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News & Market Highlights Chana Sugar Oilseed Complex Spices Complex Kapas/Cotton
Research Team
Vedika Narvekar - Sr. Research Analyst vedika.narvekar@angelbroking.com (022) 2921 2000 Extn. 6130 Anuj Choudhary - Research Analyst anuj.choudhary@angelbroking.com (022) 2921 2000 Extn. 6132
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Agricultural Commodities
News in brief
Modification in tick size and lot size
Trading and Clearing Members are requested to note that the circular no. NCDEX/TRADING-047/2013/161 dated May 15, 2013 on modification in Tick Size and Lot Size in Coriander, Soyabean, Refined Soya Oil and Turmeric has been kept in abeyance till further notice. (Source: NCDEX)
Sensex Nifty INR/$ Nymex Crude Oil - $/bbl Comex Gold - $/oz
.Source: Reuters
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Agricultural Commodities
Chana
After gaining for the initial part of the week, chana prices corrected sharply towards the end of the week on account of profit taking coupled with higher supplies and record output expectations of the new crop. Emergence of demand at lower levels has pushed up the prices. The Spot as well as the June Futures settled 0.5% and 0.09% higher w-o-w. Higher supplies of the new crop from the major producing states such as Madhya Pradesh, Rajasthan and Maharashtra was a major reason attributed to recent fall in chana prices. However, supplies are expected to slow down towards the end of the month. Also, stockists are building inventories at lower levels to meet the demand for the entire season. Thus, tracking seasonality pattern, chana prices may start recovering gradually from June onwards.
Market Highlights
Unit Rs/qtl Rs/qtl Last 3392 3349 Prev day -1.49 -1.03
as on May 18, 2013 % change WoW MoM 0.50 -6.03 1.09 -7.31 YoY -19.11 -21.55
Source: Reuters
Source: Telequote
Technical Outlook
Contract Chana May Futures Unit Rs./qtl Support
3330-3360
Trade Scenario
According to IBIS, imports of chana in the month of February declined to 0.46 lakh metric tonnes compared to 2.31 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 is expected to decline today extending previous days losses due to higher supplies. However, demand from stockists may limit downside and support prices at lower levels. Seasonal pattern in chana indicates that prices may generally bottom out in May when arrivals reach their peak, while they start recovering gradually June onwards with declining supply pressure. On the downside, we dont expect chana prices to go below Rs 3200 per qtl levels as this being the MSP levels farmers may hold back their stock. Considering the record output expectatations and seasonal patterns and demand side fundamentals, we expect chana prices to trade in the range of Rs 3200- Rs 3800 per qtl over the medium term (3 months).
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Agricultural Commodities
Sugar
Sugar prices continued to gain for the third consecutive week as sentiments have turned positive after the government notified partial sugar decontrol. However, prices corrected from higher levels towards the end of the week on account of profit booing and settled marginally higher by 0.16%. Demand from bulk consumers also supported prices. However, higher supplies are seen offsetting summer season demand. Prices recovered last week after the government notified the cabinet committee on economic affairs (CCEA) decision to remove two key controls on sugar sector. Improving demand from bulk consumers and expected lower output next season in Maharashtra also supported an upside in the prices. The Minimum Initial Margin has been revised to 5% of the value of the contract or VaR based margin whichever is higher and will be imposed on all running contracts and yet to be launched contracts w.e.f beginning of trading day Monday, May 13, 2013. The Government has cleared the partial decontrol of sugar on April 4, 2013, however, notified the same after almost a month. According to this, the government will now have to buy sugar from the mills at open market prices. Also the release mechanism will be done away with, after September 2013. According to the Ministry of Agriculture, Sugarcane has been planted in 40.74 lakh ha as compared to 45.74 lakh ha at this time last year. Less area is reported mainly in Karnataka, Maharashtra and Tamil Nadu.
Market Highlights
Unit Sugar Spot- NCDEX (Kolhapur) Sugar M- NCDEX May '13 Futures Rs/qtl Last 3052
as on May 18, 2013 % Change Prev. day WoW -0.56 -0.42 MoM -0.07 YoY 3.03
Rs/qtl
3053
-0.59
0.16
4.63
#N/A
Source: Reuters
International Prices
Unit Sugar No 5- LiffeAug'13 Futures Sugar No 11-ICE July '13 Futures $/tonne $/tonne Last 477.5 375.33
as on May 17, 2013 % Change Prev day WoW 0.27 0.36 -2.39 -3.10 MoM -5.01 -4.52 YoY -16.27 -17.49
.Source: Reuters
Technical Outlook
Contract Sugar May NCDEX Futures Unit Rs./qtl Support
3030-3045
Outlook
Overall sentiments for domestic sugar remain positive on account good demand from bulk manufacturers at such low levels. Also, government has notified cabinets decision to remove two key controls on sugar sector, which may keep sentiments upbeat. Wedding season demand may also support prices. However, higher supplies and weak international markets may prices at higher levels.
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Agricultural Commodities
Oilseeds
Soybean: Soybean traded on a flat note last week as poor supplies
of the bean supported prices while weak meal exports coupled with IMDs prediction of a normal monsoon pressured prices. The spot as well as the Futures settled 0.45% and 0.14% higher w-o-w. Indias soy meal exports for the month of April 2013 were 99.451 tonnes, lower by 68.31 percent from 313,832 tonnes a year ago. 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.
Market Highlights
% Change Unit Soybean Spot- NCDEX (Indore) Soybean- NCDEX May '13 Futures Ref Soy oil SpotNCDEX(Indore) Ref Soy oil- NCDEX May '13 Futures Rs/qtl Rs/qtl Rs/10 kgs Rs/10 kgs Last 4042 4041 726.4 726 Prev day -0.54 1.62 0.03 0.03
International Markets
CBOT Soybean traded on a positive note and settled 1.47% higher on Friday drawing strength from tight U.S. stocks. According to the weekly crop progress report, only 6% of Soybean has been planted as against 43% last year and five year average of 24%. There are delays in planting in the Midwest. However, large South American crop coupled with forecasts for US weather to improve in the coming week have capped sharp gains. NOPA reported that the soybean crush fell to 120.11 million bushels in April, from 137.08 million in March. China is forecast to import a record 66 mn tn of soy in 2013/14, 11% higher than the estimates of current season, driven by robust domestic demand and low stocks.
Source: Reuters
as on May 17, 2013 International Prices Soybean- CBOTJuly'13 Futures Soybean Oil - CBOTJuly'13 Futures Unit USc/ Bushel USc/lbs Last 1449 49.52 Prev day 1.47 0.00 WoW -2.67 0.71 MoM 1.85 0.26
Source: Reuters
as on May 18, 2013 % Change Prev day WoW 0.60 -0.13 1.92 -0.30
Refined Soy Oil: Ref soy oil settled 0.5% last week higher tracking
positive edible oil prices in the international markets while MCX CPO settled marginally lower by 0.3% on account of profit taking. Palm oil futures on KLCE climbed 1.92% last week as stocks are expected to decline and demand is set to rebound ahead of Ramadan. Exports of Malaysian palm oil products from May 1 to 20 declined 9.4 percent to 799,405 tonnes from 882,469 tonnes shipped during April 1 to 20. But, it is expected that output in Malaysia, the world's second largest producer, to slow this month and help to further ease stocks that have dipped below the psychological 2 million tonne mark to 1.93 million tonnes in April. Stocks data from industry regulator the Malaysian Palm Oil Board showed inventory levels at the end of April down 11.3 percent against the previous month's 2.17 mn tn. India's palm oil imports declined for a third straight month in April. But India, the world's largest importer of edible oils, is still on track to surpass last year's record purchases of 10 million tonnes of cooking oil as demand rises.
Unit
CPO-Bursa Malaysia June '13 Contract CPO-MCX- May '13 Futures
MYR/Tonne Rs/10 kg
Source: Reuters
RM Seed
Unit RM Seed SpotNCDEX (Jaipur) RM Seed- NCDEX May '13 Futures Rs/100 kgs Rs/100 kgs Last 3541 3493 Prev day 0.00 -0.43 WoW 3.15 0.52
Outlook
Soybean prices may trade sideways with upward bias as poor supplies in the domestic markets and firm international markets may support prices. However, weak meal exports coupled with forecast of a normal monsoon may cap sharp gains. Soy oil as well as CPO may gain due to higher international prices as well as lower yield period. However, comfortable stock levels may cap the upside.
Source: Telequote
Technical Outlook
Contract Soy Oil May NCDEX Futures Soybean NCDEX May Futures RM Seed NCDEX May Futures CPO MCX May Futures Unit Rs./qtl Rs./qtl Rs./qtl Rs./qtl
valid for May 20, 2013 Support 691-695 3840-3870 3490-3505 464-467 Resistance 701.50-705 3920-3940 3540-3560 474-477
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Jeera prices traded on a positive note last week higher on reports of overseas enquiries. Declining arrivals also supported the prices. Demand from stockists and exporters also emerged at lower levels. The spot as well as the June Futures settled 0.76% and 0.65% higher w-o-w. Over the last few months, prices have declined sharply on the back of higher production estimates. According to Gujarat State Agri Dept. sowing in Gujarat is reported at 3.352 lakh ha in 2013 compared with 3.719 lakh ha last year. Due to the ongoing geo-political tensions in Syria and Turkey, supply concerns from these two major exporting countries still exist. Expectations are that export orders may continue to 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 $2,450 tn (FOB Mumbai) while Syria and Turkey are not offering. Carryover stocks of Jeera in the domestic market is expected to be around 8-9 lakh bags.
Market Highlights
Unit Jeera Spot- NCDEX (Unjha) Jeera- NCDEX May '13 Futures Rs/qtl Rs/qtl Last 13563 13168 Prev day -0.49 -1.31
as on May 18, 2013 % Change WoW 0.76 1.74 MoM 0.46 -0.43 YoY -0.28 -0.72
Source: Reuters
Outlook
Jeera Futures may trade on a mixed note with a positive bias today. Improvement in overseas as well as domestic demand may support prices. However, higher output may pressurize prices. Overall trend remain positive for the Jeera prices due to overseas demand as Syria & Turkey have stopped shipments which may keep prices firm.
Market Highlights
Prev day 0.00 -1.67
Unit Turmeric SpotNCDEX (N'zmbad) Turmeric- NCDEX May '13 Futures Rs/qtl Rs/qtl
Turmeric
After trading on a bullish note in the preceding two sessions as the regulator withdrew margins on the long side, Turmeric June Futures declined sharply on Saturday after NCDEX issued a circular saying that the earlier circular regarding modification in the tick size and lot size has been kept in abeyance. Prices have declined sharply on account of weak demand coupled with huge carryover stocks. However, there are expectations of improvement in overseas demand in June ahead of Ramadan. Unseasonal rains in Andhra Pradesh have damaged about 9240 tonnes of turmeric earlier. Special Margin of 10% on the Long Side on all the running contracts in Turmeric have been withdrawn w.e.f beginning of day Thursday, May 16, 2013.
Source: Telequote
Technical Outlook
Unit Jeera NCDEX May Futures Turmeric NCDEX May Futures Rs/qtl Rs/qtl
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Agricultural Commodities
Kapas
NCDEX Kapas as well as MCX Cotton declined last week as offloading of stocks by the CCI in the open markets and weak global markets is seen pressurizing domestic prices. However, emergence of fresh demand at lower price levels is restricting sharp downside in the domestic markets. Kapas prices at NCDEX as well as Cotton prices at MCX settled 0.58% and 1.05% lower last week. The Cotton Corporation of India (CCI) and the National Agricultural Cooperative Marketing Federation of India (NAFED) are expected to offload over 8 lakh cotton bales (a bale weighs 170 kg) in the domestic market this month and the asking price may be lower by Rs 1,000 per candy than the previous price. In April, the government had offered a price of Rs 39,500 per candy, which received lukewarm response from the textile industry. (Source:
Economic Times dated 6th May 2013)
Market Highlights
Unit Rs/20 kgs Rs/Bale Last 1029 17850
as on May 18, 2013 % Change Prev. day WoW -0.15 -0.58 -0.50 -1.05 MoM YoY 18.70 #N/A -1.05 7.92
Source: Reuters
International Prices
ICE Cotton Cot look A Index Unit USc/Lbs Last 86.41 93.4
as on May 17, 2013 % Change Prev day WoW 0.44 -0.08 -0.11 -1.79 MoM 2.08 1.91 YoY 12.73 9.24
India's imports of cotton this year could reach 1.5 mn bales, missing earlier estimates of more than 2 mn as the govt may to start selling its stockpiles. Cotton supplies since the beginning of the year in October 2012 until February 10, 2013 were down at 183.4 lakh bales, down from 189.27 lakh bales a year earlier.
Source: Reuters
Technical Outlook
Contract Kapas NCDEX April 14 Fut Cotton MCX May Futures Unit Rs/20 kgs Rs/bale
valid for May 20, 2013 Support 1010-1020 17700-17780 Resistance 1040-1050 17950-18040
Outlook
Prices may remain under downside pressure in the near term on account of weak international markets coupled with offloading of stocks in the domestic markets from the state reserves. However, improving demand at lower levels may cushion sharp fall in the prices. US cotton planting intentions at a 4 year low coupled with China continuing with its stockpiling policy, may also support an upside in the prices over the medium term.
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