Soybean futures surged almost 2% during 1st half of the trading session, but it erased its gain during later part of the session as demand was quite on the lower side at major soybean Mandis. CPO futures plunged during last trading session backed by good production estimates for the current year.

USDA said soybean harvested was at 15 percent, an increase from 5 percent last week, but still behind the 36 percent averaged during the 2004-2008 crop years. Soybeans dropping leaves, a sign of maturity for the crop, was higher at 79 percent, an increase from 63 percent last week, but trailing the five-year average of 88 percent.

Illinois and Iowa alone account for a third of all U. S. corn and soybeans -- is running a couple of weeks behind normal, given crop immaturity. Recent rains and forecasts are not likely to give farmers a bigger harvest window in the coming week. USDA said 3 percent of Iowa's corn crop and 5 percent of Illinois's have been harvested. It is well below an average of
11 percent and 41 percent, respectively.

Current year soybean crop quality of Soybean especially of Maharashtra (which accounts for 25-30%) is relatively low, as the seed size of the soybean is smaller as compared to previous year and the oil extract is expected to be around 14-15% which normally is around 18-20%.

Arrivals at major Mandis like Vidharba, Nagpur and Indore stood around 30000 bags and are expected to increase in coming days. Estimated production of Maharashtra is expected to be revised and expected to show some further downside as any rainfall during harvesting season can prove highly detrimental to the yield as well as the overall production of the crop.

We expect soybean futures to trade sideways to up mainly on account of increased rains in Maharashtra as they would provide good support to any downside.