Agri-Commodities Daily Report

Transcription

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

2 News in brief Minister says rabi sowing not hit by cash curb, data shows otherwise Agriculture Minister Radha Mohan Singh today said the withdrawal of 500-rupee and 1,000-rupee currency notes from circulation has not affected sowing of rabi crops, but data released by his ministry seems to paint a different picture. The government's demonetisation move dragged down India's rabi acreage, which was down 0.7% on year as of last week. The acreage, which was 16% higher on year a week ago, took a hit because most farmers depend on cash to buy seeds and fertilisers. The year-on-year rise in wheat, chana, and mustard, among major rabi crops, narrowed significantly after the government's move to demonetise higher-denomination banknotes. Wheat acreage was up only 0.7% till last week. However, in the preceding week, area under the grain was 40% higher on year. Area under chana was up 2% on year as of Thursday, while it was 25.9% higher on year in the preceding week, the farm ministry data showed. (Source: Cogencis) After spike, cotton prices ease as market arrivals improve Cotton prices, which shot up last week in the immediate aftermath of demonetisation, even surpassing global prices, have begun to ease now with the increase in market arrivals amidst slack demand from spinning mills. Daily market arrivals improved to around 1.2 lakh bales (of 170 kg each) on Tuesday from around 80,000 bales last week, sources said. After rising to 41,000 levels per candy (355 kg) prices have now come down to 39,000-39,500 levels. Similarly, raw cotton (kapas) prices have come down to 4,900-5,000 levels from the 5,200-5,300 levels that prevailed last week. Also, cottonseed prices have come down by per quintal to around 2,200-2,250, trade sources said. Farmers have selectively started accepting payments through cheques, resulting in improved arrivals and easing of prices. However, there are no buyers for cotton as there is no onward movement of yarn from the mills, said Ramanuja Das Boob, a ginner in Raichur, Karnataka. (Source: FE) Maharashtra chana area up 16% at 934,640 ha as of Nov 18 Acreage under chana in Maharashtra was up 16% on year at 934,640 ha as on Nov 18, data released by the state's agriculture department showed. Rise in prices and higher minimum support price announced by the government are the main reasons why farmers have increased the acreage under chana. The support price has been raised by 500 rupees per 100 kg to 4,000 rupees, inclusive of a bonus of 200 rupees. Maharashtra is among the key chana-growing states in the country. Total sowing of rabi crops in the state so far is lagging by 8% on year at 3,008,623 ha. Area covered under the rabi crop so far is lower than the entire season's normal acreage--based on the last five years' average--of 5.5 mln ha. (Source: Cogencis) North-East monsoon remains subdued as low fails to form The US Climate Prediction Centre has forecast above-normal rainfall for Jammu & Kashmir, Himachal Pradesh and adjoining parts of Punjab during this week. A low-pressure area that was expected to form off Sri Lanka did not materialise on Monday, putting paid to hopes of a revival of the North-East monsoon over south Tamil Nadu. But the parent trough persisted over the south-west Bay of Bengal off Sri Lanka and is already generating rain along the East Coast of Sri Lanka, the Palk Straits and the Gulf of Mannar. The India Met Department (IMD) seems to have withdrawn the outlook for a low around the region for now, which indicates an extended dry patch over most of the southern part of the Peninsula. The only exception is the southern coastal regions of Tamil Nadu and adjoining south Kerala, which may remain cloudy over the next couple of days and even witness rain at times. (Source: HBL) Palm oil to weaken after slight uptick Palm oil performed well in the oil year (November-October) mainly because of El Nino-induced plunge in production for the first time since 1998, along with a significant reduction in yield. Palm oil futures prices at the Malaysian exchange soared to 3,089 ringgits on November 11 on account of favourable exchange rate, pruned down production data, coupled with labour shortage for harvesting, and hardened soyaoil prices on increased Chinese demand. These gains were, however, limited by reduced export demand. The USDA reports that global palm oil production will decline to 58.8 million tonnes (mt) in compared to 61.6 mt in It puts Malaysia s palm oil production at 17.7 mt in against 19.8 mt in Similarly, Indonesia is expected to produce 32 mt in against 33 mt in A significant decline in production has reduced the world palm oil stock closer to half. By October 16, Malaysia s palm oil stocks stood at 1.57 mt, down by 40 per cent on year. However, lower purchases by India and China caused Malaysian palm oil stockpiles to edge up in October compared to September. (Source: HBL) Sugar deficit phase to end in , says ISO 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", the International Sugar Organization said. The ISO, in its first estimate for the global sugar balance sheet next season, which starts in October 2017, said that "assuming normal weather conditions fairly balanced global production and consumption come into view". This would mean "a possible end of the deficit phase in the world sugar cycle", after two seasons when global output has fallen short of demand. However, the organisation cautioned against expecting a correction in prices on response to ideas that a world shortfall would not stretch into a third successive season. "Any easing of price in reaction to expectations of a possible return of the world supply and demand to a more balanced scenario in may be muted," the ISO said. (Source: AM) Now, demonetisation drive to hit Maharashtra sugar season The sugar season in Maharashtra is likely to bear the brunt of the demonetisation move from the next week onwards when payments will have to be made to labourers engaged in the sector. Out of 110 factories which have got licence, as many as 67 mills have begun crushing in the state. Top officials of the Maharashtra State Cooperative Sugar Factories Federation (MSCSFF) said that the payment issues will begin to crop up next week onwards when the labourers will have to be paid. Sanjeev Babar, MD of the federation, said that if the situation does not improve soon, crushing in the state could also be impacted. Maharashtra s cane season has gotten off to a stormy start on November 5 after disputes with farmer organisations over the first instalments on cane payments to be made to farmers. (Source: FE)

3 Sugar Sugar Futures closed down on Tuesday on profit booking at higher levels on anticipation of good physical stocks as the crushing season is in full swing in main sugarcane growing states. Moreover, there is subdued demand in the physical market as stockists are not buying in the cash crunch situation. The most-active December sugar contract closed 0.06% down to settle at 3,457 per quintal. However, the prices have recovered from the lows of Rs. 3,401 per quintal on anticipation of improved situation in coming days. As per ISMA, Sugar mills have produced 15,000 tonnes more till November 15 this year at 7.87 lakh tonne against 7.72 lakh tonne in the same period last year. Sugar production has increased marginally on account of early crushing in states like Uttar Pradesh and Karnataka 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. 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 Mar 17 ICE-US Sugar No 11- Mar 17 Usc/lbs Chart Sugar M Daily NSMZ6 Cndl, NSMZ6, , 3,436.00, 3,489.00, 3,401.00, 3, , (-0.58%) (BOM) ,600 3,500 3, ,400 Sugar Spread Matrix Closing 20-Dec Mar May-17 Spot Dec Mar May Global Updates ICE raw sugar futures fell to a two-month low on Tuesday on technicallydriven fund selling as the market tested support around 20 cents a lb on the March contract. Brazil (crop) weather looks to be excellent and there are significant fund long positions. Moreover, speculators reduced their record bullish in raw sugar contracts in the week to Nov. 15, U.S. Commodity Futures Trading Commission data showed on Friday. Industry group Unica said sugar production was 2.05 mt, near the top of a range of forecasts of around 1.9 million to 2.08 million. 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 lower on reports of easing supplies in the coming months as crushing season started in all the sugarcane growing states. Moreover, higher sugar production till Nov 15 may pressurize 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 its recovery as soybean supplies in the spot market is not picking up. Thus the market participants are buying soybean at near low levels. The most-active Dec 16 delivery contract closed 0.26% higher to settle at Rs. 3,088 per quintal. There are lower supplies in the physical market as there is cash as well as supply crunch in all the APMC mandi. Recently, SOPA has raised the estimate for (Jul-Jun) soybean output in the country to 115 lt from 109 lt estimated earlier. The spot prices have dropped below the MSP in some places in States of MP, Maha and Gujarat. The harvesting of soybean in full swing and supplies are strong in the physical market. Global update CBOT soybean rose for a fourth straight session on Tuesday to hit a near one-month high as strong export demand and fund buying. USDA reported export inspections of U.S. soybeans in the latest week at more than 2.6 million tonnes, topping a range of trade expectations for 1.7 million to 2 million tonnes. A weaker U.S. dollar, stronger energy prices and lingering concerns over dry conditions in Brazil, a rival soybean grower, further lifted the market. The U.S. soybean harvest is now over. U.S. farmers are eager to sell before importers' attention starts to shift towards South American crops. We expect Soybean prices to trade sideways to higher due to low level buying by the market participants. Physical traders and stockists 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 fall on Tuesday on reports of good sowing progress and profit booking at higher levels. However, boost in winter demand and increase in MSP limit the downtrend. The Dec 16 contract ended 0.85% down to settle at Rs. 4,668/quintal. Govt increases mustard MSP by 350 rupees/100 kg to 3,700 rupees for FY16-17 which includes bonus of Rs.100 / quintals. As per agriculture ministry data, all-india acreage of mustard in the ongoing rabi season was nearly 50.8 lh as on Nov 18 up 19.5% from a year ago. The sowing operations were not affected much, as sowing is nearing an end, and farmers had already bought the seeds. Till Nov 18, Rajasthan, planted 24.6 lakh ha, up 24% from a year ago similarly acreage increase in Uttar Pradesh, where mustard is sown in 9.82 lh, up 15.4% from a year ago. In MP, the oilseed was sown over 5.21 lh, up 23.2% sown a year ago. 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. We expect mustard seed to trade higher due to dwindling supplies in off-season and pickup in demand in the physical market. Moreover, good demand from industrial buyers and increase in MSP for mustard crop may support prices. Market Highlights - Oilseeds Unit Last Prev day WoW MoM YoY Soybean Spot- NCDEX /qtl Soybean- NCDEX Dec 16 /qtl Soybean-CBOT Jan 17 USc/Bsh RM Seed Spot- NCDEX /qtl RM Seed- NCDEX Dec 16 /qtl Chart Soybean Daily NSBZ6 Cndl, NSBZ6, , 3,099.00, 3,114.00, 3,082.00, 3, , (+0.19%) Soybean Spread Matrix Closing 20-Dec Jan Feb-17 Spot Dec Jan Feb Chart Mustard (BOM) Daily NRSZ6 Cndl, NRSZ6, , 4,715.00, 4,745.00, 4,662.00, 4, , (-0.85%) 3,200 3, ,100 3, (BOM) Aug 16 Sep 16 Oct 16 Nov 16 5,000 4,800 4, ,600 4,400 Mustard Seed Spread Matrix Closing 20-Dec Jan Apr-17 Spot Dec Jan Apr Technical Levels Contract Unit Support Resistance Soybean NCDEX Dec 16 /qtl RM Seed NCDEX Dec 16 /qtl

5 Refined Soy Oil Refined soy oil futures continue its uptrend on Tuesday tracking firm spot prices as market participants turned to edible oil due to lower soybean arrivals. Moreover, increase in tariff value by government of India for second half of November to support prices. The most active Ref Soy oil Dec 16 expiry contract closed 0.01% higher to settle at Rs per quintal. The tariff value of crude soyoil were raised by $13 per tn to $866 which was the fourth increase in two month by the government. Since January 2016, the base import prices for crude soy oil increase by more than 20.3% 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 to higher on anticipation of good physical demand as soybean arrivals take a hit in the physical market. Reports of higher imports during current oil year may keep the stock sufficient and increase in tariff values coupled with firm international prices may support prices at higher levels. Crude Palm Oil (CPO) CPO Futures closed higher on Tuesday tracking the firm international markets. In domestic market, the prices are following the international market as country is depending on the imports. The most active CPO Nov 16 expiry closed 1.99% higher to settle at Rs per 10 kg. Meanwhile, the tariff value of CPO increase by 2.2% to $739 per tonne for the 2nd half of Nov compared to previous fortnight. This is second straight increase but lower than the September tariff price. As per USDA report, ending stocks of palm oil in India in 2015/17 will dropped 30% to 381,000 tonnes compared to previous month estimates. 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 rose on Tuesday despite the bearish export data. However, the prices rise due to the weakness in the ringgit, a rally across the Chinese futures exchange and the vegoil complex Malaysian palm oil exports for the period Nov 1-20 are seen more than 8% lower than last month. The forecasts of higher output in Indonesia, the world's top producer of palm, also weighing on sentiment. Malaysian Palm Oil Board (MPOB), estimated palm oil stocks in the country at end-october rose 1.8% to 1.57 mt from September. We expect CPO to trade sideways to higher tracking firm international prices. Moreover, increase in tariff value will also to support prices ar higher levels. Market Highlights- Edible oils Ref Soyoil Spot - Mumbai Ref Soy oil- NCDEX Dec 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 NSOZ (BOM) Cndl, NSOZ6, , , , , , -0.05, (-0.01%) B Refined Soy Oil Spread Matrix Closing 20-Dec Jan Feb-17 Spot Dec Jan Feb Chart Crude Palm Oil Daily MCAX6 Cndl, MCAX6, , , , , , -0.20, (-0.04%) MCX Nov 16 contract CPO Spread Matrix Closing 30-Nov Dec Jan Nov Dec Jan (BOM) B Technical Contract Unit Support Resistance Ref Soy Oil NCDEX Dec 16 /qtl CPO MCX Nov 16 /qtl

6 Spices Jeera Jeera futures fall on Tuesday due to profit booking by the market participants at higher levels. Still, Jeera seems to in upward momentum due to expectation of tight supplies and fresh export enquiries. However, the nes on good sowing progress limit the uptrend. NCDEX Dec 16 Jeera closed 0.76% down to close at Rs 17,705 per quintal. Jeera sowing in Gujarat and Rajasthan have started. In Gujarat, Jeera sowing completed in around 99,100 hectares as compared to last year acreage of 17,400 hectares, as on 21 st Nov. The stock position in NCDEX warehouse is at lower level compared to last year stocks. As on 21 November 2016, new Jeera stock position at NCDEX approved warehouses in Jodhpur and Unjha is 743 MT. Last year stocks were about 6,426 tonnes. 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 same period last year. 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 to higher on reports of dwindling supplies at physical markets due to lower arrivals. However, good start to rabi sowing and sufficient stocks with the stockists may pressurize prices when the cash crunch ease. Turmeric Turmeric futures correct on Tuesday from higher levels on technical selling. However, good demand and lower supplies in the physical market surge in spot market. Turmeric Dec 16 delivery contract on NCDEX closed 0.64% down to settle at Rs 7,190 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. The reports of good production from new season crops may pressurize prices as the harvesting begins. On the export front, country exported about 51,147 tonnes of turmeric during April-August period up by 32% 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. Market Highlights - Spices Unit Last Prev WoW MoM YoY Jeera Spot- NCDEX /qt Jeera- NCDEX Dec 16 /qt Turmeric Spot- NCDEX /qt Turmeric- NCDEX Dec 16 /qt Technical Chart Jeera Daily NJEZ6 Jeera Spread Matrix Closing 20-Dec Jan Mar-17 Spot Dec Jan Mar Chart Turmeric (BOM) Cndl, NJEZ6, , 17,960.00, 18,070.00, 17,610.00, 17,705.00, , (-0.62%) Daily NTMZ6 Cndl, NTMZ6, , 7,238.00, 7,350.00, 7,172.00, 7,190.00, , (-0.66%) Turmeric Spread Matrix Closing 20-Dec Jan Juy-17 Spot Dec Apr Juy , ,500 17,000 16, (BOM) , ,200 7,100 7,000 6,900 6,800 We expect turmeric may trade sideways to higher on expectation that the demand from the industrial buyers will support the prices just before new season harvesting. Moreover, improved buying by the market participants and demand from upcountry buyers is supporting prices Market reports good production in coming season may start to pressurizing prices at higher levels. Technical Unit Support Resistance Jeera NCDEX Dec 16 /qtl Turmeric NCDEX Dec 16 /qtl

7 Kapas Cotton complex prices continue to ease as arrivals in the physical market improve. Market participants are selling at higher levels on expectation of good supplies when the cash crunch ease later in the month. NCDEX Kapas for Apr 17 closed 1.56% down while MCX Nov 16 cotton closed 0.83 % down. Moreover, improved demand from mills and ginners for new season crop has supported cotton prices Industry is 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 32.5 lakh bales (lb) as on 12 November, In October, Punjab, Haryana and Rajasthan together account for at 5.82 lb while Gujarat and Maharashtra added 7.3 lb. Madhya Pradesh too seen about 1.82 lb arrivals. In South India, about 3.36 lb 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 edged lower on Tuesday on profit-taking as prices looks to stabilize at current levels as US cotton harvesting continue to be good. U.S. government data showed net upland sales totaled 214,400 running bales of cotton for the week ended Nov. 10, up 27 percent from the previous week. Moreover, reports of crop damage in China may support cotton prices in long term. As per ICAC, world ending stocks are forecast to decrease further by 7% to 17.8 mt at the end of 2016/17 as China continues to reduce its stocks. Ending stocks in China, where much of the excess stocks are held, decreased by 13% to 11.3 mt as the Chinese government sold over two million tons from its official reserves from May through September Market Highlights- Cotton Unit Last Prev. day WoW MoM YoY NCDEX Kapas Apr kgs MCX Cotton Nov 16 /Bale ICE Cotton Mar 17 USc/Lbs Cotton ZCE Yuan/t Chart - Kapas Chart - Cotton NCDEX Apr 17 contract Daily NKKJ (BOM) Cndl, NKKJ7, , , , , , , (-1.51%) 20B Daily MCOTX6 Cndl, MCOTX6, , 19,310.00, 19,380.00, 19,110.00, 19,230.00, , (-0.72%) MCX Nov 16 contract Cotton Spread Matrix Closing 30-Nov Dec Jan Nov Dec Jan (BOM) 19,600 19, ,200 18,800 18,400 We expect cotton prices may trade sideways to lower due to improved supplies in the physical market and good demand for new season crop from textile mills and ginners. Moreover, easing cash crunch and acceptance of cheque by the farmers may easing the physical trade in coming weeks may pressurize prices during the peak arrival season. 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