Agri-Commodities Daily Report

Transcription

1 Content News in Brief Sugar Oilseeds Edible Oils Spices Cotton Agri-Commodity Heat Chart Technical Trend 10-Nov-2016 As on 09-Nov-2016 Commodity Exchange Contract Trend Commodities Daily Weekly Monthly Yearly Kapas CPO Turmeric Cotton Ref Soy Oil Sugar Maize Coriander Soybean Mustard Jeera Cardamom Guar seed GuarGum Mentha Spice Complex Jeera NCDEX Dec Sideways Turmeric NCDEX Dec Up Coriander NCDEX Dec Sideways Cardamom MCX Nov Down Edible Oil Complex Soybean NCDEX Dec Sideways Mustard Seed NCDEX Dec Down Ref Soy Oil NCDEX Dec Sideways CPO MCX Nov Sideways Others Sugar NCDEX Dec Down Kapas NCDEX Apr 17 Up Cotton MCX Nov Sideways Cotton Oilseed Cake NCDEX Dec Up Wheat NCDEX Dec Up MaizeKhrf NCDEX Dec Up Barley NCDEX Dec Up Mentha Oil MCX Dec Down Guar Gum5 NCDEX Dec Down Guar Seed 10 NCDEX Dec Down

2 News in brief SEBI s capital norm may impact commodity-specific bourses SEBI s parameters for multi commodity exchanges in line with stock exchanges might lead to the closure of many commodity specificexchanges. Fulfilling the capital requirement of 100 crore is a difficult task for Commodity Specific Exchanges (CSEs) and even some of the national multi commodity exchanges may not be able to cope with the SEBI parameters, a trade source said. Commodity-specific regional exchanges like IPSTA for Pepper, Rajkot Exchange for Castor and Hapur Exchange for Gur should be considered separately for the parameters to be maintained, Kishor Shamji, former President, IPSTA, told BusinessLine. Trading in commodity-specific exchanges has been affected since 2000, ever since national multi commodity exchanges came into existence. (Source: HBL) Revised estimates put soyabean output higher, at lakh tones In its revised crop projection for kharif 2016, the Soyabean Processors Association of India (SOPA) has put India s soyabean crop at lakh tonnes (lt) about 5 per cent higher than the initial crop estimate of lt. The increase in output is attributed to lower damage and better yield mainly in Madhya Pradesh and Maharashtra. The sowing area is recorded at lakh hectares with over 90 per cent of the area falling in Madhya Pradesh, Maharashtra and Rajasthan. However, the revised crop projections by the industry are still lower than the Agriculture Ministry s estimates. In its first advanced estimates, the Agriculture Ministry had pegged the soyabean cropsize at lakh tonnes, higher than last year s lakh tonnes. (Source: HBL) Hedge funds extend bullish ag spree to longest in two years Hedge funds extended their buying streak in agricultural commodities to the longest in two years, led by appetite for the soy complex which more than offset the biggest sell-down in sugar in nine months. Managed money, a proxy for speculators, lifted its net long position in futures and options in the top 13 US-traded agricultural commodities, from corn to cocoa, by 35,925 contracts in the week to last Tuesday, analysis of data from the Commodity Futures Trading Commission regulator shows. The rise took the overall net long - the extent to which long bets, which profit when values rise, exceed short holdings, which benefit when prices fall to 536,493 lots, the highest since July. (Source: AM) China October soy imports drop nearly 6 pct on year customs China, the world's top soybean buyer, imported 5.21 million tonnes of the oilseed in October, down 5.79 percent year-on-year, customs data showed on Tuesday. The volume was slightly below market forecasts of about 5.4 million tonnes after a relatively high level of imports the month before. It marked the lowest monthly imports since February, when arrivals dropped to less than 5 million tonnes due to the Lunar New Year holiday that month. () Fall in production may push sugar prices up With assembly polls in five states round the corner, both central and state governments will try to keep sugar prices below Rs 40 a kg. But if production is low, particularly in Mahar ashtra while market experts put the output at 5 million tonne, according to Indian sugar mills association (ISMA) figures it could be 6.3 million tonne sugar prices could increase to Rs 50 a kg after the end of crushing season. Market grapevine is that India will import 1-2 million tonne of raw sugar this season to meet the shortfall. While mills in Maharashtra and Karnataka are likely to benefit from rising sugar prices and stagnant cane costs, sugarcane pricing in UP, which is yet to be finalised for sugar year, will be crucial for the sustainability of the UP-based sugar mills profitability, analysts feel. (Source: FC) SEA says India Oct oilmeal export 67,779 tn, up 98% on yr India exported 67,779 tn oilmeal in October, nearly double the quantity it exported a year ago, the Solvent Extractors' Association of India said in its monthly report today. The country exported 34,168 tn of the oilmeal in October last year. However, oilmeal export fell 29% on year to 554,147 tn during Apr-Oct. This was on account of lower availability of oilseeds for crushing, and because domestic prices of soymeal are higher than the prices in the international market, the association said. Export of soymeal from India also declined to 16,665 tn in October against 46,980 tn a year ago, the association said. Higher export of oilmeal in October can be attributed to a significant rise in overseas shipments of mustard meal. In October, the mustard meal exports increased a whopping 670% on year at 23,720 tn, the SEA data showed. (Source: Cogencis) Scanty rains in southern peninsula to cause damage to plantation crops, spices Failure of monsoon rains in the southern peninsula is likely to cause irreparable damage to the plantation crops and spices. The southwest monsoon remaining weak in most of the southern states, coupled with reports that the retreating northeast monsoon is also on the lower side in the initial few days, is a worrying scenario, experts said. Plantation crops like pepper, cardamom, rubber, tea and coffee are highly monsoon-sensitive with production directly dependent on the timing and quantum of rain. While too much of rain damages most of the cash crops, too short a monsoon also leads to lower crop production. (Source: FE) Higher edible oil prices despite record production Edible oilseed production for (kharif and rabi) is forecast to be an all-time high of 35 million tonnes (mt) on account of record soybean production of around 11 mt. Globally, too, the US department of agriculture (USDA), has forecast the total oilseed production to be 548 mt, a record. However, this is not reflected in lower edible oil prices because of acute shortage in palm oil supply, the largest and cheapest edible oil. Last year, El Nino weather effect has, for the first time in 17 years, reversed a rising production trend of palm oil. Stocks have now declined to a five year lows and the impact of improved production will be felt by mid (Source: BS) October 2016 Market Summary - Cotlook International cotton prices moved in a relatively volatile nature during the month. The Cotlook A Index fell to a low point of US cents per lb on October 10, before recovering ground. A rally in New York, which culminated in the A Index registering a high of 80.35, was preceded by the release of USDA s statistical report on October 12. Although the outlook for fundamentals did impact price sentiment, speculative influences remained a factor in the direction of ICE futures. Open interest has remained heavy, reaching an eight-year high late in the period. China s electronic markets have also witnessed sharp price movements, and the differential between the Cotlook A Index and the China Cotton Index has continued to widen. (Source: Cotlook)

3 Sugar Sugar Futures continue to close down for the third successive day on Wednesday due to expectation of sufficient supplies in the country as crushing is commenced in all the sugar growing states including Maharashtra and Gujarat. The most-active December sugar contract closed 0.41% down on to settle at 3,388 per quintal. As per ISMA s first media release, the carryover stock as on 1 st October is pegged at 77 lt and production is estimated at 234 lt in SS. Therefore, total sugar available in the country during SS would be around 311 lt, against the estimated consumption of 255 lt. Sugar production in the country in October the first month of the ongoing sugar season -- dropped sharply by 44% to 1.04 lakh tonnes compared to the same month last year as Maharashtra and Gujarat delayed sugarcane crushing.. During SS, Maharashtra mills delayed their starting so as to get the cane matured further to get better sugar recovery from standing cane. These mills are now expected to start crushing from 5th November, Similarly, Gujarat mills are expected to start this week. Moreover, government is looking to enhance domestic supplies by reduce import duty if the prices domestic market increase. Central government is exploring the option of lowering the 40% import duty on the sweetener in its raw form. Due to droughts, sugar production in Maharashtra is likely to drop nearly 40% to 5 mt in the 2016/17 season started on Oct. 1 compared with a year earlier. Market Highlights - Sugar Unit Last Prev. day WoW MoM YoY Sugar Spot /qtl Sugar M- NCDEX /qtl Dec 16 ICE-Europe Sugar No $/tonne Dec 16 ICE-US Sugar No 11- Mar 17 Usc/lbs Chart Sugar M Daily NSMZ6 Cndl, NSMZ6, , 3,399.00, 3,405.00, 3,360.00, 3, , (-0.21%) NCDEX Dec 16 contract (BOM) 3,600 3,500 3, ,400 Sugar Spread Matrix Closing 20-Oct Dec Mar-17 Spot Dec Mar May Global Updates ICE raw sugar futures turned higher on Wednesday as the Brazilian real BRL= fell as Donald Trump's victory in the U.S. presidential elections. A weaker real is seen as bearish for sugar, making prices more attractive in local currency terms in the world's top exporter. Moreover, there is no change in fundamentals in sugar and market participants are still looking at lower supplies than demand in the coming season. As per CFTC data, speculators reduced their bullish sugar stance for a fifth straight week on ICE Futures U.S. by 34,784 contracts to 224,903 in the week to Nov. 1. However, according to market participants, fund selling during the recent decline had only put a modest dent in the speculators' large position and they remain heavily net long. We expect sugar prices to trade sideways to lower as new season crushing about to start in Maharashtra and Gujarat. Moreover, report of decreasing import taxes for sugar may be negative for prices. Reports of lower sugar production in October may have support prices. Government has extended stock limit on sugar for next six months to keep the supply sufficient. Technical Contract Unit Support Resistance Sugar NCDEX Dec 16 /qtl

4 Soybean Soybean futures continue to close down due to expected higher supplies of new season crop as SOPA has raised the estimate for (Jul-Jun) soybean output in the country to 115 lt from 109 lt estimated earlier. The most-active Nov 16 delivery contract closed 1.44% down to settle at Rs. 2,952 per quintal. The spot prices have dropped below the MSP in some places in States of MP, Maharashtra and Gujarat. The harvesting of soybean in full swing and supplies are strong in the physical market. Global update CBOT soybean fell about 2% on Wednesday, declining for the first time in five days, after the U.S. Department of Agriculture estimated a larger U.S. crop than analysts anticipated. USDA, in a monthly supply and demand outlook, forecast U.S. soybean production this year at mt, up from the average analyst estimate of mt. USDA said yields averaged a record-high of 52.5 bushels per acre, above analyst estimates of 52.0 bpa. The USDA s weekly export sales, net sales of 2.5 mt for 2016/2017--a marketing-year high--were up 28% from the previous week and 34% from the prior 4-week average. U.S. soy harvest was 87% complete as on 30 Oct, ahead of the five-year average of 85 percent but in line with an average of trade expectations. We expect Soybean prices to trade sideways due to higher supplies in the physical market from new season crop. Market participants have realize that soybean prices have bottom out and will be traded in a tight range during the peak arrival season during Nov - Dec. Rape/mustard Seed Mustard seed futures closed with a biggest fall in a single day for the November delivery contract on Wednesday due to profit taking by the market participants. Rapid start to rabi sowing of mustard seed in Rajasthan also pressurize the prices. The Nov 16 contract ended 2.20% down settle at Rs. 4,614/quintal. As per agriculture ministry data, all-india acreage of mustard in the ongoing rabi season was nearly 27.3 lh as on Nov 04 up 80% from a year ago. The Rajasthan, planted 16 lakh ha, up 39% from a year ago similarly acreage sharply increase in Uttar Pradesh, where mustard is sown in 7.15 lh, up 321% from a year ago. In MP, the oilseed was sown over 69,000 ha, up 86.5% from 37,000 ha sown a year ago. Global updates As per the latest USDA monthly report, global rapeseed production for 2016/17 is forecast higher at mt in Nov. compared to 67.6 mt in October and down 3.4% from 2015/16. Larger crops are expected from Canada and India compared to previous year crop while EU and China will have lower crop by more than 9.5%. We expect mustard seed may trade down on technical selling at higher levels. Pickup in the physical demand and anticipation of increase in MSP declaration may be positive for price but good progress in sowing may be negative for prices. Technical Levels Contract Unit Support Resistance Market Highlights - Oilseeds Unit Last Prev day WoW MoM YoY Soybean Spot- NCDEX /qtl Soybean- NCDEX Nov 16 /qtl Soybean-CBOT Jan 17 USc/Bsh RM Seed Spot- NCDEX /qtl RM Seed- NCDEX Nov 16 /qtl Chart Soybean Daily NSBX6 Cndl, NSBX6, , 2,967.00, 2,971.00, 2,917.00, 2,951.00, , (-1.44%) Soybean Spread Matrix Spot Nov Dec Jan Chart Mustard (BOM) Daily NRSX6 Cndl, NRSX6, , 4,737.00, 4,737.00, 4,580.00, 4,614.00, N/A, N/A 3,200 3,100 3,000 2, , (BOM) 15 4,800 4,700 4, ,600 4,500 Mustard Seed Spread Matrix Spot Nov Dec Jan Soybean NCDEX Dec 16 /qtl RM Seed NCDEX Dec 16 /qtl

5 Refined Soy Oil Refined soy oil futures closed flat on Wednesday on a volatile trade tracking firm edible oil market in domestic and sufficient supplies. The most active Ref Soy oil Nov 16 expiry contract closed 0.04% higher to settle at Rs per quintal last week. Though the tariff value of crude soyoil were raised by $8 per tn to $853 which was the third increase in two month by the government the domestic prices were traded rangebound on steady demand and good stocks. Since January 2016, the base import prices for crude soy oil increase by more than 20% from $720 per tonnes. As per SEA data, India September crude soyoil import 469,564 tonnes, an increase of 46 % compared to 321,062 tonnes year ago while, India Nov-Sep crude soyoil import 3.96 mt vs 2.58 mt an increase of 53% y/y for the current oil year (Nov-Oct). Soy oil futures may trade sideways on anticipation of steady physical demand and sufficient supplies. Reports of higher imports during current oil year may keep the stock sufficient in the domestic market in the domestic market may keep prices in check.. Crude Palm Oil (CPO) CPO Futures closed higher on tracking international prices but the prices traded in narrow range since last week due to sufficient supplies of CPO in the domestic market. The most active CPO Nov 16 expiry closed 0.33% higher to settle at Rs per 10 kg. According to USDA report, ending stocks of palm oil dropped by 30% to 381,000 tonnes compared to previous month estimates. The tariff value of CPO increase by 2.6% to $723 per tones for the 1st half of Nov compared to previous fortnight did not have any affect in the domestic prices due to good supplies in the pipelines. As per SEA data, imports of RBD palmolein increase to 2.40 mt vs 1.43 mt for Nov-Sep period and India's palm oil imports in 2016/17 are likely by rise 9% to 9.24mt from a year earlier, as a growing population and higher income levels drive up edible oil consumption. Malaysian palm oil futures closed higher on Wednesday due to concerns of declining output ahead of monsoon rains. Moreover, implement higher biodiesel mandates for the transportation and industrial sector from Dec. 1, supported prices as there will be increase demand for palm oil as it is used as a component of biodiesel. However, October inventories are seen rising 8.8% from September to 1.68 mt, its strongest monthly gain since August 2015 and October production is seen rising marginally by 1.1% to 1.73 mt from the previous month. We expect CPO to trade sideways on sufficient stocks and steady demand from traders. Moreover, low import taxes may encourage cheaper edible oil imports in the domestic market which may pressurize prices. Technical Market Highlights- Edible oils Ref Soyoil Spot - Mumbai Ref Soy oil- NCDEX Nov 16 Soybean Oil- CBOT- Dec 16 CPO-Bursa Malaysia - Jan 17 CPO- MCX Nov 16 Chart Ref Soy Oil Unit Last Prev day WoW MoM YoY /10 kg /10 kg USc/lb MYR/Tn /10 kg Daily NSOX (BOM) Cndl, NSOX6, , , , , , N/A, N/A 10B Refined Soy Oil Spread Matrix Spot Nov Dec Jan Chart Crude Palm Oil Daily MCAX6 Cndl, MCAX6, , , , , , +1.70, (+0.33%) MCX Nov 16 contract CPO Spread Matrix Closing 30-Nov Dec Jan Nov Dec Jan (BOM) 10B Contract Unit Support Resistance Ref Soy Oil NCDEX Dec 16 /qtl CPO MCX Nov 16 /qtl

6 Spices Jeera Jeera futures continue to correct for second consecutive day on Wednesday tracking downtrend in spot prices as physical demand slowed down due to higher prices. NCDEX Nov 16 Jeera closed 2.34% down to close at Rs 17,320 per quintal. After two days of corrections the price trend on the chart looks negative for short term but positive on long term on reports of dwindling physical supplies and slow start to the new season sowing in Gujarat and Rajasthan. The stock position in NCDEX warehouse is at lower level compared to last year stocks. As on 06 November 2016, new Jeera stock position at NCDEX approved warehouses in Jodhpur is 57 MT and Unjha 1325 MT. Last year stocks were 1298 tonnes in Jodhpur and 5291 tonnes in Unjha. According Department of commerce data, the exports of Jeera in the first five months (Apr-Aug) of is recorded at 60,907 tonnes, higher by 62% compared to last year same period. The exports of jeera during August 2016 increase 65% m/m to 9,003 tonnes while there is also increase exports y/y by 65.7%. We expect Jeera futures to trade sideways on expectation of profit booking at higher levels. However, slow start to rabi sowing and lower stocks with the stockists may support prices if demand increases for exports. Reports of increase in domestic and exports demand may support prices. Turmeric Turmeric futures recovered on Wednesday due to technical bounce from the lower levels. There are reports of good production from new season crops pressurize the prices earlier. Turmeric Nov 16 delivery contract on NCDEX closed 0.31% higher to settle at Rs 7,208 per quintal. Currently the supplies are for medium and poor quality during the rest of the season till new crop arrived which may keep the prices sideways to higher. It is expected that the demand from the industrial buyers will support the prices just before new season harvesting. On the export front, country exported about 51,147 tonnes of turmeric during April-August period up by 32% compared last year, as government data. Expectations of increasing production in coming harvesting season and lowering export demand in recent months are putting pressure on turmeric prices at higher levels. Turmeric acreage in Telangana and Andhra Pradesh was higher this year as compared last year. We expect turmeric may trade higher due to expectation of improved buying by the market participants at lower levels. Recently, the upcountry buyers are interested to buy during the end of the season. However, reports of good production in coming season may pressurize prices at higher levels. Technical Market Highlights - Spices Unit Last Prev WoW MoM YoY Jeera Spot- NCDEX /qt Jeera- NCDEX Nov 16 /qt Turmeric Spot- NCDEX /qt Turmeric- NCDEX Nov 16 /qt Technical Chart Jeera Daily NJEX6 Jeera Spread Matrix Spot Nov Dec Jan Chart Turmeric (BOM) Cndl, NJEX6, , 17,385.00, 17,665.00, 17,030.00, 17,320.00, N/A, N/A Daily NTMX6 Cndl, NTMX6, , 7,044.00, 7,316.00, 7,044.00, 7,208.00, N/A, N/A Turmeric Spread Matrix Spot Nov Dec Jan ,000 17,500 17, ,000 16,500 16, (BOM) ,400 7, ,200 7,000 Unit Support Resistance Jeera NCDEX Dec 16 /qtl Turmeric NCDEX Dec 16 /qtl

7 Kapas Cotton complex prices closed higher for the second consecutive day due to expectation of improved demand from mills and ginners. NCDEX Kapas for Apr 17 closed 0.72% higher while MCX Oct 16 cotton closed 0.16% higher. The arrivals have begun in Gujarat, Madhya Pradesh and are expected to pick in Haryana where the ginners have called off their strike. Industry expects the cotton output to surpass million bales this season. Despite less area under cotton, good monsoon expected to rescue the production. industry are estimating 355 lakh bales (170 kg each) for the season (Oct-Sep), as against the government s first estimate of lakh bales. As per CAB, India's cotton output is seen at 351 lakh bales (1 bale = 170 kg), up 4% from 338 lakh bales a year ago due to good monsoon and minimum pest infestation. Cotton area is down by 11.6% at lh against 116 lh last year. Domestic update For the current season, cotton arrivals in the country are pegged at 21 lakh bales as on 2 nd November, In October, Punjab, Haryana and Rajasthan together account for at 5.82 lakh bales while Gujarat and Maharashtra added 7.3 lakh bales. Madhya Pradesh too seen about 1.82 lakh bales arrivals. In South India, about 3.36 lakh bales arrivals have been recorded. According to USDA, production in India is forecast at 26.5 million bales (5.77 mt), up marginally from 2015/16. A rebound in India s yield is expected to offset a 10-percent reduction in cotton area this season. Global Cotton Updates ICE Cotton futures down on Wednesday after the U.S. Department of Agriculture raised its projections by 0.57% to 22.5 mt compared to previous month forecast. Moreover, global and U.S. inventories by the end of July 2017 will be higher than previously expected due to higher production outlooks and also reduced its expectations for world demand. The USDA weekly crop progress showed 56% of U.S. cotton crops were harvested, up from 46% a week ago and lower than 60% five years average. As per CFTC data, ICE cotton speculators cut net long position by 1,365 contracts to 76,934 in the week to Nov 01. USDA weekly export sales data showed net upland sales totaled 160,400 running bales (RB) of cotton for the week ended Oct. 27, up 24% from the previous week. Exports were down 25%, however, from the prior 4-week average. Market Highlights- Cotton Unit Last Prev. day WoW MoM YoY NCDEX Kapas Apr kgs MCX Cotton Nov 16 /Bale ICE Cotton Dec 16 USc/Lbs Cotton ZCE Yuan/t Chart - Kapas Chart - Cotton NCDEX Apr 17 contract Daily NKKJ (BOM) Cndl, NKKJ7, , , , , , N/A, N/A B MCX Nov 16 contract Daily MCOTX (BOM) Cndl, MCOTX6, , 18,250.00, 18,490.00, 18,250.00, 18,460.00, , (+0.22%) 19,500 Cotton Spread Matrix Closing 30-Nov Dec Jan Nov Dec Jan ,200 18,900 18,600 18, ,300 We expect cotton prices may trade sideways to higher due to improved supplies from new season crop pressurized prices. Moreover, textile mills have slow down the purchases of cotton on anticipation of lower prices during peak arrivals in December and January. The demand for the new season crop and late harvesting in some regions of Maharashtra and Gujarat may support prices. Technical Contract Unit Support Resistance Kapas NCDEX April 17 /20 kgs Cotton MCX Nov 16 /bale

8 Prepared By Anuj Gupta Head Technical Research (Commodity & Currency) (011) Ritesh Kumar Sahu Research Analyst Agri-Commodities (022) (Ext 6165) Angel Commodities Broking Pvt. Ltd. Registered Office: G-1, Ackruti Trade Centre, Rd. No. 7, MIDC, Andheri (E), Mumbai Corporate Office: 6th Floor, Ackruti Star, MIDC, Andheri (E), Mumbai Tel: (022) MCX Member ID: / FMC Regn No: MCX / TCM / CORP / 0037 NCDEX: Member ID / FMC Regn No: NCDEX / TCM / CORP / 0302 Disclaimer: The information and opinions contained in the document have been compiled from sources believed to be reliable. The company does not warrant its accuracy, completeness and correctness. The document is not, and should not be construed as an offer to sell or solicitation to buy any commodities. This document may not be reproduced, distributed or published, in whole or in part, by any recipient hereof for any purpose without prior permission from Angel Commodities Broking (P) Ltd. Your feedback is appreciated on commodities@angelbroking.com