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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
Cabinet approval to FCRA Bill boosts trader sentiment
With the Union cabinet clearing the Forward Contract (Regulation) Acts Amen-dment Bill, raising a lot of optimism for a resurgence in the commodity futures market, traders have responded positively. The turnover of all commodity exchanges turned positive in the first fortnight of October, after four quarters of sustained decline. Data compiled by the Forward Markets Commission (FMC), the commodity derivatives market regulator, showed an eight per cent rise in overall turnover to Rs 709,841 crore in the fortnight, compared to Rs 657,000 crore in the corresponding period last year. The Bill aims to provide financial autonomy to the FMC, which can become self-sufficient by collecting revenues in the form of fees from the exchanges. The Bill seeks to increase the penalty on defaulters to Rs 50 lakh from the existing Rs 25 lakh. While the business in agri commodities remained up by 30 per cent to Rs 100,055 crore in the first fortnight of October compared to Rs 76,981 crore in the same period last year, overall turnover in bullion declined 11.2 per cent from Rs 352,868 crore to Rs 313,275 crore in the period under consideration. (Source: Business Standard)
Sensex* Nifty* INR/$* Nymex Crude Oil - $/bbl Comex Gold - $/oz
Source: Reuters
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Agricultural Commodities
Chana
Chana Spot as well as November futures extended further gains and settled higher by 3.06% and 1.75% on Saturday on account of ongoing festive season demand. Chana sowing has started in Maharashtra, AP and Karnataka and is expected to commence soon in MP and Rajasthan too. In Maharashtra, 1.09 lakh ha area has been covered so far which is only 8.8% 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. 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 4750 4769 Prev day 3.06 1.75
as on Oct 27, 2012 % change WoW MoM 2.15 10.38 0.89 10.37 YoY 33.80 36.14
Source: Reuters
Source: Telequote
Technical Outlook
Contract Chana Oct Futures Unit Rs./qtl Support
4680-4720
Outlook
Chana futures may 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 higher by 1.52% on Saturday on account of festive demand. Also, The food ministry dropped a plan to recommend a 10% duty on raw sugar imports as of now amid strong opposition from the industry, which supported the prices. Prices had declined considerable in the last one month on the back of higher quota. 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. Liffe white sugar settled 0.26% higher on short coverings while ICE raw sugar closed 0.92% lower on Friday due to good supplies from Brazil. Higher output and lower imports expectations for the 2012-13 season from China coupled with higher sugar surplus forecast for fourth straight year is keeping international prices under downside pressure.
Market Highlights
Unit Sugar Spot- NCDEX (Kolkata) Sugar M- NCDEX Nov '12 Futures Rs/qtl Last 3701
as on Oct 27, 2012 % Change Prev. day WoW 0.00 -1.31 MoM -2.06 YoY 13.88
Rs/qtl
3342
1.52
1.06
-3.07
10.63
Source: Reuters
International Prices
Unit Sugar No 5- LiffeDec'12 Futures Sugar No 11-ICE Mar '13 Futures $/tonne $/tonne Last 545.2 430.00
as on Oct 26, 2012 % Change Prev day WoW 0.26 -0.92 -0.89 -3.54 MoM -4.40 -1.12 YoY -20.94 -24.91
Source: Reuters
Source: Telequote
Technical Outlook
Contract Sugar Oct NCDEX Futures Unit Rs./qtl Support
3310-3328
Outlook
Sugar prices may recover as demand is expected to emerge at lower levels. However higher quota is seen offsetting festive season demand which might cap the gains. 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: After Soybean prices continued to trade on a positive
week for the third consecutive week due to good export demand for soy meal. Also, demand for soy oil ahead of the festive season supported the prices. Also farmers are holding back their stocks in anticipation of better prices. The spot as well as the Futures settled 2.28% and 1.07% higher w-o-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 marginally lower by 0.18% on supply pressure. However, farmers have slowed their sales expecting better prices for their crop. 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. Argentina's 2012-13 soybean planting is Just 2% of the record 19.7 mn ha seen going to soybeans this season, down 4.2% from a year earlier as a series of recent heavy rains has slowed progress. Production is expected to reach 55-60 mn tn crossing record 52.7 mn tn in 2009-10. Brazil could also churn out 81 mn tn of oilseed and replace the drought-stricken US as the world's top soybean producer.
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 3313 3345 717.1 703.3
as on Oct 27, 2012 % Change Prev day 0.39 -0.37 1.18 0.36 WoW 2.28 1.07 4.27 3.62 MoM 7.36 8.82 5.37 10.46 YoY 50.39 51.54 12.43 10.33
Source: Reuters
as on Oct 26, 2012 International Prices Soybean- CBOTNov'12 Futures Soybean Oil - CBOTDec'12 Futures Unit USc/ Bushel USc/lbs Last 1561 50.96 Prev day -0.18 -0.95 WoW 1.76 -1.20 MoM -0.75 -1.34
Source: Reuters
as on Oct 27, 2012 % Change Prev day WoW 1.30 -0.21 4.34 2.43
Unit
CPO-Bursa Malaysia Nov '12 Contract CPO-MCX- Oct '12 Futures*
MYR/Tonne Rs/10 kg
Source: Reuters
RM Seed
Unit RM Seed SpotNCDEX (Jaipur) RM Seed- NCDEX Nov '12 Futures Rs/100 kgs Rs/100 kgs Last 4070 4325 Prev day 0.00 -0.30
Refined Soy Oil: Ref soy oil as well as MCX CPO traded on a bullish
note last week on higher palm oil exports and good demand for edible oil in the domestic markets. Exports of Malaysian palm oil products for Oct. 1-25 rose 11 percent. 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. 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. 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. Rape/mustard Seed: Mustard Futures traded on a positive note due to low stocks coupled with festive season demand for its oil. Higher demand for mustard meal is also supporting prices. However, prospects of better sowing pressurized the prices in the spot. The Futures settled 2.03% higher w-o-w. Mustard sowing as on th 25 Oct was reported at 8.37 lakh ha as compared to 20.15 lakh ha in the same period last year. However, on the back of higher returns and improved rains, next years output is expected to be better. Outlook Edible oil complex is expected to trade on a positive note in the coming week on account of good demand for edible oil in the domestic markets. However, in the short term prices may again come under downside pressure as arrivals are expected to improve in the coming weeks.
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 25, 2012 Support 688-695 3270-3305 4240-4280 434-439 Resistance 709-714 3375-3400 4360-4395 448-452
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Agricultural Commodities
Black Pepper
Pepper futures traded on a positive note last week due to good festive demand. However, expectations of better output this season have capped sharp gains. Festive season demand has also supported the prices in the spot. 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 as well as the Futures settled 0.75% and 1.17% higher w-o-w. 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 42757 44020 % Change Prev day 0.18 -0.35
as on Oct 27, 2012 WoW 0.75 1.17 MoM 1.55 1.35 YoY 24.21 27.72
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 trade sideways 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 Futures corrected last week as exporters refrained from buying at higher levels. Also, prospects of better sowing this season have pressurized prices. However, expectations of good export demand supported prices in the spot. Festive demand is also expected to be good in the coming days. 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 any sharp gains. The spot as well as the Futures settled 1.41% and 6.72% lower w-o-w. According to markets sources about 75% exports target has already been achieved due to a supply crunch in the global markets. Around 45 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 14994 14425 Prev day -0.30 -2.55
as on Oct 27, 2012 % Change WoW -1.41 -6.72 MoM 3.99 5.77 YoY 5.23 7.99
Source: Reuters
Source: Telequote
Market Highlights
Prev day 0.00 1.13
Unit Turmeric SpotNCDEX (N'zmbad) Turmeric- NCDEX Nov '12 Futures Rs/qtl Rs/qtl
Outlook
Jeera futures are expected to trade downwards. Exporters may stay away at higher prices. However, prices may recover if the export demand increases. Festive buying may also lend support to the 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 negative note on last week 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 markets remained closed due to festive and is expected to reopen today. The Futures settled 4.74% lower w-o-w. 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 27, 2012 Support 14110-14270 4900-4960 Resistance 14585-14720 5064-5110
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 settled 0.50% lower on account of short coverings. ICE cotton futures closed lower by 0.43% on account of profit taking and also pace in US harvest 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.
NCDEX Kapas Futures MCX Cotton Futures
Market Highlights
Unit Rs/20 kgs Rs/Bale Last 995 16330
as on Oct 27, 2012 % Change Prev. day WoW -0.50 0.10 -0.49 -1.69 MoM 8.68 -1.69 YoY -8.82
Source: Reuters
International Prices
ICE Cotton Cot look A Index Unit Usc/Lbs Last 72.42 81.35
as on Oct 26, 2012 % Change Prev day WoW -0.43 -5.86 0.00 0.00 MoM 4.17 0.00 YoY -29.20 #N/A
Source: Reuters
Source: Telequote
Outlook
Kapas futures in intraday is expected to trade on a positive note on account of improved demand and procurement by CCI might maintain the upside in prices. 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.
Source: Telequote
Technical Outlook
Contract Kapas NCDEX April Kapas MCX April Cotton MCX November Unit Rs/20 kgs Rs/20 kgs Rs/bale
valid for Oct 27, 2012 Support 970-982 965-978 16000-16150 Resistance 1008-1022 1005-1018 16400-16520
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