Agri-Commodities Daily Report

Transcription

1 Content News in Brief Sugar Oilseeds Edible Oils Spices Cotton Agri-Commodity Heat Chart Technical Trend 28-Dec-2016 As on 27-Dec-2016 Commodity Exchange Contract Trend Commodities Prev. Day W/W M/M Y/Y Mentha-MCX CPO - MCX Ref Soy Oil Sugar Cotton-MCX Jeera Kapas Maize Turmeric GuarGum Coriander Mustard Guar seed Soybean Cardamom- MCX Spice Complex Jeera NCDEX Jan Up Turmeric NCDEX Apr Sideways Coriander NCDEX Jan Down Cardamom MCX Jan Down Edible Oil Complex Soybean NCDEX Jan Sideways Mustard Seed NCDEX Jan Sideways Ref Soy Oil NCDEX Jan Up CPO MCX Dec Up Others Sugar NCDEX Mar Sideways Kapas NCDEX Apr 17 Up Cotton MCX Dec Up Cotton Oilseed Cake NCDEX Jan Sideways Wheat NCDEX Jan Sideways MaizeKhrf NCDEX Jan Down Barley NCDEX Jan Sideways Mentha Oil MCX Dec Up Guar Gum5 NCDEX Jan Up Guar Seed 10 NCDEX Jan Up Commodity Exchange Contract Trend

2 News in brief Cotton Corpn buying fibre at market rates to supply industrial consumers Even as cotton trades firm on lower arrivals due to the impact of the currency crunch, the Cotton Corporation of India (CCI) has begun purchasing the fibre at market rates from various parts of the country to ensure supplies for its customers in the textiles industry. We have made a small beginning and have purchased about 1,000 bales (of 170 kg each) so far, at commercial rates, from various centres. We expect to purchase up to 15 lakh bales in the current season, said MM Chockalingam, CCI s Chairman and Managing Director (in-charge). After a gap of almost four years, the state-run CCI, which comes under the Ministry of Textiles, has resorted to commercial purchase of cotton from markets such as Ahmedabad and Nandurbar. CCI has been purchasing kapas or raw cotton from markets wherever the prices are lower, Chockalingam said, adding that the commercial purchase of up to 15 lakh bales would be mainly from the West, Central and Southern parts of the country as prices in the Northern markets are ruling much higher.. (Source: HBL) NCDEX cuts special cash margin on sugar buy side to 25% from today The National Commodity and Derivatives Exchange has cut special cash margin on buy positions on all running and yet-to-be-launched sugar contracts, effective from today, the exchange said in a circular. The exchange has also scrapped a 10% cash margin on sugar long positions, it said. The March sugar contract hit 3% upper limit following the reduction in cash margin. The March contract of sugar was at 3,739 rupees per 100 kg, up 3.03% from the previous close. The decision comes in the wake of less volatility in the future contracts of sugar over the past few days, a senior official with the bourse said. "For the past few days, we noticed there was less volatility in sugar contracts and SEBI (Securities and Exchange Board of India) instructed to go ahead with this as it did not seem risky," the official said. (Source : Cogencis) Lower output reports lift sugar An extended gain in sugar prices at the mill level resulted in a bullish run in spot and futures prices on Wednesday. Mill prices went up a quintal on higher demand and on the spot market the S grade price was up Naka rates, too, increased. Freight rates increased by 5 per bag. Sources said as that sugar production this is year expected to be lower than the previous season and there are fears on early closing of crushing, sentiments have been positive with demand ruling the market trend. Arrivals to the Vashi market were stable at truckloads and local dispatches were at loads. (Source: HBL) Pulses, wheat, oilseeds sowing surpasses 5 years average Pulses, wheat and oilseeds sowing in the on-going rabi season have picked up pace and out-stripped average acreage of the previous five years, as per the Agriculture Ministry s latest sowing data (till December 23) circulated on Friday. Sowing of rice and coarse cereals, however, remain lower than the average acreage in the previous five years (normal of the corresponding week). Total sowing of all the five rabi crops so far at lakh hectares (lh) is about 1.65 per cent higher than the normal average of the corresponding week at lh, but 6 per cent higher than the total acreage in the same period of the previous drought year which was at lh. About lh area coverage under wheat has been reported compared to the normal area of corresponding week of lh. Higher acreage of wheat so far has been reported from Madhya Pradesh, Rajasthan, Maharashtra and Bihar among others. (Source: HBL) Castor futures likely to be relaunched Castor seeds futures, a leader in the segment and suspended by the National Commodity and Derivatives Exchange (NCDEX), are likely to be relaunched again. The market regulator, the Securities and Exchange Board of India (Sebi), is considering a proposal on this and is likely to announce its decision soon, according to sources. Even the Multi Commodity Exchange (MCX), a leader in metals and energy commodities, has also applied for launching castor seed futures and is ready with contracts once Sebi approves it. Castor seed futures were suspended in January last year (Source: BS) Maharashtra sugar output seen 5 mln tn, unch vs Oct estimate The Maharashtra cane department has estimated the state's sugar output for (Oct-Sep) at 5 mln tn, unchanged from its October forecast. The output estimate is lower than the Indian Sugar Mills Association's estimate of 6.3 mln tn and also less than 8.4 mln tn produced a year ago. "In a review meeting chaired by Cane Commissioner Vipin Sharma, and attended by millers and officials of agriculture department, it was unanimously agreed upon that sugar output in the state would be 5 mln tn," an official who attended the meeting said. The decline is output is because of lower availability of cane in the state due to two back-to-back years of drought. In , the state produced mln tn of sugarcane, sharply lower than 93 mln tn produced last year, according to Maharashtra State Cooperative Sugar Federation. (Source: Cogencis) 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) 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)

3 Sugar Sugar Futures closed higher for the second consecutive day this week as output for the next season is expected to be lower than the consumption demand. Moreover, firm mill tender rates also indicate a renewed demand from the stockists and bulk buyers. The most-active March sugar contract closed 0.57% higher to settle at 3,724 per quintal. As per the exchange circular, the National Commodity and Derivatives Exchange has cut special cash margin on buy positions on all running and yet-to-be-launched sugar contracts, effective from Tuesday, 27- Dec-16. Special Cash Margin on Long side shall be reduced by 40% from existing 65% to 25%. 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. 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, , 3,685.00, 3,749.00, 3,685.00, 3,724.00, NCDEX Mar 17 contract (BOM) Oct 16 3, ,700 3,600 3,500 Global Updates Raw sugar for March closed up 2.2% at cents a pound on Tuesday as market is consolidating just above last week's 6-1/2 month low. 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. The prices have fallen recently 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. According to the latest CFTC data (20th Dec. 2016), managed money has trimmed their long position for the second consecutive week by 13,111 contracts to 146,709 contracts. 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 in anticipation of easing supplies and profit booking at higher levels.. The production is higher till mid-december, however an anticipation of cane scarcity in Maharashtra but production in UP is going to be good this season. Technical Contract Unit Support Resistance Sugar NCDEX Mar 17 /qtl

4 Soybean Soybean futures traded lower on Tuesday due to profit booking at higher levels after prices surges in two trading sessions. The mostactive Jan 17 delivery contract closed 0.56% down to settle at Rs. 3,015 per quintal. There is expectation of good demand from the oil mills. 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 closed higher on Tuesday in a technical rebound from one-month lows set last week. Export demand lent support as USDA reported export inspections of U.S. soybeans in the latest week at 1,710,188 tonnes, toward the high end of trade expectations for 1,400,000 to 1,800,000 tonnes. Recent rains in Argentine miss the key area in the southeastern part of the bread-basket province of Buenos Aires, Money managers were less bullish on soybeans because of the weather in South America, pushing net longs down to 111,993 contracts, down from 121,859 the prior week according to CFTC data released last week. We expect Soybean prices to trade sideways as supplies will increase as prices have improved and there is good crushing demand from the mills. Soybean prices may trade in a tight range during the peak arrival season in December and January. 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, , 3,037.00, 3,050.00, 3,005.00, 3, Chart Mustard (BOM) Daily NRSF7 Cndl, NRSF7, , 4,350.00, 4,400.00, 4,293.00, 4,306.00, 3,200 3,100 3, , (BOM) Rape/mustard Seed Mustard seed futures closed down on Tuesday on technical correction by the market participants from the higher levels. Good physical demand has supported the prices in spot market. The Jan 17 contract ended about 0.55% down to settle at Rs. 4,306/quintal. As per agriculture ministry data, Country s mustard acreage in the ongoing rabi season touched 68.2 lakh hectares (lh) as on Dec 23 up 13.5% 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 since last month. Technical Levels Contract Unit Support Resistance Soybean NCDEX Jan 17 /qtl RM Seed NCDEX Jan 17 /qtl ,600 4,400 4, ,200

5 Refined Soy Oil Refined soy oil futures closed higher on Tuesday on tracking good physical demand. The most active Ref Soy oil Jan 17 expiry contract closed 0.69% higher to settle at Rs /10kg. The increase in tariff values is supporting the prices. 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 will trade higher as the soybean prices in the country started to improve from lower levels which encourages crushing by the local oil mills. Increase tariff values may also support prices. Crude Palm Oil (CPO) CPO Futures closed higher on Tuesday tracking international prices. In the domestic market, the stocks are sufficient but the demand is increasing as the country is now returning to normalcy after the demonetization. The most active CPO Dec 16 expiry closed 1.37% 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 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 gained 2.2% on Tuesday's trading day, helped by little improved exports and improved sentiment for rival oils on Dalian and CBOT. Exports of Malaysian palm oil products for Dec fell 5.6 percent to 845,441 tonnes from 895,625 tonnes shipped during Nov Chinese are gearing up their purchases ahead of the lunar New Year celebrations at the end of January, pushing palm up. We expect CPO to trade higher today due to expectation of good physical demand of edible oil in the country. Moreover, increase in tariff prices and firm international may also support prices in the domestic market. Technical 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, , , , , B Oct MCX Dec 16 contract Daily MCAZ (BOM) Cndl, MCAZ6, , , , , , +8.00, (+1.41%) B Oct Contract Unit Support Resistance Ref Soy Oil NCDEX Jan 17 /qtl CPO MCX Jan 17 /qtl

6 Spices Jeera Jeera futures closed higher for the second consecutive session on Tuesday tracking good demand in the physical market. The demand for exports has supported the jeera prices but recently the good sowing progress is weighing on prices. NCDEX Jan 17 Jeera closed 0.35% higher to settle at Rs 17,415 per quintal. The progress of Jeera sowing in Gujarat is good. As on 19-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 tonnes in Apr-Dec, because of robust demand from overseas market and negligible stocks in other exporting nations. 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 stock position in NCDEX warehouse as on 25-Dec-2016, new Jeera stock position at NCDEX approved warehouses in Jodhpur and Unjha is totaled at 72 tonnes while it was 206 tonnes last week. We expect Jeera futures to trade higher as physical demand from the stockists and traders improve. However, the reports good sowing progress and lower demand at higher levels may be negative for the prices. Turmeric Turmeric futures closed higher on Tuesday as prices is consolidating near current levels as market is waiting for the new season crop. Turmeric is trading range bound since last some trading session as market is expecting a good crop this season. Turmeric Jan 17 delivery contract on NCDEX closed lower by 0.27% higher to settle at Rs 6,792 per quintal. The stock positions of Turmeric in the Exchange warehouses in the current season are only stock at Sangali (1142 tonnes as on 25-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 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. 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 Apr 17 /qt Technical Chart Jeera Daily NJEF7 Chart Turmeric (BOM) Cndl, NJEF7, , 17,485.00, 17,625.00, 17,355.00, 17,415.00, Oct 16 Daily NTMJ7 Cndl, NTMJ7, , 6,750.00, 6,810.00, 6,736.00, 6,792.00, 18,000 17, ,500 17,000 16, (BOM) ,200 7,000 6, ,800 6,600 Unit Support Resistance Jeera NCDEX Jan 17 /qtl Turmeric NCDEX Apr 17 /qtl

7 Kapas Cotton complex continue to trade higher for the third consecutive day on Tuesday on reports that the cotton corporation goes for purchase of the cotton to ensure supplies for the textile mills during the off-season. Moreover, anticipation of good demand in physical market as the arrivals has not touched its peak in the current season. The CCI s expected to purchase around 15 lakh bales for the season of 2016/17. 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. 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 NCDEX Apr 17 contract Daily NKKJ (BOM) Cndl, NKKJ7, , , , , , 20B Chart Cotton- MCX Daily MCOTZ6 Cndl, MCOTZ6, , 18,980.00, 19,120.00, 18,960.00, 19,080.00, , (+0.63%) MCX Dec 16 contract (BOM) 19,200 19, ,900 Global Cotton Updates ICE cotton futures edged lower for the second straight session on Tuesday in limited holiday trading, amid a steady dollar. Moreover, declining export demand from the US, which showed net upland sales of 276,700 RB for 2016/2017 were down 11 percent from the previous week and 6 percent from the prior 4-week average. CFTC data showed that in the week to Dec. 20, speculators trim their bullish position in cotton contracts for the second straight week, reducing 7,179 contracts in their net long position, taking it to 76,039 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 higher as arrivals in the physical market did not reached its peak with the demand for new season crop increasing. The prices may also get supported by the news of purchase by the CCI. Technical Contract Unit Support Resistance Kapas NCDEX April 17 /20 kgs Cotton MCX Dec 16 /bale ,600 18,300

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