Tuesday, January 17, 2012

NCDEX Soyabean & Chana (February) Weekly Analysis

NCDEX February Soybean futures traded higher this week on account of improved demand from crushers and firm overseas market as weather concern in South America (Brazil and Argentina). As per WASDE, US dept. of Agriculture which is released on January 12, 201, U.S. oilseed production for 2011/12 is estimated at 91.2 million tons, up 0.2 million tonnes from last month. Soybean production is estimated at 3.056 billion bushels, up 10 million based on increased yields. The Soybean yield is estimated at 41.5 bushels per acre, up 0.2 bushels from the previous estimate. Soybean exports are projected at 1.275 billion bushels, down 25 million from last month and down 226 million from 2010/11. Soybean ending stocks are projected at 275 million bushels, up 45 million. Global oilseed production for 2011/12 is projected at 457.4 million tons, down 0.3 million tonnes. Global Soybean production is projected at 257 million tons, down 2.2 million mostly due to lower production forecasts for South America. The Argentina Soybean crop is projected at 50.5 million tons, down 1.5 million due to lower projected area and yields. Excessive heat and dry conditions since December throughout much of the principal growing area is expected to limit Soybean plantings and reduce yields from earlier expectations. The Brazil Soybean crop is reduced 1 million tons to 74 million reflecting hot, dry conditions in recent weeks, especially in the second largest producing state of Parana where planting was more than half completed by late October. Global oilseed ending stocks are projected at 74.8 million tons, down 0.7 million tonnes.
Strategy for next Week :
For next week in Soybean one should go for buy on lower level strategy. If it sustains above the level of 2645 we can see the level of 2675 and on the downside if it sustains below 2545 level we can see Soybean at 2515 level.

Chana spot as well as futures settled higher on account of lower area covered under Chana and thereby fears of lower output in the coming season. As the Rabi sowing season is almost nearing its end, area covered under the Pulses and Chana are probably to miss the target. According to the Rajasthan farm department's first advance estimates for Rabi crops, Chana output is estimated 7.8% lower at 14.75 lakh tonnes in 2011-12 season against 16 lakh tonnes in 2010-11. Rajasthan is the third largest Chana producing state in India contributing around 10-12% share in total Indian Chana output after MP and Maharashtra. Although sowing of Chana is higher in Rajasthan, unfavorable climate is expected to lower the yield of the Chana crop in the coming season harvesting of which would begin in February in Rajasthan. Chana sowing across India as on January 5th 2012 is 5.23% down at 8.72 million hectares as compared to 9.22 million hectares in the same period previous year. Highest decline in area is witnessed in Maharashtra where sowing is down 23%, while in Karnataka it is down by 19%. Except in Rajasthan, all other major producing states i.e MP, Maharashtra, Karnataka and AP are likely to witness a fall in output in the coming season harvesting of which would begin after mid January. Indian
government is targeting total pulses output of 17 mln tn in the current crop year that started July 2011, down marginally from last year's record production of 18.09 mln tn on account of 10% decline in Kharif Pulses output.
Strategy for next Week :
For the next week in Chana February contract one should go for buy on lower level strategy. If it sustains above 3445 we can see the level of 3490 and on the downside if it sustains below the level of 3295 we can see Chana at 3250.