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Daily Agri Report Sep 20
Daily Agri Report Sep 20
Agricultural Commodities
Content
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
Postponement of expiry of contracts expiring on Sept 20, 2012
As per the NCDEX Circular dated 18th September 2012, there is a possibility of closure of the various physical markets due to the General Strike called by various political parties. Thus, the contracts Barley, Chana, Red Chilli, Cotton seed Oilcake, Coriander, Gold 100 gms, Gur, Jeera, Maize, Potato, Pepper Rubber, mustard seed, Silver 5 kgs, Sugar M, Ref Soy Oil, Turmeric and Wheat, which were scheduled to expire on September 20, 2012 shall now expire on September 21, 2012. It is to be noted that the expiry dates on Market Watch screen would remain unchanged; however, the last trading day for the above contracts will now be September 21, 2012. (Source: NCDEX)
Sensex Nifty INR/$ Nymex Crude Oil - $/bbl Comex Gold - $/oz
Source: Reuters
Iran keen to sign long-term wheat import deal with India: Govt
The revival in monsoon reduced the rain deficit further to 7 per cent as on September 14, but the shortfall in kharif acreage persisted. The total kharif area is lower by 55.62 lakh hectares (lh) over last year, though the crop sowing data continued to trickle in as reports from the interior areas continued to pour. The acreage deficit has largely been reduced in case of pulses, oilseeds and cotton, but the gap has widened in rice and coarse cereals over the previous week. In case of coarse cereals, the shortfall in acreage was mainly observed in sorghum at 2 lh over last year, bajra (19 lh), ragi (1. Iran has evinced interest in importing wheat from India on a regular basis and up to two million tonnes of the grain could be shipped to the West Asian country this year, Food Minister K V Thomas has said. Few months ago, the sanction-hit Iran had sent a delegation to India to check the quality of Indian wheat. It had also taken wheat samples for quality analysis. Asked whether India will export wheat to Iran via diplomatic route, the Minister said, We are still working on modalities. Sources said a delegation from India will soon visit Iran to discuss about wheat exports. (Source: Business Line)
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Agricultural Commodities
Chana
Chana Futures closed marginally up by 0.15% on Tuesday on account of short coverings while spot closed 0.51% down on expectations of higher imports to ease supplies in the domestic markets. As per the NCDEX circular dated 18 September, the expiry of chana st September contract has been postponed to 21 September on account of possible closure of the various physical markets due to the General Strike called by various political parties. Prices declined last week on improved rains and reports of expected higher output in Australia, the largest supplier of chickpeas to India. In Australia, chana production rose by 70.5 percent to 8.27 lakh tonnes from 4.85 lakh tonnes in previous year. Ongoing recovery in monsoon and above average rains in the past few days is showing better prospects for 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. However, the overall fundamentals still remain supportive for the prices on account of supply tightness amid festive season demand. Government released fourth advance estimates wherein it revised upward Chana output at 7.58 mn tn from 7.4 mn tonnes estimated in the third advance estimates and 8.22 mn tn in 2010-11.
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Market Highlights
Unit Rs/qtl Rs/qtl Last 4590 4565 Prev day -0.51 -0.15
as on Sept 18, 2012 % change WoW MoM -0.76 -4.73 1.06 -4.82 YoY 44.41 51.96
Source: Reuters
Technical Outlook
Contract Chana Oct Futures Unit Rs./qtl Support
4390-4430
Outlook
Chana futures are expected to trade with upward bias during the intraday on expectations of good demand at lower prices levels. However, sharp upside may be capped on possible higher imports and improved sowing prospects. In the medium term to long term, the trend remains positive as supplies may not be sufficient to meet the rising demand of the commodity.
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Agricultural Commodities
Sugar
Sugar futures declined 0.3% on Tuesday amid profit booking, while spot continued to trade on a positive note due to emerging demand at lower levels ahead of the festive season. As per the NCDEX circular, the expiry of Sugar September contract due today, has been postponed to 21st September on account of possible closure of the various physical markets due to the General Strike called by various political parties. The Cabinet Committee on Economic Affairs (CCEA) is likely to consider on Friday a proposal to raise price of sugar sold through ration shops - if approved it would be the first hike in about a decade. There are reports that Maharashtra will start crushing for the 2012/13 season from Nov. 1, instead of Oct. 1 supported the prices. Indian Sugar Mills Association (ISMA) has forecast sugar production for 2012-13 season at 24 mn tn. This is about 8 per cent lower than 26 mt produced in 2011-12 season and from its initial forecast of 25 mn tn for 2012-13 season. The Indian government has provided an additional 10 days to sugar mills to sell around 200,000 tonnes of unsold non-levy sugar stocks of August. ICE raw sugar and life white sugar futures declined on Wednesday, with dealers focused on a global surplus of the sweetener and on the progress of the harvest in Brazil.
Market Highlights
Unit Sugar Spot- NCDEX (Kolkata) Sugar M- NCDEX Sept '12 Futures Rs/qtl Last 3829
as on Sept 18, 2012 % Change Prev. day WoW 0.76 4.90 MoM 3.29 YoY 26.78
Rs/qtl
3546
-0.31
1.98
2.96
29.89
Source: Reuters
International Prices
Unit Sugar No 5- LiffeOct'12 Futures Sugar No 11-ICE Oct '12 Futures $/tonne $/tonne Last 552 424.67
as on Sept 19, 2012 % Change Prev day WoW -2.01 -1.70 -3.02 -3.04 MoM -1.34 -5.30 YoY -13.75 #N/A
Source: Reuters
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Source: Telequote
Technical Outlook
Contract Sugar Oct NCDEX Futures Unit Rs./qtl
Outlook
Sugar prices may trade on a positive note due to improving demand ahead of the festive season. A delay in crushing in Maharashtra by a month may also support prices. However, sufficient supplies and improved rains may cap a sharp upside.
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Agricultural Commodities
Oilseeds Soybean: Soybean futures as well as spot declined sharply due to
good monsoon conditions in the key soybean growing regions along with commencement of harvesting in India as well US. CBOT Futures witnessed had declined on Tuesday on account of start to harvesting and up gradation of US crop condition Good to Excellent to 33% from 32% last week. According to the report, 10% of soybeans have already been harvest as against 4% last week. However, on Wednesday prices witness short coverings and thus settled marginally higher. U.S. Department of Agriculture monthly report pegged the soybean harvest at 2.634 billion bushels, down from last month's 2.692 billion and below the analysts' average estimate of 2.657 billion. Ending stocks next summer were projected to be the lowest in nine years at 115 million, unchanged from Augusts estimate. Brazils grain Association expects the number 2 producers of soybean to produce record 81.3 mn tn in 2012-13. Planting in Brazil would commence from Sept. 15 & exports may soar to 37.5 mn tn, beating the 33.8-mn tn record in 2010/11 crop. In the domestic markets, as on 14 September, 2012, Oilseeds have been sown in 171.17 lakh hectares so far, compared with 176.97 lakh ha same period last year. Soybean area is higher at 106.9 lakh ha. In 2011-12 season, soybean was sown under 107 lakh hectares area and recorded 12.28 million tonne output, down from 12.73 mn tn in 2010-11 season. Soy meal exports fell to 10,005 tn in August, from 165,610 tn a year ago. (Source: Solvent Extractors' Association of India). Soybean exports from Brazil declined from 4.13 mn tn in July to 2.4 mn tn in the month of August. (Source: Reuters)
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Market Highlights
% Change Unit Soybean Spot- NCDEX (Indore) Soybean- NCDEX Oct '12 Futures Ref Soy oil SpotNCDEX(Indore) Ref Soyoil- NCDEX Aug '12 Futures Rs/qtl Rs/qtl Rs/10 kgs Rs/10 kgs Last 4280 3569 787.5 790 Prev day -2.15 -3.38 -1.02 -0.61
Source: Reuters
as on Sept 18, 2012 International Prices Soybean- CBOTSept'12 Futures Soybean Oil - CBOTSept '12 Futures Unit USc/ Bushel USc/lbs Last 1640 54.91 Prev day -1.74 -0.13 WoW -3.33 -0.72 MoM -3.22 4.81
Source: Reuters
MYR/Tonne Rs/10 kg
Refined Soy Oil: NCDEX Soy Oil settled lower tracking the oilseeds
complex. Exports of Malaysian palm oil products for Sept. 1-20 rose 14.6 percent to 928,110 tonnes from 809,814 tonnes shipped during Aug. 1-20, according to cargo surveyor Intertek Testing Services. Palm oil exports from Indonesia increased by 20 percent to 1.5 mt in July compared to the previous month. Palm oil output is expected to be 23-25 mt, and around 18 mt is likely to be exported. India imported 112,611 tn of refined palm oil in July, down 9.28 percent from June. Total vegetable oil imports in July were 870,328 tn, up from 783,315 tn in the previous month (Source: Sea of India). Rape/mustard Seed: Taking cues form the weak sentiments in the oilseeds market, mustard seed settled 2.6% down on Tuesday. Mustard output was lower in 2011-12. However, on the back of higher returns and improved rains, next years output is expected to be better. Rainfall deficit in Rajasthan has come down sharply due to rainfall in last 4-5 days. It will ensure higher area under rapeseed as its prices are trading near record high level. Sowing of rapeseed starts from October and north-western Rajasthan is the top producing area in the country.
Source: Reuters
RM Seed
Unit RM Seed SpotNCDEX (Jaipur) RM Seed- NCDEX Sept '12 Futures Rs/100 kgs Rs/100 kgs Last 4050 4116 Prev day -2.29 -2.67
Outlook
After declining sharply on Tuesday, Edible oil complex may witness short coverings taking cues form the international markets. However, overall sentiments remain bearish for the edible oil complex on account of start to harvesting in India as well as US. Expectations of improved yield of domestic soybean may also pressurize the prices.
Source: Telequote
Technical Outlook
Contract Soy Oil Oct NCDEX Futures Soybean NCDEX Oct Futures RM Seed NCDEX Oct Futures CPO MCX Oct Futures Unit Rs./qtl Rs./qtl Rs./qtl Rs./qtl
valid for Sept 20, 2012 Support 736-739 3475-3525 4050-4085 500-506 Resistance 747-752 3595-3640 4140-4180 515-520
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Agricultural Commodities
Black Pepper
Pepper traded sideways on Tuesday, but corrected from higher levels towards the end due to low demand from the upcountry markets. However, low stocks in the domestic markets which have supported prices at lower levels. Traders are buying pepper directly from the farmers. Lower demand for Indian pepper in the international markets has capped sharp gains. The Spot as well as the Futures settled 0.08% and 0.11% lower on Tuesday. 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 $8,400/tonne(C&F) while Indonesia Austa is quoted at $6,750/tonne (FOB). Vietnam was offering 550GL at $6,900/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
% Change Unit Pepper SpotNCDEX (Kochi) Pepper- NCDEX Sept '12 Futures Rs/qtl Rs/qtl Last 41505 42290 Prev day -0.08 -0.11
as on Sept 18, 2012 WoW 1.13 2.15 MoM 1.37 1.21 YoY 16.49 15.45
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 June 2012 is estimated around 73000 mt 73,000 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 prices are expected to trade on a sideways in the intraday. Low stocks in the domestic markets may support prices. However, prices may correct due to lower demand at higher levels in the domestic as well as international markets. Also, demand from the upcountry markets is said to be weak.
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Agricultural Commodities
Jeera
Jeera Futures traded on a negative note on Tuesday due to profit booking at higher levels. Good rains in Gujarat also pressurized the prices. However, the spot remained positive due to low arrivals as farmers are not ready to sell their stocks. Also, expectations of higher exports data have supported the prices. According to markets sources about 75% exports target has already been achieved due to a supply crunch in the global markets. Around 10 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. The Spot settled 0.17% lower while as the Futures settled 1.88% lower on Tuesday. 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 $2,700-2,750 tn (c&f) while Syria and Turkey are not offering. Carryover stocks of Jeera in the domestic market is expected to be around 7-8 lakh bags as compared to 4-5 lakh bags in the last year.
Market Highlights
Unit Jeera SpotNCDEX(Unjha) Jeera- NCDEX Sept '12 Futures Rs/qtl Rs/qtl Last 14800 13995 Prev day 0.17 -1.88
as on Sept 18, 2012 % Change WoW -0.28 0.83 MoM -7.64 -9.86 YoY -2.23 -3.08
Source: Reuters
Source: Telequote
Market Highlights
Prev day 1.62 -0.43
Outlook
Jeera prices are expected to trade sideways. Prices may find support at lower levels on expectations of higher export figures. However, good rains in Gujarat may cap any sharp gains. In the medium term (September-October 2012), prices are likely to witness a bounce back as there are limited stocks with Syria and Turkey.
Unit Turmeric SpotNCDEX (N'zmbad) Turmeric- NCDEX Sept '12 Futures Rs/qtl Rs/qtl Last 5880 6062
Turmeric
Turmeric Spot traded on a bullish note on Tuesday as farmers are not selling stocks at lower levels demanding higher floor price of Rs.9000/tn. Lower sowing figures have also supported prices at lower levels. However, good stocks with the stockists lead to a correction in the Futures. Rainfall in Nizamabad is 15% lower than the normal as on 12/9/2012. Turmeric has been sown in 0.54 lakh hectares in A.P as on 12/9/2012. Sowing is also reported 30-35% lower during the sowing period. The Spot settled 1.62% higher while the Futures (October contract) settled 2% lower on Tuesday. No fresh positions will be allowed in respect of Turmeric September 20, 2012 expiry contract from September 08, 2012 till the expiry of the contract. Only squaring up of existing positions will be allowed.
Source: Telequote
Technical Outlook
Unit Jeera NCDEX Oct Futures Turmeric NCDEX Oct Futures Rs/qtl Rs/qtl
valid for Sept 20, 2012 Support 13750-13900 5530-5600 Resistance 14200-14400 5770-5850
Outlook
Turmeric prices are expected to trade sideways taking cues from lower sowing figures and lower arrivals. Demand for higher floor prices may also support prices. Traders expect fresh export orders in the coming days. However, good stocks may pressurize prices at higher levels. In the medium term (September) prices may take cues from the sowing figures.
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Agricultural Commodities
Kapas
In intraday NCDEX Kapas declined sharply in the early part of the trading session, however, recovered towards the end and settled marginally higher by 0.2%. Cotton prices have declined sharply during the last week on account of improved rains which may narrow down the crop losses in Gujarat. Monsoon deficiency has further narrowed to 6% below LPA which is raising hopes of better output. Good rains in Gujarat, the top producer of Cotton has provided some relief to the standing cotton crop. ICE cotton Futures settled up marginally on Wednesday on account of bargain buying and rebound in other agricultural commodities. Cotton harvesting has commenced in US, in all 6% is harvested as compared to 4% a week ago, versus 8% same period a year ago. Cotton crop condition is 43% in Good/Excellent state as compared to 41% a week ago, and 27% same period a year ago.
Market Highlights
Unit Rs/20 kgs Rs/Bale Last 988.5 16680
as on Sept 18, 2012 % Change Prev. day WoW 0.20 -3.28 0.00 -4.85 MoM -13.10 -7.18 YoY -
Source: Reuters
International Prices
ICE Cotton Cot look A Index Unit Usc/Lbs Last 75.09 81.35
as on Sept 18, 2012 % Change Prev day WoW 0.15 2.93 0.00 0.00 MoM 3.34 0.00 YoY -23.10 -29.20
Source: Reuters
Source: Telequote
Source: Telequote
Outlook
After declining sharply during the last few weeks, cotton prices may trade with upwards bias as demand is expected to emerge at lower levels. Higher international prices after the U.S. Federal Reserves stimulus action may also support the sentiments in the short term.
Technical Outlook
Contract Kapas NCDEX April Kapas MCX April Cotton MCX October Unit Rs/20 kgs Rs/20 kgs Rs/bale
valid for Sept 20, 2012 Support 965-974 960-970 16430-16550 Resistance 999-1010 992-1005 16740-16850
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