Soybean weakens on short selling

The bearish trend in the soybean futures market extended for sixth consecutive day on Wednesday.
Investors and traders advanced their bean sales on expectation of further shrink in demand for its by-products. Likely shift in global soy meal demand from India to Latin America has been putting pressure on the market.
Spot markets witnessed subdued trading. Soy meal spot prices have been declining due to weak demand from local traders as well as exporters. The difference of soy meal between India and Brazil has been narrowing down as Brazilian traders are offering their meal at lower price compared to India.
Indian market moved in line with weak overseas markets, which were down on dampening demand and improvement in weather condition.
Outlook
The soybean futures are expected to extend its bearish trend on Thursday on continued selling pressure.
The physical demand for soybean and its by-products has been declining for last couple of days on fear of likely government intervention to control higher food inflation. In the upcoming budget, food inflation is major concern and government might announce further measures to control it.
The soy meal export demand has been slowing down thus prompting crushers to stay away from active bean purchases. The crush margin is also declining due to decline in soy meal price.
The difference of soy meal between India and Brazil has been narrowing down as Brazilian traders are offering their meal at lower price compared to India. 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 fortnight ago.
This may result into shift in meal demand from India to Brazil. Indian government hinted the market that it may take necessary steps to control food inflation by showing intention to extend stock limit on edible oil and oilseeds.
The spot price at Indore mandi quoted at `2280-2300 per quintal. On global front, CBOT soybean futures advanced its downtrend falling to 5-week low on continued selling pressure.
Larger Brazilian crop expectation, shift in demand from US to Brazil following lower cash price, improvement in Argentina weather condition and shrink in Chinese demand added bearishness to the market. Weak trend in overseas market is likely to weigh on Indian market.

(Source: http://www.commodityonline.com/futures-trading/technical/Soybean-weakens-on-short-selling-22009.html)