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Friday | 13 Sept, 2013
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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 HIGHLIGHTS Market Highlights (% change)
Additional allocation of 50 la ton of foodgrains for the BPL families at BPL prices during 2013-14
The Cabinet Committee on Economic Affairs has approved the additional allocation of 50 lakh tonne of foodgrains for the Below Poverty Line (BPL) families at BPL prices during the current financial year. This additional allocation of 50 lakh tonne will remain valid for lifting upto 31st March, 2014 or till the National Food Security Ordinance is implemented in the respective State/UT Governments. Earlier this year also a similar allocation of 50 lakh tonne of foodgrains to States/UTs has been approved. Considering the sufficient availability of stock of foodgrains in the Central Pool and requests received from States/UTs, Government has been allocating additional BPL allocation of 50 lakh tonne of wheat and rice to the States/UTs since 2010-11. The Government of India is allocating foodgrains to the States/Union Territories (UTs) under Targeted Public Distribution System (TPDS). (Source: PIB, GOI)
Last Prev. day
Sensex Nifty INR/$ Nymex Crude Oil - $/bbl Comex Gold - $/oz
.Source: Reuters
Export of Sugar will help Faster Clearance of Cane Price Arrears to the Farmers-Prof. K.V.Thomas
Ministry of Food in principle does not have any objection to permit further export of sugar as it will help faster clearance of cane price arrears and help the country to earn some precious foreign exchange. This was stated by Prof. K.V. Thomas, Minister for Consumer Affairs, Food and Public Distribution while addressing the annual general meeting of National Federation of Cooperative Sugar Factories here today. He said that Government policies, including, the ones relating to sugar exports, are aimed at balancing the interest of consumers, farmers and the industry. Prof Thomas assured that while reviewing sugar export policy, his Ministry will be fair to all stakeholders. (Source: PIB, GOI)
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Agricultural Commodities
Chana
After declining over the past few sessions, chana futures picked up considerably on Thursday on strong festive season demand. Improving demand from the millers due to declining supplies from the major producing regions also supported prices. Also prospects of higher sowing amid good rains in the chana growing regions have pressurized prices over the last few days. The spot as well as the October Futures settled 1.61% and 3.54% higher respectively on Thursday. As per a circular by NCDEX dated August 21 2013, Special Margin of 5% on the Short side imposed earlier has been withdrawn in Chana with effect from beginning of day Friday, August 23, 2013. As per the data released by the ministry of Agriculture, area under kharif th Pulses stood at 102.93 lakh ha as on 6 September 2013, up by 5.35 percent compared to the corresponding period last year. Pulses sowing in Gujarat as on 2 Sept was seen on 4.83 la ha, up by 31% compared to the same period last year. Also, sowing of kharif pulses in th Rajasthan as on 26 August was seen 22.68 lakh ha, up by 20% compared to the corresponding period last year.
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Market Highlights
Unit Chana Spot - NCDEX Chana- NCDEX Sept'13 Fut
`/qtl `/qtl
as on Sept 12, 2013 % change Last 3150 3111 Prev day 1.61 3.56 WoW 0.00 0.45 MoM 7.75 10.40
Source: Reuters
Spread Matrix
Closing 3150 3111 3220 3298 20-Sep-13 -39 0 -
as on Sept 12, 2013 18-Oct-13 70 109 0 20-Nov-13 148 187 78 0 as on Sept 11, 2013 Stocks as on 10th Sept 45605 53893 10732 109230 Qty in Process 160 30 70 260
309
111
938
1358
Source: Telequote
Outlook
Chana futures may trade higher today extending yesterdays gains. A pickup in the physical demand specially from the millers on the back of declining supplies coupled with the upcoming festive demand is expected to support prices. However, higher kharif pulses sowing and expectations of a better rabi sowing due to good rains in the chana producing regions may cap sharp gains and pressurize prices at higher levels.
Technical Levels
Contract Chana Oct Futures Unit `/qtl Support
3130-3180
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Agricultural Commodities
Soybean
Soybean futures traded on a positive note on Thursday and settled 0.99% higher due to higher international markets coupled with weakness in the Rupee. Prices have declined earlier on expectations of new season arrivals to commence in the coming days. In the domestic markets, although area under soybean this season is at record level, concerns over output remain as excessive rains in MP have damaged some soy crop. Overall production is still expected to remain higher due to early rains and increased planting As per data released by the ministry of Agriculture, area under oilseeds th was recorded at 191.64 la ha on 6 Sept, 2013, an increase of 12.86% th as compared to the corresponding period last year. As on 10 September, soybean sowing in MP is up 9.8% at 63.8 la ha, while in Maharashtra it is up by 21.7% at 39.16 la ha. Indias Soymeal exports jumped to 1.83 lk tn in August against 10,006 tn in August last year due to robust demand and favorable prices. International Markets CBOT Soybean traded on a positive to bullish note as the USDA monthly report revised soybean production estimates lower than August and settled 2.62% higher on Thursday. The USDA monthly crop report kept the acreage to 77.2 mn acres unchanged from its earlier estimates. Harvest estimates have been trimmed to 3.149 bn bushels from the earlier estimates of 3.255 bn bushels. Forecast of 2013-14 ending stocks have also been slashed from 220 mn bushels in August to 150 mn bushels. Dry weather and heat conditions in the Midwest have raised yield concerns and support prices. Export demand further supported an upside in the prices. The USDA weekly crop progress report downgraded the good-toexcellent rating to 52% from 54% last week and 32% a year ago. USDA reported that 97% of the crop is setting pods vs. 99% a year ago. According to Agro consult, a local analyst, Brazil new soy crop is seen at a record 88.4 mn tn in 2013/14 as against 81.46 mn tn last year.
Market Highlights
as on Sept 12, 2013 % Change Prev day WoW 0.99 -0.22 0.99 2.62 0.89 2.03 -2.35 1.34 -1.60 -1.96
Unit Soybean Spot- NCDEX Soybean- NCDEX Oct '13 Fut Soybean-CBOT Sept'13 Fut RM Seed Spot- NCDEX RM Seed- NCDEX Sept'13 Fut
`/qtl `/qtl
USc/Bsh
`/qtl `/qtl
Source: Reuters
as on Sept 12, 2013 20-Dec-13 -74 34 31.5 0 as on Sept 12, 2013 18-Oct-13 -82.1 40 0 20-Nov-13 -38.1 84 44 0
Outlook
Soybean futures are expected to trade on a positive note tracking higher international markets on the back of weather concerns in the domestic as well as the US. However, commencement of arrivals of early sown soy crop in the coming days may cap gains.
Rape/mustard Seed
Mustard seed also traded higher tracking higher oilseeds 0.85% higher on Thursday. Demand for mustard is also good due to lean supplies of other oilseeds Prices declined over the last few days due to weak oilseeds prices coupled with comfortable supplies of mustard.. Agriculture ministry in its fourth advance estimates, pegged mustard output at 7.82 mn tn, up by 18.4% compared to 2011-12 season.
Outlook
Mustard seed futures may trade on a positive note on the back of good mustard demand coupled with higher oilseeds prices. However, ample supplies coupled with expectations of a better sowing may continue to cap gains and pressurize prices.
Technical Levels
Contract Soybean NCDEX Oct Futures RM Seed NCDEX Oct Futures Unit `/qtl `/qtl
valid for Sept 13, 2013 Support 3385-3420 3497-3524 Resistance 3485-3515 3575-3600
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Agricultural Commodities
Refined Soy Oil
Ref soy oil October futures traded on a positive note yesterday and settled 0.92% higher on account of festive demand coupled with Rupee depreciation. However, arrivals of new season soy crop in would commence soon, easing supplies in the coming weeks, thus capping sharp gains. 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 declined 6.13% to 889,493 tn in July. Monthly soy oil imports rose 69% as local supplies are almost before the soybean crop enters the markets. Stockpiles of edible oil at ports on Aug 1 stood at 610,000 tn, the trade body said, lower than 695,000 tn on July 1. Stocks were still on the higher side despite the decline in monthly imports.
Market Highlights
% Change Unit `/10 kg `/10 kg USc/ Bushel MYR/Tonne `/10 kg Last 675.40 684.05 42.69 2361 531.80 Prev day 0.39 0.40 0.09 0.43 0.30
Ref Soy oil SpotNCDEX Ref Soy oil- NCDEX Sept '13 Fut Soybean Oil- CBOTSept'13 Fut
CPO-Bursa Malaysia Sept '13 Fut CPO-MCX- Sept '13 Futures
Source: Reuters
as on Sept 12, 2013 20-Nov-13 -10.1 -18.75 -3.8 0 as on Sept 12, 2013
Outlook
Soy oil may trade on a mixed note with a negative bias. Appreciation in the Rupee, coupled with expectations of arrivals of the early soy crop and comfortable stocks of imported edible may pressurize prices. However, festive demand may support prices at lower levels.
Outlook
CPO may trade on a mixed note. Festive demand, higher oilseeds and depreciation in the Rupee may support prices. However, comfortable supplies may cap sharp upside. Sentiments for Malaysian palm oil futures remain positive on hopes of healthy exports to continue in the month of September.
Technical Outlook
Contract Soy Oil Oct NCDEX Futures CPO MCX Sept Futures Unit `/qtl `/qtl
valid for Sept 13, 2013 Support 661-665 520-525 Resistance 673-677 536-541
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Agricultural Commodities
Spices
Jeera
Jeera futures traded on a positive note on account of good overseas as well as domestic demand. However, easing tensions in Syria have capped gains. Good rains in the jeera belt in Gujarat have increased prospects of a better sowing in the upcoming season. The spot as well as the October Futures settled 0.07% and 1.05% higher on Thursday. According to IBIS, India exported 9462.64 tn of jeera in June. The major destinations were UAE, Nepal, Vietnam & USA. 1% Jeera of Indian origin Singapore is being offered at $2,200/tn (FOB Mum) while Europe at $2,300-2,325/tn (CNF). (Source: Agriwatch) 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.
Market Highlights
Unit `/qtl `/qtl `/qtl `/qtl Last 13674 13348 4942 4568 Prev day 0.07 1.33 -2.17 -3.10
as on Sept 12, 2013 % Change WoW -1.11 -2.73 -4.37 -11.13 MoM 1.01 0.95 -2.85 -2.31 YoY -7.91 -3.91 -11.55 -24.12
Jeera Spot- NCDEX Jeera- NCDEX July '13 Sept Turmeric Spot- NCDEX Turmeric- NCDEX Sept '13 Fut
Source: Reuters
as on Sept 12, 2013 20-Nov-13 188.8 515 200 0 as on Sept 12, 2013 20-Sep-13 -374.4 0 18-Oct-13 -58.4 316 0 20-Nov-13 59.6 434 118 0 as on Sept 11, 2013 Stocks as on Qty in 10th Sept Process 1319 2310 3629 8546 NCDEX October contract 0 267 267 0
Production of Jeera in 2012-13 is expected around 40-45 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 futures may trade on a mixed note. Overseas as well as domestic demand may support prices. However, Easing tensions in Syria coupled with prospects of higher sowing in the coming season may cap sharp upside in the prices. Situation in Syria needs to be closely watched, as escalation of tensions will push up the prices.
Turmeric
Turmeric Futures traded on a negative note on account of huge carryover stocks coupled with good sowing amid favorable weather conditions. However, prices recovered from lower levels towards the end of the day and settled 0.69% lower on Thursday. Overseas as well as domestic demand has supported prices at lower levels. According to a circular by NCDEX, launch of April 2014 expiry contract in Turmeric has been postponed till further notice.
Technical Outlook
Jeera NCDEX Oct Futures Turmeric NCDEX Oct Futures Unit `/qtl `/qtl
Source: Telequote
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Agricultural Commodities
Sugar
Sugar October futures recovered on Thursday on account of short coverings and settled 0.13% higher. Prices have declined due to ample supplies along with expectations of a higher output and selling pressure from the mills. However, a pickup in demand ahead of the festive season restricted a sharp decline and supported prices at lower levels. An increase in the import duty to curb the inflows also supported prices at lower levels. The Food Minister said that his ministry has moved a cabinet proposal to allow state governments to hike prices of sugar for PDS. Good monsoon conditions in Maharashtra and Karnataka has led to expectations of recovery in the cane yield, keeping prices under pressure. According to the Ministry of Agriculture, Sugarcane has been planted in th 48.74 la ha as on 6 Sept 2013 as compared to 50.06 la ha last year as drought affected Maharashtra and Karnataka have reported lower area. Based on satellite images for June and field surveys carried out by ISMA (Indian Sugar Mills Association), total sugarcane acreage available for crushing in the sugar season 2013-14 will be about 51.50 lakh hectares, which is about 1.52% less than 52.30 lakh hectares last year. (Source: ET)
Market Highlights
Unit Sugar SpotNCDEX Sugar M- NCDEX Sept '13 Fut Sugar No 5- LiffeOct'13 Fut Sugar No 11-ICE October '13 Fut `/qtl 3008 `/qtl 494.5 $/tonne 381.78 $/tonne 0.06 -0.52 0.30 Last 3020
as on Sept 12, 2013 % Change Prev. day WoW -0.25 -0.38 0.37 1.98 4.06 MoM YoY -0.80 -15.63 -0.43 -1.14 0.12 -12.81 -11.36 -12.88
Source: Reuters
Outlook
Sugar may trade with negative bias as ample supplies, selling by the mills and expectations of a sugar surplus continue to mount pressure on the prices. However, festive demand may support prices at lower levels.
Technical Outlook
Contract Sugar Oct NCDEX Futures Unit `/qtl
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Agricultural Commodities
Kapas
NCDEX Kapas as well as MCX Cotton Futures gained 0.59% and 1.8% on Thursday on demand from millers as well as yarn exports coupled with expectations of delay in harvesting by around 15 days due to heavy rains have supported prices. Depreciation in the Rupee also supported prices. The government has allowed the CCI to export more cotton in the current season. The government deferred the decision of imposing a 10% tax on exports of surplus cotton. Ministry of Agriculture, in its fourth Advance estimates of Food grain production wherein it pegged Cotton output at 34 million bales (1 bale= 170 kg) in 2012-13, lower than the record 35.2 million bales in the previous year. With the cotton season nearing its end, arrivals have declined considerably. According to CCI, Cotton arrivals since the beginning of the th season (Oct 2012- Sep 2013) till 14 July is reported at 331.15, down 1.48 percent compared to same period last year.
Market Highlights
Unit `20 kgs `/Bale USc/Lbs Last 1027 21520 85.88 89.85
as on Sept 12, 2013 % Change Prev. day WoW 0.59 0.00 1.80 -0.78 1.27 4.22 -0.17 1.24 MoM YoY 0.00 #N/A 2.92 22.76 -4.64 17.92 -4.47
Source: Reuters
NCDEX Kapas Apr Fut MCX Cotton Aug Fut ICE Cotton Oct 13 Cot look A Index
6.46
Sowing Progress
As per the ministry of agriculture, cotton sowing was reported at 113.12 th la ha on 6 Sept 2013 as against 113.46 la ha last year. In Gujarat, cotton was sown on 26.88 la ha as on 6 September 2013, up by 13.7% compared to the same period last year. In Rajasthan, it was th done on 3 la ha as on 27 August 2013 as against 4.53 la ha last year. In th AP, cotton sowing was undertaken on 20.94 la ha as on 4 September 2013 as against 21.4 la ha last year.
th
Outlook
Cotton futures may trade on a mixed note. Depreciation in the Rupee coupled with expected delay in arrivals and from millers as well as yarn exporters may support prices.
Technical Outlook
Contract Kapas NCDEX April 14 Fut Cotton MCX Oct Futures Unit `/20 kgs `/bale
valid for Sept 13, 2013 Support 1015-1021 21130-21330 Resistance 1032-1036 21700-21900
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Agricultural Commodities
Guar Complex
Guar complex continued to trade on a bullish note and hit the upper circuit on Thursday on concerns over crop yield. Further holding back of stocks in anticipation of further rise in the prices also supported an upside rally in the complex. Despite of the regulator imposing 10 percent special margin on long side w.e.f from Wednesday, upside remained intact. Special Margin of 10% on the Long side will be imposed on all running contracts and yet to be launched contracts in Guar Seed and Guar Gum w.e.f beginning of Wednesday Sept 11, 2013. This will be in addition to Special Margins imposed as stated in contract specifications. Dry and hot weather in the Guar areas in Rajasthan and Haryana may have an adverse impact on the yield. Supplies have declined in the last 23 weeks as farmers are not liquidating their stocks at lower levels. All these factors along with overall weakness in the Indian rupee supported an upside movement in the guar complex.
Market Highlights
Unit Guar Seed SpotNCDEX Guar Seed- NCDEX Oct 13 Fut Guar Gum SpotNCDEX Guar Gum- NCDEX Oct 13 Fut `/qtl 8040 `/qtl 22974 `/qtl 22380 `/qtl 4.00 -10.43 3.34 Last Prev day 8264 -8.58
as on Sept 12, 2013 % change WoW -0.21 19.47 -0.85 21.56 MoM 62.54 99.01 66.23 94.44 YoY #N/A #N/A #N/A #N/A
Source: Reuters
as on Sept 12, 2013 20-Nov-13 -534.3 -310 0 20-Dec-13 -544.3 -320 -10 0 as on Sept 12, 2013 20-Nov-13 -1573.8 -980 0 20-Dec-13 -1453.8 -860 120 0 as on Sept 11, 2013 Stocks as on 10th Sept 50 52 20 Qty in Process 0 0 0
Outlook
Guar prices may continue to trade on a positive note on concerns over crop yield amid high temperature in Rajasthan and Haryana. Also, supplies are comparatively lower as farmers are also holding back their stocks expecting better realization in the coming days. However, overall higher output expectations due to higher acreage may cap sharp upside.
Technical Outlook
Contract Guar Seed Oct (NCDEX) Guar Seed Oct (MCX) Guar Gum Oct (NCDEX) Guar Gum Oct (MCX) Unit `/qtl `/qtl `/qtl `/qtl
valid for Sept 13, 2013 Support 7900-7970 7730-7800 22030-22200 21000-21150 Resistance 8120-8200 7960-8030 22550-22730 21500-21670
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