Decision enabling cash market analysis & price outlook For the week beginning Dec 26, 213 Fundamental Summary Technical Summary Price drivers Report Summary Lower production at Argentina amidst higher spread with Ukraine Higher global sun oil production vis àvis last year Higher export pace at Russia & Ukraine Weak international competing oil prices Impact Marginally Bullish Weightage Score % (1 5) 3% 4 Marginally Bearish 3% 2 Marginally Bullish Marginally Bearish 2% 4 2% 2 Indexed score 3. *1 Bearish; 2 Marginal Bearish; 3 Consolidation; 4 Marginal Bullish; 5 Bullish Argentina sunflower oil price are likely to trade on mixed note ahead of witnessing technical rebound in the coming weeks. Ukraine sunflower oil prices are likely to trade on mixed note ahead of witnessing technical rebound in the coming weeks. Fundamental Review and Analysis Sun oil prices edged lower in the wake of higher global sun seed production coupled with weak international competing oils like soy. However, prevailing lean season coupled with lower acreage at Argentina front has limited the aggressive fall. Due to the lower 213/14 sun seed acreage coupled with prevailing lean season for sun seed production at Argentina, sun oil spread remain at positive note at $ 47 with respect to Ukraine sun oil while it remains at negative note for the same period last year. In this context, Ukraine sun seed crush is likely to remain on higher side as sun seed harvesting has already completed which in turn has kept the prices under pressure. Moving ahead, delay in sun seed sowing at Argentina due to prolonged drought like condition during Oct/Nov has kept the sun seed plant development behind the schedule. 2 1 1.2.12 1.4.12 1.6.12 1.8.12 1.1.12 1.12.12 1.2.13 1.4.13 1.6.13 1.8.13 1.1.13 1.12.13 Sun Oil Spread : Argentina Vs Ukraine ($/ton) In this context, North Central Santa Fe 6% of the pictures is in grain filling, in very good conditions, accompanied by a suitable water condition. Thus, the collection of first batches begin within 15 days, and is expected to be the average yields near average historical (16 qq / ha). Further, southwest of Buenos Aires and La Pampa South sunflower is somewhat delayed in their development, culminated as seeding later than other areas. Whereas, Southeast, Girasol era important region of the country, the date keeps adequate moisture condition on the floor, enabling the optimum culture developed. 1 Discuss with our expert Phone: +91 4 33444 E mail: services@transgraph.com Internet: www.transgraph.com
To date, 7% of the area is still in the vegetative stage, while 3% of the surface has reached the stage of flower bud. In view of the increased world sun seed availability, which is likely to persist throughout virtually the entire crop year, world production and export supplies of sun oil will also be very high in Apr/Sept 214 and considerably above the year ago. In this context, for Oct/Sept 213/14, sun oil production at 15.2 million ton up 1.7 million ton or 13% from the reduced level of last season. Export is likely to increase to 7. 7.1 million ton out of which Ukraine 3.6 million ton (Vs 3.1 million ton last year), Russia 1.5 million ton (vs 1.1 million tons) and Argentina.62 million tons (vs.61 million tons. Under this scenario, global usage of sun flower oil is projected to reach 14.9 million ton in 213/14, with 3.6 million ton likely to be consumes in EU 28, 3.5 million ton in former Soviet Union, 1.3 million tons in India,.9 million ton in Turkey and.7 million tons in China. Further, it is interesting that Ukraine is expected to garner additional market share on the sun oil market of the EU in Jan/Sept 214, benefiting from the EU s generalized Scheme of preference(gsp) which will make Ukrainian Sun oil prices more attractive compared to Russian Origin. However, as more sun oil is likely to be exported to EU, less will be available to other destination which might help Russia sun oil exporter offsetting reduced buying interest from Europe. In nutshell, anticipation of higher global sun seed production coupled with higher crushing of sun seed might keep the sentiment negative where as lower sun seed acreage at Argentina coupled with support from other veg oil could cushion the losses at the same time. In crux, sun oil prices are expected to trade with range bound in next 3 4 weeks. Argentina Sunflower 1M forward USD/Ton Technical Summary Price Outlook Summary Price Ranges Particulars Sun oil, Crude, non food usage Sun oil, crude, food Usage Sun oil, refined, non food usage Sun oil, refined, food usage General MFN (E.g Russia and Argentina from Jan1, 214 Last closing: USD 935 ( 5) per MT as on Dec 2, 213 GSP (E.g Russia & Argentina until Dec 31, 213, Ukraine Turkey, Moldova, Serbia, Bosnia, Croatia 3.2% % % 6.4% 2.9% % 5.1% 1.6% % 9.6% 6.1% % Prices remained standstill at USD 94 from last two & half months, after sharp sell off in earlier month, momentum oscillators are moving flat in deep oversold territory, which may create possibility of technical pullback in the coming weeks. Prices on holding above USD 9 are likely to stay with mixed bias, in the range of USD 9 to USD 9, ahead of witnessing technical rebound towards USD 1, in the coming weeks. 2 weeks 1 month 2 months IL SL IL SL IL SL 9 9 9 9 1 IL=Initial level (Initial Expectation from the current closing) SL= Subsequent level (The subsequent forecast after reaching the initial level) Strategy Review Dec 13 buying requirement were completed at a price of USD 94. Generic Procurement Strategy For fresh Jan 14 buying requirement % can be covered on any dip near USD 93. Turnaround point A close below USD 9 could turn the sentiments further weak. 2
Chartist View on Argentina Sun Oil 1 Month Forward (USD/MT) Argentina Sunflower Oil after posting a high of USD 116 in the month of July 13, remained mixed to weak then after and after trading on flat note for the last three months traded on weak note in the pweriod under review. Prices after remained static at USD 94 from last three months traded lower by USD 5 and closed at USD 935 and continued to hold below its 21 & 13 week EMA. On the weekly technical setup Stochastic (14/3/3) moving flat in level, and RSI (14) moving flat in oversold territory. Momentum oscillators are moving in oversold to deep oversold condition, which creates possibility of technical pullback in prices, in days to come. Therefore, initially prices may remain mixed to weak ahead of witnessing technical pullback towards USD 1. On the downside, prices are likely to find support near USD 92 9 from 61.8% Fibonacci Retracement of upleg from the lows USD 62 to the highs of USD 1375, followed by swing low support near USD 8. On the higherside, prices has immediate resistance from % Fib. Ret near USD followed by resistance from major swing low of USD 1. Concisely, prices on holding above USD 9 are likely to stay with mixed bias, in the range of USD 9 to USD 9, ahead of witnessing technical rebound towards USD 1, in the coming weeks. Ukraine Sunflower 1 month forward USD/T Last closing: USD 885 (.) per MT as on Dec 16, 213 Technical Summary Prices are trading in a choppy way from last couple of weeks, post finding resistance at USD 915. Momentum oscillators are poised with mixed bias. Prices upon holding above USD 8 are likely to stay with mixed bias, in the range Price Outlook Summary of USD 925 to USD 8, ahead of witnessing technical rebound towards USD 12, in the coming weeks. 2 weeks 1 month 2 months Price Ranges IL SL IL SL IL SL 8 925 8 9 8 12 Strategy Review Dec 13 buying requirement were completed at an average price of USD 899. Generic Procurement Strategy For fresh Jan 14 buying requirement, 25% was completed at USD 885 and 25% can be covered on dip near USD 875. Turnaround point A close below USD 8 shall turn the sentiment further weak. 3
Chartist View on Ukraine Sunflower spot 1m forward (USD/MT) Ukraine Sunflower Oil prices plunged sharply lower from the highs of USD 114 in the mid July 13, and found support on USD 845 in the month of Aug 13; subsequently prices traded on mixed to flat note. In the week under review prices remain unchnaged after dropping USD 15 in the preceding week and settled at USD 885, below its 13 pd EMA. On the technical setup Stochastic (14/3/3) gradually easing from overbought territory, while 14 period RSI meandering below equilibrium level. Momentum oscillators are poised with mixed bias. Therefore, prices on holding above USD 8 are likely to stay with mixed bias, in the range of USD 8 to USD 925, in the coming sessions. On the upside prices has immediate resistance in the range of USD 925 94 from fractal highs, and Fibonacci Retracement levels, breaking above which fresh follow through buying will emerge whiich can take prices higher towards USD 12 where it is likely to find resistance from earlier major swing low. On the downside prices has firm support in the range of USD 8 84 from its recent swing low, below which prices will find support near USD 8. Concisely, Prices upon holding above USD 8 are likely to stay with mixed bias, in the range of USD 925 to USD 8, ahead of witnessing technical rebound towards USD 12, in the coming weeks. 12 8 6 4 2 Soy oil import parity (INR/1 kg) 4 45 Kandla Landed 4. Sep Oct Nov 63 Dec JNPT Indore Edible oil prices @ Mumbai (INR/1 kg) 7 3 1-1 Weekly Dashboard CPO import parity (INR/1 kg) 13. 35.86 38 9/17 1/17 11/17 12/17 HS LOCAL LANDED Edible oil prices @ Mumbai (INR/1 kg) 2 1 Sunflower oil import parity (INR/1 kg) 8 77.5 19/Aug 28/Sep 7/Nov 17/Dec Landed Local Benchmark Gross soybean crush margins @ US ($/bu) 4
83 73 63 53 43 1 585 625 77 66 Sep Oct Nov Dec Ref Soy Ref CT Repe Oil Olein Soy RBD Olein price spread (At origin, $/ton) 82 Oct Nov Dec 1 9 8 7 6 3 - - 7 81 Oct Nov Dec GN Oil Ref Sun oil Sun Soy price spread (FOB Argentina, $/ton) 43 Oct Nov Dec.9.7.5.3.1 -.1 3 -.653 18-Oct Nov Dec Sun Soy price spread (CNF India, $/ton) -5 Oct Nov Dec INR vs. USD Euro vs. USD Dollar Index 7 65 61.92 6 55 18-Oct 18-Nov 18-Dec 1.4 1.38 1.36 1.34 1.32 1.3 1.377 Oct Nov Dec 84 82 8.1 8 78 76 Oct Nov Dec 15 95 9 85 NYMEX Crude ($/barrel) 97.2 Oct Nov Dec Facts and Figures Digest Dec 2, 213 Dec 11, 213 Sunflower oil FOB, Argentina one month forward (US$/MT) 935* 94* Sunflower oil FOB, North European ports forward (US$/MT) 97 99 Soy oil futures at CBOT,Jan 14 (cents / Lb) 39.31 4.4 Soy oil FOB, Argentina one month forward (US$/MT) 93 96 Crude palm oil futures at BMD, Jan 14 (MYR/MT) 2532 2617 As on 2 th Dec 213* 5
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