeans from crushers and traders is subdued, which may limit the gains.
There are no fresh soy meal export enquiries from South East Asian countries, which is likely to limit the gains.
South East Asian countries have turned to Latin America to scout for their meal demand as harvesting and crushing of beans is progressing well in Brazil and Argentina. As a result of full-fledged harvesting they are offering soybean and its derivatives at much lower price compared to other countries.
Lower crush margin and absence of fresh export enquiries is prompting local crushers to stay away from active buying.
Courtesy: Karvy Commtrade Ltd.

(Source: http://www.commodityonline.com/futures-trading/technical/Soybean-trades-up-on-short-covering-23307.html)