Soyabean on an upward curve, headed for Rs 3,600 target 

Prices of soyabean have been consolidating in Rs 3,200-3,400 for the past five months, and international contracts at CBOT came under pressure because of the trade standoff between the US and China.
China stopped buying from the US after a hefty tariff by Trump administration on Chinese imports. China imports and consumes largest soyabean in the world. According to the December USDA report, total global production of soyabean in crop year 2018-19 stood at 369.20 million tonnes against total production of 339.47 million tonnes last year.

Production of soyabean is around 8 per cent higher than last year’s. Global end stock of soyabean in crop year 2018-19 is seen at 115.33 mt against a total closing stock of 101.30 mt last year.

Looking at the total production and lower import of China from the US, prices of soyabean felt the pressure and traded below the psychological level of 900 on CBOT. On NCDEX, prices were unable to break Rs 3,450.

From the start of 2019, prices of soyabean started moving upwards.

At CBOT, soyabean March contract closed above 900 levels last week and on NCDEX, it had a breakout above Rs 3,450 last week before closing at Rs 3,442. Soyabean prices are showing strength again and tracking positive cues from international markets.

We expect prices to test Rs 3,600 levels at NCDEX in coming days.

Technical view
Soyabean prices at NCDEX made a high of Rs 3,488 last week before closing at Rs 3,442 on Friday. The prices consolidated in a range for almost five months and gave the much awaited breakout of Rs 3,450 on the weekly chart.

On the weekly chart, soyabean is forming a bullish engulfing pattern, which is showing positivity in trend.

We expect that it will show further strength after a price breakout of Rs 3,450 and will test 3,520-3,560-3,600 levels, going forward. Weakness in the prices is expected only when it closes and sustains below Rs 3,350 and in that case, it could test Rs 3,300-3,250 levels again, but chances are very remote.

CBOT is also showing strength, which is expected to test Rs 964 levels in coming days and will also support prices in domestic markets. Traders can buy and accumulate soyabean at NCDEX in the price range of Rs 3,450-3,420 with a strict stop loss below Rs 3,350 on a closing basis for the upside target of Rs 3,520-3,600.

Recommendations:
Buy soyabean between Rs 3,450-3,420 SL Rs 3,350 (closing basis) targets Rs 3,520-3,600.

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