Agri-Commodities Daily Report

Transcription

1 Content News in Brief Sugar Oilseeds Edible Oils Spices Cotton Agri-Commodity Heat Chart Technical Trend 16-Dec-2016 As on 15-Dec-2016 Commodity Exchange Contract Trend Commodities Daily Weekly Monthly Yearly CPO - MCX Ref Soy Oil Jeera GuarGum Kapas Guar seed Cotton-MCX Mustard Soybean Maize Sugar Mentha-MCX Coriander Turmeric Cardamom- MCX Spice Complex Jeera NCDEX Jan Sideways Turmeric NCDEX Apr Down Coriander NCDEX Jan Down Cardamom MCX Jan Down Edible Oil Complex Soybean NCDEX Jan Down Mustard Seed NCDEX Jan Down Ref Soy Oil NCDEX Jan Sideways CPO MCX Dec Up Others Sugar NCDEX Mar Sideways Kapas NCDEX Apr 17 Up Cotton MCX Dec Up Cotton Oilseed Cake NCDEX Jan Down Wheat NCDEX Jan Up MaizeKhrf NCDEX Jan Up Barley NCDEX Jan Up Mentha Oil MCX Dec Down Guar Gum5 NCDEX Jan Sideways Guar Seed 10 NCDEX Jan Sideways

2 News in brief Churn in Bay too feeble to give peninsula any major rain gains Three days after cyclone Vardah made an eventful landfall, the South Peninsula finds itself asking for more rainfall to bridge the huge deficit. With only 15 days more left in the North-East monsoon season, there is not much to expect either, though models point to a feeble churn in the Gulf of Siam (Thailand), which lies next to the Bay of Bengal. The India Met Department (IMD) too located an upper air cyclonic circulation in the area but there is no guarantee it would produce a low-pressure area, as was the case with Vardah. Global models have kept up a watch and in fact go on to predict that the churn in the Gulf of Siam would get transmitted into the Andaman Sea and the adjoining Bay of Bengal over the next two days. The Canadian Meteorological Centre is the most optimistic pointing to a well-endowed circulation travelling the distance from the Andaman Sea to Sri Lanka, adjoining south Tamil Nadu and Kerala. (Source: HBL) UP sugar mills expect higher output this year Sugar mills in Uttar Pradesh are expecting higher recovery from cane this year. Average recovery of sugar was a record per cent last year. This year, in some cane blocks, it is reportedly percentage points more, though almost similar to last year in the others. The industry, therefore, estimates average increase in recovery by 0.5 percentage points. With liquidity getting easier day by day (after the initial demonetisation upset) and the price remaining elevated, we can certainly expect profitability for UP mills to be higher this year, said Deepak Guptara, secretary, Uttar Pradesh Sugar Mills Association. The Indian Sugar Mills Association estimates output in UP at 7.66 million tonnes for crushing season , from 6.84 mt the previous year. A second set of satellite images reveals this year s cane sowing as almost similar to last year at 2.31 million hectares. (Source: BS) Brazil center-south produces 1.13 mln tns of sugar in late Nov Brazil's main center-south cane belt produced 1.13 million tonnes of sugar in the second half of November compared with 1.37 million tonnes in the previous two-week period, as mills approached the end of the 2016/17 crushing season, sugar industry group Unica said on Wednesday. Its data showed mills crushed million tonnes of cane late in November versus million tonnes earlier in the month. () Palm oil imports down 8.27% in November Palm oil imports fell by 8.27 per cent to 8,01,311 tonnes in November this year, on expected bumper oilseeds crop and better domestic edible oils supply, industry body Solvent Extractors Association (SEA) said today. India, the world's leading vegetable oil buyer, had imported 8,73,592 tonnes palm oil in November Country's total vegetable oil imports fell by 12 per cent to lakh tonnes in November this year, from lakh tonnes in the year-earlier period. Import has reduced due to expected bumper kharif oilseeds crop and better domestic availability of edible oils. Also, currency crunch due to demonetisation has slow down the purchases by end consumers also affected the demand and import to some extent. (Source: PTI) Traders see India Apr-Dec jeera exports up 30% on year at 88,000 tn India's jeera exports are likely to rise 30% to 88,000 tn in Apr-Dec, because of robust demand from overseas market and negligible stocks in other exporting nations, exporters said. The country had exported 67,300 tn of the commodity in the same period last year, according to Spices Board India. Traders pegged jeera exports in November at 8,000-10,000 tn, and in December at around 5,000 tn. Indian-origin jeera is being sold at around $2,450-$2,550 per tn, free on board, in international markets. "Continuous shipments to Bangladesh and China have given a boost to exports of the spice," said Vijay Joshi, proprietor of Unjha-based Vijay Exim. Unjha is a key market for the spice. Joshi said that Bangladesh is the major export destination for the spice and contributes nearly 70% of the total overseas shipments. (Source-Cogencis) India's soymeal exports to hit 3-yr high as soybean output jumps India's soymeal exports in 2016/17 are likely to jump to three-year highs as a sharp price correction due to a rebound in soybean production makes overseas sales competitive, said industry officials. Higher exports from India could trim shipments of South American soymeal into Asia, and also shore up local soybean prices, which fell below a governmentfixed support level in physical markets recently. () Global Cotton Stocks Decline Further in 2016/17 World cotton stocks are forecast to decline 8 percent (7.7 million bales) in 2016/17 to 89.1 million bales, the lowest in 5 years (fig. 4). Despite the considerable decrease from 2014/15 s peak of million bales, global ending stocks remain at relatively high levels as excess supplies that have been stored in China s national reserve are reduced. In 2016/17, China s total ending stocks are projected at 47.8 million bales, compared with 66.9 million bales just 2 years ago, or an estimated 54 percent of global stocks at season s end. China has announced that reserve sales would begin again in March 2017 in an effort to reduce the excess supplies further. (Source: USDA) Sugar dives into bear market, on ideas of world output surge New York-traded raw sugar futures for March delivery tumbled by 3.4% to settle at cents a pound a five-month closing low for a spot contract. The drop took to 22% the drop in sugar prices from an early- October high so meeting both of the usual criteria for signalling a bear market. That is, a drop of more than 20%, over at least two months. The latest plunge came despite some reassurance by Rabobank that market dynamics, including "the prospect of continuing tight market conditions in the immediate future", should prevent "the recent decline in sugar prices from becoming a rout". Still, the bank cut its estimate of the world sugar production deficit in , and highlighted a "preliminary consensus" in the market of output balancing, or potentially exceeding, demand next season. (Source: AM) Sucden sees small global sugar surplus, record crop in 2017/18 Sugar production may rise to a record level in 2017/18 leading to a small global surplus following two deficit seasons, commodity trader Groupe Sucres et Denrees said on Tuesday. "It is still early and highly uncertain to discuss 2017/18. It seems, however, that (except in CS Brazil) many key crops are on course for a decent increase, particularly India," Sucden said in a quarterly report. (Source- Reuters) GAPKI says Indonesia Oct palm oil exports 2.54 mln tn, up 34% MoM Indonesia's palm oil exports surged 34% month on month to 2.54 mln tn in October due to strong increase in production and global demand, Fadhil Hasan, executive director of Indonesia Palm Oil Association or GAPKI, said in a statement today. Hasan said palm oil exports to West Asian countries, African countries, and Bangladesh soared 147%, 154% and 117%, respectively. (Source: Cogencis)

3 Sugar Sugar Futures fell on Thursday due to profit booking from higher levels as market is expecting production estimate by the mills till 15 th Dec. However, there is good steady demand from the market participants on reports of slowing production due to cane scarcity in Maharashtra. The most-active March sugar contract closed 0.52% lower to settle at 3,662 per quintal. The country is likely to produce 23.4 mt sugar in 2016/17, down about 7% from a year earlier as back-to-back droughts ravaged cane crops in the top producing western state of Maharashtra. Sugar production in India has increased marginally this season due to early crushing in states like Uttar Pradesh and Karnataka. As per ISMA, Indian sugar mills produced 2.74 mt of sugar between Oct. 1 and November. 30, up 17% compared to last year same period. During SS, the states of Maharashtra and Gujarat have produced lower sugar as compared to last year till the end of November 30 while Uttar Pradesh and Karnataka produce more sugar than the last year. The sugar dispatched from sugar mills in first month of current season i.e. October 2016, was lt as compared to lt dispatched in October 2015, last year, down 2.35 lt. 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. Global Updates ICE raw sugar bounced back Thursday after a five-day losing streak, as some buyers showed up after a steep drop in sugar prices. Sugar's gains were also supported by firmer oil prices, as higher oil prices tend to encourage sugar mills to switch cane production toward ethanol. Market Highlights - Sugar Unit Last Prev. day WoW MoM YoY Sugar Spot /qtl Sugar M- NCDEX /qtl Mar 17 ICE-Europe Sugar No $/tonne Mar 17 ICE-US Sugar No 11- Mar 17 Usc/lbs Chart Sugar M Daily NSMH7 Cndl, NSMH7, , 3,650.00, 3,675.00, 3,650.00, 3,662.00, NCDEX Mar 17 contract (BOM) 3,700 3, ,600 3,500 Sugar Spread Matrix Closing 20-Dec Mar May-17 Spot Dec Mar May The recent drop in sugar prices was caused by an absence of fresh bullish news that could further support the sugar rally and some trading houses began to predict a global surplus in sugar market for the next season, due to record production. As per, the International Sugar Organization, world sugar production and demand will come back into balance in , ending the run of deficits which has left inventories at a "critically low level" in the current season. We expect sugar prices to trade sideways on anticipation of cane scarcity in Maharashtra but production in UP is going to be good this season. However, there are also reports of easing supplies in the coming months as crushing season is going on in all the sugarcane growing states. Government has extended stock limit on sugar till end of the crushing season to keep the supply sufficient. Technical Contract Unit Support Resistance Sugar NCDEX Mar 17 /qtl

4 Soybean Soybean futures closed higher on Wednesday as market participants buy soybean at lower levels. However, increase in supplies in December and January capped further gains. The most-active Jan 17 delivery contract closed 0.68% lower to settle at Rs. 3,090 per quintal. There is an expectation that the arrivals of soybean in the domestic market keeping the supplies more than the demand. For India, USDA estimates 2016/17 soybean production 1.8 mt higher this month to 11.5 mt based on reports of better than expected yields. As a consequence, Indian soybean meal exports in 2016/17 could recover to 1.8 mt. Global update CBOT soybean prices gain on Thursday amid good export demand for the Soybean. Old-crop soybean export sales also topped trade forecasts at 2 million tonnes, while new-crop sales were at the high end of a range of trade estimates at 396,500 tonnes. It was the largest week of sales in six weeks. As per USDA report, world soybean production raised by 1.9 mt this month to 338 mt compared to 336.1mt last month on higher projected yields for India and Canada. Last year production was mt. World ending stocks increase to 82.8 mt this month Vs 81.5 last month and 77.2 mt last year. We expect Soybean prices to trade sideways to down on improving arrivals in the physical market. Moreover, low level buying by the market participants coupled with good crushing demand from the mills may support prices from lower levels. Soybean prices may trade in a tight range during the peak arrival season during Dec. Rape/mustard Seed Mustard seed futures traded down on Thursday as the sowing progress is weighing on the prices. However the prices may get support due to winter demand. The Jan 17 contract ended 0.17% down to settle at Rs. 4,564/quintal. As per agriculture ministry data, Country s mustard acreage in the ongoing rabi season touched 64.2 lakh hectares (lh) as on Dec 09 up 12.04% from a year ago. The sowing operations were not affected much, as farmers had already bought the seeds. Rajasthan, the top mustard producing state, planted 27.4 lakh ha, up 17% from a year ago similarly acreage under mustard increase by 10% in Uttar Pradesh to 11.6 lh. In MP, mustard is sown in 6.80 lh, up 12% compared to last year. Govt increases mustard MSP by 350 rupees/100 kg to 3,700 rupees for FY16-17 which includes bonus of Rs.100 / quintals. We expect mustard seed to trade sideways to down due to good start to rabi sowing in Rajasthan and Gujarat. There is dwindling supplies and good demand in the physical market which may support prices at lower levels. Technical Levels Contract Unit Support Resistance Market Highlights - Oilseeds Unit Last Prev day WoW MoM YoY Soybean Spot- NCDEX /qtl Soybean- NCDEX Jan 17 /qtl Soybean-CBOT Mar 17 USc/Bsh RM Seed Spot- NCDEX /qtl RM Seed- NCDEX Jan 17 /qtl Chart Soybean Daily NSBF7 Cndl, NSBF7, , 3,100.00, 3,105.00, 3,075.00, 3, Soybean Spread Matrix Closing 20-Dec Jan Feb-17 Spot Dec Jan Feb Chart Mustard (BOM) Daily NRSF7 Cndl, NRSF7, , 4,576.00, 4,579.00, 4,552.00, 4, ,250 3,200 3,150 3,100 3, , (BOM) 4,800 4,700 4,600 4, ,500 4,400 Mustard Seed Spread Matrix Closing 20-Dec Jan Apr-17 Spot Dec Jan Apr Soybean NCDEX Jan 17 /qtl RM Seed NCDEX Jan 17 /qtl

5 Refined Soy Oil Refined soy oil futures continue to trade higher on Thursday tracking higher international prices and steep increase in tariff prices by the government. The most active Ref Soy oil Jan 17 expiry contract closed 0.58% higher to settle at Rs /10kg. The tariff value of crude soyoil was raised by $42 per tn to $912 which was the sixth increase in three month by the government. The tariff value of soy oil has been increase by about 21.3% since mid july. As per SEA data, India import of soybean oil declined to 1,64,286 tonnes in November from 2,56,836 tonnes in the year-ago period while, India s 2015/16 crude soyoil import 4.23 mt vs 2.99 mt an increase of 41% y/y for the current oil year (Nov-Oct). Country's total vegetable oil imports fell by 12% to lakh tonnes in November 2016, from lakh tonnes in the year-earlier period. Soy oil futures may trade sideways as the soybean prices in the country at lower levels which encourages crushing by the local oil mills. However, increase tariff and firm international prices may support prices. Crude Palm Oil (CPO) CPO Futures trade on positive note tracking international prices and increase in tariff value by the government. The most active CPO Dec 16 expiry closed 0.41% higher to settle at Rs per 10 kg. On 15-Dec-16, the tariff value of CPO increase by $16 to $780/tonne for the 2nd half of Dec compared to previous fortnight. This is fourth straight increase but still lower than the September tariff price. In domestic market, the prices are following the international market as country is depending on the imports. As per SEA data, Palm oil imports fell by 8.27% to 8,01,311 tonnes in November this year, on expected bumper oilseeds crop and better domestic edible oils supply,. As per USDA, the imports in 2016/17 will be higher by 14% to 10 mt and consumption too increases by 11% in India. Malaysian palm oil futures rose to the highest in 4-1/2-years on Thursday evening, charting a third straight session of gains on a weaker ringgit and tight supplies. The ringgit, palm's currency of trade, fell 0.4 percent to reach per U.S. dollar at noon, its weakest in two weeks. A weaker ringgit makes palm oil cheaper for holders of foreign currencies. Tight supplies in the market also contributed to the rise in prices. The November data showed a sharper-than-expected decline in production, down 6.1% to 1.57 mt, while inventories rose 5.1% to 1.66 mt. Exports fell 4..2% to 1.37 mt We expect CPO to trade sideways to higher due to increase in tariff prices and higher international prices. However, there is sufficient supplies and steady demand in the domestic market. Market Highlights- Edible oils Ref Soyoil Spot - Mumbai Ref Soy oil- NCDEX Jan 17 Soybean Oil- CBOT- Jan 17 CPO-Bursa Malaysia - Feb 17 CPO- MCX Dec 16 Chart Ref Soy Oil Unit Last Prev day WoW MoM YoY /10 kg /10 kg USc/lb MYR/Tn /10 kg Daily NSOF (BOM) Cndl, NSOF7, , , , , , 10B Refined Soy Oil Spread Matrix Closing 20-Dec Jan Feb-17 Spot Dec Jan Feb Chart Crude Palm Oil MCX Dec 16 contract Daily MCAZ (BOM) Cndl, MCAZ6, , , , , , B CPO Spread Matrix Closing 30-Dec Jan Feb Dec Jan Feb Technical Contract Unit Support Resistance Ref Soy Oil NCDEX Jan 17 /qtl CPO MCX Jan 17 /qtl

6 Spices Jeera Jeera futures close higher on Thursday tracking good demand in the physical market. Dwindled supplies and good demand for exports supported the jeera prices. NCDEX Jan 17 Jeera closed 0.57% higher to close at Rs 17,725 per quintal. As per traders, India's jeera exports are likely to rise 30% to 88,000 tn in Apr-Dec, because of robust demand from overseas market and negligible stocks in other exporting nations. The progress of Jeera sowing in Gujarat is good. As on 12-Dec-16, Gujarat farmers have planted jeera in 2, hectares, up by 13.8% compared to last year acreage of 1,99,200 hectares same period. The stock position in NCDEX warehouse as on 13-Dec-2016, new Jeera stock position at NCDEX approved warehouses in Jodhpur and Unjha is totaled at 173 tonnes while it was 140 tonnes last week. Last year stocks were about 4,840 tonnes. According Department of commerce data, the exports of Jeera in the first six months (Apr-Sep) of is recorded at 70,809 tonnes, higher by 51% compared to same period last year. The exports of jeera during September 2016 down 26.3% m/m to 7,012 tonnes while it also down y/y by 8.84%. We expect Jeera futures to trade sideways on expectation of good demand in the physical market as supplies have been lower. However, the reports good sowing progress and lower demand at higher levels may be negative for the prices. Turmeric Turmeric futures closed down on Thursday as damage to the turmeric crop in recent rains is not significant and expected a good crop next season. Turmeric Jan 17 delivery contract on NCDEX closed lower by 1.97% to settle at Rs 7,048 per quintal. The stock positions of Turmeric in the Exchange warehouses in the current season are only stock at Sangali (1928 tonnes as on 13-Dec-16) while last year the stocks were stored in Duggirala, Erode and Nizamabad too and recorded about 4446 tonnes. On the export front, country exported about 51,147 tonnes of turmeric during April-September period, up by 27% to 58,233 tonnes compared last year, as per 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 to trade sideways to down due to good production estimates as recent rains have not affected the standing crop. Moreover, good upcountry demand and dwindling supplies in the physical market just before the harvesting season begins may support prices. Technical Market Highlights - Spices Unit Last Prev WoW MoM YoY Jeera Spot- NCDEX /qt Jeera- NCDEX Jan 17 /qt Turmeric Spot- NCDEX /qt Turmeric- NCDEX Jan 17 /qt Technical Chart Jeera Daily NJEF7 Jeera Spread Matrix Closing 20-Dec Jan Mar-17 Spot Dec Jan Mar Chart Turmeric (BOM) Cndl, NJEF7, , 17,570.00, 17,770.00, 17,500.00, 17,725.00, Daily NTMJ7 Cndl, NTMJ7, , 7,200.00, 7,200.00, 7,048.00, 7,048.00, Turmeric Spread Matrix Closing 20-Dec Jan Jul-17 Spot Dec Apr Jul ,000 17, ,500 17,000 16,500 16, (BOM) Oct 16 November 2016 December ,200 7, ,000 6,800 6,600 Unit Support Resistance Jeera NCDEX Jan 17 /qtl Turmeric NCDEX Apr 17 /qtl

7 Kapas Cotton complex traded steady due to good demand for the new season crops from ginners and textile industries coupled with pick up in arrivals in the physical market. NCDEX Kapas for Apr 17 closed 0.16% higher while MCX Dec 16 cotton closed 0.10% lower. As per latest release by CAI, the total supplies of cotton in the domestic market during 2016/17 will be lower at 408 lakh bales compared to 427 lakh bales as compared to last year supplies due less carry over stock and imports. For the current season, cotton arrivals in the country are pegged at lakh bales (lb) as on 27 November, As per Agmarknet data, during November about 34 lakh bales has arrived in the country. As per USDA monthly report, for India, the 2016/17 crop is forecast at 27.0 million bales, up 2 percent from 2015/16, despite a 12-percent reduction in area as farmers looked to alternatives in 2016/17. The cotton mill use is projected at million bales, 500,000 bales below 2015/16 and a 3-year low while the stocks are projected at 11.8 million bales, 8 percent higher than a year ago, accounting for 13 percent of global stocks. On the trade front, 2016/17 export forecast is 5.3 million bales ( 170 kg bales)or / 914,000 mt. Recently, CAI estimated 356 lakh bales (170 kg each) for the season (Oct-Sep), as against the government s first estimate of lakh bales. Cotton area is down by 11.6% at lh against 116 lh last year. Global Cotton Updates ICE Cotton futures edged higher for the third time in four sessions, supported by strong U.S. exports sales data amid a surging dollar. Export data from the U.S. Department of Agriculture showed net upland sales of 311,700 running bales of cotton for the week ended Dec. 8, up 16 percent from the prior four-week average. The data from the Commodity Futures Trading Commission (CFTC) showed that managed money raising its net long position in cotton contracts on ICE Futures U.S. to a record high in the week to Dec 06. Speculators raised their bullish position adding 1,623 contracts to their net long position, taking it to 103,015 contracts. As per USDA latest report, the global 2016/17 forecasts show higher production (22.7 mt Vs 22.5 mt)and increased ending stocks (19.4 mt Vs 19.2 mt) compared with last month. Production is raised for Australia(0.87 mt Vs 0.98 mt), the US (3.6 mt Vs 3.6 mt), and others (3.65mt Vs 3.63 mt). Consumption is reduced for India, the United States, and South Korea, and raised for China and Vietnam. We expect cotton prices to trade sideways to higher due to pick up in demand from the ginners. However, the improved arrivals in the physical market may weigh on prices at higher levels. The prices may stabilize as there is expectation of improved demand for new season crop. Technical Market Highlights- Cotton Unit Last Prev. day WoW MoM YoY NCDEX Kapas Apr kgs MCX Cotton Dec 16 /Bale ICE Cotton Mar 17 USc/Lbs Cotton ZCE Yuan/t Chart Kapas-NCDEX Chart Cotton- MCX NCDEX Apr 17 contract Daily NKKJ (BOM) Cndl, NKKJ7, , , , , , 20B Daily MCOTZ6 Cndl, MCOTZ6, , 18,940.00, 19,080.00, 18,940.00, 19,050.00, MCX Dec 16 contract Cotton Spread Matrix Closing 30-Dec Jan Feb Dec Jan Feb (BOM) 19,200 19, ,900 18,600 18,300 Contract Unit Support Resistance Kapas NCDEX April 17 /20 kgs Cotton MCX Dec 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