Soybean drops on selling pressure

The Indian soybean derivatives market saw a sharp decline on Saturday on extended selling pressure and taking cues from weak overseas market.
Domestic traders sold futures anticipating decline in demand for the produce at current higher levels. Prices fell on expectation of rise in import of soy oil in January will increase the inventory level.
Lack of demand in the physical market had a bearish impact on the futures market. On global front, CBOT soybean futures ended down on last Friday on profit selling and on fresh selling. Commencement of harvesting in Brazil and firmness in dollar led the prices to decline on last week-end.
Outlook
The soybean futures are expected to open on a positive note taking cues from firm overseas market.
CBOT soybean futures are trading higher by 0.50% on fresh buying. However, positive trend may not be sustained as harvest progress in Brazil is likely to weigh on the market. According to Safras and Mercado, Brazilian farmers harvested 4.9% of their 2010 soy crop as on 11th February.
Last week’s USDA monthly crop report failed to have a major bullish impact on the market. However, in later part of the day, prices may reverse the direction towards downside on bearish demand outlook. Fresh export enquiries for Indian soy meal from South East Asian countries have slowed down as Latin American crop is entering into maturity stage.
Soy meal Brazil-FOB prices have been declining thus narrowing down the spread between India and Brazil meal price to $15 a ton compared to $30 a ton a week ago. This may result into shift in meal demand from India to Brazil. The crush margin has declined and currently is below `1000 a ton, which may distract crushers to go for aggressing buying of the seeds.
Market participants are eagerly waiting for Budget, wherein Finance Minister is likely to make some announcement for the oilseed sector. The derivative analysis is also suggesting continuation of weak trend in the prices during the day.

(Source: http://www.commodityonline.com/futures-trading/technical/Soybean-drops-on-selling-pressure-21892.html)