Agri-Commodities Daily Report

Transcription

1 Content News in Brief Sugar Oilseeds Edible Oils Spices Cotton Agri-Commodity Heat Chart Technical Trend 23-Dec-2016 As on 22-Dec-2016 Commodity Exchange Contract Trend Commodities Daily Weekly Monthly Yearly Sugar Cardamom- MCX Kapas Maize Turmeric Cotton-MCX CPO - MCX Ref Soy Oil Soybean Mentha-MCX Jeera Coriander GuarGum Mustard Guar seed Spice Complex Jeera NCDEX Jan Sideways Turmeric NCDEX Apr Sideways Coriander NCDEX Jan Sideways Cardamom MCX Jan Up Edible Oil Complex Soybean NCDEX Jan Down Mustard Seed NCDEX Jan Down Ref Soy Oil NCDEX Jan Down CPO MCX Dec Down Others Sugar NCDEX Mar Up Kapas NCDEX Apr 17 Sideways Cotton MCX Dec Down Cotton Oilseed Cake NCDEX Jan Sideways Wheat NCDEX Jan Sideways MaizeKhrf NCDEX Jan Sideways Barley NCDEX Jan Sideways Mentha Oil MCX Dec Sideways Guar Gum5 NCDEX Jan Down Guar Seed 10 NCDEX Jan Down Commodity Exchange Contract Trend

2 News in brief India's Apr-Oct guar gum exports up 7% YoY on rise in crude prices India's guar gum exports rose 7% on year during Apr-Oct because the recent rise in crude oil prices has spurred demand for the gum, which is used as a fracking agent in oil drilling and shale gas exploration. The country exported 195,602 tn of guar gum during Apr-Oct, higher than 182,723 tn shipped overseas a year ago, according to data available on the website of the Agricultural and Processed Food Products Export Development Authority. Crude oil prices rose 7.6% during Apr-Nov following as major oil exporting countries initiated talks to cut production in a bid to trim the global glut. The US, however, is not a part of the deal, and higher prices in global markets have triggered more production of crude oil in the country. (Source: Cogencis) Chinese cotton price expected to rise in Q2, 2017 Zhengzhou cotton futures market continued to decrease from last week and began to dive on Dec 19. The most actively contract, May contract, has slumped to 14,905yuan/mt on Dec 20, down nearly 840yuan/mt in the first two days of this week. From the technical analysis, MACD (Moving Average Convergence-Divergence) and KDJ indicators showed signs of adjustment. From the fundamental analysis, cotton futures were affected significantly by the commodity market with the retreat of capital. Moreover, the physical market remained weak. On one hand, the downstream yarn and grey fabric market kept lackluster. Spinning mills operating rate decreased slowly and cotton inventory in mills also declined. Grey fabric plants also cut operating rate to face the dull sales. On the other hand, the ginning volumes of new cotton in Xinjiang have exceeded 3.60 million tons, so the total output may reach 4.00 million tons, much higher than market anticipation, weighing on the market. (Source: CCFgroup) Pulse buffer-stock seen missing 20-lakh-tonne target The Central government s ambitious plan of creating a 20 lakh tonnes (lt) buffer stock of pulses in to ensure remunerative prices to farmers is most likely to fail if the tardy progress of procurement so far is any indication. The 20-lt target comprises 10 lt of imported pulses and procurement of five lt each from domestic kharif and rabi harvests. Pulse growers are sure to feel short-changed because in many marketing centres prices of kharif pulses are ruling below the minimum support price (MSP) and the pace of government purchase is rather slow. (Source: HBL) Minister says Maharashtra sugar mills may end crushing ops early Low availability of sugarcane may force sugar mills in Maharashtra to end their crushing operations two months earlier than usual, Union Minister Nitin Gadkari said today, even as industry body Indian Sugar Mills Association said the country will not face shortage of sugar this year. Cane is likely to be in short availability following two years of drought in the state, which is a key producer of sugar. Crushing operations, which normally end in March, might end in January this time, Gadkari said. The roads minister was speaking at the annual general meeting of the Indian Sugar Mills Association today. Gadkari's company Purty Group also has interest in the sugar business. The president of the industry body, Tarun Sawhney, said that there will be no shortage of sugar this year, and stocks in the next year, (Oct-Sep), are likely to be in surplus. The food ministry has estimated sugar output in the current season that began Oct 1 at 22.5 mln tn, down from 25.1 mln tn a year ago. (Source:Cogencic) Soybean prices are surging thanks to stunning demand from China China's growing middle class has propped up sales of luxury goods and box-office receipts of Hollywood blockbusters in recent years. Add another beneficiary to the list: Soybeans. s of the oilseed are on a tear this year after a torrid 2015, helped by buoyant demand from the mainland that has exacerbated supply disruptions due to weather uncertainties in Argentina and Brazil, two major producers of the commodity. (Source : CNBC) Indonesian palm oil shipments seen climbing to 13-month high Indonesian palm oil exports probably rose to the highest level in 13 months in November as some buyers replenished stockpiles. Exports of palm and kernels oils increased 5.4% from October to 2.54 million tonnes, according to the median of eight estimates from analysts, traders, refiners and plantation executives compiled by Bloomberg. That s the highest since October 2015, data from the Indonesian Palm Oil Association showed. The association, known as Gapki, may release November data in January. Rising exports in November were due to the tight stocks situation in main buyers such as China and India, said Derom Bangun, chairman of the Indonesian Palm Oil Board. Shipments may have been even higher if a surge in prices hadn t curbed some demand, he said. (Source: Bloomberg) Brazil trims sugar output forecast for 2016/17 - Reuters News Brazil should produce million tonnes of sugar in the 2016/17 crop season, less than the projection given in August of million tonnes, government agency Conab said on Tuesday. Sugar output in the main center-south cane belt is now expected to amount to 36.3 million tonnes, down from the 36.5 million tonnes previously envisaged. Forecast production in the Northeast region is expected to be up at 3.5 million tonnes from the 3.4 million tonnes predicted in August. () 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) China: Grain and Feed Update In spite of China s economic growth slowdown, Chinese feed demand remains strong. Swine numbers are forecast to recover and poultry production is forecast slightly higher in MY2016/17 and MY2017/ has also been a dynamic year for Chinese agricultural policy and market prices. The Central Government has abandoned price support policies for all commodities except wheat and rice. Several new Central and Provincial Government reforms for corn and other feed grains have started liquidation of government surpluses through auctions and processor subsidies, tightened market access for cheaper imports, and ended China s long-standing price policy supports. (Source: USDA)

3 Sugar Sugar Futures closed higher on Thursday as output for the next season is expected to be lower than the consumption demand and on lower level buying by the market participants. The most-active March sugar contract closed 1.23% higher to settle at 3,608 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 and Karnataka. However, according to ISMA press release on 16-Dec-16, sugar production in India has increased by 11.2% this season compared to corresponding period las year. Indian sugar mills produced 53.3 lakh tonne of sugar between Oct. 1 and Dec 15 Vs 47.9 lt. Output in Maharashtra, the top sugar-producing state, was 17.3 lt as on 15-Dec-16, down from 22.5 lt a year ago while Uttar Pradesh produced 17.7 lt of sugar this season compared to 8.52 lt a year ago. The Indian Sugar Mills Association has estimated closing stock at the end of current season at lt, equivalent to three months' domestic consumption which was earlier forecasted at 55 lt. Global Updates ICE raw sugar boosted by a pick-up in physical demand after recent declines helped to tighten nearby supplies. Moreover, Brazil trims sugar output forecast for 2016/17. As per government agency, CONAB, Brazil should produce mt of sugar in the 2016/17 crop season, less than the projection given in August of mt. 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, , 3,575.00, 3,613.00, 3,575.00, 3,608.00, NCDEX Mar 17 contract (BOM) 3,700 3, ,600 3,500 The prices have fallen last week due to a weakening of the Brazilian real, which could stimulate sugar exports. Moreover, sugar prices also down due to signs of a lower 2016/17 world sugar market deficit and expectations of a surplus in the next season. As per CFTC data, speculators cut a bullish bet in raw sugar by 20,781 contracts to 136,190 in week to December 13. 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 to higher on expectation of little recovery after two days of loss. Though the production is higher till mid-december, there is however an anticipation of cane scarcity in Maharashtra but production in UP is going to be good this season. There are also reports of easing supplies in the coming months as crushing season is going on in all the sugarcane growing states. Technical Contract Unit Support Resistance Sugar NCDEX Mar 17 /qtl

4 Soybean Soybean futures continue its downtrend on Thursday due to higher production estimate by SOPA and arrivals also picked up in the physical market. The most-active Jan 17 delivery contract closed 1.20% lower to settle at Rs. 2,976 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 futures fell to a new one-month on Thursday due to forecasts for rain in Argentina may increase world soybean production. Rains in dry areas of Argentina, a major exporter, pressured soybeans as traders projected South America will stay on track to produce a bumper harvest that will compete with U.S. exports. Earlier this month, dryness in Argentina fuelled worries about planting problems, and soybean futures prices rose on hopes for increased demand. 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. We expect Soybean prices to trade 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 in December and January. Rape/mustard Seed Mustard seed futures fell for the fourth session this week on Thursday on good physical supplies from the last season crop and improved sowing progress in Rajasthan. The Jan 17 contract ended about 0.03% down to settle at Rs. 4,370/quintal. 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, , 3,007.00, 3,007.00, 2,974.00, 2,976.00, Chart Mustard (BOM) Daily NRSF7 Cndl, NRSF7, , 4,341.00, 4,354.00, 4,239.00, 4, ,200 3,100 3,000 2, (BOM) 4,600 4,400 4, ,200 As per agriculture ministry data, Country s mustard acreage in the ongoing rabi season touched 65.5 lakh hectares (lh) as on Dec 16 up 9.7% from a year ago. Rajasthan, the top mustard producing state, planted 27.6 lakh ha, up 16% from a year ago similarly acreage under mustard increase in Uttar Pradesh at lh Vs 11.9 lh last year. In MP, mustard is sown in 6.84 lh Vs 6.2 lh last year same time. 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 on expectation of lower level buying by the market participants. Good start to rabi sowing in Rajasthan and Gujarat is weighing on prices. Technical Levels Contract Unit Support Resistance Soybean NCDEX Jan 17 /qtl RM Seed NCDEX Jan 17 /qtl

5 Refined Soy Oil Refined soy oil futures continue to close lower on Thursday tracking international prices and expectation of good domestic soy crushing which may reduce export dependence. The most active Ref Soy oil Jan 17 expiry contract closed 0.78% lower to settle at Rs /10kg. Despite the increase in tariff values the prices are under pressure as there is sufficient domestic soybean production. 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. Despite increase in tariff prices, the record oilseed production in country is weighing on the soy oil prices. As per SEA data, India import of soybean oil declined to 1,64,286 tonnes in Nov 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). Soy oil futures may trade sideways down 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 closed lower on Thursday tracking international prices. In the domestic market, the stocks are sufficient and the demand is also on lower side due to winter. The most active CPO Dec 16 expiry closed 0.55% lower 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 Nov 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 falls on Thursday on profit booking from higher levels due to lower export demand in December. Shipment data released on Tuesday by cargo surveyors Intertek Testing Services and Societe Generale de Surveillance showed a 14.4% drop in exports for Dec. 1-20, compared with the Nov figures. Market Highlights- Edible oils Ref Soyoil Spot - Mumbai Ref Soy oil- NCDEX Jan 17 Soybean Oil- CBOT- Jan 17 CPO-Bursa Malaysia - Mar 17 CPO- MCX Dec 16 Chart Ref Soy Oil Chart Crude Palm Oil Unit Last Prev day WoW MoM YoY /10 kg /10 kg USc/lb MYR/Tn /10 kg Daily NSOF (BOM) Cndl, NSOF7, , , , , , 10B MCX Dec 16 contract Daily MCAZ (BOM) Cndl, MCAZ6, , , , , , B We expect CPO to trade sideways to down due to expectation of good physical supplies of edible oil in the country. However, increase in tariff prices and firm international may support prices in the domestic market. Technical Contract Unit Support Resistance Ref Soy Oil NCDEX Jan 17 /qtl CPO MCX Jan 17 /qtl

6 Spices Jeera Jeera futures closed lower on Thursday tracking drop in the physical market. The demand for exports has supported the jeera prices but the good sowing progress is weighing on prices. NCDEX Jan 17 Jeera closed 1.66% down to settle at Rs 16,935 per quintal. The progress of Jeera sowing in Gujarat is good. As on 12-Dec-16, Gujarat farmers have planted jeera in 2,56,800 hectares, up by 5.6% compared to last year acreage of 2,43,000 hectares same period. 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 stock position in NCDEX warehouse as on 16-Dec-2016, new Jeera stock position at NCDEX approved warehouses in Jodhpur and Unjha is totaled at 206 tonnes while it was 173 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. We expect Jeera futures to trade sideways as physical demand from the stockists and traders is dipping while the arrivals have increase for the oil crops. However, the reports good sowing progress and lower demand at higher levels may be negative for the prices. Turmeric Turmeric futures closed little lower on Thursday on chart based trading. The prices have declined in recently as market is expecting a good crop this season. Turmeric Jan 17 delivery contract on NCDEX closed lower by 0.52% to settle at Rs 6,822 per quintal. The stock positions of Turmeric in the Exchange warehouses in the current season are only stock at Sangali (1142 tonnes as on 16-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 as new season turmeric is hitting the physical market. Moreover, the traders are expecting good production as recent rains have not affected the standing crop. Good upcountry demand for the new season crop may support prices. 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 Chart Turmeric (BOM) Cndl, NJEF7, , 17,165.00, 17,170.00, 16,885.00, 16,935.00, Daily NTMJ7 Cndl, NTMJ7, , 6,840.00, 6,868.00, 6,784.00, 6,822.00, 18,000 17,500 16, ,000 16, (BOM) November 2016 December ,200 7,000 6, ,800 6,600 Technical Unit Support Resistance Jeera NCDEX Jan 17 /qtl Turmeric NCDEX Apr 17 /qtl

7 Kapas Cotton complex continue to trade sideways to lower on anticipation of good arrivals in physical market coupled with normal demand. For the current season, cotton arrivals in the country is expected to have reached about 20 % for total expected arrivals of 350 lakh bales at lakh bales (lb) as on 15 Dec, 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 last year supplies of 427 lakh bales due less carry over stock and imports. As per USDA monthly report, for India, the 2016/17 crop is forecast at 27.0 million bales, up 2% from 2015/16, despite a 12% 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% higher than a year ago, accounting for 13%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 closed little higher due to good export demand recently. Export demand for cotton has been robust in recent weeks and traders are largely anticipating strong demand again in Thursday's report. Cotton net sales exports for the period December 9-15, 2016 is 1,812,700 MT for 2016/2017 were down 10% from the previous week, but up 9% from the prior 4-week average. CFTC data showed that in the week to Dec. 13, speculators lifted their bullish position in cotton contracts to a record high for the fourth straight week, adding 630 contracts to their net long position, taking it to 103,645 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 futures to trade sideways to down as arrivals in the physical market increased with the demand for new season crop also increasing. The prices may be range bound as there is expectation of balanced demand and supply scenario in the country during the peak arrival season. 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 November 2016 December 2016 Daily MCOTZ6 Cndl, MCOTZ6, , 19,100.00, 19,100.00, 18,870.00, 18,890.00, MCX Dec 16 contract (BOM) 19,200 18, ,900 18,600 18,300 Technical 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