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News & Market Highlights Chana Sugar Oilseed Complex Spices Complex Kapas/Cotton
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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
MSP unchanged for Wheat, government may offer 10% bonus
The government may offer a bonus of 10% for wheat as an incentive to farmers in the coming winter while holding down the minimum support price on the recommendation of the Commission for Agricultural costs and prices (CACP). The CACP, which advises the government on the floor price for major crops, has suggested retaining last year's MSP of Rs 1,285/tonne to discourage excess production for the second consecutive year. However, agriculture ministry is looking at ways to incentivise farmers and encourage them for record output this year also. "CACP has suggested 10% bonus for wheat farmers if exports are banned next year. But we may give bonus unconditionally to offset rise in input costs including prices of fertiliser, seeds and irrigation. We will soon announce the floor prices of rabi crops, said an agriculture department official. However, any rise in the purchase price would upset the budget of food ministry which buys wheat from farmers. (Source: The economic Times)
Sensex Nifty INR/$ Nymex Crude Oil - $/bbl Comex Gold - $/oz
Source: Reuters
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Agricultural Commodities
Chana
Chana spot prices on Thursday traded on a positive note and closed up by 2.28% ahead of tight supplies. Also sentiments have turned positive in the past one week on account of improved festive season demand at lower price levels. Prices had declined in the month September 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. CACP has recommended a hike in minimum support price (MSP) of gram by Rs.200 to Rs.3000 a quintal and Masoor by Rs.100 to Rs.2900 a quintal for upcoming 212-13 Rabi season to boost the production of pulses. As per the statement of Finance Minister P. Chidambaram, India has raised the subsidy on imported pulses to Rs. 20/kg from the earlier Rs. 10/kg, this move is expected to increase pulses imports. As per the NCDEX circular dated 1 October, Special Margin of 10% (in cash) on the Long Side on all the running contracts and yet to be launched contracts in Chana have been withdrawn with effect from beginning of day Thursday, October 04, 2012. Good rains in the month of August and September has raise prospects of Rabi pulses sowing in the coming days that would commence soon. Monsoon has recovered across India, especially in Rajasthan, one of the major chana growing states, and may prove beneficial for the chana sowing.
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Market Highlights
Unit Rs/qtl Rs/qtl Last 4593 4686 Prev day 2.28 0.51
as on Oct 11, 2012 % change WoW MoM 3.20 0.93 3.28 3.97 YoY 31.21 37.95
Source: Reuters
Source: Telequote
Technical Outlook
valid for Oct 12, 2012 Unit Rs./qtl Support 4450-4493 Resistance 4585-4615
Outlook
Chana futures are expected to gain further ahead of festive season demand and tight supplies. However, reports of higher sowing of Rabi pulses this season might pressurize the prices in the medium term. Also, higher imports from Australia may cap the sharp upside in the prices.
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Agricultural Commodities
Sugar
Sugar Futures on Thursday settled lower by 0.41% ahead of higher supplies due to release of non levy sugar quota. The Government has decided to make available a quantity of 40 lakh tons of non-levy quota, for the months of October and November 2012. Indian mills have signed deals to buy up to 450,000 tonnes of Brazilian raw sugar for delivery from October to December as a gap between domestic and overseas prices widens, making room for the first imports in more than two years, five dealers told Reuters. Millers based in western and southern India and global trading firms bought sugar at around $500/ton a CIF basis, as the price in the domestic market has jumped more than 23% to $680/ tn in the past three months. ICE raw sugar and Liffe white sugar extended further losses and settled 3.81% and 3.73% lower respectively on Thursday taking cues from the September Monthly USDA report which showed increase in supplies. Also, higher output and lower imports expectations for the 2012-13 season from China.
Market Highlights
Unit Sugar Spot- NCDEX (Kolkata) Sugar M- NCDEX Oct '12 Futures Rs/qtl Last 3727
as on Oct 11, 2012 % Change Prev. day WoW 0.34 -2.08 MoM -0.18 YoY 21.80
Rs/qtl
3376
-0.41
-0.91
-4.74
22.32
Source: Reuters
International Prices
Unit Sugar No 5- LiffeOct'12 Futures Sugar No 11-ICE Oct '12 Futures $/tonne $/tonne Last 568.4 454.44
as on Oct 11, 2012 % Change Prev day WoW -3.73 -3.81 -4.84 -5.06 MoM 2.14 5.20 YoY -20.09 #N/A
Source: Reuters
Source: Telequote
Technical Outlook
Contract Sugar Oct NCDEX Futures Unit Rs./qtl
Outlook
Sugar prices may trade sideways with a negative bias taking cues from weaker international markets as well as higher Quota for the month of October and November. However, festive demand might support prices at lower levels.
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Agricultural Commodities
Oilseeds
Soybean: Soybean Futures as well as spot extended the gains
taking cues from the international oilseed market. Also, demand for edible oil ahead of ongoing festive season supported the upside. The Futures settled 1.10% higher while the spot closed up by 0.84%. As per NCDEX, Special Margin of 20% (in cash) on the Long Side on Soya bean October 2012 expiry contract will be withdrawn with effect from beginning of day Monday, October 08, 2012. Special margin on soy meal has also been withdrawn w.e.f October 12 2012. CBOT Soybean settled 1.66% higher on Thursday taking cues from the monthly USDA report which showed lower ending stocks. USDA estimates 2012/13 u.s. soybean crop 2.860 bln bu (above trade 2.764), yield 37.8 bu/ac (above trade 37.006), harvest acres 75.7 mln (above trade 74.579). Ending stocks are seen down from 169 million bushels in 2011-12 to 115 million bushels in 2012-13 season. In Brazil planting has started 10 days earlier amid good rains. If rains continue in the coming weeks as forecast, Brazil could churn out 81 million tonnes of oilseed and replace the drought-stricken US as the world's top soybean producer, according to the USDA. Brazils grain Association expects the number 2 producers of soybean to produce record 81.3 mn tn in 2012-13. In the domestic markets, as on 20 September, 2012, Oilseeds have been sown in 174.39 lakh ha so far, compared with 178.16 lakh ha same period last year. Soybean area is higher at 106.9 lakh ha. According to first advance estimates, Soybean output is pegged at at 126.2 lk tn for 2012-13. However, drop in area under groundnut, sunflower & castor seed may lead to lower output of these oilseeds in 2012-13 which is estimated 9.6% lower at 187.8 lakh tn.
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Market Highlights
Unit Soybean Spot- NCDEX (Indore) Soybean- NCDEX Oct '12 Futures Ref Soy oil SpotNCDEX(Indore) Ref Soy oil- NCDEX Oct'12 Futures Rs/qtl Rs/qtl Rs/10 kgs Rs/10 kgs Last 3229 3256 672 669 Prev day 0.84 1.10 0.36 1.83
as on Oct 11, 2012 % Change WoW 11.08 10.11 3.48 7.49 MoM -28.55 -15.29 -16.02 -16.32
Source: Reuters
as on Oct 11, 2012 International Prices Soybean- CBOTNov'12 Futures Soybean Oil - CBOTOct '12 Futures Unit USc/ Bushel USc/lbs Last 1549 50.88 Prev day 1.66 1.42 WoW 1.09 1.09 MoM -12.56 -11.62 YoY 12.25 -11.20
Source: Reuters
as on Oct 11, 2012 % Change Prev day WoW 4.43 2.87 8.73 8.81
Unit
CPO-Bursa Malaysia Oct '12 Contract CPO-MCX- Oct '12 Futures
MYR/Tonne Rs/10 kg
Refined Soy Oil: Ref soy oil settled higher taking cues from the
international market, while MCX CPO also settled higher due to approval of export cut for crude palm oil in Malaysia. According Malaysian Palm Oil Board, the ending stocks for palm oil increased by 17.24% for September. Also, Malaysia has approved a plan to cut crude palm oil (CPO) export taxes from 23 percent per tonne Although, exports are high the overall stocks of Malaysian palm oil are higher on the back of seasonally higher yield. Exports of Malaysian palm oil products for Sept. 1-25 rose 8 percent to 1,170,720 tonnes from 1,084,343 tonnes shipped during Aug. 1-25. Indias edible oil imports should rise 5.4 percent to a record 10.31 million tonnes in 2012/13, with the entire increase met by palm oil. 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).
Source: Reuters
RM Seed
Unit RM Seed SpotNCDEX (Jaipur) RM Seed- NCDEX Oct '12 Futures Rs/100 kgs Rs/100 kgs Last 4200 4043 Prev day -1.18 -0.59
Outlook Edible oil complex is expected to trade sideways with a upper bias taking cues from the firm international Oilseed market ahead of supportive monthly demand supply USDA report for September. However due to good quantity new crop arrivals of soybean hitting the market, sharp upside might be capped for short term.
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 Oct 12, 2012 Support 641-646 3150-3190 4020-4050 420-425 Resistance 658-665 3265-3305 4150-4195 435-440
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Agricultural Commodities
Black Pepper
Pepper futures continued to trade on a positive note for the fourth consecutive session yesterday due to low supplies in the domestic markets as well as festive demand. Farmers are also unwilling to sell their stocks at lower levels. However, expectations of improvement in weather conditions as well as better output in Indonesia have capped sharp gains. Traders are buying pepper directly from the farmers. Exports demand for Indian pepper in the international markets remains weak due to huge price parity. The Spot settled lower by 0.5% while the Futures settled 0.14% higher on Thursday. 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 $8,500/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
Unit Pepper SpotNCDEX (Kochi) Pepper- NCDEX Oct '12 Futures Rs/qtl Rs/qtl Last 42315 43940 % Change Prev day -0.50 0.08
as on Oct 11, 2012 WoW 0.36 1.37 MoM 1.75 4.06 YoY 22.30 28.35
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 is expected to continue to trade on a positive note today. Low supplies in the domestic markets as well as festive season demand are expected to support prices. However, reports that FMC has asked NCDEX to find out any irregularities in pepper trade may cap sharp upside.
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Agricultural Commodities
Jeera
Jeera prices traded corrected yesterday on account of profit booking at higher levels. Also, arrivals improved as prices increased. Expectations of better export figures have also supported the prices at lower levels. However, reports of higher carryover stocks as compared to last year restricted sharp gains. Good rains in Gujarat, thereby expectations of better sowing prospects ahead of the rabi sowing have also pressurized the prices in the spot market. The spot as well as the Futures settled 0.54% and 1.06% lower on Thursday. 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. 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 $2,650 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 Oct'12 Futures Rs/qtl Rs/qtl Last 14622 14278 Prev day -0.54 -1.06
as on Oct 11, 2012 % Change WoW 1.07 4.75 MoM -0.87 3.18 YoY -1.38 -0.17
Source: Reuters
Source: Telequote
Market Highlights
Prev day -0.94 0.70
Outlook
Jeera futures are expected to continue to trade upwards today. Prices may find support at lower levels on expectations of higher export figures. However, good rains in Gujarat and higher carryover stocks may cap any sharp gains. In the medium term (October-November 2012), prices are likely to witness a bounce back as there are limited stocks with Syria and Turkey.
Turmeric SpotNCDEX (N'zmbad) Turmeric- NCDEX Oct '12 Futures
Turmeric
Turmeric Futures extended previous days gain after prices have corrected sharply. Higher stocks with the stockists also pressurized the prices. However, a reduction in the special cash margin on the long side supported the prices. Turmeric has been sown in 0.57 lakh hectares in A.P as on 03/10/2012. Sowing is also reported 30-35% lower during the sowing period. The Spot settled 0.94% lower while the Futures settled 0.7% higher on Thursday. Special Cash Margin of 40% on the Long side shall be reduced to 20% (cash) on all the running contracts and yet to be launched contracts in Turmeric w.e.f. beginning of day Wednesday, September 26, 2012.
Technical Outlook
Unit Jeera NCDEX Oct Futures Turmeric NCDEX Oct Futures Rs/qtl Rs/qtl
valid for Oct 12, 2012 Support 14130-14300 5450-5506 Resistance 14600-14780 5618-5674
Outlook
Turmeric prices are expected to trade sideways today. Stockists are not buying actively, which may pressurize prices. However, a reduction in the special cash margin, lower sowing figures and lower arrivals may support prices.
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Agricultural Commodities
Kapas
NCDEX Kapas traded lower in the intraday but closed marginally higher on Thursday as traders covered their short positions towards the end of day. Also, ongoing harvesting pressure in the key producing states provided resistance to the prices. ICE cotton Futures closed up by 2.28% as investors are awaiting for the Monthly demand supply report of USDA that is going to be issued today . Cotton harvesting has commenced in US, in all 14% is harvested as compared to 10% a week ago, versus 15% same period a year ago. Cotton crop condition is 42% in Good/Excellent state as compared to 43% a week ago, and 29% same period a year ago.
Market Highlights
Unit Rs/20 kgs Rs/Bale Last 945.5 16130
as on Oct 11, 2012 % Change Prev. day WoW 0.37 5.00 -0.19 2.02 MoM -5.97 2.02 YoY -11.37
Source: Reuters
International Prices
ICE Cotton Cot look A Index Unit Usc/Lbs Last 70.71 81.35
as on Oct 11, 2012 % Change Prev day WoW -1.93 1.30 0.00 0.00 MoM -4.81 0.00 YoY -30.64 -29.20
Source: Reuters
Source: Telequote
Outlook
Kapas futures in intraday is expected to trade on a bearish note taking cues from the weaker international markets. Prices might take support at lower levels as farmers are not willing to sell their produce at lower levels. Besides, prices in spot market are nearing its MSP, which would restrict any major fall. In the international front, cotton harvesting has begun globally which might cap a sharp upside in medium term. Also, prices might have taken cues from the USDA monthly demand supply report which showed higher ending stocks for 2012-13 season.
Source: Telequote
Technical Outlook
Contract Kapas NCDEX April Kapas MCX April Cotton MCX October Unit Rs/20 kgs Rs/20 kgs Rs/bale
valid for Oct 12, 2012 Support 916-932 913-929 15880-16000 Resistance 962-978 958-975 16280-16420
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