FOR PRIVATE CIRCULATION ONLY September 10, 2018

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1 FOR PRIVATE CIRCULATION ONLY September 10, 2018 MPOB Data Scheduled at 10 AM on 10th September is postponed to 12th September as the country owing to national holiday. BMD market is closed for 2 days, short-trading weak, Indian Palm traders might have speculative behavior, amid rupee weakness. MCX CPO FUTURES- RS/10 KG CRUDE PALM OIL Sep % Oct AGR Vol % Chng Nov % BMD CPO FUTURES MYR/MT Oct % Nov % In the gone by week BMD palm oil future settled at 2266 MYR/MT up by 18 MYR from previous week s close. No major gains in the price while it has just come out of the last four week s trading range. Nonetheless, we aren t so hopeful of the price gain while we think market might eventually trade down. Market might witness seasonal bearish pressure on price amid oversupply concern. Also this is a short trading week and the trading participations might be low. Monday and Tuesday markets are closed for BMD due to the King's Birthday (Monday) and Awal Muharram (Tuesday). In the previous month MPOB reported a 1.26% monthly rise in July inventory levels to 2.21 million tonnes from 2.18 million tonnes at end-june. We think the number releasing today for August might increase marginally. We think the inventory number might hover around 2.25 to 2.50 million tons. The last month data also showed production rose 12.79% to 1.5 million tonnes from 1.33 million tonnes and palm oil exports were up 6.75% at 1.20 million tonnes from 1.12 million tonnes the previous month. Any significant change in the number shall have impact on the market. However, since the markets are closed Indian traders might speculative over the data and the effect may be felt on the price. DCE RBD PALM OLEIN FUTURES- CNY/MT Sep % Jan % CPO - SPOT PRICE MCX KANDLA - Rs/10 kg SEA KANDLA - Rs/10 kg RBD OLN KANDLA- Rs/10 kg CPO FOB INDONESIA- $/MT RBD FOB INDONESIA- $/MT FOREIGN EXCHANGE INDIAN RUPEE MALAYSIAN RINGGIT INDONESIAN RUPIAH DOLLAR INDEX BRAZILIAN REAL ARGENTINE PESO Note: All Currency are pegged against US$ As far as Indian palm oil is concerned the September future during the last week had made a weekly high of Rs but settled the week lower at , no significant change from the previous week s close. We think Indian palm oil is adjusted to some extend while overall the view might remain weak.

2 However, volatility cannot be ruled amid Indian rupee s continued depreciation against the USD. The trading range for the MCX September future for today would be Rs. 604 to Rs. 596 and for this week Rs. 607 to Rs Sell on rise is recommended. Also note as per the import parity calculation the MCX current and near month contracts are trading at Rs. 8 and Rs. 6 higher than the imported landed tariff price. This determines the Indian palm oil is still under parity to landed price which can keep the MCX price elevated. Nonetheless, the broad fundamentals are still bearish for palm oil hence we recommend selling on rise. For the week we recommend selling the September future at Rs for a target price of Rs. 597 with Stop loss above Basis (Spot-Sep) CPO - Forward Curve Spot Aug Sep Oct 1 Week 2 Week 3 Week

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4 REFINE SOY OIL The active CBOT soy oil futures declined by 50 points and settled at c/lb. Price declined with higher trading volume and increased aggregate open interest which indicates short accumulation. Significant reduction in soybean prices amid concerns of bumper U.S. soybean crop and no signs of reprieve from trade war between (U.S.-China) two largest soy oil producing and consuming countries In the domestic market the Indore spot price for soy oil was increased by 6 points at 741/10 kg. Soy degum Kandla September cif was marginally down by 1 point at $695. Soy oil prices have gained significantly since last week of August as demand was witnessed higher in domestic market due to on-going festive season. However, tracking weakness in edible oil prices in international market, price decreased again in last 3 session. On NCDEX the active Sep futures prices gained by 0.4% and settled at 739/10 kg. With decline in import price from Argentina and comparatively less correction in domestic future price, Import parity of soy oil has narrowed further. As on September 7th, Soy oil September future price was trading at premium of 2-3 points compared to Import cost from Argentina which stood at Rs.737/kg. SOFT OIL - SPOT PRICE NCDEX INDORE - Rs/10 kg DG SOYOIL MUM - Rs/10 kg REF COTTON OIL- Rs/10 kg REF SUNF OIL- Rs/10 kg SOY OIL - FOB ARG $/MT SOY OIL - FOB BRZ $/MT SUN OIL - FOB UKR $/MT #N/A N/A 2.36 CANOLA OIL - FOB EU $/MT WTI CRUDE OIL $/BL BRENT CRUDE OIL $/BL Trade war worries- US-China trade conflict is expected to intensify further as US president plans to impose tariffs on more goods. Both US and China are showing no signs of talks which means trade war worries will continue and this will be negative for commodities at large. Trade war is coincided with bumper crop in U.S. which has raised concerns for the prospects of soybean and soy oil.

5 FOR PRIVATE CIRCULATION ONLY September 10, Basis (Spot-Aug) Indian rupee- Indian rupee has opened lower by 0.6% to hit a fresh record low level of against the US dollar. Rupee remains pressurized by choppiness in equity market amid persisting trade war worries and contagion concerns in emerging market economies. Trade worries intensified as US President Donald Trump threatened that he's ready to tax all Chinese imports at short notice. Trump has also warned to take up trade issues with Japan while trade talks between US and Canada have failed to yield results. Concerns about health of emerging markets have also resulted in investor outflows Feb 16-Feb 3-Mar 18-Mar 2-Apr 17-Apr 2-May 17-May 1-Jun 16-Jun 1-Jul 16-Jul 31-Jul As per reports, foreign funds were net sellers of $102.3m in Indian bonds on Sept. 6 and net sellers of $119.7m in nation s equities that same day. Rebound in crude oil price is also weighing on rupee. Brent crude ha rescaled $77 per barrel amid optimism about US economy, rise in Chinese crude imports and worries about Iranian supply. The US dollar is also supported by optimism about US economy amid better than expected US non-farm payrolls data released Friday which further strengthens case for Fed s monetary tightening. While rupee remains under pressure, Economic affairs secretary Subhash Chandra Garg told in an interview that there was no reason for further depreciation of the Indian currency and no extraordinary measures were needed as of now. Rupee may remain under pressure unless we see stability in global financial market. USDINR may trade in a range of and bias may be on the upside Soy oil - Forward Curve Spot Aug Sep Oct 1 Week 2 Week 3 Week Soy oil - CPO Spot Spread Feb 17-Feb 4-Mar 19-Mar 3-Apr 18-Apr 3-May 18-May 2-Jun 17-Jun 2-Jul 17-Jul 1-Aug

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7 NCDEX SOYBEAN FUTURES- RS/QTL SOYBEAN CBOT soybean active futures traded steady for the last week and settled at 844 c/bu on Friday. Price marginally gained with higher trading volume and increased aggregate open interest which hints at long accumulation. On-going arrivals season in U.S., and expectation of bumper crop in U.S. is keeping soybean prices under pressure in international market. Though soybean price have improved in last couple of sessions, overall price during the season is still trading at multi-year. CBOT Soybean November contract price is down about 13% this year compared to corresponding period last year. Market is expected to keep a close eye on USDA s soyabean production number, especially for the U.S. Analysts are already betting big on all-time high production and increase in ending stock, which will probably keep soybean price in international market weak. In the Benchmark Indore market, soybean spot price gained by 2.3% points during the week as lower arrivals ahead of new crop supply supported the prices. On Friday soybean prices were quoted at 3426/quintal. Soyabean arrivals have declined as much as 25% during previous week across the country. 4-folds increase in supply from Maharashtra has however contained further correction in arrivals during festive season. NCDEX soybean October futures gained by 0.7% points and settled at 3246/quintal as expectation of increase in supply by next month has contained the rise. Besides, expectation of higher yield due to conducive weather in key soybean producing states is also taking a toll on soybean prices. Oct % Nov AGR Vol % Chng Dec % CBOT SOYBEAN FUTURES- USD/BU Nov % Jan % DCE SOYBEAN FUTURES- CNY/MT Sep % Jan % CBOT SOYMEAL FUTURES- CNY/MT Sep % Dec % DCE SOYMEAL FUTURES- CNY/MT Sep % Jan % SOYBEAN Rs/quintal INDORE INDORE-SEA KOTA NAGPUR SOYMEAL SPOT PRICE INDORE- Rs/MT INDORE- $/MT Arg - $/MT BRZ- $/MT USA- $/MT SOYBEAN NCDEX STOCK (MT) VALID STOCK QTY IN PROCESS Last Week 17/8/2018 Change % SOYBEAN ARRIVALS (in tons) STATE LAST WEEK PREVIOUS WEEK % Change MADHYA PRADESH 14,675 22,506-35% MAHARASHTRA 4,628 1, % RAJASTHAN 538 1,873-71% OTHERS 406 1,575-74% Total 20,247 27,029-25% Source: Agmarket and KCSPL Research

8 Acreage and weather update: As on first week of September, Overall, India s rainfall for the season to date was 94% of normal Basis (Spot-Oct) India s weather pattern during the past week disfavored abundant rain in western and southern parts of the nation, but soil moisture was still favorably rated in a large part of the nation and most crop conditions were still rated good. Some growing concern over dryness in the south is under way and close watch on mid- to late-september rainfall is needed to make sure seasonal rains increase as they should soon enough to protect crop production. The September period is expected to bring greater rain back to western Madhya Pradesh, Maharashtra and areas south into Tamil Nadu, although the rain is expected to be erratic. With regards to acreage, soyabean sowing has not increased as per expected growth rate of 10-15% higher from previous year. Till September 7 th, Soyabean acreage across the country was reported at lakh Hectares, which is 6.3% higher than same period last year Jun 6-Jun 11-Jun 16-Jun 21-Jun 26-Jun 1-Jul 6-Jul 11-Jul 16-Jul 21-Jul 26-Jul 3650 Soybean - Forward Curve Spot Oct Nov Dec 1 Week 2 Week 3 Week With higher declared MSP by central government and huge crop loss in cotton last year, soybean acreage was expected to grow over 12-15% this kharif season. However, with no signs of crop damage and adequate rainfall, soyabean crop yield is expected to rise significantly this season, which will keep overall output by at least 10-12% higher than last year s output of 109 lakh MT.

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10 MUSTARD Mustard Seed market shut up significantly in the last week to end the active contract at Rs up by Rs. 96 from previous week s close. In the similar lines the October future ended the week at Rs up by Rs. 88 from previous week s close. The support to the price rise was with the gains in the physical market amid tight supply. Also we think oversold price and lower level buying may have supported mustard seed price to trade higher. This can be further understood with the fact that the aggregate open interests at the futures market has dropped significantly while the volumes have increased. This clearly determines the effect of short covering. We think market might soon correct from higher level amid the fact that NAFED will have further selling on mustard seed in the physical market. As far as price trend is concerned we now have to look at October future contract. The October contract may trade in the range of Rs to Rs On the technical front we see as key resistance level however, on break of the same the momentum may push the price higher. For the week on technical chart suggests mustard seed price to trade in the range of Rs to Rs and recommend buying from lower levels. Due to slow offloading of stocks by NAFED pushed the price higher. We think the momentum may be continued in the short term. Mustard price is also underpinned over the spread with soybean which has reached to near At spot a spread of INR 1000 is good enough. Thus Mustard prices after correction is expected to remain under the consolidative phase unless there is aggressive bearishness in Soybean. NCDEX MUSTARD FUTURES- RS/QTL Aug % Sep AGR Vol % Chng Oct % WCE - ICE CANOLA FUTURES CANADA - CAD/MT Sep % Jan % MUSTARD SEED SPOT PRICE Rs/quintal JAIPUR ALWAR MUSTARD OIL - SPOT PRICE RM OIL EXPEL - Rs/10 kg Canola Oil FOB EU - $/MT MUSTARD MEAL - SPOT PRICE JAIPUR- Rs/MT KANDLA - $/MT MUSTARD NCDEX STOCK (MT) VALID STOCK QTY IN PROCESS Last Week 17/8/2018 Change % MUSTARD ARRIVALS (in tons) State LAST WEEK PREVIOUS WEEK % Change RAJASTHAN % UTTAR PRADESH % MADHYA PRADESH % GUJARAT % OTHERS % TOTAL 10,219 17,459-41% Source: Agmarket and KCSPL Research

11 The Mustard forward curve structure has not changed much in last week. With price gaining the spreads have narrowed in last two weeks Basis (Spot-Aug) May 12-May 22-May 1-Jun 11-Jun 21-Jun 1-Jul 11-Jul 21-Jul 31-Jul Mustard- Forward Curve Spot Aug Sep Oct 1 Week 2 Week 3 Week

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13 Aurobinda Gayan- Vice President Research Fundamental Team Faiyaz Hudani- DVP Oilseeds Complex Madhavi Mehta- AVP Bullion; Energy Priyanka Jhaveri- AVP Base Metals Mohit Vyas- Senior Manager Agriculture Technical Team Ashok Kamrani- Senior Manager Anup Sahu- Manager Disclaimer This document is not for public distribution and has been furnished to you solely for your information and must not be reproduced or redistributed to any other person. Persons into whose possession this document may come are required to observe these restrictions. This material is for the personal information of the authorized recipient and we are not soliciting any action based upon it. This report is not to be construed as an offer to seller or solicitation of an offer to buy any commodity or commodity derivative to any person in any jurisdiction where such an offer or solicitation would be illegal. It is for the general information of clients of Kotak Commodity Services Private Limited. It doesn't constitute a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual clients. We have reviewed the report, and in so far as it includes current or historical information, it is believed to be reliable though its accuracy or completeness cannot be guaranteed. Neither Kotak Commodity Services Private Limited, nor any person connected with it, accepts any liability arising from the use of this document. The recipients of this material should rely on their own investigations and take their own professional advice. Price and value of the commodity referred to in this material may go up or down. Past performance is not a guide for future performance. Certain transactions including those involving commodity derivatives involve substantial risk and are not suitable for all investors. Reports based on technical analysis centers on studying charts of a commodity's price movement and trading volume as opposed to focusing on a commodity's fundamentals and as such may not match with a report on a commodity's fundamentals. We do not have any information other than information available to general public. The report is based on information from sources like respective industry associations, FICCI, CII, companies, media and other public sources. Opinions expressed are our current opinions as of the date appearing on this material only. While we endeavor to update on a reasonable basis the information discussed in this material, there may be regulatory, compliance, or other reasons that prevent us from doing so. Prospective investors and others are cautioned that any forward-looking statements are not predictions and may be subject to change without notice. Our proprietary trading may make trading decisions that are inconsistent with the recommendations expressed herein. We and our affiliates, officers, directors, and employees worldwide may: (a) from time to time, have long or short positions in, and buy or sell the commodities mentioned herein or (b) be engaged in any other transaction involving such commodities and earn brokerage or other compensation or act as a market maker in the commodity/ (ies) discussed herein or have other potential conflict of interest with respect to any recommendation and related information and opinions. The analyst for this report certifies that all of the views expressed in this report accurately reflect his or her personal views about the subject commodity and no part of his or her compensation was, is or will be, directly or indirectly related to specific recommendations or views expressed in this report. No part of this material may be duplicated in any form and/or redistributed without Kotak Commodity Services Private Limited's prior written consent. Registered Office: Kotak Commodity Services Private Ltd., Nirlon house, 1st Floor, Dr. Annie Besant Road, Opp. Sasmira, Near Old Passport Office, Worli, Mumbai CIN No. U65910MH1987PTC Fax: Customer care no Website: SEBI registration no.: INZ NCDEX/TCM/CORP/0479. MCX/TCM/CORP/0026. NCDEX MCX Trading in commodities is subject to market risk and one should read the Risk Disclosure Document carefully prior to trading