Soybean Trades Up on Global Cues .

Extended profit booking backed by weak overseas market led the Indian soybean futures to trade on a weaker note on Tuesday.

Indian traders sold soybeans futures on report of Bird Flu in South Korea. Outbreak of bird flu reduces the demand for soy meal as it is major feed for poultry birds. Weakness in CBOT soy market also had a bearish impact on Indian market.

CBOT soybean futures traded lower on Monday on profit sales after report of improvement in weather condition in Argentina.

However, in later part of the day, prices recovered on short covering and taking cues from firm Malaysian market.

Outlook

The soybean futures are forecast to trade on a weaker note on Wednesday on follow through selling. Outbreak of bird flu in South Korea is likely to pressurize the soybean prices. Korea is one of largest importers of soy meal from India.

Domestic traders are likely to sell futures anticipating shrink in demand for soybean from crushers.

Normally, Indian crushers buy soybeans based on export demand for soy meal. Weakness in overseas market on improved weather condition in Argentina is likely to have a bearish impact on Indian market.

Weather depart-ment has projected showers for Argentina, which might ease the yield loss concern.

We have to closely watch weather movement in Argentina till end of this month, which will decide on production. USDA will be releasing January month World Agriculture Supply and Demand Estimates report on 12th January 2011.

Source : commodityonline.com