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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
Demand for agricultural credit remains high: RBI
Demand for agricultural credit this year is sustained even if other sectors have shown lesser demand. According to the latest Reserve Bank of India (RBI) data for sectoral deployment of bank credit, agricultural loans showed a healthy growth rate of 19.8 per cent against 6.3 per cent last year. This is despite some parts of the country facing severe drought situation this year. The overall non- food credit growth was 14.6 per cent in January 2013, compared to 15.9 per cent in January last year. All major sectors except agriculture had lower credit demand, compared to last year, RBI said. (Source: Business Standard)
Sensex Nifty INR/$ Nymex Crude Oil - $/bbl Comex Gold - $/oz
.Source: Reuters
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Agricultural Commodities
Chana
Chana futures extended the previous sessions losses as arrivals increased further in the domestic markets. Higher output expectations are also seen pressurizing prices. April Futures settled 0.71% lower on Tuesday. In the union budget 2013-14, although no direct move was considered for Pulses, still The Finance Minister expressed concern about the supplydemand mismatch in pulses. He said that the aggregate demand is a concern. Stating that food inflation is worrying, he said the government would take all steps to augment the supply side.
Market Highlights
Unit Rs/qtl Rs/qtl Last 3500 3348 Prev day 0.00 -0.71
as on March 12, 2013 % change WoW MoM 2.94 -1.68 0.87 -1.41 YoY -1.14 -6.51
Source: Reuters
Higher returns earned in 2012, coupled with a hike in minimum support prices (MSP), have helped expand overall acreage in 2012-13 season. The Centre has hiked the MSP by 14 per cent to Rs 3,200 a quintal for chana and as part of its strategy to encourage farmers to grow more pulses to reduce import dependence.
Source: Telequote
Technical Outlook
Contract Chana Apr Futures Unit Rs./qtl Support
3310-3325
Trade Scenario
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 tons in 2011-12. In Canada chickpea output is estimated at 1.58 lakh tonnes compared with 86000 tn in 2011-12.
Outlook
Increasing arrivals of new crop from MP coupled with higher imports may exert downside pressure on the domestic prices However, prices may not sustain below Rs 3200 as farmers will not liquidate their produce below these levels.
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Agricultural Commodities
Sugar
Sugar futures settled flat as traders are adopting wait and watch policy ahead of decontrol decision. Prices traded on a positive note last week as some mills in Maharashtra have stopped crushing due to non availability of cane. The spot as well as April Futures settled 0.11% and 0.33% higher on Tuesday.
India, the world biggest sugar consumer, could consider easing curbs on the tightly controlled industry by next week. Decontrolling the sugar sector would, involve abolition of regulated release mechanism, removal of levy sugar obligation from industry, freer export-import policy, removal of sugar from compulsory packing in jute bags only and a transparent policy linking cane price with sugar price. The government has decided not to increase import duty on sugar though industry bodies and manufacturers had demanded a hike in the duty to 60% from the current 10% to curb shipment of the sweetener. India's sugar production in the 2013/14 season is set to fall below consumption for the first time in four years as a water shortage trims acreage in three key states.
Market Highlights
Unit Sugar Spot- NCDEX (Kolhapur) Sugar M- NCDEX Mar'13 Futures Rs/qtl Last 3142
as on March 12, 2013 % Change Prev. day WoW 0.11 -0.62 MoM -1.39 YoY 8.26
Rs/qtl
3030
0.33
1.13
-0.66
9.15
Source: Reuters
International Prices
Unit Sugar No 5- LiffeMay'13 Futures Sugar No 11-ICE May '13 Futures $/tonne $/tonne Last 534.8 418.22
as on March 12, 2013 % Change Prev day WoW -0.07 0.00 3.50 3.46 MoM 10.18 3.75 YoY -16.61 -22.01
.Source: Reuters
Technical Outlook
Contract Sugar Apr NCDEX Futures Unit Rs./qtl Support
3050-3062
Outlook
Although supplies continue to remain high in the domestic markets, we expect sugar prices to recover as demand will now reemerge to meet the summer season requirement. Further, crushing will now start declining amid lower cane availability this season.
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Agricultural Commodities
Oilseeds
Soybean: Soybean April declined sharply from higher levels due to
profit taking at higher levels. Weak international markets also added to the downside pressure. The spot as well as the April futures settled 0.93% and 1.26% lower on Tuesday. Exports of Soybean meal during February, 2013 was 5,77,589 tones as compared to 3,70,524 tonnes in February, 2012 showing an increase by 55.88% over the last year. On a financial year basis, the export during April 2012 to February 2013 is 31,13,651 tonnes as compared to 34,52,791 tonnes in the same period of previous year showing a decrease of 9.82%. According to the second advance estimates, 2012-13 oilseed output is pegged at 29.4 mn tn, down by 1.1%, while soybean output is pegged higher at 12.9 mn tn, up 3.2%.
Market Highlights
% Change Unit Soybean Spot- NCDEX (Indore) Soybean- NCDEX Mar '13 Futures Ref Soy oil SpotNCDEX(Indore) Ref Soy oil- NCDEX Mar '13 Futures Rs/qtl Rs/qtl Rs/10 kgs Rs/10 kgs Last 3608 3539 681.1 684.4 Prev day -0.93 -1.26 -0.63 -0.60
Source: Reuters
as on March 12, 2013 International Prices Soybean- CBOTMar'13 Futures Soybean Oil - CBOTMar'13 Futures Unit USc/ Bushel USc/lbs Last 1490 49.83 Prev day -1.65 -0.82 WoW -0.45 -0.18 MoM 2.56 -3.11
Source: Reuters
International Markets
Soybean Futures on CBOT declined by 1.65% on Tuesday on account of profit taking. Demand for US soy was also low as no fresh sales of the old crop was reported. Also the advancement of the South American crop added to the downside pressure. The USDA monthly crop report has kept the Brazil output unchanged at 83.5 mn tn while, it reduced Argentinas crop forecast from 53 mn tn to 51.5 mn tn. German oilseeds analyst Oil World cut its forecast of the 2013 soybean harvest in Argentina by 2 mn tn to 50 mn tn from its Jan estimates because of dry weather, but has raised its forecast of Brazil's soybean crop by 0.5 mn tn. Argentina soybean acreage is estimated at 19.35 mn ha. U.S. farmers will harvest record soybean crops in 2013, ending three years of falling production and rebuilding nearly depleted stockpiles. U.S. soybean processors say they have been pleasantly surprised by the high oil content of the latest U.S. soybean harvest, a factor that has contributed to strong profit margins and should pad year-end soy oil inventories.
as on March 12, 2013 % Change Prev day WoW -1.64 -0.48 0.67 -0.83
Unit
CPO-Bursa Malaysia Mar '13 Contract CPO-MCX- Mar '13 Futures
MYR/Tonne Rs/10 kg
Source: Reuters
RM Seed
Unit RM Seed SpotNCDEX (Jaipur) RM Seed- NCDEX Apr'13 Futures Rs/100 kgs Rs/100 kgs Last 3587 3456 Prev day -0.59 -1.17 WoW 1.65 1.38
Refined Soy Oil: Ref soy oil and CPO declined by 0.6% and 0.48%
respectively yesterday tracking weak international markets. Lead speakers in the Palm Oil Conference have forecasted lower prices due to rising supplies. Higher global production estimates of palm oil by oil world have pressurized prices at higher levels. Global palm oil output is estimated at 55.3 mn tn in 2012-13, up by 3.4 mn tn. India's vegetable oil imports soared 27 percent from a month ago to an all-time high in January on purchases of cheap palm oil. To curb imports, the tariff value of crude palm oil, the edible oil India imports most, has been raised from $ 815 a tonne to $ 848 a tonne, a rise of 4.04%.
Outlook
Soybean is expected to decline today extending yesterdays losses on account of profit booking as well as weak international markets. Mustard seed may also decline tracking weaker oil pack coupled with arrivals of the new crop. Soy oil and CPO may continue to decline on account of forecast of higher supplies. However prices may find support on expectations that output may fall due to seasonally lower yield.
Source: Telequote
Technical Outlook
Contract Soy Oil Apr NCDEX Futures Soybean NCDEX Apr Futures RM Seed NCDEX Apr Futures CPO MCX Mar Futures Unit Rs./qtl Rs./qtl Rs./qtl Rs./qtl
valid for Mar 13, 2013 Support 668-671 3440-3470 3420-3440 451-454 Resistance 676-680 3545-3590 3485-3515 456-458
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Agricultural Commodities h
Black Pepper
Pepper Futures traded on a positive note extending previous days gains. Low stocks in the warehouses coupled with thin supplies and delayed harvesting on back of to lack of skilled laborers also supported prices. Increasing arrivals of the new crop from Karnataka pressurized prices last week. Harvesting of the fresh crop is going in and is expected to gain momentum in the coming days. Food Safety and Standards Authority of India sealed the entire quantity of pepper stored in six warehouses in Kerala of about 8,000 tonnes. Exports demand for Indian pepper in the international markets is also weak due to price parity. The Spot as well as the April Futures settled 0.07% and 0.93% higher on Tuesday. According to a circular issued by NCDEX on 09/02/2013, launch of June 2013 expiry contract in Pepper which is scheduled on February 11, 2013, has been postponed till further notice. The revised launch date will be announced in due course. Spices Board has announced plans to import high yielding Madagascar variety that was behind the record productivity in Vietnam. It could raise productivity of Indian pepper from 2,000 kg/ha to 7,000 kg/ha. Pepper prices in the international market are being quoted at $7,000/tn. Vietnams Asta is quoted at $6,925-6,975/tn, Indonesia GM-1 is quoted at $6,900/tn and Brazil Asta is quoted at $6,600/tn.
Market Highlights
Unit Pepper SpotNCDEX (Kochi) Pepper- NCDEX Mar'13 Futures Rs/qtl Rs/qtl Last 36886 36765 % Change Prev day 0.07 0.93
as on March 12, 2013 WoW -2.75 1.38 MoM -8.20 -5.05 YoY -6.95 -7.52
Source: Reuters
Technical Outlook
Contract Black Pepper NCDEX Apr Futures Unit Rs/qtl
Outlook
Pepper is expected to trade on a mixed note. Low stocks coupled with good demand from the upcountry markets may support prices at lower levels. Reports that farmers are holding back stocks may also support prices at lower levels. However, improvement in arrivals may pressurize prices further.
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Agricultural Commodities
Jeera
Jeera Futures gained yesterday on account of good export demand. However, the arrival pressure caped sharp upside. Demand of the new crop is low due to high moisture content. The arrivals of new crop are averaging around 20,000 bags/ day and are expected to improve in the coming days. Higher sowing as well as conducive weather in Gujarat, the main jeera growing region has increased output expectations. 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. According to the Rajasthan State Budget 2013-14, it has exempted jeera from VAT. In Rajasthan, sowing is expected to increase by 10-15%. The spot as well as the April Futures settled 0.71% and 1.68% higher on Tuesday. According to markets sources the 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 $2,625 tn (c&f Europe) while Syria and Turkey are not offering. Carryover stocks of Jeera in the domestic market is expected to be around 5-6 lakh bags.
Market Highlights
Unit Jeera Spot- NCDEX (Unjha) Jeera- NCDEX Mar '13 Futures Rs/qtl Rs/qtl Last 13459 13310 Prev day 0.71 1.49
as on March 12, 2013 % Change WoW -0.20 3.32 MoM -1.74 1.31 YoY 0.68 2.72
Source: Reuters
Source: Telequote
Market Highlights
Prev day 7.64 4.02
Unit Turmeric SpotNCDEX (N'zmbad) Turmeric- NCDEX Apr '13 Futures Rs/qtl Rs/qtl
Outlook
Jeera Futures trade may gain today on account of fresh export as well as domestic demand. However, increasing arrivals may pressurize prices. In the medium term, prices are likely to stay firm as Syria and Turkey have stopped shipments.
Turmeric
Turmeric Futures traded on a bullish note yesterday hitting the 4% upper circuit filter. Fresh export enquiries coupled with output concerns have pushed up the prices. Traders have received fresh orders from Bihar, Maharashtra, Delhi, Kolkata and some other places. Unseasonal rains in Andhra Pradesh have damaged about 9240 tonnes. The Spot as well as the Futures settled 7.64% and 4.02% higher on Tuesday.
Technical Outlook
Unit Jeera NCDEX Apr Futures Turmeric NCDEX April Futures Rs/qtl Rs/qtl
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Agricultural Commodities
Kapas
NCDEX Kapas as well as MCX Cotton declined by 0.47% and 0.27% respectively on Tuesday on demand from the traders to the government agencies (Cotton Corp of India) to release the stocks procured by them. There is some buying interest seen from China which has raised expectations of export demand. However, a sharp downside was capped as government decided to continue with current cotton exports policy. Traders expect exports to cross governments estimates of 8 mn bales. Finance Minister announced various incentives and policies in the Union Budget to support the ailing textile industry. 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.
Market Highlights
Unit Rs/20 kgs Rs/Bale Last 960.5 18460
as on March 12, 2013 % Change Prev. day WoW -0.47 -1.23 -0.27 0.27 MoM 6.13 0.27 YoY #N/A 11.07
Source: Reuters
International Prices
ICE Cotton Cot look A Index Unit USc/Lbs Last 87.33 81.35
as on March 12, 2013 % Change Prev day WoW 0.70 1.58 0.00 0.00 MoM 5.64 0.00 YoY -0.81 -29.20
Source: Reuters
Source: Telequote
At its annual Outlook Forum, USDA projected a crop of 14 million bales from planted acreage of 10 million acres. Plantings would be the smallest in four years and down 19 percent from last year. The crop, projected to be down 18 percent from 2012, would be the smallest since 2009. China is planning to issue more cotton import quotas to exportdependent textile mills that are struggling to protect margins as domestic prices soar due to a state stockpiling plan. However, according to USDA, the world's largest cotton grower and user, will import the smallest amount of cotton, 8 million bales, in five years in 2013/14 as it copes with huge domestic reserves.
Source: Telequote
Outlook
Cotton prices may trade on a mixed note. Prices may decline as the traders have demanded the government to release the stocks procured by them. However, prices may find support at lower levels on expectations of good export demand. Various policy announcements to support the textile industry may support prices. Also the prices may take cues from firmness in the international markets. Expectations that China may release higher import quota which might boost imports also supported an upside in the cotton prices. Also, expected lower US cotton acreage and output in 2013-14 may also support prices at lower levels.
Technical Outlook
Contract Kapas NCDEX April Futures Cotton MCX March Futures Unit Rs/20 kgs Rs/bale
valid for Mar 13, 2013 Support 945-955 18300-18380 Resistance 970-980 18570-18670
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