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Research Team
Vedika Narvekar - Sr. Research Analyst vedika.narvekar@angelbroking.com (022) 2921 2000 Extn. 6130 Anuj Choudhary - Research Analyst anuj.choudhary@angelbroking.com (022) 2921 2000 Extn. 6132
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Agricultural Commodities
News in brief
Growers await monsoon for turmeric to gain colour
Turmeric farmers and traders are eagerly waiting for rainfall, so that prices of their produce may increase .For the past one month, turmeric prices are declining and exporters have not received good upcountry orders. This is due to the severe summer in North India and other places. Contrast to the traditional practice of getting North Indian orders during the month of May, this year only negligible number of orders were received by the exporters for the yellow spice, said R.K.V. Ravishankar, President, Erode Turmeric Merchants Association. He said that if it begins to rain, farmers will start sowing. This year for want of rain, no farmer has raised turmeric crop so far. This will result the price hike only during the next year. But this year the farmers will bring their accumulated stock with them to the market for sale. (Source: Business Line)
Sensex Nifty INR/$ Nymex Crude Oil - $/bbl Comex Gold - $/oz
.Source: Reuters
U.K. wheat imports top exports for 10th month after wet harvest
The U.K. was a net-importer of wheat for a 10th consecutive month in March after wet weather reduced domestic supplies last year, the Agriculture & Horticulture Development Board said. Wheat imports during the month were 251,176 metric tons, against exports of 32,947 tons, the Kenilworth, England-based AHDB said in an e-mailed report today, citing customs data. Since the 2012-13 marketing year began July 1, imports total 2.12 million tons, compared with exports of 580,908 tons. In the same period a year earlier, imports were 664,800 tons and exports were 2.23 million tons. The U.K. may be a net-importer of wheat this season for the first time in 11 years, the AHDB has said, after the second-wettest year on record in 2012 slashed the domestic harvest by 13 percent. The U.K. is the European Unions third-biggest wheat grower.
(source: Bloomberg)
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Agricultural Commodities
Chana
Emergence of demand at lower levels is seen supporting an upside in the chana prices since last two sessions. However, higher supplies and record output expectations are capping sharp upward movement in the prices. Higher supplies of the new crop from the major producing states such as Madhya Pradesh, Rajasthan and Maharashtra was a major reason attributed to recent fall in chana prices. However, supplies are expected to slow down towards the end of the month. Also, stockists are build inventories at lower levels to meet the demand for the entire season. Thus, tracking seasonality pattern, chana prices may start recovering gradually from June onwards.
Market Highlights
Unit Rs/qtl Rs/qtl Last 3368 3345 Prev day 0.95 0.66
as on May 14, 2013 % change WoW MoM -0.96 -7.15 -1.56 -7.90 YoY -21.75 -19.34
Source: Reuters
Source: Telequote
Technical Outlook
Contract Chana May Futures Unit Rs./qtl Support
3345-3375
Trade Scenario
According to IBIS, imports of chana in the month of February declined to 0.46 lakh metric tonnes compared to 2.31 lakh metric tonnes during the previous month. India imports Chana mainly from Australia and Canada and higher availability in these countries at comparatively cheaper rates is seen boosting imports of Chana to meet the domestic shortfall. In Australia, total chickpea production in 201213 is estimated to have increased to a record 713000 tones as compared with 485000.
Outlook
Chana prices are expected to remain firm in the early part of the session on account of robust buying by the stockiest at lower levels. However, sharp upside may be capped on account of higher arrivals. Seasonal pattern in chana indicates that prices may generally bottom out in May when arrivals reach their peak, while they start recovering gradually June onwards with declining supply pressure. On the downside, we dont expect chana prices to go below Rs 3200 per qtl levels as this being the MSP levels farmers may hold back their stock. Considering the record output expectatations and seasonal patterns and demand side fundamentals, we expect chana prices to trade in the range of Rs 3200- Rs 3800 per qtl over the medium term (3 months).
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Agricultural Commodities
Sugar
After showing some signs of recovery last week, Sugar prices remained flat in the current season as higher supplies is seen offsetting summer season demand. Prices recovered last week after the government notified the cabinet committee on economic affairs (CCEA) decision to remove two key controls on sugar sector. Improving demand from bulk consumers and expected lower output next season in Maharashtra also supported an upside in the prices. The Minimum Initial Margin has been revised to 5% of the value of the contract or VaR based margin whichever is higher and will be imposed on all running contracts and yet to be launched contracts wef beginning of trading day Monday, May 13, 2013. The Government has cleared the partial decontrol of sugar on April 4, 2013, however, notified the same after almost a month. According to this, the government will now have to buy sugar from the mills at open market prices. Also the release mechanism will be done away with, after September 2013. India's sugar output is set to decline 10-15 per cent in the 2013-14 crushing season due to lower cane availability from drought-hit Maharashtra districts, where sowing could not be finished or crops were damaged due to lack of monsoon showers in 2012. (Source: Business Standard.
Market Highlights
Unit Sugar Spot- NCDEX (Kolhapur) Sugar M- NCDEX May '13 Futures Rs/qtl Last 3060
as on May 14, 2013 % Change Prev. day WoW -0.24 0.63 MoM -0.12 YoY 2.92
Rs/qtl
3061
0.39
4.54
4.94
3.62
Source: Reuters
International Prices
Unit Sugar No 5- LiffeMay'13 Futures Sugar No 11-ICE May '13 Futures $/tonne $/tonne Last 478 378.22
as on May 14, 2013 % Change Prev day WoW -1.46 -1.33 -3.24 -3.51 MoM -8.46 -5.60 YoY -14.20 -16.03
.Source: Reuters
Source: Telequote
Technical Outlook
Contract Sugar May NCDEX Futures Unit Rs./qtl Support
3000-3020
Outlook
Although higher supplies and weak international markets may cap sharp upside in the prices, overall sentiments for sugar remain positive on account good demand from bulk manufacturers at such low levels. Also, government has notified cabinets decision to remove two key controls on sugar sector, which may keep sentiments upbeat.
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Agricultural Commodities
Oilseeds
Soybean: soybean futures gained on Tuesday as poor supplies in
the domestic markets continue to support prices at lower levels. However, weak meal export demand coupled with IMDs prediction of a normal monsoon capped sharp upside. According to the 3rd advance estimates, Soybean output is pegged at 14.14 mn tonnes. The spot as well as the June Futures settled 0.77% and 0.85% higher on Monday. Indias soy meal exports for the month of April 2013 were 99.451 tonnes, lower by 68.31 percent from 313,832 tonnes a year ago.
Market Highlights
% Change Unit Soybean Spot- NCDEX (Indore) Soybean- NCDEX May '13 Futures Ref Soy oil SpotNCDEX(Indore) Ref Soy oil- NCDEX May '13 Futures Rs/qtl Rs/qtl Rs/10 kgs Rs/10 kgs Last 4088 4107 728 725.7 Prev day 0.81 0.26 0.30 0.51
International Markets
CBOT Soybean extended the gains of the previous session and settled 0.23% higher on Tuesday on account of concerns over US planting. According to the weekly crop progress report, only 6% has been planting as against 43% last year and five year average of 24%. There are delays in planting in the Midwest. However, large South American crop coupled with forecasts for US weather to improve in the coming week have capped sharp gains. According to the Rosario Grains Exchange, Argentinas 2012 -13 soybean production is estimated at 48.3 mn tn. Chinas soybean imports were reported at 3.98 mn tonnes in April, lower by 18.4% in April last year, but marginally higher compared to 3.84 mn tonnes in March. The decline is attributed to delays in shipment from Brazil coupled with weak demand on the back of outbreak of the bird flu.
Source: Reuters
as on May 14, 2013 International Prices Soybean- CBOTMay'13 Futures Soybean Oil - CBOTMay'13 Futures Unit USc/ Bushel USc/lbs Last 1525 49.26 Prev day 0.23 -0.71 WoW 4.17 0.35 MoM 7.89 0.06
Source: Reuters
as on May 14, 2013 % Change Prev day WoW -0.04 -0.47 1.88 2.27
Unit
CPO-Bursa Malaysia May '13 Contract CPO-MCX- May '13 Futures
Refined Soy Oil: Ref soy oil settled 0.51% higher tracking positive
bean prices while MCX CPO settled 0.04% lower on account of weak KLCE palm oil futures. India's palm oil imports declined for a third straight month in April. But India, the world's largest importer of edible oils, is still on track to surpass last year's record purchases of 10 million tonnes of cooking oil as demand rises. Exports of Malaysian palm oil products from May 1 to 15 inched down 7.6 percent to 599,300 tonnes from 648,275 tonnes shipped during April 1 to 15. Stocks data from industry regulator the Malaysian Palm Oil Board showed inventory levels at the end of April down 11.3 percent to 1.93 million tonnes against the previous month's 2.17 mn tn.
MYR/Tonne Rs/10 kg
Source: Reuters
RM Seed
Unit RM Seed SpotNCDEX (Jaipur) RM Seed- NCDEX May '13 Futures Rs/100 kgs Rs/100 kgs Last 3499 3479 Prev day 0.34 -0.34 WoW 3.28 2.96
Outlook
Soybean prices are expected to trade with a positive bias on account of poor supplies in the domestic markets coupled with positive international markets. However, forecast of a normal monsoon coupled with weak meal export demand may cap sharp gains. Soy oil as well as CPO may gain due to higher international prices as well as lower yield period. However, comfortable stock levels may cap sharp upside.
Source: Telequote
Technical Outlook
Contract Soy Oil May NCDEX Futures Soybean NCDEX May Futures RM Seed NCDEX May Futures CPO MCX May Futures Unit Rs./qtl Rs./qtl Rs./qtl Rs./qtl
valid for May 15, 2013 Support 695-697 3870-3925 3450-3475 464-466 Resistance 702-705 4000-4040 3535-3570 470-472
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After gaining sharply over the last three previous sessions, Jeera futures corrected yesterday on account of profit taking. Jeera prices have gained on reports of improvement in overseas enquiries. Arrivals have also declined from their peak in mid April. Demand from stockists and exporters also emerged at lower levels. The spot settled as well as the June Futures settled 0.23% and 0.79% lower on Tuesday. Over the last few months, prices have declined sharply on the back of higher production estimates. According to Gujarat State Agri Dept. sowing in Gujarat is reported at 3.352 lakh ha in 2013 compared with 3.719 lakh ha last year. Due to the ongoing geo-political tensions in Syria and Turkey, supply concerns from these two major exporting countries still exist. Expectations are that export orders may continue to 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 $2,450 tn (FOB Mumbai) while Syria and Turkey are not offering. Carryover stocks of Jeera in the domestic market is expected to be around 8-9 lakh bags.
Market Highlights
Unit Jeera Spot- NCDEX (Unjha) Jeera- NCDEX May '13 Futures Rs/qtl Rs/qtl Last 13475 13163 Prev day -0.23 -0.68
as on May 14, 2013 % Change WoW 0.75 4.05 MoM -2.26 -4.64 YoY -1.26 -1.15
Source: Reuters
Source: Telequote
Market Highlights
Prev day -0.16 -0.17
Outlook
After correcting yesterday, Jeera Futures is expected to trade higher today. Improvement in overseas as well as domestic demand may support prices. However, higher output may cap sharp gains. Overall trend remain positive for the Jeera prices due to overseas demand as Syria & Turkey have stopped shipments which may keep prices firm.
Unit Turmeric SpotNCDEX (N'zmbad) Turmeric- NCDEX May '13 Futures Rs/qtl Rs/qtl Last 5977 5788
Turmeric
Turmeric June Futures continued to decline yesterday and settled 0.51% lower on Tuesday on account of weak domestic as well as overseas demand coupled with huge carryover stocks. Quality of arrivals is also poor as farmers are holding back good quality stocks. However, there are expectations of improvement in overseas demand in June ahead of the Ramadan festival. Unseasonal rains in Andhra Pradesh have damaged about 9240 tonnes of turmeric earlier.
Source: Telequote
Technical Outlook
Unit Rs/qtl Rs/qtl
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Agricultural Commodities
Kapas
NCDEX Kapas as well as MCX Cotton traded on a mixed note yesterday. Kapas traded with a negative bias as CCI is offloading stocks in the open markets and settled 0.1% lower. Prices are also taking cues from the weak global markets which declined after USDA released its monthly crop report which revealed that excess supplies would continue in the next year too. However, MCX Cotton gained 0.22% on account of short coverings coupled with some improvement in prices in the international markets. Emergence of fresh demand at lower price levels cushioned sharp downside in the domestic markets. The Cotton Corporation of India (CCI) and the National Agricultural Cooperative Marketing Federation of India (NAFED) are expected to offload over 8 lakh cotton bales (a bale weighs 170 kg) in the domestic market this month and the asking price may be lower by Rs 1,000 per candy than the previous price. In April, the government had offered a price of Rs 39,500 per candy, which received lukewarm response from the textile industry. (Source:
Economic Times dated 6th May 2013)
Market Highlights
Unit Rs/20 kgs Rs/Bale Last 1023 17940
as on May 14, 2013 % Change Prev. day WoW -0.10 -1.54 0.22 -0.11 MoM YoY 11.01 4.49 -0.11 8.86
Source: Reuters
International Prices
ICE Cotton Cot look A Index Unit USc/Lbs Last 86.92 93.25
as on May 14, 2013 % Change Prev day WoW 1.02 1.06 -0.43 -1.64 MoM 1.57 1.14 YoY 10.28 6.63
Source: Reuters
India's imports of cotton this year could reach 1.5 mn bales, missing earlier estimates of more than 2 mn as the govt may to start selling its stockpiles. Cotton supplies since the beginning of the year in October 2012 until February 10, 2013 were down at 183.4 lakh bales, down from 189.27 lakh bales a year earlier.
Source: Telequote
Outlook
We expect Cotton prices to trade on a negative note today as offloading from the state reserves may ease supplies in the short term. Weak international markets may also pressurize prices. However, improving demand at lower levels may support prices. Positive prices in the international markets may also support prices at lower levels. Also, farmers may not liquidate their stocks at lower prices unless they are in need of cash. US cotton planting intentions were reported at a 4 year low. China will continue its stockpiling policy, may also support prices.
Source: Telequote
Technical Outlook
Contract Kapas NCDEX April 14 Fut Cotton MCX May Futures Unit Rs/20 kgs Rs/bale
valid for May 15, 2013 Support 1005-1015 17800-17880 Resistance 1030-1040 17990-18050
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