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Commodities Daily Report

Tuesday| August 28, 2012

Agricultural Commodities

Content
News & Market Highlights Chana Sugar Oilseed Complex Spices Complex Mentha Potato

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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Commodities Daily Report


Tuesday| August 28, 2012

Agricultural Commodities
News in brief
US corn harvest slows with rains; farmers maintain record pace
The U.S. corn harvest inched forward during the past week, government data showed on Monday, as farmers gave crops more time to dry down to save them the cost of machine drying. Farmers were still on a record fast harvest pace but the choice to slow their combines left corn vulnerable to diseases such as aflatoxin. Much of the corn, which had poorly developed stalks due to the summer-long drought, also was at risk of being knocked down if high winds arrive with Tropical Storm Isaac. A U.S. Agriculture Department report showed that the corn harvest was 6 percent complete as of Aug. 26, up just 2 percentage points from a week earlier, and below analyst expectations for 10 percent. The five-year average for late August is 2 percent complete. A year ago, farmers had harvested 2 percent of the corn crop. USDA also said that corn was rated 22 percent good to excellent, down 1 percentage point from a week earlier and still the lowest rated crop since 1988. Good-to-excellent ratings for soybeans also fell 1 percentage point, to 30 percent. (Source:
Reuters)

Market Highlights (% change)


Last Prev. day

as on Aug 27, 2012


WoW MoM YoY

Sensex Nifty INR/$ Nymex Crude Oil - $/bbl Comex Gold - $/oz

17679 5350 55.69 95.47 1672

-0.59 -0.68 0.04 -0.56 3.49

-0.07 -0.30 0.34 -0.52 3.23

4.50 4.33 -0.85 7.88 6.12

8.18 9.22 22.23 13.49 -11.45

Source: Reuters

Import of pulses, edible oils may go up this year: Thomas


The Government may go in for higher imports of pulses and edible oils this year, as lower kharif acreage following deficient monsoon is likely to impact output. The Food Minister K.V. Thomas in a written reply to the Rajya Sabha here on Monday, said that lower acreage may impact production of pulses and oilseeds. The supply-demand gap may have to be matched by a higher level of imports. However, he said, no specific estimation had been made with respect to overall likely import of pulses and edible oils this year. Due to deficient monsoon, pulses acreage is down at 8.83 million hectare so far in the kharif season, against 9.97 million hectare in the same period last year. On an average, the country has imported about 2.5-3.5 million tonnes of pulses and 8-9 million tonnes of edible oil in the last three years, the Minister said. The Government does not maintain buffer stocks of pulses and oilseeds, he said. In reply to another question, Thomas said the Government was considering extending the scheme for distribution of imported edible oils with subsidy of Rs 15 a kg for another year. The scheme was due to end on September 20. However, some States has sought an extension. For imported pulses, he said a variant of the June 30 scheme for distribution through the public distribution system was under consideration.
(Source: Business Line)

Rain from Isaac to help US wheat, but not corn, soy


The drought-parched Midwest farm belt could get up to 5 inches of rain from Tropical Storm Isaac but it would be a mixed blessing to farmers, as the moisture will be too late for corn and soybeans but just in time for wheat planting next month. Farmers are harvesting their corn, which has been devastated by the worst drought in half a century, as a result rain would be of no help at this time of the season. Rain could be of marginal help to soybeans that were planted late in the season, but not to the bulk of the crop that is fast approaching harvest due to early planting this year. For farmers gearing up to plant the winter wheat crop, rain could boost soil moisture and get the crop in the world's top wheat exporter off to a good start. (Source: Reuters)

Vigorous monsoon cuts deficit further to 13%


Vigorous monsoon over parts of peninsular India and the north-west has further helped cut overall deficit to 13 per cent as of Monday. Over peninsular India, the monsoon held strong over Vidarbha and south interior Karnataka during the 24 hours ending on Monday morning, an India Meteorological Department (IMD) update said. Central India continued to be at a more respectable 11 per cent in deficit, with east and northeast India stagnating at 13 per cent for sometime now. The recovery has been nothing less than dramatic for north-west India, while south peninsula made most of a late monsoon surge which is active even now. Outlook for September, when the monsoon begins to withdraw from extreme west and north-west India, is being eagerly looked forward to against a predicted build-up of an El Nino event in the equatorial east Pacific. (Source: Business Line)

Turmeric farmers hold back produce


Sloganeering by farmers after traders refused to give in to their demand of buying turmeric at Rs 9,000 a quintal disrupted sales on Monday. Farmers confirmed only half of the stocks for sales as traders quoted Rs 6,700 a quintal. On Saturday, the National Federation of Turmeric Farmers Associations, at its conference here, had urged the farmers not to sell below Rs 9,000 a quintal. At the Regulated Marketing Committee, traders quoted below Rs 6,000 a quintal. Subsequently, representatives of the farmers association and farmers raised a hue and cry forcing the officials to cancel the sale. Farmers had to return with the 419 bags they had brought to the auction centre. Traders said that farmers are expecting prices will improve within a few days and wanted traders to quote more than Rs 9,000. The farmers held discussion with the Erode Turmeric Merchants Association on Monday noon. Association President R.K.V. Ravishankar said: , We are not getting any upcountry market orders. Only local spices firms are placing orders and they, too, are demanding the spice for below Rs 7,000 a quintal. He also told farmers that due to heavy rain and flood in North India they are not receiving any orders. (Source: Business Satndard)

Despite lower price, maize exports hit by short supply


Maize (corn) prices have surged to record highs in the domestic market but they are still one of the cheapest options in the global market. However, shortage of stocks is hindering maize exports. There may not be much of maize and domestic market is priced higher. But by world standards, it is still cheaper. Indian maize has been accepted in the world market and will continue to be traded in the close by markets of SouthEast and West Asia, said Amit Sachdev of Techpro (India) Private Limited, in his weekly report on Indian grains. Some small traders have sold to exporters in Chennai, said Sachdev. Though export may not happen now, small cargoes have gone to South-East Asia, he said. There is demand from Malaysia, Indonesia, Vietnam and the Gulf. But no exporter is offering bulk volume, said Alagendran. Kharif sowing is lower compared with last year. This has also made exporters being conservative in their offering, he said. According to the Agriculture Ministry, kharif maize sowing is lower by one per cent at 71.3 lakh hectare compared with the same period a year ago. (Source: Business Line)

China Cotton Output Likely to Decline by 4.2 percent in 2012


According to China Cotton Association, country output in 2012 is projected at 6.97 million tonnes which is lower by 4.2 percent from last year production. CCA declined production by 20,000 tonnes than earlier projected in June this year. (Source: Agriwatch)

Pakistan Cotton Production Likely to Increase by 1.0-1.2 million Bales in 2012-13


Pakistan, world' fourth largest producer of cotton, is likely to raise its production from 14.8 million bales to 16 million bales even after area under cotton was reduced. (Source: Agriwatch)

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Commodities Daily Report


Tuesday| August 28, 2012

Agricultural Commodities
Chana
Chana Futures declined sharply on account of improved rains that has raised hopes of better chana sowing. Fears the government may take certain measures to curb rising prices also led to the correction. The Spot as well as the Futures settled 0.91% and 3.18% lower w-o-w. As per the IMD, Monsoon has recovered in the month of August in Northwest and Central India. This has aided kharif sowing in the last one week. Also this may prove beneficial for the chana sowing. However, overall weak rainfall would have a significant impact on yield of kharif pulses. The Cabinet Committee on Economic Affairs approved the Minimum Support Prices (MSP) for Arhar (Tur) and Moong for 2012-13 season. The MSP for Arhar has been fixed at Rs.3850 per quintal and of Moong at Rs.4400 per quintal marking an increase of Rs.650 per quintal and Rs.900 per quintal respectively. 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.

Market Highlights
Unit Rs/qtl Rs/qtl Last 4811 4595 Prev day -0.91 -3.18

as on Aug 27, 2012 % change WoW MoM -2.31 0.15 -6.98 -2.07 YoY 34.75 30.95

Chana Spot - NCDEX (Delhi) Chana- NCDEX Sept '12 Futures

Source: Reuters

Technical Chart - Chana

NCDEX Sept contract

Sowing progress and demand supply fundamentals


According to the Ministry of Agriculture 88.3 Lakh hectare area has been th planted under Kharif pulses as on 24 August, 2012 compared to 99.78 lakh hectare (ha) same period last year. Sowing is reported lower mainly in Rajasthan. Rajasthan Agriculture Department states that, planted area under Kharif Pulses is down at 15.33 lakh hectares ha compared to 24.14 lakh ha same th period last year. (Dated 17 August, 2012). Sowing which was down by more than 55% has gained momentum after improvement in rainfall in the last one week and is now down by 35%. In Maharashtra, Kharif Pulses sowing is down by 7% at 18.63 lakh hectares. While in AP it is up by 5% at 6.98 lakh hectares. According to the Fourth advance estimates, Pulses output is pegged at 17.21 mn tn in 2011-12 compared with 18.24 mn tn produced in the year 2010-11. While Chana output in 2011-12 is estimated at 7.58 million tones, Tur is estimated at 2.65 million tones, Urad is estimated at 1.83 million tones, Moong is estimated at 1.71 million tones. As per the latest release, Ministry of Commerce & Industry revealed that 20.23 lakh tones of peas, 2.03 lakh tons of Chana, 4.32 lakh tons of Urad & Moong, 1.12 lakh tons of Masoor and 4.26 lakh tons of Tur has been imported by India during April11-March 12. Assocham estimates, 21 mn tn of pulses demand in 2012-13 and is likely to reach at 21.42 mn tn in 2013-14 and 21.91 MT in 2014-15. (Source: Agriwatch) India's consumption of pulses is on the rise, while the growth in output in not consistent amid vagaries of weather, which may lead to increase in imports this year. However, rupee weakness may turn import costlier.
Source: Telequote

Technical Outlook
Contract Chana Sept Futures Unit Rs./qtl

valid for Aug 28, 2012 Support 4485-4540 Resistance 4640-4685

Outlook
Improved rains may continue to keep chana prices under downside pressure. 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. Also lower sowing of kharif pulses may support chana prices.

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Commodities Daily Report


Tuesday| August 28, 2012

Agricultural Commodities
Sugar
Sugar spot prices declined on account of sufficient supplies in the domestic markets. The Spot as well as the futures settled 2.13% and 0.03% lower respectively on Monday. Reports that 25 mn tn of the cane is diverted towards fodder so far in the drought hit districts of Maharashtra have raised concerns over sugar output in Maharashtra. 25mn tn cane diversion would result into 3 mn tn drop in sugar output. However, with the latest forecast of good rains in the month of September may ease these concerns and help improve yield. With chances of El Nino weather pattern receding, the Agriculture Ministry hopes that rainfall in September would be better than earlier forecast, helping in bridging the shortfalls in sowing area to some extent. Apart from the 45 lakh tonnes quota released during the start of the quarter Jul-Sept, government released additional 2.66 lac tn to be sold off by 31st August. Sugar mills have been directed to sell at least 70% of July-September quota (45 lakh tonnes) by August. Another additional quota of 4 lac tn has also been released on 7th August, 2012 to be sold off by 31stAugust. The quota is sufficient to meet the festive season demand and thus helped contain prices. In the international markets ICE sugar closed marginally low by 0.1% while Liffe Sugar remained closed. Raw sugar futures on ICE hovered around an 11-week low on Friday, as Brazil's cane harvest accelerated, making up for some of the time lost due to wet weather.

Market Highlights
Unit Sugar Spot- NCDEX (Kolkata) Sugar M- NCDEX Sept '12 Futures Rs/qtl Last 3670

as on Aug 27, 2012 % Change Prev. day WoW -2.13 0.00 MoM 3.38 YoY 24.41

Rs/qtl

3419

-0.03

-1.58

1.06

22.54

Source: Reuters

International Prices
Unit Sugar No 5- LiffeOct'12 Futures Sugar No 11-ICE Oct '12 Futures $/tonne $/tonne Last 549.4 434.67

as on Aug 27, 2012 % Change Prev day WoW 0.42 -0.10 -1.81 -4.59 MoM -13.89 -13.14 YoY -29.02 -33.96

Source: Reuters

Technical Chart - Sugar

NCDEX Sept contract

Domestic Production and Exports


The area under sugarcane is estimated at 52.88 lakh ha for 2012-13 crop season, up from 50.63 lakh ha on same period a year ago. Despite of higher acreage, the producers body has estimated next years output lower at 25mn tn, down by 1mn tn compared to the current year. Sugar production in India the worlds second-biggest producer touched 26 million tonne since October 1, 2011. Industry body ISMA has estimated 7 mn tn stocks for the new season beginning October 01, 2012 compared to 5.5 mn tn year ago. India may exports 2.5-3 mn tn sugar in 2012-13. India will likely produce 25 million tonne of sugar in 2012-13 factoring in dry spells in biggest producer Maharashtra as well as Karnataka. With the opening stocks of 7 mn tn, domestic Sugar supplies are estimated at 32mn tn against the domestic consumption of around 22.523 mln tn for 2012-13. Thus, no curbs on exports are seen as of now.

Source: Telequote

Technical Outlook
Contract Sugar Sept NCDEX Futures Unit Rs./qtl

valid for Aug 28, 2012 Support 3370-3390 Resistance 3442-3463

Global Sugar Updates


Brazilian cane mills produced 3 mn tn of sugar in the first half of August thanks to dry weather. Unica in its latest report stated said that total sugar output since the start of the crushing season is still down 12 percent from the same period a year ago. Brazil exported 2.489 million tons of sugar, raw value, up from 1.692 million tons in June but lower from 3.06 million tons sugar exported last year same period. The global sugar surplus remains on target to fall in 2012/13 season, though declines will be less than previously suggested, while adverse weather in several producers may stop prices dropping far below recent levels. (Source: Reuters) According to the International Sugar Organization (ISO), the global sugar surplus is forecast to halve to around 3 mln tn in 2012/13 (OctoberSeptember) from a surplus of 6.5 million tonnes in 2011/12).

Outlook
Forecast of good rains in the month of September might ease concerns over next years output. These alnongwith sufficient supplies may keep sugar prices under downside pressure during the intraday.

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Commodities Daily Report


Tuesday| August 28, 2012

Agricultural Commodities
Oilseeds Soybean:
Soybean Spot as well as Futures remained firm last week on account of supply tightness in the domestic as well as global markets till the arrival of fresh crop in mid September. The Spot as well as Futures settled 0.13% and 0.6% higher respectively on Monday. CBOT Soybean settled lower by 0.45% on Monday on account of profit booking at higher levels. According to the newsletter, Pro farmer, Soybean production was seen at 2.60 bn bushels on a yield of 34.8 bushels/ acre. lower compared to the USDAs soybean output estimates of 2.692 billion bushels and yield at 36.1 bushels/ acre. 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. According to weekly crop progress report, the condition of U.S soybeans declined to 30% during last week from 31% in good to excellent condition due to weather concerns in the US Midwest. th USDA released its monthly crop report on 10 August wherein its cut U.S. 2012/13 soybean production forecast to 2.692 billion bushels, from 3.05 billion in July. India's oil meal exports fell to 2.75 lakh tn in July from 2.82 lakh tn a year earlier led by a sharp drop in the overseas sales of rapeseed meal. Soy meal exports rose to 1.68 lakh tn in July, from 1.39 tn a year ago. th In the domestic markets, as on 24 August Oilseeds have been sown in 164.29 lakh hectares so far, compared with 169.94 lakh hectares same period last year. Soybean area is higher at 106.4 lakh hectares. In 2011-12 season, soybean was sown under 102.9 lakh hectares area and recorded 12.28 million tonne output, down from 12.73 mn tn in 2010-11 season. Refined Soy Oil: NCDEX Soy Oil witnessed profit booking on Monday after gaining sharply during the past few sessions. However, MCX CPO continued to traded on a positive note on global oilseed supply fears and rising export demand. As per Intertek Testing Services, Malaysian palm oil product exports during Aug 1-25 rose 5.7 percent to 1,084,343 compared to 1,026,153 tonnes shipped in July 1-25. India imported 112,611 tonnes of refined palm oil in July, down 9.28 percent from June. Total vegetable oil imports in July were 870,328 tonnes, up from 783,315 tonnes in the previous month (Source: Sea of India). Although, Malaysia's July palm oil stocks rose 17.6 percent to 1,998,870 tn from a revised 1,699,117 tn in June, the export demand is expected to regain momentum amid supply shortage of edible oil globally. Indonesia, the world's top palm oil producer, has lowered its earlier output forecast by 8 percent to 23.6 million tonnes this year Rape/mustard Seed: Mustard seed settled lower by 0.6% on Monday on profit taking. Mustard output this season has declined significantly and deficient rains in Rajasthan would not provide proper moisture for mustard sowing next season. According to a circular issued by NCDEX, existing Special Cash Margin of 5% on the Long side shall be increased to 15% on all the running and yet to be launched contracts w.e.f beginning of 18/07/2012.

Market Highlights
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 4595 4008 797.1 801.3

as on Aug 27, 2012 % Change Prev day 0.13 0.26 0.55 -0.53 WoW 2.16 1.79 2.18 1.60 MoM 2.87 -8.29 2.53 2.09 YoY 96.96 71.54 19.19 19.93

Source: Reuters

as on Aug 27, 2012 International Prices Soybean- CBOTSept'12 Futures Soybean Oil - CBOTSept '12 Futures Unit USc/ Bushel USc/lbs Last 1730 55.91 Prev day -0.45 -0.59 WoW 1.53 3.75 MoM 4.47 8.18
Source: Reuters

YoY 22.27 -1.22

Crude Palm Oil


% Change Unit
CPO-Bursa Malaysia Sept '12 Contract CPO-MCX- Aug '12 Futures

as on Aug 27, 2012

Last 3032 564.7

Prev day 0.07 0.18

WoW 6.01 1.91

MoM 4.62 0.00

YoY -10.82 12.83

MYR/Tonne Rs/10 kg

Source: Reuters

RM Seed
Unit RM Seed SpotNCDEX (Jaipur) RM Seed- NCDEX Sept '12 Futures Rs/100 kgs Rs/100 kgs Last 4385 4470 Prev day -0.57 -0.51

as on Aug 27, 2012 WoW 1.24 1.57 MoM 7.47 3.33


Source: Reuters

YoY 50.16 56.13

Technical Chart Soybean

NCDEX Oct contract

Source: Telequote

Technical Outlook
Contract Soy Oil Sept NCDEX Futures Soybean NCDEX Oct Futures RM Seed NCDEX Sept Futures CPO MCX Sept Futures Unit Rs./qtl Rs./qtl Rs./qtl Rs./qtl

valid for Aug 28, 2012 Support 792-796 3940-3973 4440-4465 562-565 Resistance 806-810 4050-4083 4538-4565 572-575

Outlook
Oilseed may trade sideways with a negative bias tracking the international prices. Good rains in Madhya Pradesh and other parts of india may also lead to a downside movement in the prices in the coming days.

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Commodities Daily Report


Tuesday| August 28, 2012

Agricultural Commodities
Black Pepper
Pepper Futures traded sideways with a poisitive bias yesterday due to very low arrivals in the domestic markets. Farmers are unwilling to sell the produce at lower levels. However, lower demand for Indian pepper in the international markets due to huge price parity resisted any sharp gains. Good supplies from Indonesia have also pressurized the prices. The Spot as well as the Futures settled 0.06% and 0.42% higher on Monday. 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 $8,0008,100/tonne(C&F) while Vietnam was offering its produce at $6,000/tonne for 500 GL. Brazil was offering its pepper at $6,150/tonne for the B-Asta grade. 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 41088 41795 Prev day 0.06 0.42

as on Aug 27, 2012 WoW -1.77 -1.26 MoM -2.74 -2.56 YoY 22.37 20.31

Source: Reuters

Technical Chart Black Pepper

NCDEX Sept contract

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 Sept Futures Unit Rs/qtl

valid for Aug 28, 2012 Support 41250-41430 Resistance 42050-42300

Production and Arrivals


There arrivals in the spot market were reported at 20 tonnes while offtakes were 20 tonnes on Monday. Global Pepper production in 2012 is expected to increase 7.2% to 3.20 lakh tonnes as compared to 2.98 lakh tonnes in 2011 with sharp rise of 24% in Indonesian pepper output and in Vietnam by 10%. According to latest report pepper output in Vietnam is estimated to be 1.35 lakh tonne as compared to 1.10 lakh tonne estimated early in the beginning of year (2012). Domestic consumption of Pepper in the world is expected to grow by 3.03% to 1.25 lakh tonnes while exports are likely to grow by 1.48% to 2.46 lakh tonnes in 2012. (Source: Pepper trade board) On the other hand production of pepper in India in 2011-12 is expected to decline further by 5% to 43 thousand tonnes as compared to 48 thousand tonnes in the last year. Production is lowest in a decade.

Outlook
Pepper prices are expected to trade sideways today. Lack of supplies may support prices at lower levels. The spot markets will remain closed due to the Onam festival. However, prices may correct due to lower demand at higher levels in the domestic as well as international markets.

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Commodities Daily Report


Tuesday| August 28, 2012

Agricultural Commodities
Jeera
Jeera Futures corrected sharply yesterday due to good rains in northern part of Gujarat, the main Jeera growing region. Good rains are expected improve moisture levels which may increase prospects of better yield next season. Exporters are also avoiding buying at higher levels. However, Supply concerns from Syria and Turkey still exists. The Spot as well as the Futures settled 1.73% and 3.43% lower on Monday. Expectations are that large export orders may be diverted to India from the international markets due to the ongoing civil war in Syria which is hampering supplies. There are reports that there has been an increase in demand from Bangladesh for Indian Jeera. Production in Syria and Turkey is being reported around 17,000 tonnes and around 5,000 tonnes, lesser than expectations. Jeera prices in the international market of Indian origin are being offered at $2,950 tn (c&f) while Syria and Turkey are not offering their produce. 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 15736 14550 Prev day -1.73 -3.43

as on Aug 27, 2012 % Change WoW -3.68 -10.24 MoM -1.49 -5.21 YoY 2.18 -4.15

Source: Reuters

Technical Chart Jeera

NCDEX Sept contract

Production, Arrivals and Exports


Unjha markets witnessed arrivals of 4,000 bags, while off-takes stood at 4,000 bags on Monday. Production of jeera in 2011-12 is expected to be around 40 lakh bags as compared to 29 lakh bags in 2010-11 (each bag weighs 55 kgs). (Source: spot market traders). According to Spices Board of India, exports of Jeera in April 2012 stood at 2,500 tonnes as compared to 2,369 tonnes in April 2011, an increase of 6%.

Source: Telequote

Outlook
Jeera prices are expected to correct further today. Good rains in Gujarat may pressurize the prices. However, revival of export demand at lower levels may support prices at lower levels. In the medium to long term (Aug-September 2012) prices are likely to witness a bounce back as there are limited stocks with Syria and Turkey and crop there is 30% short as compared to last year.

Market Highlights
Prev day 1.46 1.53

as on Aug 27, 2012 % Change

Unit Turmeric SpotNCDEX (N'zmbad) Turmeric- NCDEX Sept '12 Futures Rs/qtl Rs/qtl

Last 5496 5986

WoW 0.89 -0.17

MoM 4.42 4.18

YoY -1.82 33.08

Turmeric
Turmeric Futures traded on a positive note yesterday as exporters were active in the markets due to export demand from Pakistan. Exporters also expect orders to increase in the coming days. Sowing is also reported 30-35% lower during the sowing period. Turmeric has th been sown in 0.49 lakh hectares in A.P as on 22 August 2012. The Spot as well as the Futures settled 0.56% and 1.67% lower respectively w-o-w. The pre expiry margin on Turmeric has been increased to 5% for last 7 trading days increased on a daily basis on both buy and sell side from the existing 3% on daily basis for last 5 days.

Technical Chart Turmeric

NCDEX Sept contract

Production, Arrivals and Exports


Arrivals in Erode and Nizamabad mandi stood at 4,000 bags and 1,500 bags respectively on Monday. Turmeric production for the year 2011-12 is projected at historical high of 90 lakh bags (1 bag= 70 kgs) compared to 69 lakh bags in 201011. Erode is expected to produce 55 lakh bags of turmeric a rise of 29% as compared to previous year. According to Spices Board of India, exports of Turmeric in April 2012 increased by 1% at 7,300 tn as compared to 7,230 tn in April 2011.

Source: Telequote

Technical Outlook
Unit Jeera NCDEX Sept Futures Turmeric NCDEX Sept Futures Rs/qtl Rs/qtl

valid for Aug 28, 2012 Support 14250-14370 5850-5920 Resistance 14700-14850 6054-6120

Outlook
Turmeric prices are expected to continue to trade sideways with a positive bias in the intraday due to lower sowing figures as well as reports of export demand from Pakistan. Traders also expect fresh export orders in the coming days. However, improving weather conditions may cap sharp gains. In the medium term (Aug to September) prices may take cues from the sowing figures.

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Commodities Daily Report


Tuesday| August 28, 2012

Agricultural Commodities
Mentha Oil
Mentha oil Futures traded on a negative note tracking correction in all agri commodities. Lower demand due to ban on Gutkha and Pan Masala also corrected the prices. However, the spot remained positive anticipating buying to emerge at lower levels. The spot settled 0.14% higher while the Futures settled 0.6% lower on Monday. Total Special Cash margin of 25% on the long side of Mentha Oil has been reduced to 10% in the May contract and 5% in June contract onwards from May 5, 2012. For detailed reference please refer to the Circular No: MCX/T&S/180/2012 dated 03/05/2012.

Market Highlights
Unit Mentha Oil- MCX Spot (Chandausi) Mentha Oil MCX Aug Futures Rs/qtl Rs/qtl Last 1521 1314 Prev day 0.14 -0.60

as on Aug 27, 2012 % Change WoW 0.54 1.23 MoM 2.82 0.44 YoY 20.36 4.02

Source: Reuters

Production, Arrivals and Exports


According to spot market sources, the overall acreage is estimated to increase from 1.75 lakh ha to 2.1 lakh ha this year. The overall production of Mentha is expected to around 50,000 tonnes. Arrivals of the fresh crop are going on in the mandis and currently stand around 500 drums (each drum weighs 180 kgs). Exports of Mentha during April 2011 to January 2012 witnessed a decline of 6% to 12,850 tonnes as compared to 13,550 tonnes in the same period last year.

Technical Chart Mentha Oil

MCX Sep contract

Outlook
In the intraday trading session Mentha oil is expected to trade sideways in the intraday. Buying at lower levels may emerge from stockists anticipating good demand from pharmaceutical companies in the coming days. However, lower demand due to ban on Gutkha and Pan Masala may cap any sharp upside. In long to medium term (July-September) prices are likely to remain under pressure due to peak arrival period.

Source: Telequote

Market Highlights
Prev day -0.59 -3.99

as on Aug 27, 2012 % Change

Potato
Potato futures extended further losses and settled 4% lower on Monday due to lack of buying interest in the domestic market. Commodity market regulator Forward Markets Commission (FMC) has banned launch of new Tarkeshwar potato contracts. Also From 01-08-2012 no fresh positions shall be allowed during the Staggered Delivery period in all running contracts of Potato in MCX and NCDEX. Only squaring off of existing positions will be allowed during the Staggered Delivery period.
Unit Potato SpotNCDEX (Agra) Potato- NCDEX Sept '12 Futures Rs/qtl Rs/qtl Last 1147 1082

WoW -1.23 -6.20

MoM #N/A -11.49

YoY 180.02 233.07

Technical Chart Potato

NCDEX Sept contract

Production and Arrivals Scenario


Around 200-220 lakh MT potato had been stored in the country in different cold storages during the current season. Although 27-30% of the cold storage stocks are released so far from overall producing belts, they are much lower compared to normal 35-38% every year. According to NHRDF, The sowing of potato seed for Kharif production in Karnataka completed but the area sown is adversely affected due to less and delayed rains. The sowing in hills of Himachal Pradesh, Uttarakhand and Jammu and Kashmir are also completed. The seed sowing in Maharashtra for Kharif is continued, which is delayed due to delay arrival of monsoon, which is still scanty. The area for Kharif is expected to be less or may be same with delayed planting compared to last year, but it depends on further rains. With reports of crop damages in Karnataka, the supplies from this region to other states may also be affected as the overall output is expected to decline by 70-75%. In fact, the state may have to rely on the supplies from the north Indian markets.

Source: Telequote

Technical Outlook
Unit Mentha Oil Aug Futures Potato NCDEX Sept Futures Potato MCX Sept Futures Rs/kg Rs/qtl Rs/qtl

valid for Aug 28, 2012 Support 1308-1320 1057-1068 1126-1138 Resistance 1344-1355 1095-1106 1163-1176

Outlook
Potato futures in intraday might trade sideways to down as West Bengal government has decided to curb its decision to restrict interstate transfer of potato after October that might provide resistance to the prices in short term. Though Upcoming festive season might provide support to the prices from falling sharply in Medium term.

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