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Tuesday| June 25, 2013
Agricultural Commodities
Content
News & Market Highlights Chana Oilseeds Edible Oils Spices Sugar Cotton Guar Complex
Research Team
Vedika Narvekar Chief Manager- Agri Commodities 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
Modification in Contract Specification- Maize- Feed/Industrial grade
As per a circular dated 21 June, 2013, the Exchange, with the approval of the Forward Markets Commission, has made modifications in the Maize-Feed/Industrial Grade (Kharif) futures contracts (SYMBOL: MAIZEKHRF). Currently, Maize-Feed/Industrial Grade (Rabi) futures contracts (SYMBOL: MAIZERABI) expiring in July 2013, August 2013 and September 2013 are available and would continue to be traded as per existing contract specifications. The modifications will be applicable for all contracts expiring in October 2013 and thereafter. Contract expiring in the month of October 2013 were made available for trading from June 24, 2013. (Source: NCDEX)
st
Sensex Nifty INR/$ Nymex Crude Oil - $/bbl Comex Gold - $/oz
.Source: Reuters
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Agricultural Commodities
Chana
Chana futures traded on a flat note yesterday and settled 0.06% lower as good demand from the millers supported prices while good rains in the kharif pulses growing regions pressurized prices. Chana prices are sustaining above their MSP levels since past two weeks. Despite of good demand at such lower levels, sharp upside in the prices is capped mainly on account of higher production this season along with good progress of monsoon. Sowing of kharif pulses have commenced and 3.74 lakh hectares have st been covered as on 21 June compared to normal 1.22 lakh ha. 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 July'13 Fut
`/qtl `/qtl
as on June 23, 2013 % change Last 3228 3248 Prev day -0.23 -0.06 WoW 1.34 1.72 MoM -3.05 -1.61
Source: Reuters
Spread Matrix
Closing 3227.9 3248 3314 3382 19-Jul-13 20.1 0 -
as on June 23, 2013 20-Aug-13 86.1 66 0 20-Sep-13 154.1 134 68 0 as on June 22, 2013 Stocks as on 21st June 77361 44118 10724 132203 Qty in Process 551 754 232 1537
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.
Source: Telequote
Outlook
Chana may trade on a mixed note today. Good demand at lower levels coupled with declining arrivals may provide support to the prices. However, good rains and thereby, prospects of better kharif sowing may cap sharp upside in the prices in the short term. 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
3220-3234
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Agricultural Commodities
Soybean
Soybean continued to decline yesterday extending last weeks losses as sowing is progressing well across major growing belts amidst smooth progress of monsoon so far. The spot as well as the futures settled 1.32% and 1.7% lower respectively on Monday. In the domestic markets, planting of kharif oilseeds such as groundnut, sesame and castor has started in states such as Gujarat, Andhra Pradesh and Karnataka. Soybean sowing has also 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 completed under 8.13 lakh ha against normal 3.37 lakh ha. Groundnut was sown in 5.56 lakh ha against 2.21 lakh ha sown during the same period last year. Soybean was planted on 1.32 lakh ha, against 0.16 lakh 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 gained by 1.26% on Monday ahead of the planting intentions data to be released on Friday. Also, estimates of lower soybean stocks as on June 1 supported prices. However, favorable weather capped gains in the far month contracts. Price were 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.
Market Highlights
as on June 23, 2013 % Change Prev day WoW -1.32 -1.67 -1.70 1.26 -0.18 -0.91 -4.15 -0.03 0.07 0.11
Unit Soybean Spot- NCDEX Soybean- NCDEX July '13 Fut Soybean- CBOT July'13 Fut RM Seed Spot- NCDEX RM Seed- NCDEX July '13 Fut
`/qtl `/qtl
USc/Bsh
`/qtl `/qtl
Source: Reuters
as on June 23, 2013 20-Nov-13 -692 -558 -20 0 as on June23, 2013 20-Aug-13 28.65 42 0 20-Sep-13 72.65 86 44 0 as on June 22, 2013 Qty in Process 80 0 0 80 as on June 22, 2013 Qty in Process 0 21 71 0 947 110 70 1218 NCDEX July contract
Outlook
Soybean prices may extend the losses of the last week on account of higher sowing amidst smooth progress of monsoon. However, recovery in the international markets may support prices at lower levels. Monsoon progress also has to be tracked as failure to continue its smooth progress may restrict sharp downside.
Rape/mustard Seed
Mustard futures July futures declined by almost a percent on Monday tracking weak edible oil complex. Prices gained last week due to lower level demand while comfortable supplies in Rajasthan, the largest producing belt have pressurized prices in the past few weeks. 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 is expected to 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 25, 2013 Support 3675-3710 3458-3475 Resistance 3800-3850 3520-3545
Source: Telequote
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Agricultural Commodities
Refined Soy Oil
Refine soy oil July futures settled 0.41% lower on Monday tracking weak international markets. Broad sell off in commodities last week on concerns the U.S. Federal Reserve may phase out stimulus exerted downside pressure on the CBOT soy oil prices. Edible oil prices have gained in the domestic markets in the last 3-4 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 kg `/10 kg USc/ Bushel MYR/Tonne `/10 kg Last 706.95 690.85 47.55 2394 504.20 Prev day -0.69 -0.41 -0.98 -1.52 -0.47
Ref Soy oil SpotNCDEX Ref Soy oil- NCDEX July '13 Fut Soybean Oil- CBOTJuly'13 Fut
CPO-Bursa Malaysia June '13 Fut CPO-MCX- June '13 Futures
Source: Reuters
as on June 23, 2013 20-Sep-13 -29.15 -13.05 -6.8 0 as on June 23, 2013
Outlook
Soy oil may continue to trade with a negative bias on account of weakness in the international markets. However, good demand ahead of Ramazan may limit the downside in the prices. A weak Rupee may also limit the downside in the prices.
Outlook
CPO prices may continue to decline taking cues from the weak international markets. however, a weak Rupee may restrict the downside.
Technical Outlook
Contract Soy Oil July NCDEX Futures CPO MCX July Futures Unit `/qtl `/qtl
valid for June 25, 2013 Support 684-687 500-502 Resistance 694-698 507-510
Source: Telequote
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Agricultural Commodities
Spices
Jeera
After gaining sharply over the last four sessions, Jeera prices corrected from higher levels on account of profit taking and settled 0.58% lower on Monday. Prices have gained last week on account of good overseas as well as local demand. 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 $2,525 tn (FOB Mumbai).
Market Highlights
Unit `/qtl `/qtl `/qtl `/qtl Last 13764 13603 5701 5966 Prev day 0.25 -0.58 2.11 0.98
as on June 23, 2013 % Change WoW 2.31 4.35 2.50 4.92 MoM 1.16 2.35 -5.50 0.71 YoY -1.69 -1.72 56.16 42.05
Jeera Spot- NCDEX Jeera- NCDEX July '13 Fut Turmeric Spot- NCDEX Turmeric- NCDEX July '13 Fut
Source: Reuters
as on June 23, 2013 20-Sep-13 506.1 667.5 360 0 as on June 23, 2013 19-Jul-13 265 0 20-Aug-13 343 78 0 20-Sep-13 439 174 96 0 as on June 22, 2013 Stocks as on Qty in 21st June Process 846 7354 8200 4942 NCDEX July contract 170 75 245 120
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 prices may trade higher today on account of overseas as well as domestic demand. However, good supplies may cap upside. Overall trend remains positive for Jeera due to overseas demand, as Syria & Turkey are not supplying which may keep the prices firm.
Turmeric
Turmeric futures continued to trade higher yesterday and settled 0.98% higher on account of lower arrivals. Also, fresh export enquiries supported prices. However, good progress of the monsoon thereby expectations of good sowing have capped sharp 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 traded on a flat note yesterday. The government will not consider increase in the import duty until September 2013, pressurized prices. However, output concerns supported prices at lower levels. The recent rains in the drought affected sugarcane areas in the Southern and Western parts of the country have eased damage concerns thereby exerting downside pressure on the prices. However, 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 44.55 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 July '13 Fut Sugar No 5- LiffeAug'13 Fut Sugar No 11-ICE July '13 Fut `/qtl 3011 `/qtl 510.9 $/tonne 378.00 $/tonne 1.61 2.90 0.00 Last 3047
as on June 23, 2013 % Change Prev. day WoW -0.34 -0.74 -2.37 3.84 0.47 MoM -0.73 -0.30 7.24 1.01 YoY 2.19 3.33 -13.52 -17.15
Source: Reuters
Source: Telequote
Outlook
Sugar futures may trade with a negative bias today as the government will not increase the import duty. Good rains in the cane growing regions may also pressurize prices at higher levels. However, improvement in the international prices coupled with Ramadan demand as well as output concerns this season may support prices at lower levels.
Technical Outlook
Contract Sugar July NCDEX Futures Unit `/qtl
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Agricultural Commodities
Kapas
MCX Cotton settled 0.36% higher on Monday on account of good demand for yarn coupled with declining supplies in the domestic markets. However weak international prices coupled with higher cotton planting this season capped the upside in the prices. NCDEX Kapas settled 0.36% lower. 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 1074 19500 82.98 91.85
as on June 23, 2013 % Change Prev. day WoW -0.65 1.03 0.36 2.52 -2.55 -5.09 -0.54 -4.97 MoM YoY 1.03 #N/A 8.51 21.50 1.83 21.48 1.94 11.60
Source: Reuters
NCDEX Kapas Apr Fut MCX Cotton June Fut ICE Cotton Cot look A Index
Sowing Progress
Cotton planting has been reported at 28.13 lakh ha as against 24.59 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 21st June 12300 5900 117900 24300 900 100 161400 NCDEX April contract
Outlook
Cotton is expected to trade with a positive bias today on account of thin supplies and good yarn demand. Weakness in the Indian rupee may also support prices. Higher cotton planting figures so far in the domestic markets and smooth progress of monsoon may however, cap sharp upside in the prices in the coming weeks.
Technical Outlook
Contract Kapas NCDEX April 14 Fut Cotton MCX June Futures Unit `/20 kgs `/bale
valid for June 25, 2013 Support 1045-1058 19650-19740 Resistance 1090-1105 19920-20010
Source: Telequote
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Agricultural Commodities
Guar Complex
Guar seed as well as Guar gum July Futures settled 1.72% and 1.92% lower respectively on Monday due to improvement in the sowing of the guar crop. However, slack supplies as farmers held back stocks on hopes of better prices supported prices at lower levels. 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.
Market Highlights
Unit Guar Seed SpotNCDEX Guar Seed- NCDEX July 13 Fut Guar Gum SpotNCDEX Guar Gum- NCDEX July13 Fut `/qtl 7440 `/qtl 21774 `/qtl 21510 `/qtl -1.92 -0.79 -1.72 Last Prev day 7704 -0.87
as on June 23, 2013 % change WoW 0.44 -1.33 -1.66 -2.14 MoM -17.23 -17.52 -20.97 -21.24 YoY #N/A #N/A #N/A #N/A
Source: Reuters
as on June 23, 2013 20-Aug-13 -1334.15 -1070 0 20-Sep-13 -1494.15 -1230 -160 0 as on June 23, 2013 20-Aug-13 -2824.15 -2560 0 Stocks as on 21st June 59 10 20-Sep-13 -3274.15 -3010 -450 0 as on June 22, 2013 Qty in Process 0 71
Outlook
A prediction of below normal rains in Northwest India may support an upside in the prices in the near term. However, it is too early to predict the same as monsoon progress so far is smooth. Further, supply side fundamentals remain strong to cater the domestic and overseas demand thus exerting pressure on the prices at higher levels. good sowing may also add to the downside pressure.
Source: Telequote
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