Soybean prices has been in a strong uptrend since June. The Soybean futures contract traded on the National Commodity and Derivatives Exchange (NCDEX) made a low of ₹2,643 quintal in the first week of June and has been on a strong uptrend since then. A high of ₹3,074 per quintal was made on July 31. The contract has come-off from this high and is currently trading at ₹2,991 per quintal. Though the prices have corrected slightly since the beginning of this month, but the overall uptrend remains intact.

Outlook The corrective fall that had begun from the high of ₹3,074 in the NCDEX-Soybean contract was halted at a low of ₹2,919 on August 7. It has been stuck in a sideways range between ₹2,900 and ₹3,000 since then. Inability to extend the fall breaking below ₹2,900 indicates lack of sellers in the market. Also the 200-day moving average at ₹2,935 has been providing strong support over the last few days by limiting the downside in the contract. Overall the bias is bullish on the charts.

Near-term resistance is in the ₹3,050-₹3,070 zone which is likely to be tested in the coming days. A strong break above this resistance zone will pave way for the next targets of ₹3,130 and ₹3,170 in the short term. A pull-back move from ₹3,170 can pull the contract lower to ₹3,100 or ₹3,070 thereafter. But a strong break above ₹3,170 can boost the momentum. Such a break will increase the possibility of the contract extending its rally to ₹3,250 over the medium term.

Key support for the contract is in the ₹2,900-₹2,880 zone. The outlook will turn negative only if it declines below ₹2,880 decisively. The ensuing target on such a break will be ₹2,800.

Note: The recommendations are based on technical analysis and there is a risk of loss in trading.

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