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Wednesday| June 19, 2013
Agricultural Commodities
Content
News & Market Highlights Chana Oilseeds Edible Oils Spices Sugar Cotton Guar Complex
Research Team
Vedika Narvekar - Sr. Research Analyst vedika.narvekar@angelbroking.com (022) 2921 2000 Extn. 6130 Shruti Ghanekar - Research Associate shruti.ghanekar@angelbroking.com (022) 2921 2000 Extn. 6133 Anuj Choudhary - Research Analyst anuj.choudhary@angelbroking.com (022) 2921 2000 Extn. 6132
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Agricultural Commodities
News in brief
Monsoon not Maharashtra enough yet for drought-hit districts of
The drought-hit districts of Maharashtra have started receiving some rainfall but not enough, just yet, according to the state government. Monsoon arrived ahead of schedule in most parts of western India, but Aurangabad, Nanded and Jalna districts, which are part of Marathwada region, have not received enough rain. The average rainfall in these areas has been about 100mm to 120 mm. Though there has been some increase in the water level in dams, there has not been enough rain for agriculture in this region. (Source: Economic Times)
Sensex Nifty INR/$ Nymex Crude Oil - $/bbl Comex Gold - $/oz
.Source: Reuters
Russia wheat harvest starts early; volumes seen up, quality down
Russia, one of the world's largest wheat exporters, will start this year's wheat harvest on a large scale next week, two weeks earlier than usual, the state weather forecaster said on Tuesday. Last year, a drought slashed Russia's wheat harvest by one third, while the share of higherquality milling wheat increased. This year, wheat volumes are expected to recover to near previous levels, while quality falls back to the usual level of about 70 percent milling wheat and 30 percent feed wheat, traders said. Russia's southern regions of Krasnodar and Stavropol, responsible for its largest wheat production and cereal export via the Black Sea, started the harvest a few days ago, according to a representative at the weather forecaster. (Source: Reuters)
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Agricultural Commodities
Chana
Chana futures settled almost flat as supplies are sufficient to cater the domestic demand. July futures settled 0.13% higher on Tuesday. Chana prices are sustaining above their MSP levels since past two weeks. Despite of god demand at such lower levels, sharp upside in the prices is capped despite of good demand mainly on account of higher production this season along with good progress of monsoon is restricting. Sowing of kharif pulses have commenced in the rain fed areas Maharashtra & Karnataka on account of timely and normal rains. Spillover effect of kharif pulses is capping sharp upside in chana prices. Sowing of kharif pulses was adversely impacted last year and was down by 16 percent due to deficient rains.
Market Highlights
Unit Chana Spot - NCDEX Chana- NCDEX June'13 Fut
`/qtl `/qtl
as on June 18, 2013 % change Last 3171 3197 Prev day -0.46 0.13 WoW -0.91 0.95 MoM -6.52 -4.54
Source: Reuters
Spread Matrix
Closing 3170.75 3197 3227 3294 20-Jun-13 26.25 0 -
as on June 18, 2013 19-Jul-13 56.25 30 0 20-Aug-13 123.25 97 67 0 as on June 15, 2013 Stocks as on 14th June 74497 43351 10116 127964 Qty in Process 1059 233 463 1755
Spot 20-Jun-13
19-Jul-13 20-Aug-13
Trade Scenario
According to IBIS, imports of chana in the month of April 2013 declined to 0.04 lakh metric tonnes compared to 0.11 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 may trade on a mixed note today. Declining arrivals from major producing states as well as good demand from stockists may support prices at lower levels. However, good rains, thereby, prospects of better kharif sowing may pressurize prices at higher levels. Seasonal pattern in chana indicates that prices generally bottom out in May when arrivals reach their peak, while they start recovering gradually June onwards with declining supply pressure. Thus, going forward downside seems to be limited as prices are near their MSP levels.
Technical Levels
Contract Chana July Futures Unit `/qtl Support
3196-3210
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Agricultural Commodities
Soybean
Soybean continued with its upward trend for fifth straight session on account of tight supplies of the oilseed in the domestic markets coupled with good soy meal export demand. Spot as well as July futures settled % and 1.7% higher on Tuesday. Despite of good progress of monsoon & hopes of better sowing, Soybean prices remained in a positive territory on account of supply tightness in the domestic markets along with the firmness in the international markets due to delayed planting. In the domestic markets, the planting of kharif oilseeds such as groundnut, sesame and castor has started in states such as Andhra Pradesh, Karnataka and Tamil Nadu. Soybean sowing has commenced with good monsoon over Maharashtra and MP. Monsoon has covered almost the entire country a month before the normal schedule. As per the Ministry of Agriculture, oilseeds sowing is 1.57 lakh ha against 1.56 lk ha last year. According to the 3rd advance estimates, Soybean output is pegged at 14.14 mn tonnes. IMDs forecasts of normal monsoon have raised hopes of better output next season too. International Markets CBOT soybean remained firm during most part of the session however settled marginally lower by 0.1percent on Tuesday. Price are on an upward trend since past few weeks as supplies are tight till the new crop arrives in the US and delayed planting will further delay harvesting adding to the already squeezed stocks. According to the latest USDA report, 85% planting is complete as against 98% last year and a five year average of 91%. The government is predicting record soybean yields this year despite intense spring showers that have delayed planting & damaged crops already in ground prevented farmers from sowing all of their seeds. According to NOPA, soybean crush increased from 120.1 mn tn in April to 122.6 mn tn in May.
Market Highlights
as on June 18, 2013 % Change Prev day WoW 0.78 2.41 -0.12 -0.03 0.20 2.18 6.45 -1.93 -0.65 -0.65
Unit Soybean Spot- NCDEX Soybean- NCDEX June '13 Fut Soybean- CBOT July'13 Fut RM Seed Spot- NCDEX RM Seed- NCDEX June '13 Fut
`/qtl `/qtl
USc/Bsh
`/qtl `/qtl
Source: Reuters
as on June 18, 2013 20-Aug-13 -744 -770 -714.5 0 as on June18, 2013 19-Jul-13 12.25 19 0 20-Aug-13 59.25 66 47 0 as on June 15, 2013 Qty in Process 1636 273 0 1909 as on June 15, 2013 Qty in Process 50 30 111 0 1953 20 50 2214 NCDEX July contract
Outlook
Soybean prices may continue with its upward trend in the intraday supported by tight supplies in the domestic markets along with strong gains in the international markets as a result of delayed planting.
Rape/mustard Seed
Mustard futures July futures declined 0.2% on Tuesday on account of higher supplies in Rajasthan, the largest producing belt. However, positive sentiments in other oilseed and edible oil complex, restricted sharp fall in the prices. Sowing of this Rabi crop was up by 2.2% at 67.23 lakh ha in 2012-13. Agriculture ministry in its third advance estimates, pegged mustard output at 7.36 mn tn, up by 11.5%.
Outlook
Mustard seed futures may remain under downside pressure on account of higher supplies in the domestic markets.
Technical Levels
Contract Soybean NCDEX July Futures RM Seed NCDEX July Futures Unit `/qtl `/qtl
valid for June 19, 2013 Support 3880-3914 3490-3505 Resistance 3984-4012 3540-3556
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Agricultural Commodities
Refined Soy Oil
Ref soy oil July contract traded gained 0.33% higher on accounts of rising demand for edible oil ahead of Ramadan. Rupee depreciation also supported prices. Edible oil prices have gained in the domestic markets in the last 2-3 weeks on account of weak rupee which was making imports costlier. India meet 50-55 percent of its edible consumption through imports and thus rupee factor is a major determinant of edible oil prices. As per the data released by the Solvent Extractors' Association of India, imports of vegetable oils, including non-edible oils, rose 40.2% to 917,964 tn in May, after dropping for 3 months, mainly due to surge in palm oil imports. Monthly soy oil imports rose 2.7% as local supplies are almost exhausted before the new planting season for soybean. Edible oil stocks as on June 1, 2013 at various ports were estimated at 6.75 lakh tonnes and about 13 lakh tonnes are in the pipeline.
Market Highlights
% Change Unit `/10 kgs `/10 kgs USc/ Bushel MYR/Tonne Last 717 716.7 48.81 2465 504
CPO-MCX- June '13 Fut
Ref Soy oil SpotNCDEX Ref Soy oil- NCDEX June '13 Fut Soybean Oil- CBOTJuly'13 Fut
CPO-Bursa Malaysia June '13 Fut
`/10 kg
Source: Reuters
as on June 18, 2013 20-Aug-13 -21.3 -21 -7.25 0 as on June 18, 2013
Outlook
Soy oil may trade with a positive bias as festive season demand and weak rupee may support prices.
Outlook
CPO prices are expected to trade higher as good demand as well as lower yield period of Malaysian palm oil may support prices. Prices may also take cues from Rupee movement.
Technical Outlook
Contract Soy Oil July NCDEX Futures CPO MCX June Futures Unit `/qtl `/qtl
valid for June 19, 2013 Support 697-700 497-501 Resistance 706-710 507-510
Source: Telequote
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Agricultural Commodities
Spices
Jeera
Jeera has consolidated over the last few days and traded on a flat note yesterday. The spot as well as the July futures settled 0.15% and 0.06% higher on Tuesday. Good overseas demand is supporting prices at lower levels, while higher arrivals have pressurized prices. Currently, about 25-30% of total arrivals have been exported, mainly to Singapore, Europe and Dubai. In the global markets, there is a supply crunch due to the ongoing geopolitical tensions in Syria and Turkey, which has raised supply concerns from these two major exporting countries. Export orders are diverted to India. Production is also expected to decline in Syria and Turkey. Jeera of Indian origin are being offered in the international market at $2,475 tn (FOB Mumbai).
Market Highlights
Unit `/qtl `/qtl `/qtl `/qtl Last 13473 12978 5611 5628 Prev day 0.15 -0.44 0.88 -1.02
as on June 18, 2013 % Change WoW 0.28 0.52 2.50 6.43 MoM -0.66 -1.44 -7.89 -6.14 YoY -0.66 0.12 60.15 53.02
Jeera Spot- NCDEX Jeera- NCDEX June '13 Fut Turmeric Spot- NCDEX Turmeric- NCDEX June '13 Fut
Source: Reuters
as on June 18, 2013 20-Aug-13 -17.5 477.5 292.5 0 as on June 18, 2013 20-Jun-13 16.9 0 19-Jul-13 -11.1 -28 0 20-Aug-13 72.9 56 84 0 as on June 15, 2013 Stocks as on Qty in 14th June Process 727 7369 8096 4239 NCDEX July contract 176 237 413 368
Production of Jeera in 2012-13 is expected around 40-42 lakh bags (55 kgs each), marginally higher than 40 lakh bags last year. Carryover stocks from 2011-12 harvest were around 8-9 lakh bags.
Outlook
Jeera is expected to trade sideways today. Overseas demand may support prices at lower levels while good supplies may cap the upside. Overall trend remains positive for Jeera due to overseas demand, as Syria & Turkey are not supplying which may keep the prices firm.
Turmeric
After gaining sharply over the last 5 sessions, Turmeric futures corrected from higher levels and settled 2.51% lower on Tuesday. Prices have gained on account of lower arrivals coupled with fresh export enquiries. However, good progress of the monsoon thereby expectations of good sowing have capped the gains. NCDEX issued a circular whereby the earlier circular regarding modification in the tick size and lot size has been kept in abeyance. The regulator also withdrew special margins on the long side.
Technical Outlook
Jeera NCDEX July Futures Turmeric NCDEX July Futures Unit `/qtl `/qtl
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Agricultural Commodities
Sugar
Sugar prices declined by 0.19% on account of comfortable supplies coupled with improvement in monsoons in the sugarcane growing regions. The recent rains in the drought affected sugarcane areas in the Southern and Western part of the country have eased damage concerns. However, expectations of increase in the import duty coupled good demand ahead of Ramadan as well as concerns about cane output in the coming season due to drought conditions in Maharashtra last year limited the downside. According to the Ministry of Agriculture, Sugarcane has been planted in 42.09 lakh ha as compared to 46.78 lakh ha as drought affected Maharashtra and Karnataka have reported lower area.
Market Highlights
Unit Sugar SpotNCDEX Sugar M- NCDEX June '13 Fut Sugar No 5- LiffeAug'13 Fut Sugar No 11-ICE July '13 Fut `/qtl 3083 `/qtl 489.4 $/tonne 372.44 $/tonne -1.00 -0.53 -0.03 Last 3064
as on June 18, 2013 % Change Prev. day WoW -0.19 -0.28 -0.23 2.73 2.89 MoM 0.40 0.98 2.77 -0.42 YoY 4.07 7.50 -19.93 -22.30
Source: Reuters
Source: Telequote
Outlook
Sugar futures are expected to trade on a mixed note today. Demand from stockists coupled with output concerns this season coupled with expectations of imposition of import duty may support prices.. However, weak international prices coupled with good rains in the cane growing regions may pressurize prices at higher levels.
Technical Outlook
Contract Sugar July NCDEX Futures Unit `/qtl Support
3094-3100
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Agricultural Commodities
Kapas
After witnessing profit booking on Monday, NCDEX Kapas as well as MCX Cotton continued with its upward trend on account of thin supplies and good demand for yarn. Weak domestic currency Firm international markets in the past 1-2 weeks had supported an upside in the cotton prices in the domestic markets. With the cotton season nearing its end, arrivals have declined considerably. Cotton supplies since the beginning of the year in October th 2012 until 26 May, 2013 were down at 311.17 lakh bales, down from 320.82 lakh bales a year earlier.
Market Highlights
Unit `20 kgs `/Bale USc/Lbs Last 1073 19130 84.98 96.05
as on June 18, 2013 % Change Prev. day WoW 0.94 0.14 0.58 0.00 -2.80 -3.50 -0.62 2.29 MoM YoY 4.17 9.43 0.00 19130 -1.22 2.41 2.73 15.10
Source: Reuters
NCDEX Kapas Apr Fut MCX Cotton June Fut ICE Cotton Cot look A Index
Sowing Progress
Cotton planting has been reported at 15.85 lakh ha as against 15.72 lakh ha during the same period last year. Plating is almost complete in North India and sowing in Punjab and Haryana declined marginally. Sowing in the rain fed areas of Southern India has also commenced. Sowing has picked up in Andhra Pradesh as well as Karnataka. Planting in Gujarat is yet to gain momentum.
Stocks as on 16th June 12300 5900 117900 24300 900 100 161400 NCDEX April contract
Outlook
Cotton may trade with upward bias during the intraday on account of thin supplies and good yarn demand. Weakness in the Indian rupee may also support prices.
Technical Outlook
Contract Kapas NCDEX April 14 Fut Cotton MCX June Futures Unit `/20 kgs `/bale
valid for June 19, 2013 Support 1058-1065 18850-18990 Resistance 1079-1086 19250-19360
Source: Telequote
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Agricultural Commodities
Guar Complex
Guar seed as well as Guar gum July Futures witnessed very volatile session on Tuesday as prices increased sharply in the early part of the session, but settled at lower limit of 4 percent. Since the resumption of Guarseed and Guar gum contracts on the futures platform, prices are on a downward trend on account of host of factors like bumper summer harvest in Gujarat, smooth monsoon progress and expected higher sowing. Also, Stockiest who were holding stocks in anticipation of better prices liquidated stocks in the physical markets on expected normal monsoon thereby increasing supplies in the market.
Market Highlights
Unit Guar Seed SpotNCDEX Guar Seed- NCDEX June 13 Fut Guar Gum SpotNCDEX Guar Gum- NCDEX June 13 Fut `/qtl 7320 `/qtl 20272 `/qtl 21550 `/qtl -1.96 -8.45 -2.92 Last Prev day 7092 -7.54
as on June 18, 2013 % change WoW 8.28 8.61 5.83 4.92 MoM -24.95 -21.12 #N/A -23.42 YoY #N/A #N/A #N/A #N/A
Source: Reuters
as on June 18, 2013 20-Aug-13 -1102.3 -1330 -840 0 as on June 18, 2013 19-Jul-13 337.85 -940 0 20-Aug-13 -1972.15 -3250 -2310 0 as on June 15, 2013 Stocks as on 14th June 30 Qty in Process 30
Outlook
Overall trend remain bearish in Guar complex as conditions so far are favorable for smooth advancement of monsoon in the major guar growing belts. Further, supply side fundamentals remain strong to cater the domestic and overseas demand.
Technical Outlook
Contract Guar Seed July (NCDEX) Guar Seed July (MCX) Guar Gum July (NCDEX) Guar Gum July(MCX) Unit `/qtl `/qtl `/qtl `/qtl
valid for June 19, 2013 Support 6470-6650 6450-6620 19650-20130 19500-20000 Resistance 7150-7400 7150-7400 21000-21530 20950-21460
Source: Telequote
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