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
FMC for minimum daily avg turnover in illiquid contracts
The Forward Markets Commission (FMC) is planning to introduce a minimum daily average turnover criterion for illiquid contracts for all commodity exchanges. The criterion would come into effect in a month. Contracts for commodities that record no trade for years are categorised as illiquid contracts. For a number of commodities, after the initial euphoria, contracts turn illiquid. This has been a concern for FMC. Today, commodity exchanges submitted renewal requests for illiquid contracts, along with detailed plans of action for these. We are planning to frame a mandatory daily average turnover criterion for illiquid contracts to encourage exchanges to make positive efforts. Currently, the guidelines are being prepared, and these would be introduced in a month, said FMC Chairman Ramesh Abhishek. Under the new guidelines, exchanges would have six months to attract participation. During this period, exchanges can organise brokers meetings (in production and consumer segments) and enroll members from across the country. FMC has asked commodity exchanges to prepare a justification note before submitting a proposal for renewal of illiquid contracts. In case a commodity offered for trading fails to attract participation and exchanges renewed it for years, the exchange would need justification for another renewal. Exchanges would also have to submit the details of efforts made by them to attract participation in that commodity. (Source: Business Standard)
as on Oct 3, 2012
WoW MoM YoY
Sensex Nifty INR/$ Nymex Crude Oil - $/bbl Comex Gold - $/oz
Source: Reuters
Indian cabinet may allow 1 mln tonnes vegetable oil importsgovt source
Indian cabinet may consider allowing import of 1 million tonnes of vegetable oil from October 2012 to November 2013, for subsidised sale, a government source told Reuters on Wednesday. The cabinet meeting is scheduled on Thursday. (Source: Reuters)
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Agricultural Commodities
Chana
Chana spot as well as futures which were in downside pressure in the past couple of weeks, witnessed a sharp reversal on Wednesday and settled higher by 1.56% and 3.54% respectively. Emerging demand at lower levels due to upcoming festive season supported the upside. 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. According to the first advance estimates, kharif pulses output is estimated lower by 14.6% at 5.26 million tonnes compared with 6.16 mn tn last year. Kharif pulses harvesting would commence from next month. 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. 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.
st
Market Highlights
Unit Rs/qtl Rs/qtl Last 4370 4463 Prev day 1.56 3.29
as on Oct 3, 2012 % change WoW MoM -2.12 -10.81 0.36 -7.43 YoY 29.89 33.18
Source: Reuters
Source: Telequote
Technical Outlook
Contract Chana Oct Futures Unit Rs./qtl Support
4180-4220
Outlook
Chana futures are expected to trade sideways with upward bias on emergence of fresh demand at lower levels. Estimated lower kharif pulses output may also support the upside in the prices during the intraday. In the medium term to long term, the trend remains positive on account of supply tightness. However, higher imports from Australia may cap the sharp upside in the prices.
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Agricultural Commodities
Sugar
Sugar prices recovered on Wednesday and spot as well as the Futures settled 0.03% and 0.64% higher ahead of short coverings. Also upcoming festive demand provided support to the prices. With the release of higher sugar quota for the next two months prices declined further during the intraday however, prices closed on a flat note on expectations of festive season demand. The Government has decided to make available a quantity of 40 lakh tons of non-levy quota, for the months of October, 2012 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 life white sugar futures on Wednesday settled marginally lower by 0.05% and 0.25%.
Market Highlights
Unit Sugar Spot- NCDEX (Kolkata) Sugar M- NCDEX Oct '12 Futures Rs/qtl Last 3780
as on Oct 3, 2012 % Change Prev. day WoW 0.03 -1.82 MoM 0.63 YoY 21.94
Rs/qtl
3470
0.64
-2.28
0.09
25.95
Source: Reuters
International Prices
Unit Sugar No 5- LiffeOct'12 Futures Sugar No 11-ICE Oct '12 Futures $/tonne $/tonne Last 591.1 479.56
as on Oct 3, 2012 % Change Prev day WoW -0.25 -0.05 3.12 10.10 MoM 4.94 11.58 YoY -7.89 #N/A
Source: Reuters
Source: Telequote
Technical Outlook
Contract Unit Rs./qtl
Outlook
Sugar prices may decline in the coming weeks amid higher sugar quota for the next two months and reports of raw sugar import after almost 2 years. However, a delay in crushing in Maharashtra by a month and lower cane output estimates may restrict sharp fall in the short term.
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Agricultural Commodities
Oilseeds
Soybean: Soybean Futures as well as spot extended heavy losses
and Spot closed 7.39% lower and Futures closed on 4% lower limit ahead of ongoing harvest pressure and prospects of higher output. CBOT Futures recovered and settled marginally higher by 0.08% due to short coverings. US soybeans condition is reported 35 pct good/excellent as compared to 35 pct week ago, and 54 pct a year ago. US soybeans are 41 pct harvested vs 22 pct week ago and 19 pct to 5-year nd average as on 2 October 2012. 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.
th
Market Highlights
% Change 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 2858 2951 652.1 615 Prev day -7.39 -3.99 -4.19 -3.41
as on Oct 3, 2012
Source: Reuters
as on Oct 3, 2012 International Prices Soybean- CBOTNov'12 Futures Soybean Oil - CBOTOct '12 Futures Unit USc/ Bushel USc/lbs Last 1532 50.33 Prev day 0.08 0.12 WoW -2.62 -2.56 MoM -11.45 -9.98 YoY 11.04 -12.16
Source: Reuters
as on Oct 3, 2012 % Change Prev day WoW 4.80 -3.96 -11.98 -12.93
Unit
CPO-Bursa Malaysia Oct '12 Contract CPO-MCX- Oct '12 Futures
Refined Soy Oil: Ref soy oil also extended the fall and settled
3.41% lower after hitting a 4% lower limit taking cues from the domestic soybean markets along with weak international market 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).
MYR/Tonne Rs/10 kg
Source: Reuters
RM Seed
Unit RM Seed SpotNCDEX (Jaipur) RM Seed- NCDEX Oct '12 Futures Rs/100 kgs Rs/100 kgs Last 3975 3712 Prev day 1.40 -1.46
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 4, 2012 Support 588-597 2865-2900 3640-3705 395-401 Resistance 610-617 2992-3025 3798-3825 411-416
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Agricultural Commodities
Black Pepper
Pepper traded sideways with a positive note yesterday due to low supplies in the domestic markets coupled with festive demand. Farmers are unwilling to sell their stocks at lower levels. Reports that FMC has asked NCDEX to find out if there were any erratic trades in Pepper have capped any sharp upside. Traders are buying pepper directly from the farmers. Exports demand for Indian pepper in the international markets is said to be low due to huge price parity. The Spot as well as the November Futures settled 0.11% and 0.43% higher on Wednesday. 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 $8,4758,450/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 Oct '12 Futures Rs/qtl Rs/qtl Last 42150 43415 Prev day 0.11 -0.05
as on Oct 3, 2012 WoW 0.56 -0.31 MoM 1.80 2.55 YoY 21.09 26.26
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 trade on a positive note today due to low supplies in the domestic markets. Festive season buying is also expected 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 in a rangebound manner yesterday. Expectations of better export figures and low arrivals in the spot markets supported the prices at lower levels while reports of higher carryover stocks as compared to last year restricted any sharp upside. Good rains in Gujarat, thereby expectations of better sowing prospects ahead of the rabi sowing have also pressurized the prices. The spot settled 0.19% higher while the Futures settled 0.27% lower on Wednesday. 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 $2,625-2,650 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 14447 13600 Prev day 0.19 -0.27
as on Oct 3, 2012 % Change WoW -0.17 -0.69 MoM -4.57 -2.35 YoY -3.44 -5.75
Source: Reuters
Source: Telequote
Market Highlights
Prev day -1.14 -1.41
Outlook
Jeera futures may trade on a sideways note 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 (September-October 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 traded on a negative note yesterday on reports that FMC asked NCDEX to find out if there are any erratic trades in Turmeric kept the prices under check. Higher stocks with the stockists also pressurized the prices. However, a reduction in the special cash margin on the long side supported the prices in the Futures at lower levels. 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 as well as the Futures settled 1.14% and 1.41% lower on Wednesday. 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.
Source: Telequote
Technical Outlook
Unit Jeera NCDEX Oct Futures Turmeric NCDEX Oct Futures Rs/qtl Rs/qtl
valid for Oct 4, 2012 Support 13550-13680 5420-5500 Resistance 13980-14130 5610-5680
Outlook
Turmeric prices are expected to trade on a negative note today on reports that FMC has asked NCDEX to find out any erratic trades in turmeric. However, a reduction in the special cash margin, lower sowing figures and lower arrivals may support prices.
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Agricultural Commodities
Kapas
After recovering on Monday, Kapas futures again corrected and settled marginally lower by 0.38% on ongoing harvesting pressure in the key states. According to the first advance estimates, released by the ministry of agriculture, Indias 2012/13 cotton output is seen at 33.4 mln bales as compared to 352 lakh bales in 2011-12 seasons. ICE cotton Futures closed 0.34% higher on account of short coverings. 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 912 16020
as on Oct 3, 2012 % Change Prev. day WoW -0.38 -0.19 -0.92 -1.60 MoM -11.28 -1.60 YoY -15.06
Source: Reuters
International Prices
ICE Cotton Cot look A Index Unit Usc/Lbs Last 70.54 81.35
as on Oct 3, 2012 % Change Prev day WoW 0.34 0.73 0.00 0.00 MoM -5.98 0.00 YoY -31.01 -29.20
Source: Reuters
Source: Telequote
Source: Telequote
Outlook
Kapas futures in intraday is expected to trade sideways as ongoing harvesting in the key states coupled with new cotton crop arrivals from the northern states might pressurize the prices. However, prices in spot market are nearing its MSP, which would restrict any major fall. Also Farm Minister has lowered the output estimates of cotton for the 2012-13 season, that will provide support to the prices in the short term. However, in the international front, cotton harvesting has begun globally which might cap a sharp upside in medium term.
Technical Outlook
Contract Kapas NCDEX April Kapas MCX April Cotton MCX October Unit Rs/20 kgs Rs/20 kgs Rs/bale
valid for Oct 4, 2012 Support 889-902 882-897 15720-15880 Resistance 925-935 922-933 16150-16280
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