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News & Market Highlights Chana Sugar Oilseed Complex Spices Complex Kapas/Cotton
Research Team
Vedika Narvekar - Sr. Research Analyst vedika.narveker@angelbroking.com (022) 2921 2000 Extn. 6130 Anuj Choudhary - Research Associate anuj.choudhary@angelbroking.com (022) 2921 2000 Extn. 6132
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Agricultural Commodities
News in brief
Agri production to grow 1.5% this year, says Abhijit Sen
Despite advance estimates of the khariff output showing a decline this year in value terms, agriculture production would post a positive growth of 1-1.5 per cent this year, said Abhijit Sen, member of the Planning Commission. I am hopeful that the rabi and livestock sectors will take a rebound this time. So, at the end of the day, it will be positive, said Sen. He cautioned that the prices of coarse cereals, which are mainly used as livestock feed, would shoot up if the government does not act quickly by releasing more food grain stocks into the market. Any failure to act quickly would impact the prices of milk and livestock products, which have so far remained stable, he said. There is no reason for the prices of rice and wheat to go up but the ongoing exports are building pressure on these prices as well. On inflation, Sen said that the general direction is down from eight per cent level, although it would remain high in the next couple of months as the full effect of recent pass through of oil prices will be seen. Responding to a question on distress conditions reported in some part of the country, Sen said that farmers are ending up in debt by growing risky cash crops is one reason behind the distress condition.
(Source: Business Standard)
Sensex Nifty INR/$ Nymex Crude Oil - $/bbl Comex Gold - $/oz
Source: Reuters
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Agricultural Commodities
Chana
Chana November declined further on Monday on prospects of better sowing and reports of higher shipments from Australia and Canada in the coming weeks Chana sowing has started in some parts of Maharashtra, AP and Karnataka and is expected to commence soon in MP and Rajasthan too. In Maharashtra, 97000 ha area has been covered so far which is only 7.1% of the targeted 12.32 lakh ha by the state dept. In AP, chana acreage stood at 41000 hectares as on 17 October, 2012 compared with 98000 hectares during the same period last year. Prices have gained considerable since the beginning of October amid festive season buying and lower supplies caused by lower output in 2011-12 season. CACP has recommended a hike in minimum support price (MSP) of gram by Rs.200 to Rs.3000 a quintal and Masoor by Rs.100 to Rs.2900 a quintal for upcoming 212-13 Rabi season to boost the production of pulses. As per the NCDEX circular dated 1 October, Special Margin of 10% (in cash) on the Long Side on all the running contracts and yet to be launched contracts in Chana have been withdrawn with effect from beginning of day Thursday, October 04, 2012. Good rains in the month of August and September has raise prospects of Rabi pulses sowing in the coming days. Monsoon has recovered across India, especially in Rajasthan, one of the major chana growing states, and may prove beneficial for the chana sowing.
st th
Market Highlights
Unit Rs/qtl Rs/qtl Last 4589 4661 Prev day -1.30 -1.40
as on Oct 22, 2012 % change WoW MoM -3.61 2.79 -4.92 4.81 YoY 33.03 37.98
Source: Reuters
Source: Telequote
Technical Outlook
Contract Chana Oct Futures Unit Rs./qtl Support
4605-4635
Outlook
Chana futures mat remain firm in the current week on account of festive season demand and tight supplies. However, reports of higher sowing of Rabi pulses this season might pressurize the prices in the medium term. Although short term trend remain positive for chana, we expect prices to come under downside pressure in the month of November as supply pressure may ease amid shipments from Australia and Canada.
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Agricultural Commodities
Sugar
Sugar November futures settled marginally lower on Monday on account of adequate supplies to meet the festive season demand. Further, food ministry is keeping a close watch on sugar sales by millers in the open market and warned against failure to sell the entire quota allocated to them for the October-November period, which lead to selling pressure. India, which is likely to produce a sugar surplus for its third year in a row, has decided to allow exports for another year, Food Minster K.V. Thomas said, reflecting confidence about domestic supplies in the world's top consumer of the sweetener. Mills and traders will have to wait for a formal order to export sugar in the new season that began on Oct. 1. Millers based in western and southern India and global trading firms bought sugar at around $500/ton a CIF basis, as the price in the domestic market has jumped more than 23% to $680/ tn in the past three months. Liffe white sugar settled 0.4% higher due to short coverings, while ICE raw sugar closed 0.84% lower on Monday. Prices have corrected over the last couple of days due to good supplies from Brazil. Higher output and lower imports expectations for the 2012-13 season from China coupled with weak international markets is keeping prices under downside pressure.
Market Highlights
Unit Sugar Spot- NCDEX (Kolkata) Sugar M- NCDEX Nov '12 Futures Rs/qtl Last 3750
as on Oct 22, 2012 % Change Prev. day WoW 0.00 -0.32 MoM -2.60 YoY 16.94
Rs/qtl
3290
-0.51
-5.02
-7.35
10.48
Source: Reuters
International Prices
Unit Sugar No 5- LiffeDec'12 Futures Sugar No 11-ICE Mar '13 Futures $/tonne $/tonne Last 550.1 445.78
as on Oct 22, 2012 % Change Prev day WoW 0.40 -0.84 -1.40 -0.55 MoM -1.24 4.42 YoY -24.49 -25.54
Source: Reuters
Source: Telequote
Technical Outlook
Contract Sugar Oct NCDEX Futures Unit Rs./qtl Support
3260-3275
Outlook
Sugar prices may remain under downside pressure as higher quota is seen offsetting festive season demand. Approval to unrestricted exports may benefit India only if the global sugar prices gain considerably. However, supply pressure from Brazil is keeping international sugar markets under downside pressure.
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Agricultural Commodities
Oilseeds
Soybean: Soybean futures traded on a positive due to bargain
buying at lower levels. Reports of improved soy meal exports demand along with festive season demand for edible oil supported the prices. Also, farmers were not ready to sell their stocks at lower levels. The Spot as well as the Futures settled 1.5% 4.43% higher wo-w. New soybean arrivals at MP stood at 450000 bags, Maharashtra170000 bags and Rajasthan 100000 bags on Wednesday. Arrivals are expected to improve to 6-6.5 lakh bags in MP in the coming weeks. According to first advance estimates, Soybean output is pegged at 126.2 lk tn for 2012-13. However, drop in area under groundnut, sunflower & castor seed may lead to lower output of these oilseeds in 2012-13 which is estimated 9.6% lower at 187.8 lakh tn. CBOT Soybean settled higher by 0.80% as reports of farmers holding back their stocks as a reason for firming up the prices supported the upside. According to the latest crop progress report released by USDA, as on 23 Oct 2012, US soybean harvest is 80 per cent complete as compared to 71 per cent last week and 69 per cent compared to 5 year average. According to the USDA October monthly report, Global soybean production is projected at 264.3 million tons, up 6.2 million mostly due to an increase for the United States. Ending stocks are seen down from 169 million bushels in 2011-12 to 115 million bushels in 2012-13 season. Brazil could churn out 81 million tonnes of oilseed and replace the drought-stricken US as the world's top soybean producer, according to the USDA.
Market Highlights
Unit Soybean Spot- NCDEX (Indore) Soybean- NCDEX Nov '12 Futures Ref Soy oil SpotNCDEX(Indore) Ref Soy oil- NCDEX Nov '12 Futures Rs/qtl Rs/qtl Rs/10 kgs Rs/10 kgs Last 3270 3322 696.3 690.3
as on Oct 22, 2012 % Change Prev day 0.96 0.38 1.24 1.70 WoW 4.44 6.03 4.42 4.25 MoM -5.63 -2.41 -7.11 -3.74 YoY 50.55 52.01 11.77 11.17
Source: Reuters
as on Oct 22, 2012 International Prices Soybean- CBOTNov'12 Futures Soybean Oil - CBOTDec'12 Futures Unit USc/ Bushel USc/lbs Last 1547 51.66 Prev day 0.80 0.16 WoW 3.62 3.30 MoM -4.64 -5.12
Source: Reuters
as on Oct 22, 2012 % Change Prev day WoW 2.70 2.62 2.88 4.24
Unit
CPO-Bursa Malaysia Nov '12 Contract CPO-MCX- Oct '12 Futures
MYR/Tonne Rs/10 kg
Refined Soy Oil: Ref soy oil as well as MCX CPO traded on a
positive note on Monday due to festive season demand for the oil along with higher exports of Malaysian palm oil during 1-20 October. Ref soy oil as well as MCX CPO (Nov) settled 1.6% and 2.45% higher respectively w-o-w. Exports of Malaysian palm oil products for Oct. 1-20 rose 14.1 percent to 1,058,844 tonnes from 928,110 tonnes shipped during Sept. 1-20. Malaysia, the world's No.2 producer of palm oil, will scrap a tax free export quota for the crude grade from 2013 in a bid to reduce feedstock prices for refiners who have lost market share to top supplier Indonesia. According to latest data from SEA, total vegetable oil imports in September were 993,912 tn, up from 897,018 tn in the previous month. India imported 111,163 tn of refined palm oil in September. As per MPOBs latest report, Malaysia's September palm oil stocks rose 17 percent to record high 2.48 million tons compared to previous month. Moreover, crude palm oil output in September rose 20 percent from August to 2 million tons.
Source: Reuters
RM Seed
Unit RM Seed SpotNCDEX (Jaipur) RM Seed- NCDEX Nov '12 Futures Rs/100 kgs Rs/100 kgs Last 4200 4269 Prev day -0.59 0.71
Source: Telequote
Technical Outlook
Contract Soy Oil Oct NCDEX Futures Soybean NCDEX Oct Futures RM Seed NCDEX Oct Futures CPO MCX Nov Futures Unit Rs./qtl Rs./qtl Rs./qtl Rs./qtl
valid for Oct 23, 2012 Support 680-685 3230-3270 4165-4225 432-437 Resistance 699-705 3360-3410 4310-4370 448-455
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Agricultural Commodities
Black Pepper
Pepper futures traded on a positive note yesterday due to firm sentiments. Festive season demand has also supported the prices in the Futures. However, the spot prices remained under pressure due to expectations of a better output in the coming season. Farmers are unwilling to sell their stocks at lower levels. Traders are buying pepper directly from the farmers. Exports demand for Indian pepper in the international markets remains weak due to huge price parity. The Spot settled 0.36% lower while the Futures settled 1.44% higher on Monday. th According to the circular released on June 13 2012 the existing Special margin of 10% (cash) on the long side stands withdrawn on all running contracts and yet to be launched contracts in Pepper from beginning of day Friday June 15, 2012. Pepper prices in the international market are being quoted at $8,850/tonne(C&F) while Indonesia Austa is quoted at $6,850/tonne (FOB). Vietnam was offering 550GL at $7,000/tonne. As per circular dt. 29/06/2012 issued by NCDEX, Hassan will be available as an additional delivery centre for all the yet to be launched contracts. (not applicable to the currently available contracts-till Dec 2012 expiry).
Market Highlights
Unit Pepper SpotNCDEX (Kochi) Pepper- NCDEX Nov '12 Futures Rs/qtl Rs/qtl Last 42284 44135 % Change Prev day -0.36 1.44
as on Oct 22, 2012 WoW -0.16 1.81 MoM 0.88 1.34 YoY 23.29 29.50
Source: Reuters
Exports
According to Spices Board of India, exports of pepper in April 2012 fell by 47% and stood at 1,200 tonnes as compared to 2,266 tonnes in April 2011. India imported 1,848 tonnes of pepper till March 2012 and has become the third country to import such large quantity after UAE and Singapore. (Source: Agriwatch) According to Vietnam Ministry of Agriculture and Rural Development (MARD) exports of black pepper in 2012 are forecasted at around 1,25,000 tonnes. Exports of Pepper from Vietnam during January till September 2012 is estimated around 80,433 mt, higher by 4.3% in volume and 31.7% in value compared to corresponding year last year. Exports of Pepper from Brazil during January till May 2012 are estimated around 13369 mt. (Source: Peppertradeboard). Pepper imports by U.S. the largest consumer of the spice declined 14.8% in the first 2 months of the year (2012) to 8810 tn as compared to 10344 tn in the same period previous year. Imports of Pepper in the month of February declined by 16.8% to 3999 tn as compared to 4811 tn in the month of January 2012. Exports from Indonesia posted significant decrease of 42% as compared to previous year. Exports stood at 36,500 tonnes as compared to 62,599 tonnes in the last year. During May 2012 Brazil exported 1,705 tonnes of pepper as against 1600 tn in May 2011.
Source: Telequote
Technical Outlook
Contract Black Pepper NCDEX Oct Futures Unit Rs/qtl
Outlook
Pepper is expected to continue to remain firm and trade on a positive note today. Festive season demand is expected to support prices at lower levels. However, low export demand as well as good supplies in the international market from other origins may cap sharp gains.
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Agricultural Commodities
Jeera
Jeera November Futures corrected yesterday due to profit booking at higher levels. Also, a stronger Rupee added to the downside. However, the spot prices did not correct as much as the Futures due to good export as well as festive demand. Over the last couple of days, exporters have been buying actively due to escalated tensions between Syria and Turkey. Good rains in Gujarat, have increased expectations of better sowing prospects ahead of the rabi sowing and have restricted sharp gains in the spot markets.. The spot as well as the Futures settled 0.88% and 2.21% lower on Monday. According to markets sources about 75% exports target has already been achieved due to a supply crunch in the global markets. Around 4-5 lakh bags of Jeera are reported across India. Supply concerns from Syria and Turkey still exists. Expectations are that export orders may still be diverted to India from the international markets due to lack of supplies from Syria on back of the ongoing civil war. Production in Syria and Turkey is being reported around 17,000 tonnes and around 4,000-5,000 tonnes, lesser than expectations. Jeera prices of Indian origin are being offered in the international market at $2,900 tn (c&f) while Syria and Turkey are not offering. Carryover stocks of Jeera in the domestic market is expected to be around 4-5 lakh bags lower by around 3 lakh bags last year.
Market Highlights
Unit Jeera SpotNCDEX(Unjha) Jeera- NCDEX Nov '12 Futures Rs/qtl Rs/qtl Last 15075 15123 Prev day -0.88 -2.21
as on Oct 22, 2012 % Change WoW -0.20 -0.71 MoM 4.17 10.42 YoY 5.86 13.12
Source: Reuters
Market Highlights
Prev day 0.00 -3.15
Unit Turmeric SpotNCDEX (N'zmbad) Turmeric- NCDEX Nov '12 Futures Rs/qtl Rs/qtl
Outlook
Jeera futures are expected to trade sideways. Prices may recover due to export buying. Festive buying may also lend support to the prices. However, exporters may stay away at higher prices. In the medium term (October-November 2012), prices are likely to stay firm as there are limited stocks with Syria and Turkey.
Turmeric
Turmeric Futures traded on a bearish note yesterday due to lack of fresh orders from the upcountry market and exporters. Stockists also have good carryover stocks with them. Turmeric has been sown in 0.58 lakh hectares in A.P as on 10/10/2012. Sowing is also reported 30-35% lower during the sowing period. The Spot market remained closed due to Ashtami and is expected to reopen on Thursday. The Futures settled 3.15% lower on Monday. Special Margin of 20% (in cash) on the Long Side in Turmeric November 2012 and December 2012 expiry contracts will be withdrawn with effect from beginning of day Saturday, Oct 20, 2012.
Source: Telequote
Technical Outlook
Unit Jeera NCDEX Oct Futures Turmeric NCDEX Oct Futures Rs/qtl Rs/qtl
valid for Oct 23, 2012 Support 14850-14970 4950-5030 Resistance 15300-15460 5160-5220
Outlook
Turmeric prices are expected to trade downwards today. Lack of fresh orders may pressurize prices. However, a reduction in the special cash margin, lower sowing figures and lower arrivals may support prices.
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Agricultural Commodities
Kapas
NCDEX Kapas futures extended further gains and settled up by 2.01% on account of emerging demand along with firm international market. Also, reports of procurement by CCI of new crop cotton supported the upside. ICE cotton futures closed marginally up by 0.07% on ongoing fears of supply squeeze. Pace in harvesting also weighed on the prices. Cotton harvesting has commenced in US, in all 38% is harvested as compared to 28% a week ago, versus 39% same period a year ago. Cotton crop condition is 42% in Good/Excellent state same as compares to last week, and 29% same period a year ago as on 23 Oct 2012.
Market Highlights
Unit Rs/20 kgs Rs/Bale Last 1014 16790
as on Oct 22, 2012 % Change Prev. day WoW MoM 2.01 6.74 10.16 1.08 3.77 3.77 YoY -5.89
Source: Reuters
International Prices
ICE Cotton Cot look A Index Unit Usc/Lbs Last 76.93 81.35
as on Oct 22, 2012 % Change Prev day WoW 0.07 2.77 0.00 0.00 MoM 4.33 0.00 YoY -22.82 -29.20
Source: Reuters
Source: Telequote
Outlook
Kapas futures in intraday is expected to trade on a positive note on account of improved demand. Also, Prices might take support as farmers are not willing to sell their produce at lower levels. In addition, supply worries due to poor quality of the fresh cotton crop delivery in the international market will give prices a further upward push. However, fresh arrivals from all over India and higher global cotton ending stocks might cap the sharp upside in medium term.
Technical Outlook
Contract Kapas NCDEX April Kapas MCX April Cotton MCX November Unit Rs/20 kgs Rs/20 kgs Rs/bale
valid for Oct 23, 2012 Support 992-1003 989-1000 16400-16540 Resistance 1027-1040 1023-1035 16900-17080
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