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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
Vaishali Sheth - Research Associate vaishalij.sheth@angelbroking.com (022) 2921 2000 Extn. 6133
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Agricultural Commodities
News in brief
Farmer's innovations benefit cardamom growers
An Idukki farmer's innovative approach has yielded results benefiting many cardamom growers in Kerala and its neighbouring States. The farmer-scientist, Rejimon Joseph Njallaniyil's innovation of a high-yielding hybrid variety Njallani Green Gold cardamom has nearly revolutionised the cardamom cultivation in the country, of late, many planters in Kumily and Vandanmettu told Business Line. A good majority of the growers both small and medium has planted this variety and we are benefited by it, they said. Of late, he has come out with three new planting methods and around 95 per cent of the cardamom farming community, they said, has whole-heartedly accepted the findings, and consequently could raise the production by five-fold. (Source: Business Standard)
Sensex Nifty INR/$ Nymex Crude Oil - $/bbl Comex Gold - $/oz
.Source: Reuters
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Agricultural Commodities
Chana
Chana spot as well as futures settled marginally higher by 0.12% and 0.14% on Monday on improved sowing. Total pulses acreage as on 23rd November is down by 8% to 85.1 lakh hectares from 92.49 lakh ha last season. Acreage was down by almost 17% till the previous week and thus shown some recovery in the sowing. Area under Chana cultivation in Maharashtra is up by 39 percent at 6.7 rd lakh hectares as on 23 Nov. While in Andra Pradesh it is up by 35% at 4.93 lakh hectares. However, in Rajasthan, sowing is much behind last years level due to late harvesting of kharif crops on account of delayed and deficient rains. Except for Wheat, minimum support price of all other Rabi crops has been increased by CCEA for 2012-13 season. MSP of Chana/Gram is raised by Rs 400 per qtl for 2012-13 season to Rs 3200. Higher returns and favorable soil condition will definitely boost acreage in the coming season. The Commission for Agriculture Costs and Prices (CACP) has suggested 10 per cent import duty on pulses to encourage domestic production. in the first six months of the new fiscal that is from April to September this year, imports were an estimated 12 lakh tonnes.
Market Highlights
Unit Rs/qtl Rs/qtl Last 4425 4249 Prev day -0.12 -0.14
as on Nov 26, 2012 % change WoW MoM -4.07 -3.99 -9.21 -9.34 YoY 30.72 30.50
Source: Reuters
Technical Outlook
Contract Chana Dec Futures Unit Rs./qtl Support
4168-4210
Outlook
Chana futures may open higher initially amid short coverings; however, selling at higher levels is advisable as fundamentals remain supportive for the downside. Expectations of ease in supplies amid higher shipments coupled with subdued demand will keep bearishness intact. Going forward, prices may also take cues from sowing progress of Rabi pulses which is expected to gain momentum in the coming days.
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Agricultural Commodities
Sugar
Sugar spot as well as futures settled lower by 0.36% and 0.54% on Monday as government released higher quota for the next four months to restrict any sharp rise in prices. In a move to curb any further spike in sugar prices considering lower sugar production for the marketing year 2012-13, Government has allocated total 70 lac tons of non-levy sugar quota for Dec-March 201213 period which is higher from 59.5 lac tons sugar quota allocated by government last year same period . Out of total 70 lac tons, Government released 66 lac tons non-levy sugar quota and 2 lac tons levy conversion sugar quota. Also, there is an extension of around 2 lac tons from October, 2012 - November, 2012 which the millers have to release upto 10th December, 2012. 9.84 lakh tons of sugar has been produced in the current sugar season 2012-13 upto 15th November, 2012 that is 2 lakh tons higher to the production in the same period last year of 7.76 lakh tons. (Source: PIB) Maharashtra Finance Minister Jayant Patil on 18 Nov said most of the cooperative sugar factories in western Maharashtra have agreed to pay Rs 2,500 for a tonne of sugarcane as first advance to farmers. According to sources, the UP Government may announce a hike of Rs 20-30 a quintal over the next few days against Rs 240 a quintal last season. Also, Tamil Nadu State Government for the 2012-13 season fixed State Advised Price (SAP) for a tonne of sugarcane at Rs 2,350 linked to a sugar recovery of 9.5 per cent from last season price of Rs 2,100 a ton. Liffe white sugar settled lower by 0.24% on account of higher pace of crushing in Brazil coupled with higher sugar surplus forecast for fourth straight year has led to a sharp decline in international sugar prices.
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Market Highlights
Unit Sugar Spot- NCDEX (Kolhapur) Sugar M- NCDEX Nov '12 Futures Rs/qtl Last 3426
as on Nov 26, 2012 % Change Prev. day WoW -0.36 -1.41 MoM -1.35 YoY 9.75
Rs/qtl
3290
-0.54
-6.45
-0.06
9.52
Source: Reuters
International Prices
Unit Sugar No 5- LiffeMar'13 Futures Sugar No 11-ICE Mar '13 Futures $/tonne $/tonne Last 509.4 425.56
as on Nov 26, 2012 % Change Prev day WoW -0.24 0.05 -3.21 -3.96 MoM -6.33 -1.95 YoY -15.26 -17.17
.Source: Reuters
Source: Telequote
Technical Outlook
Contract Sugar Dec NCDEX Futures Unit Rs./qtl Support
3258-3274
Outlook
Sugar prices may continue to remain under downside pressure has government has allocated higher quota for the next four months to curb any sharp rise in the prices. However, further delay in cane crushing in Maharashtra and UP may provide support to the prices at lower levels.
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Agricultural Commodities
Oilseeds
Soybean: Soybean Dec futures settled lower by 0.4% on account of
profit booking on Monday. Although arrivals have increased sharply post diwali, demand from solvent extractors is robust to meet the soy meal export commitment which is supporting the upside in the prices since past few sessions. Average daily arrivals have increased to 5.5 lakh bags compared to 1.5 lakh bags during Diwali period. Soy meal exports during October are down 49,840 tn in October, the seventh consecutive month of fall in the current fiscal year, from 223,594 tn a year ago. This is because; most export commitments were done for forward trade like Nov-Dec amid uncertainty over supplies in October. According to first advance estimates, Soybean output is pegged at 126.2 lakh tn for 2012-13.
Market Highlights
Unit Soybean Spot- NCDEX (Indore) Soybean- NCDEX Dec '12 Futures Ref Soy oil SpotNCDEX(Indore) Ref Soy oil- NCDEX Dec '12 Futures Rs/qtl Rs/qtl Rs/10 kgs Rs/10 kgs Last 3287 3260 743.6 729.7
as on Nov 26, 2012 % Change Prev day 0.80 -0.40 1.04 0.55 WoW -0.30 -0.06 4.14 2.61 MoM -0.39 -2.89 4.91 4.12 YoY 47.80 45.57 17.09 14.16
Source: Reuters
as on Nov 26, 2012 International Prices Soybean- CBOTNov'12 Futures Soybean Oil - CBOTDec'12 Futures Unit USc/ Bushel USc/lbs Last 1425 49.27 Prev day 0.42 0.47 WoW 3.00 4.72 MoM -8.90 -4.24
Source: Reuters
International Markets
CBOT soybean prices closed on a positive note on Monday taking cues from the dwindling supplies from south American nations coupled wih increasing demand for crushing in US. South American exports of soybeans to China are now dwindling, probably falling to only 0.3-0.4 Mn T in November. As per Argentina's Agriculture Ministry weekly crop progress report, farmers have planted 31% of the estimated acreage for soybean to 5.921 mn ha , down 13% from the previous year. The National Oilseed Processors Association (NOPA) reported the U.S. soybean crush for October at 153.536 million bushels, the largest monthly figure since January 2010 and the highest for October since 2009. According to the USDA November monthly report, The U.S. Department of Agriculture on Friday raised its estimate for soybean production by 4% from its forecast last month, saying that rainfall late in the growing season softened the impact of the U.S. drought. Brazil's government on 8 Nov 2012 edged up its forecast for a record 2012/13 soybean crop to between 80.1 and 83 mn tn.
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as on Nov 26, 2012 % Change Prev day WoW -0.09 -0.02 -5.07 -0.91
Unit
CPO-Bursa Malaysia Dec '12 Contract CPO-MCX- Nov '12 Futures
MYR/Tonne Rs/10 kg
Source: Reuters
RM Seed
Unit RM Seed SpotNCDEX (Jaipur) RM Seed- NCDEX Dec'12 Futures Rs/100 kgs Rs/100 kgs Last 4200 4104 Prev day -2.04 -1.37
Refined Soy Oil: Ref soy oil traded on a positive note due to
increasing demand for the edible oil amid winter season. However, CPO continue to remain weak on account of lower exports of Malaysian palm oil and fears of further stocks rise. Malaysian palm oil products export figures for 1-25 Nov. fell 1.9% to 12.56 lakh tn compared to 12.8 lakh tons in the Oct. 1-25. According to latest data from SEA, total vegetable oil imports in September were 993,912 tn, up from 897,018 tn in the previous month.
Outlook
Soy complex may trade on a positive note during the intraday on account of good demand from solvent extractors for soybean and strong demand soy oil amid lower availability of mustard oil to meet the winter season demand. Mustard prices may remain under downside pressure on prospects of higher sowing and thereby better output next year. While, CPO may continue to remain range bound as higher Malaysian stocks will cap the upside.
Source: Telequote
Technical Outlook
Contract Soy Oil Dec NCDEX Futures Soybean NCDEX Dec Futures RM Seed NCDEX Dec Futures CPO MCX Dec Futures Unit Rs./qtl Rs./qtl Rs./qtl Rs./qtl
valid for Nov 27, 2012 Support 718-724 3208-3235 4000-4050 432-437 Resistance 737-742 3298-3330 4142-4180 447-452
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Agricultural Commodities
Black Pepper
Pepper spot as well as futures continued to trade on a negative note yesterday over reports that FMC has launched probe into complaints against pepper market movement. Prices have also corrected on expectations of better output in the domestic as well as the international markets. Farmers are trying to liquidate their stocks ahead of the commencement of arrivals of the fresh crop. Exports demand for Indian pepper in the international markets remains weak due to price parity. However, low stocks and winter demand have supported the prices in the spot. The Spot as well as the Futures settled 0.13% and 1.26% lower on Monday. Pepper prices in the international market are being quoted at $7,400/tn(C&F) while Vietnam was offering Austa at $7,000/tn, Brazil Austa at $6,700/tn, and Indonesia Austa at $6,500/tn (FOB).
Market Highlights
Unit Pepper SpotNCDEX (Kochi) Pepper- NCDEX Dec '12 Futures Rs/qtl Rs/qtl Last 38639 37870 % Change Prev day -0.13 -1.26
as on Nov 26, 2012 WoW -2.52 -5.75 MoM -9.47 -14.27 YoY 11.55 8.67
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 September 2012 is estimated around 80,433 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 Dec Futures Unit Rs/qtl
Outlook
Pepper is expected to trade on a negative note today. Reports that FMC is probing into complaints against price movement may pressurize prices. Liquidation pressure from farmers as well as low export demand may pressurize prices. However, festive season as well as winter demand may arrest a sharp downside in the prices.
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Agricultural Commodities
Jeera
Jeera Futures traded on a negative note yesterday as the ongoing sowing of the crop has pressurized prices. Currently, sowing in Gujarat is currently lower by 40% but it is expected to gain momentum in the coming days. Also, higher stocks for delivery on the exchange warehouses have pressurized prices. However, export as well as demand has supported prices in the spot markets. Festive demand is also expected to improve. Exporters are buying due to tensions between Syria and Turkey. The spot as well as the Futures settled 0.95% and 1.63% lower on Monday. According to markets sources about 75% exports target has already been achieved due to a supply crunch in the global markets. 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 $2,825 tn (c&f) while Syria and Turkey are not offering. Carryover stocks of Jeera in the domestic market is expected to be around 4-5 lakh bags lower by around 3 lakh bags last year.
Market Highlights
Unit Jeera SpotNCDEX(Unjha) Jeera- NCDEX Dec '12 Futures Rs/qtl Rs/qtl Last 15000 14345 Prev day -0.95 -1.63
as on Nov 26, 2012 % Change WoW -0.42 -0.12 MoM -0.26 -3.09 YoY 4.37 4.19
Source: Reuters
Market Highlights
Prev day -1.08 -1.88
Unit Turmeric SpotNCDEX (N'zmbad) Turmeric- NCDEX Dec '12 Futures Rs/qtl Rs/qtl
Outlook
Jeera futures are expected to continue to trade downwards. Prices may correct tracking higher stocks for delivery on the exchange warehouse. However, sharp downside may be capped due to export demand. In the medium term (November-December 2012), prices are likely to stay firm as there are limited stocks with Syria and Turkey.
Turmeric
Turmeric Futures corrected yesterday as the market participants have revised the production estimates due to improved weather conditions in Andhra Pradesh and Karnataka. Also, the upcountry demand has dried up. Overseas demand is also reported to be weak. Stockists also have good carryover stocks with them. There are reports that Turmeric Farmers Association of India have decided to fix their own Minimum Support Price at Rs. 10,000/qtl. Turmeric has been sown in 0.58 lakh hectares in A.P as on 10/10/2012. Sowing is also reported 30-35% lower during the sowing period. The Spot as well as the Futures settled 1.08% and 1.88% lower on Monday. Production, Arrivals and Exports Arrivals in Erode and Nizamabad mandi stood at 4,000 bags and 1,200 bags respectively on Monday. Turmeric production in 2012-13 is expected around 50-60% lower compared to last year. Production in 2011-12 is projected at historical high of 90 lakh bags (1 bag= 70 kgs). 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. Outlook Turmeric prices are expected to trade downwards today. Higher production estimates coupled with weak upcountry demand may pressurize prices. however, prices may find support at lower levels as farmers may be unwilling to sell their stocks at lower prices.
Source: Telequote
Technical Outlook
Unit Jeera NCDEX Dec Futures Turmeric NCDEX Dec Futures Rs/qtl Rs/qtl
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Agricultural Commodities
Kapas
NCDEX Kapas settled marginally higher on short coverings. Sentiments remain weak on account of increasing arrival pressure. As on 18th November 2012, 22.66 lakh bales of Cotton has arrived so far, down by 29% compared to last year 31.97 lakh bales during the same period. Cotton export registrations for the 2012-13 season stood at 4.5 lakh bales as of November 5, 2012. Cotton exports are currently on Open General License subject to a prescribed procedure of registration. ICE cotton markets settled higher 2.05% on account of long liquidation by the market participants. Cotton harvesting has commenced in US, in all 84% is harvested as compared to 75% a week ago, versus 85% same period a year ago. Cotton crop condition is 43% in Good/Excellent state compared to 29% th same period a year ago as on 20 Nov 2012.
Market Highlights
Unit Rs/20 kgs Rs/Bale Last 958.5 16200
as on Nov 26, 2012 % Change Prev. day WoW -0.05 -2.34 0.50 -0.18 MoM -4.15 -0.18 YoY #N/A -2.99
Source: Reuters
International Prices
ICE Cotton Cot look A Index Unit Usc/Lbs Last 71.26 81.35
as on Nov 26, 2012 % Change Prev day WoW 2.05 -1.10 0.00 0.00 MoM -2.02 0.00 YoY -21.95 -29.20
Source: Reuters
Source: Telequote
Source: Telequote
Technical Outlook
Contract Kapas NCDEX April Kapas MCX April Unit Rs/20 kgs Rs/20 kgs Rs/bale
valid for Nov 27, 2012 Support 932-945 937-952 15950-16080 Resistance 968-978 975-985 16350-16480
Outlook
Cotton prices might trade sideways with negative bias as arrival pressure is weighing on the prices. However, no major downside is expected in the domestic markets as farmers will not sell their stocks at very low prices. Also, CCI procurement at MSP levels may support prices from falling sharply.
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