MARKET OUTLOOK. 31 July 2017 Oil & Oilseeds Daily. FOR PRIVATE CIRCULATION ONLY November 14, RSO CPO Spot Spread

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1 FOR PRIVATE CIRCULATION ONLY November 14, 2017 MARKET OUTLOOK Palm oil: BMD Malaysian palm oil Jan futures down to the three-week low on Monday, with the benchmark contract closing at 2760, 39 points lower. The contract opened at 2788, 11 points below the previous closing price. During the first-half session, the market edged up to the day-high at Since then, it moved down steadily before falling to the day-low at 2759 and closed at Price declined on lower the lower exports numbers for 1-10 Nov and the rising stock as the MPOB data. The production estimate for 1-10 Nov was higher by 4.5%. Gapki reported Indonesia Sep export 7.50% down to Aug, production was up by 2.10% and the stock was at LT. The exports number for 1-10 Nov by ITS showed a decline of 2.53% compared to Oct. Price has broken the technical support of 2750 and is trading at The next support is of The Nov monthly MPOB report showed a production rise of 12.92% for Oct The production rise is higher than the market expectations of 10%. Export was higher by 1.97% compared to Sep 2017 which was lower compared to the market expectations. The ending stock witnessed a rise of 8.41% at The market expectations of the stock were of 2.2 MMT which is in line with the actual number. The stocks rise has been witnessed with higher production. The data is to be price negative as the 2.2MMT stock is in line with the market. MCX Dec CPO futures traded in the range of and settled unchanged at Price traded with steady OI and volume in the Dec futures. The CPO futures have tested the levels thrice since 2017 and have not been able to sustain above it. With import duty news now gulped by the market the upside may be capped from here as the international market is also looking at a profit taking. Price has made a bearish technical pattern at the top of the chart. A decline in the next 1-2 trading session can lead to a reversal of the bull trend. FUTURES PRICE MOVEMENT 13-Nov-17 EDIBLE OIL COMPLEX Contract Open High Low Close % Chg Vol (MT) OI OI NCDEX - SOY BEANS Rs./Qtl Nov % Dec % Jan % NCDEX - REFINED SOY OIL Rs./10kg Nov % Dec % Jan % NCDEX - MUSTARD SEED Rs./Qtl Nov % Dec % Jan % MCX - CRUDE PALM OIL Rs./10kg Nov % Dec % Jan % Note : MCX OI in Lots INTERNATIONAL Contract Open High Low Close Change % chg CBOT SOY BEAN US Cents / Bushel Nov % Jan % CBOT SOY MEAL US $/short ton Dec % Jan % CBOT SOY BEAN OIL US Cents/Pound Dec % Jan % WCE CANOLA Canadian $/ton Nov % Jan % BURSA MALAYSIA PALM MYR/ton Jan RSO CPO Spot Spread RSO - CPO Spot Spread 1-Jan-16 1-Mar-161-May-16 1-Jul-16 1-Sep-16 1-Nov-16 1-Jan-171-Mar-171-May-17 1-Jul-17 1-Sep-17 1-Nov-17

2 MARKET OUTLOOK As of yesterday the import parity of Dec is at 553/10 kg while the MCX Dec futures is at 569 making the futures up by 16 points compared to import parity. Selling can be witnessed in today s trading session with lower global veg oil market and profit booking in the domestic counter. The outlook is negative with the trading range of for MCX Dec future. Soy oil: CBOT Soy oil Dec declined by 0.48 c/lb and settled at c/lb. The session opened at made the high of and witnessed selling. Intraday low of was made before the market settled at Decline of 39 points in BMD palm oil price set the negative tone for the trading session. CBOT soy was also under pressure which further added weak tone to the soy oil price. Price failed to sustain above the 35 cent mark for the second consecutive week. This also lead to technical selling with profit booking expectation in crude oil. The trading range for the session is with a negative bias. In the domestic market NCDEX Soy oil Dec contract traded in the narrow range of and settled at down by 1.85 points. Price declined with steady OI and lower volume. Indore spot was trading at 690 with Kandla cif at $838 down by 5 points. Soybean meal at Indore declined by 1000 points and settled at NCDEX Soy oil Dec future is above the NCDEX spot price by Rs 25/10kg. NCDEX DEC future is trading above the import parity by 28 points; this may cap the upside in soy oil futures. A delay in the import duty announcement can lead to correction on domestic bourses. The trading range for the session is for the NCDEX Dec contract with a negative bias. Soybean: NCDEX Dec futures gained by 13 points and settled at 2865/quintal. Price gained with rising volume and steady OI in yesterday s trading session. All India arrivals were at 7.75 lakh bags compared to 7.25 lakh bags on Friday. Correction at higher levels in veg MARKET ANALYSIS Centre Spot Change SOY BEANS Rs./Qtl Indore Kota Nagpur REFINED SOY OIL Rs./10kg Indore Mumbai Nagpur SOY MEAL Rs./ton Indore MUSTARD SEED Rs./Qtl Alwar Jaipur Source: NCDEX Oil (Crude) C&F Rate- Imp Base Landed Mumbai Tariff Price Soyoil $/ ton Rs./ 10 kg Palm Oil $/ ton Rs./ 10 kg Source: SEA, KCSL Note: Domestic price: Soy oil Ex Indore Palm Oil Ex Kandla WARE HOUSE STOCKS in MT ( As on 12th November 2017) NCDEX Demat In Process TOTAL SOY BEAN 9174 MUSTARD SEED TOTAL CRUSH MARGIN & OIL-MEAL SHARE Rape/Mustard Complex Gross Crush (Rs.) 234 Oil share 79.95% Meal share 20.05% Soybean Complex Gross Crush (Rs.) Oil share 40.5% Meal share 59.5% Source: SEA, KCSL Currency Type Close %Chg USD/INR Spot Domestic Price INTRADAY COMMODITY CONTRACT SUPPORT RESISTANCE TREND SOYBEAN December Bullish RSO December Bearish MUSTARD SEED December Bullish CPO December Bearish oils capped the upside in soybean futures. Traders expect the arrivals to decline from here on. With the government intention to support oilseeds price and Veg oil import duty hike rumors the downside in soybean looks limited. Spot price of loose soybean was at Indore while the plant delivery was trading at As per traders farmers are not willing to sell below the model rate price of 2580/quintal. Therefore traders feel 560

3 that below 2580 the farmers will hold back and this may cap major downside in price. In the global market, the benchmark Jan CBOT soy contract traded in the range of c/bu and settled at down by points compared to Fridays close. CBOT soybean came under pressure as rains in Brazil have been ideal for sowing. US weekly export inspection has fallen to a four week low also led to correction in CBOT soy futures. The latest harvesting indicates 93% of harvest of soy completed in USA. The immediate support is of 965 c/bu. The trading range for CBOT Jan is of c/bu for the session with a negative bias. The arrivals pressure will decide the price direction for NCDEX soybean. The immediate support is of for NCDEX Dec contract. For the trading session we expect soybean to trade in the range of for the Dec with a positive bias. Mustard: NCDEX Mustard seed Dec futures traded in a narrow range of and settled at Price closed higher by 5 points with lower OI and volume. Price traded dull with narrow movement in veg oils. Lower acreage number with recovery in soybean supported the Mustard fuutures counter. As of 10 Nov 2017 the all Indian area under Mustard was at lakh hec vs in last year, the normal area is lakh hec as per the govt data, the area is down by 3.54%. Traders expect the acreage to be lower compared to last year as farmers will shift to Chana due to lower realization in Mustard and higher realisation in Chana. Arrivals were higher by 5000 bags at 1.80 lakh bags and price traded steady at /quintal. The govt. has increased the MSP by 300 points at 4000/quintal. Basis is at 30 points as on Mondays close. Spot price traded at in Jaipur mandi. Especially with only 152 MT of EDD stock in Dec expiry will cap the downside in the futures. The demand of Mustard oil is also expected to pick up as we enter the winter season which is the peak demand period. The kachi gani oil declined by 5 points at 790/10 kg. Mustard cake price quoted at Rs 1390/quintal vs 1350 at the Jaipur market. The outlook is bullish on the lower sowing expectations and seasonal recovery. Correction during the session should be used as an opportunity to go long. The trading range for the session is expected to be for NCDEX December contract with a positive bias. Indian Rupee- Indian rupee appreciated by 0.2% to trade near 65.3 levels against the US dollar. Rupee recovered after 0.4% depreciation in previous session. However, weighing on rupee is choppiness in disappointing inflation data and concerns about impact of higher crude oil prices. India consumer price index rose 3.58% on the year in October, up from September s 3.28% growth and was higher than market expectations of 3.43% rise. Higher inflationary pressure will lower market expectations of RBI s interest rate cut. Also weighing on rupee is choppiness in global equity market amid mixed economic data from major economies and concerns about Trump s tax plan. Rupee has fallen sharply in last few days and while some correction is possible overall sentiment remains weak and we could see some more depreciation. USDINR may trade in a range of and bias may be on the upside.

4 MCX CPO Dec View: Sideways Trading Range /577 BMD CPO - 3 Month Forward View - SELL ON RISE TP : 2700 SL 2805 USDINR SPOT View -Buy on dips 65.20/65.15 TP : 65.5 SL 65.05

5 Aurobinda Gayan- Vice President Research Fundamental Team Faiyaz Hudani- DVP Oilseeds; Pulses Madhavi Mehta- AVP Bullion; Energy Priyanka Jhaveri- AVP Base Metals Sunandh Subramaniam- Asst. Manager Spices Technical Team Ashok Kamrani- Senior Manager Karan Shah- 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 Limited, Nirlon house, 1 st Floor, Dr. Annie Besant Road, Opp. Sasmira, Worli, Mumbai-25 CIN No. U65910MH1987PTC Fax: Customer care Website-