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Daily Agri Report, June 27
Daily Agri Report, June 27
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Thursday| June 27, 2013
Agricultural Commodities
Content
News & Market Highlights Chana Oilseeds Edible Oils Spices Sugar Cotton Guar Complex
Research Team
Vedika Narvekar Chief Manager- Agri Commodities vedika.narvekar@angelbroking.com (022) 2921 2000 Extn. 6130 Shruti Ghanekar Research Associate shruti.ghanekar@angelbroking.com (022) 2921 2000 Extn. 6133 Anuj Choudhary Research Analyst anuj.choudhary@angelbroking.com (022) 2921 2000 Extn. 6132
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Agricultural Commodities
News in brief
Withdrawal of Special Margin on Soyabean (SYBEANIDR) and Yellow Soybean Meal (SBMEALIDR) July 2013 contract
As per a circular by NCDEX dated June 26, 2013 the special Margin of 10% (in cash) on the Long Side on Soyabean (SYMBOL: SYBEANIDR) and Yellow Soybean Meal (SBMEALIDR) July 2013 expiry contracts will be withdrawn with effect from beginning of day Thursday, June 27, 2013. (Source: NCDEX)
Sensex Nifty INR/$ Nymex Crude Oil - $/bbl Comex Gold - $/oz
.Source: Reuters
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Agricultural Commodities
Chana
Chana futures declined further on Wednesday touching a new contract low of ` 3134 and settled 2.79% lower due to comfortable supplies to meet stockist demand. Spot prices also declined and settled 0.6% lower. However, Chana prices are sustaining above their MSP levels since past two weeks. Despite of good demand at such lower levels, upside in the prices is capped on account of higher production this season along with good progress of monsoon. Sowing of kharif pulses have commenced and 3.74 lakh hectares have st been covered as on 21 June compared to normal 1.22 lakh ha. Spillover effect of kharif pulses is capping sharp upside in chana prices. Sowing of kharif pulses was adversely impacted last year and was down by 16 percent due to deficient rains.
Market Highlights
Unit Chana Spot - NCDEX Chana- NCDEX July'13 Fut
`/qtl `/qtl
as on June 26, 2013 % change Last 3150 3140 Prev day -1.82 -2.79 WoW -1.49 -2.33 MoM -2.95 -0.76
Source: Reuters
Spread Matrix
Closing 3150 3140 3209 3274 19-Jul-13 -10 0 -
as on June 26, 2013 20-Aug-13 59 69 0 20-Sep-13 124 134 65 0 as on June 25, 2013 Stocks as on 24th June 78418 45328 10784 134530 Qty in Process 1020 1862 321 3203
Trade Scenario
According to IBIS, imports of chana in the month of April 2013 declined to 0.04 lakh metric tonnes compared to 0.11 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.
Source: Telequote
Outlook
Chana may trade on a mixed note during the intraday. Good rains and thereby, prospects of better kharif sowing may pressurize prices. However, good demand at lower levels coupled with declining arrivals may provide support to the prices. Seasonal pattern in chana indicates that prices generally bottom out in May when arrivals reach their peak, while they start recovering gradually June onwards with declining supply pressure. Thus, going forward downside seems to be limited as prices are near their MSP levels.
Technical Levels
Contract Chana July Futures Unit `/qtl Support
3065-3100
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Agricultural Commodities
Soybean
A sharp volatility in Soybean prices was seen on Wednesday as markets were influenced not only by the fundamental factors but the movement was also supported by the spillover effect from the international commodities and currencies segment. Spillover effect from international commodities exerted downside pressure on the prices in the first half of the trading session, however, a sharp fall in rupee, which hit historical low levels, led prices to recover in the second half of the session. The spot as well as the futures settled 3.2% and 1.48% lower respectively on Wednesday. The regulator has withdrawn 10% special cash margin on the long th side in July contract wef. 27 June, 2013 Two major soybean growing states MP and Maharashtra have received above normal rains so far in June. Thus, good monsoon and higher prices earned last year is expected to aid sowing this season. Oilseeds sowing is completed under 8.13 lk ha against normal 3.37 lk ha. Soybean was planted on 1.32 lk ha, against 0.16 lk ha last year. According to the 3rd advance estimates, Soybean output is pegged at 14.14 mn tonnes. IMDs forecasts of normal monsoon have raised hopes of better output next season too. International Markets CBOT soybean gained by 0.59% on Wednesday ahead of the planting intentions data to be released on Friday. Also, estimates of lower soybean stocks as on June 1 supported prices. However, favorable weather capped gains in the far month contracts. Price were on an upward trend since past few weeks as supplies are tight till the new crop arrives in the US and delayed planting will further delay harvesting adding to the already squeezed stocks. According to the latest USDA report, U.S. soybeans were 92 percent planted the lowest for this time of year since 2009, but not far from the five-year U.S. average of 95 percent.
Market Highlights
as on June 26, 2013 % Change Prev day WoW -3.20 -8.14 -1.48 0.59 -0.80 -0.92 -8.10 0.74 -1.46 -1.37
Unit Soybean Spot- NCDEX Soybean- NCDEX July '13 Fut Soybean- CBOT July'13 Fut RM Seed Spot- NCDEX RM Seed- NCDEX July '13 Fut
`/qtl `/qtl
USc/Bsh
`/qtl `/qtl
Source: Reuters
as on June 26, 2013 20-Nov-13 -505.5 -490 3 0 as on June26, 2013 20-Aug-13 34.1 42 0 20-Sep-13 78.1 86 44 0 as on June 25, 2013 Qty in Process 60 0 0 60 as on June 25, 2013 Qty in Process 0 20 60 0 1641 150 10 1881 NCDEX July contract
Outlook
Soybean prices may trade with a negative bias during the intraday on account of higher sowing and above normal monsoon. However, tight supplies in the domestic as well as US markets in the near term coupled with withdrawal of margins may keep sentiments positive.
Rape/mustard Seed
Mustard seed July futures declined further and hit fresh contract lows of ` 3408 on Wednesday amidst higher supplies. Spillover effect from other oilseeds is also seen on the mustard prices. Although Prices gained last week due to lower level demand but, comfortable supplies in Rajasthan, the largest producing belt again pressurized prices. Sowing of this Rabi crop was up by 2.2% at 67.23 lakh ha in 2012-13. Agriculture ministry in its third advance estimates, pegged mustard output at 7.36 mn tn, up by 11.5%.
Outlook
Although overall trend in mustard remain weak on account of higher supplies in the domestic markets, prices may remain sideways during the intraday owing to short coverings.
Technical Levels
Contract Soybean NCDEX July Futures RM Seed NCDEX July Futures Unit `/qtl `/qtl
valid for June 27, 2013 Support 3580-3625 3375-3412 Resistance 3715-3750 3484-3515
Source: Telequote
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Agricultural Commodities
Refined Soy Oil
Refine soy oil July futures extended the losses of the previous session in the first half of the trading session on Wednesday, prices recovered in the later part after rupee hit fresh lows. Ref soy oil July futures as well as spot settled 0.6% and 0.86%lower on Wednesday. Prices that gained significantly in the past one month on the back of weak rupee and Ramazan demand, declined in the last one week amidst good sowing prospects of oilseeds in the domestic markets. India meet 50-55 percent of its edible consumption through imports and thus rupee factor is a major determinant of edible oil prices. As per the data released by the Solvent Extractors' Association of India, imports of vegetable oils, including non-edible oils, rose 40.2% to 917,964 tn in May, after dropping for 3 months, mainly due to surge in palm oil imports. Monthly soy oil imports rose 2.7% as local supplies are almost exhausted before the new planting season for soybean. Edible oil stocks as on June 1, 2013 at various ports were estimated at 6.75 lakh tonnes and about 13 lakh tonnes are in the pipeline.
Market Highlights
% Change Unit `/10 kg `/10 kg USc/ Bushel MYR/Tonne `/10 kg Last 694.75 684.90 46.63 2370 505.30 Prev day -0.86 -0.59 -1.08 -1.25 0.50
Ref Soy oil SpotNCDEX Ref Soy oil- NCDEX July '13 Fut Soybean Oil- CBOTJuly'13 Fut
CPO-Bursa Malaysia June '13 Fut CPO-MCX- June '13 Futures
Source: Reuters
as on June 26, 2013 20-Sep-13 -24.25 -14.4 -7.95 0 as on June 26, 2013
Outlook
Soy oil may trade higher on account of good demand ahead of Ramadan. A weak Rupee may also support an upside in the prices.
Outlook
CPO prices may remain firm in the intraday on account of a weak Rupee along with firmness in the international markets.
Technical Outlook
Contract Soy Oil July NCDEX Futures CPO MCX July Futures Unit `/qtl `/qtl
valid for June 27, 2013 Support 675-681 500-505 Resistance 689-692 512-515
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Agricultural Commodities
Spices
Jeera
After futures corrected yesterday and settled 1.83% lower on account of profit taking coupled higher arrivals in the domestic markets. Prices have gained over the last few sessions on account of good overseas as well as local demand. Currently, about 65-70% of total arrivals have been traded in the mandis. Exports have been reported mainly to Singapore, Europe and Dubai. In the global markets, there is a supply crunch due to the ongoing geopolitical tensions in Syria and Turkey, which has raised supply concerns from these two major exporting countries. Export orders are diverted to India. Production is also expected to decline in Syria and Turkey. Jeera of Indian origin are being offered in the international market at $2,525 tn (FOB Mumbai).
Market Highlights
Unit `/qtl `/qtl `/qtl `/qtl Last 13785 13403 5772 6068 Prev day 0.13 -1.83 1.17 1.27
as on June 26, 2013 % Change WoW 2.49 1.71 3.93 8.59 MoM 1.72 3.22 -3.42 3.83 YoY -1.46 -2.42 56.46 43.72
Jeera Spot- NCDEX Jeera- NCDEX July '13 Fut Turmeric Spot- NCDEX Turmeric- NCDEX July '13 Fut
Source: Reuters
as on June 26, 2013 20-Sep-13 327.2 710 397.5 0 as on June 26, 2013 19-Jul-13 296 0 20-Aug-13 394 98 0 20-Sep-13 474 178 80 0 as on June 25, 2013 Stocks as on Qty in 24th June Process 1007 7426 8433 4991 NCDEX July contract 72 42 114 230
Production of Jeera in 2012-13 is expected around 40-45 lakh bags (55 kgs each), marginally higher than 40 lakh bags last year. Carryover stocks from 2011-12 harvest were around 8-9 lakh bags.
Outlook
Jeera prices are expected to recover from lower levels today as good overseas as well as domestic demand may support prices. However, good supplies may cap sharp gains. Overall trend remains positive for Jeera due to overseas demand, as Syria & Turkey are not supplying which may keep the prices firm.
Turmeric
Turmeric futures traded on a positive note yesterday and settled 1.27% higher on account of good quality arrivals in the spot markets. Also, fresh export enquiries as well as lower arrivals have supported the prices. However, good progress of the monsoon as well as good sowing has capped sharp gains. NCDEX issued a circular whereby the earlier circular regarding modification in the tick size and lot size has been kept in abeyance. The regulator also withdrew special margins on the long side.
Technical Outlook
Jeera NCDEX July Futures Turmeric NCDEX July Futures Unit `/qtl `/qtl
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Agricultural Commodities
Sugar
Sugar prices recovered from lower levels on account of short coverings after prices declined sharply over the last few days. Prices have declined as the government said it not will consider increase in the import duty until September 2013. However, output concerns on the back of drought conditions last year has supported prices at lower levels. The recent rains in the drought affected sugarcane areas in the Southern and Western parts of the country have eased damage concerns thereby exerting downside pressure on the prices. However, good demand ahead of Ramadan as well as concerns about cane output in the coming season due to drought conditions in Maharashtra last year limited the downside. According to the Ministry of Agriculture, Sugarcane has been planted in 44.55 lakh ha as compared to 46.78 lakh ha as drought affected Maharashtra and Karnataka have reported lower area.
Market Highlights
Unit Sugar SpotNCDEX Sugar M- NCDEX July '13 Fut Sugar No 5- LiffeAug'13 Fut Sugar No 11-ICE July '13 Fut `/qtl 3024 `/qtl 517.8 $/tonne 378.00 $/tonne -0.35 0.06 0.67 Last 3054
as on June 26, 2013 % Change Prev. day WoW 0.24 -0.13 -1.37 4.44 0.24 MoM -0.10 0.47 8.64 1.73 YoY 2.37 4.28 -13.58 -19.80
Source: Reuters
Source: Telequote
Outlook
Sugar futures may trade on a mixed note today. Prices may decline as the government will not increase the import duty. Good rains in the cane growing regions may also pressurize prices at higher levels. However, improvement in the international prices coupled with Ramadan demand as well as output concerns this season may support prices at lower levels.
Technical Outlook
Contract Sugar July NCDEX Futures Unit `/qtl
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Agricultural Commodities
Kapas
MCX Cotton settled 1.08% higher on Wednesday supported by a weak Rupee as well as tight supplies. However, higher cotton planting this season along with good monsoon is capping sharp upside in the prices. NCDEX Kapas settled 0.23% lower. With the cotton season nearing its end, arrivals have declined considerably. According to CCI, Cotton arrivals since the beginning of the seaosn (Oct 2012- Sep 2013) is reported at 318.62, down 2.2 percent compared to same period last year.
Market Highlights
Unit `20 kgs `/Bale USc/Lbs Last 1073.5 19580 83.68 92.25
as on June 26, 2013 % Change Prev. day WoW -0.23 0.33 1.08 2.46 -1.66 -2.01 1.77 -2.17 MoM YoY 0.33 #N/A 7.70 21.92 2.78 19.03 2.39 14.88
Source: Reuters
NCDEX Kapas Apr Fut MCX Cotton June Fut ICE Cotton Cot look A Index
Sowing Progress
Cotton planting has been reported at 28.13 lakh ha as against 24.59 lakh ha during the same period last year. Plating is almost complete in North India and sowing in Punjab and Haryana declined marginally. Sowing in the rain fed areas of Southern India has also commenced. Sowing has picked up in Andhra Pradesh as well as Karnataka. Planting in Gujarat is yet to gain momentum.
Stocks as on 23rd June 12300 5900 117900 24300 900 100 161400 NCDEX April contract
Outlook
Cotton is expected to trade with a positive bias today on account fresh export enquiries for cotton and yarn. Weakness in the Indian may also provide support to the domestic prices. Higher cotton planting figures so far in the domestic markets and smooth progress of monsoon may however, cap sharp upside in the prices in the coming weeks.
Technical Outlook
Contract Kapas NCDEX April 14 Fut Cotton MCX July Futures Unit `/20 kgs `/bale
valid for June 27, 2013 Support 1060-1067 19630-19750 Resistance 1080-1086 1990-20110
Source: Telequote
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Agricultural Commodities
Guar Complex
Guar seed as well as Guar gum July Futures settled 1.79% and 2.37% lower respectively on Wednesday due to improvement in the sowing of the guar crop. However, slack supplies as farmers held back stocks on hopes of better prices supported prices at lower levels. Since the resumption of Guarseed and Guar gum contracts on the futures platform, prices are on a downward trend on account of host of factors like bumper summer harvest in Gujarat, smooth monsoon progress and expected higher sowing.
Market Highlights
Unit Guar Seed SpotNCDEX Guar Seed- NCDEX July 13 Fut Guar Gum SpotNCDEX Guar Gum- NCDEX July13 Fut `/qtl 7150 `/qtl 20509 `/qtl 20560 `/qtl -2.37 -4.40 -1.79 Last Prev day 7257 -3.24
as on June 26, 2013 % change WoW -2.76 -6.17 -4.84 -7.93 MoM -16.88 -14.58 -21.24 -19.84 YoY #N/A #N/A #N/A #N/A
Source: Reuters
as on June 26, 2013 20-Aug-13 -1306.65 -1200 0 20-Sep-13 -1456.65 -1350 -150 0 as on June 26, 2013 20-Aug-13 -2868.8 -2920 0 20-Sep-13 -3358.8 -3410 -490 0 as on June 25, 2013 Stocks as on 24thJune 59 81 Qty in Process 0 0
Outlook
Supply side fundamentals remain strong to cater the domestic and overseas demand which may exert downside pressure on the prices at higher levels. Good sowing may also add to the downside pressure. However, a prediction of below normal rains in Northwest India may support prices in the near term. However, it is too early to predict the same as monsoon progress so far is smooth.
Technical Outlook
Contract Guar Seed July (NCDEX) Guar Seed July (MCX) Guar Gum July (NCDEX) Guar Gum July(MCX) Unit `/qtl `/qtl `/qtl `/qtl
valid for June 27, 2013 Support 6880-7010 6870-7000 19800-20200 19770-20160 Resistance 7300-7420 7300-7420 21000-21400 20960-21370
Source: Telequote
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