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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
Withdrawal of Additional Margin on Potato(POTATO) Contracts
Trading and Clearing members are hereby informed that in terms of Byelaws, Rules and Regulations of the Exchange, and as directed by the Forward Markets Commission, Additional Margin of 15% (in Cash) on both Long and Short side in Potato (SYMBOL:POTATO) May 2013, June 2013 and July 2013 expiry contracts have been withdrawn with effect from beginning of day Tuesday, May 07, 2013. Further, Special margin of 20% (in Cash) on Long side will be continued to be levied in above contracts. (Source NCDEX)
Sensex Nifty INR/$ Nymex Crude Oil - $/bbl Comex Gold - $/oz
.Source: Reuters
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Agricultural Commodities
Chana
Chana futures continued to trade on a negative note yesterday as higher arrivals of the new crop have mounted pressure on the prices. Demand from stockists also remains dull. However, reports of lower yield in MP supported prices at lower levels. The spot as well as the Futures settled 0.73% and 1.46% lower on Monday. Higher supplies of the new crop from the major producing states such as Madhya Pradesh, Rajasthan and Maharashtra is seen pressurizing prices in the physical markets. However, concerns over the yield in Madhya Pradesh, the largest chana producing state, due to unfavorable weather conditions has been seen supporting prices at lower levels. Chana prices may find support at lower levels as stockists will build inventories at lower levels to meet the demand for the entire season.
Market Highlights
Unit Rs/qtl Rs/qtl Last 3400 3373 Prev day -0.73 -1.46
as on May 06, 2013 % change WoW MoM 0.00 -3.55 -1.06 -3.79 YoY -17.07 -17.49
Source: Reuters
Source: Telequote
Technical Outlook
Contract Chana May Futures Unit Rs./qtl Support
3415-3435
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
We expect Chana prices to continue to decline today. Increasing arrivals of the new crop may pressurize prices at higher levels. However, value buying may emerge at lower levels. Any improvement in demand from stockists may restrict a major downside. Overall output in the current season is comparatively higher and thus no major upside is expected over a medium term.
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Agricultural Commodities
Sugar
Sugar prices traded on a negative note yesterday and touched a new contract low of Rs 2909 on account of higher supplies from mills which have been seen offsetting the summer demand while the spot gained due to improvement in demand from the bulk consumers. Sugar prices in the domestic markets are seen consolidating at lower levels. The spot settled 0.14% higher while the Futures settled 0.17% lower on Monday. The Government has cleared the partial decontrol of sugar. 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. States will decide on the FRP of cane. Indian sugar mills produced 23 million tonnes of the sweetener between Oct. 1 and March 31, about 2 percent less than a year earlier. The Central Government has decided to make available quantity of 104 lakh tons of sugar, as non-levy quota for open market sale, for the 6 months of April, 2013 to September, 2013.
Market Highlights
Unit Sugar Spot- NCDEX (Kolhapur) Sugar M- NCDEX May '13 Futures Rs/qtl Last 3043
as on May 06, 2013 % Change Prev. day WoW 0.14 0.63 MoM -0.85 YoY 3.48
Rs/qtl
2914
-0.17
-0.82
0.45
1.01
Source: Reuters
International Prices
Unit Sugar No 5- LiffeMay'13 Futures Sugar No 11-ICE May '13 Futures $/tonne $/tonne Last 496.8 395.78
as on May 06, 2013 % Change Prev day WoW -0.88 1.60 -0.74 1.83 MoM -1.60 0.91 YoY -11.25 -14.42
.Source: Reuters
Technical Outlook
Contract Sugar May NCDEX Futures Unit Rs./qtl Support
2920-2940
Outlook
Sugar is expected to trade on a mixed note today. Prices may consolidate at lower levels over the next few days. Improvement in demand from the bulk manufacturers will support prices at lower levels. A decline in sugar production may also support prices at lower levels. However, supplies will continue to remain high as millers will release stocks to clear cane arrears. This will offset summer season demand.
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Agricultural Commodities
Oilseeds
Soybean: Soybean traded on a positive note as poor supplies in the
domestic markets supported prices at lower levels. However, sharp gains have been capped on the back of IMDs prediction of a normal rd monsoon. According to the 3 advance Estimates, Soybean output is pegged at 14.14 mn tonnes. The spot as well as the Futures settled 0.1% and 0.84% higher on Monday. Special Margin (in Cash) of 10% on the Long side has be imposed in Soyabean May 2013, June 2013 & July 2013 expiry contracts with effect from beginning of day Tuesday, April 30, 2013. Indias soy meal exports in April are likely to fall to 200,000 tonnes, down 36 percent from a year ago, unless buying from Iran improves. Exports of Soybean meal during March, 2013 was 3,20,265 tonnes as compared to 4,61,892 tonnes in March, 2012 lower by 30.66% y-o-y.
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 4031 4007 733.8 718.7 Prev day 0.10 0.84 -0.37 -0.07
Source: Reuters
International Markets
Soybean gained 1.69% w-o-w on account of tight supplies of soy crop. Farmer selling has slowed down. Expectations of lower ending stocks in USDAs Monthly crop report to be released next week also supported prices. Large South American crop coupled with forecasts for US weather to improve in the coming week have capped sharp gains. Sentiments remain weak on account of smooth supplies from Brazil coupled with demand fears amid bird flu in China. Data released by National Oilseed Processors Association showed the U.S. soybean crush rose marginally to 137.08 million bushels in March, in line with forecasts for a slight gain from 136.3 million bushels in February. Soy oil stocks edged lower to 2.765 billion lbs, versus 2.79 billion lbs in February. Brazil's government lowered its forecast for the 2012/13 soybean crop from 82.1mn tn to 81.9 mn tn.
International Prices Soybean- CBOTMay'13 Futures Soybean Oil - CBOTMay'13 Futures Unit USc/ Bushel USc/lbs Last 1445 48.69
as on May 06, 2013 Prev day -0.72 -0.96 WoW -1.85 -1.56 MoM 6.08 -0.29
Source: Reuters
as on May 06, 2013 % Change Prev day WoW -0.09 0.44 -3.13 -1.59
Unit
CPO-Bursa Malaysia May '13 Contract CPO-MCX- May '13 Futures
MYR/Tonne Rs/10 kg
Refined Soy Oil: Ref soy oil as well as MCX CPO settled 0.18% and
1.01% lower w-o-w tracking weak palm oil prices on KLCE. Palm oil prices on the KLCE have declined as many investors have exited the markets ahead of the general elections to be held on Sunday. Indian government increased the base import price on crude soybean oil by US $9 per tons to US $1103. Besides, base import price on crude palm oil set at US $ 824 and reduced base import price on palmolein crude as well as refined to US $ 864 per tons and US $861 per tons. Imports of all vegetable oils, including non-edible oils, fell 7.5 per cent to 896,714 tn in March, pulled down by the drop in palm oil imports. Palm oil imports dropped 12% to 708,262 tn in March. Malaysia, the world's No.2 palm oil producer, will set its crude palm oil export tax for May at 4.5 percent, unchanged from April. Exports of Malaysian palm oil products from April 1 to 25 increased 5.2% to 1,123,129 tonnes from 1,067,140 tonnes shipped during March 1 to 25.
Source: Reuters
RM Seed
Unit RM Seed SpotNCDEX (Jaipur) RM Seed- NCDEX May '13 Futures Rs/100 kgs Rs/100 kgs Last 3401 3388 Prev day -0.15 -0.82 WoW -2.02 -1.85
Outlook
Soybean prices may gain today on account of poor supplies in the domestic markets. However, higher margins coupled with forecast of a normal monsoon may cap sharp upside in the prices. Weak meal export demand may also pressurize prices. However, poor supplies in the domestic markets may support prices. Soy oil and CPO may trade sideways with a negative bias. Weak international markets are expected to pressurize prices. However, comfortable stock levels may cap sharp 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 04, 2013 Support 682-688 3850-3880 3380-3400 452-455 Resistance 698-703 3930-3960 3450-3485 460-462
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Jeera futures declined by 0.95% on Monday due to weak demand from the domestic as well as international markets. Overall higher production estimates have also pressurized prices. However, declining arrivals from its peak supported prices at lower levels. Prices have declined sharply over the past few weeks on account of higher supplies of the new crop. Good supplies from Rajasthan also pressurized prices. Domestic as well as overseas demand is expected to improve in the coming days. 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 201314, it has exempted jeera from VAT. 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 $2,400-2,425 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 13429 12763 Prev day -0.02 -0.95
as on May 06, 2013 % Change WoW 0.82 -0.35 MoM -1.44 -6.42 YoY 1.66 -3.72
Source: Reuters
Outlook
Jeera Futures may trade on a mixed note with a negative bias today. Higher output and weak demand may pressurize prices. However, any improvement in overseas as well as domestic demand may support prices. Overall trend remain positive for the Jeera prices as they are likely to stay firm as Syria & Turkey have stopped shipments.
Market Highlights
Prev day -2.48 -3.83
Unit Turmeric SpotNCDEX (N'zmbad) Turmeric- NCDEX May '13 Futures Rs/qtl Rs/qtl
Turmeric
Turmeric prices declined sharply yesterday on account of weak domestic as well as overseas demand coupled with higher supplies. However, there are expectations of improvement in overseas demand in June. Overall output is expected to be low. Unseasonal rains in Andhra Pradesh have damaged about 9240 tonnes of turmeric. The spot as well as the Futures settled 2.48% and 3.83% lower on Monday.
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 opened lower on Monday on expectations CCI and NAFED will offload stocks in May after an unsuccessful bid to offload of 2.5 lakh bales of cotton in April 2013. However, prices recovered in the later part of the session and settled higher on account of emergence of fresh demand at lower price levels. Also, firm international markets supported an upside in the prices. 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 1049 18200
as on May 06, 2013 % Change Prev. day WoW 0.72 -0.29 0.11 0.61 MoM YoY 14.09 -5.54 0.61 1.73
Source: Reuters
International Prices
ICE Cotton Cot look A Index Unit USc/Lbs Last 85.31 93.6
as on May 06, 2013 % Change Prev day WoW 0.70 2.05 1.85 3.08 MoM -1.71 -1.99 YoY -0.88 -4.44
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
Source: Telequote
Source: Telequote
Outlook
We expect Cotton prices to trade with upward bias during the intraday taking cues from the firm international markets. US cotton planting intentions were reported at a 4 year low. China will continue its stockpiling policy, may also support prices. In the domestic markets, sharp upside will be capped as offloading from the state reserves may ease supplies in the short term.
Technical Outlook
Contract Kapas NCDEX April 14 Fut Cotton MCX May Futures Unit Rs/20 kgs Rs/bale
valid for May 04, 2013 Support 1020-1035 17850-18030 Resistance 1060-1070 18310-18420
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