Daily Agri Report, February 12
Daily Agri Report, February 12
Daily Agri Report, February 12
Agricultural Commodities
Content
News & Market Highlights Chana Sugar Oilseed Complex Spices Complex Kapas/Cotton
Research Team
Vedika Narvekar - Sr. Research Analyst [email protected] (022) 2921 2000 Extn. 6130 Anuj Choudhary - Research Analyst [email protected] (022) 2921 2000 Extn. 6132
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Agricultural Commodities
News in brief
CTT a strong possibility
Finance minister P Chidambaram may impose commodity transaction tax (CTT) in the 2013-14 budget to provide a level-playing field for both the stock and commodity markets. In the 2012-13 budget the government cut the securities transaction tax (STT) to 0.1 per cent to lower the cost of stock trading stock exchanges and market players asked that either STT was ended or CTT was imposed. STT, introduced in 2004 and levied on sale and purchase of equities, accounts for 51 per cent of transaction costs in stock markets. With stock trading volumes falling, bankers led by SBI Chairman Pradip Choudhury demanded during this year's pre-budget consultations reiterated the demand for a level playing field. He also said much of the money that could have been invested in the stock market was going into the commodity market. There is also the other view that CTT will help regulate and monitor the commodity market better. The aim of CTT is not to get more revenue. Not more than Rs 3,000 crore in a year can be expected. But the purpose is make commodity transactions in exchanges more transparent. Now that the volumes in commodity exchanges have increased manifold and volumes in stock trading are falling, it is the time to look at CTT, analysts say. Commodity exchanges, however, warn that CTT imposition would encourage illegal trading on the commodity exchanges. (Source: Financial Chronicle)
Sensex Nifty INR/$ Nymex Crude Oil - $/bbl Comex Gold - $/oz
.Source: Reuters
Indian government introduce farm machinery banks to help small scale farmers
The Indian government is planning to introduce custom hiring facilities with the help of farm machinery banks and several new programs to promote farm mechanization among small scale farmers in the country. The agricultural ministry aims to increase the reach of farm mechanization to small and marginal farmers with the help of farm machinery banks which will facilitate custom hiring of farm machinery by providing financial assistance to individual self-help groups (SHG) or farmers co-operatives. The Sub-Mission also aims to create ownership of farm equipments among small and marginal farmers in eastern and northeastern region of India, regions which have been identified as future rice granaries of India. (Source: Agriwatch)
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Agricultural Commodities
Chana
Chana prices declined yesterday on account of increasing supplies in the domestic markets amid start to harvesting. Further, higher output expectations also exerted pressure on the prices. Spot as well as futures settled 1.36% and 0.88% lower on Monday. Ministry of Agriculture in its second advance estimates, have pegged, bumper chana output for 2012-13 season at 8.57 mn tn, up 11% from 2011-12 final estimates of 7.7 mn tn.
Market Highlights
Unit Rs/qtl Rs/qtl Last 3560 3396 Prev day -1.36 -0.88
as on Feb 11, 2013 % change WoW MoM -0.44 -11.01 -1.48 -16.62 YoY -2.58 -6.83
Source: Reuters
Source: Telequote
Technical Outlook
Contract Chana Apr Futures Unit Rs./qtl Support
3365-3380
Trade Scenario
In Australia, total chickpea production in 201213 is estimated to have increased to a record of around 746000 tones as compared with 485000 tons in 2011-12. India imports Chana mainly from Australia and Canada and higher availability in these countries at comparatively cheaper rates is seen boosting imports of Chana to meet the domestic shortfall.
Outlook
Chana Futures are expected to remain under downside pressure today as the agriculture ministry has estimated bumper chana output for 2012-13 season. Also arrivals shall gain momentum in the coming days and is expected to increase the supplies in the markets. Also, higher output of Chana in other producing countries like Australia and Canada is expected to support the weak market sentiments.
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Agricultural Commodities
Sugar
Sugar March contract recovered sharply yesterday on hopes of partial decontrol of sugar industry. Bargain buying was also seen at lower levels. Also, traders expect demand to improve in the coming summer months. Prices have corrected over the last few weeks on account of higher production and availability in the domestic markets and comparatively lower demand amid winter season. The Spot as well as the Futures settled 0.17% and 1.31% higher on Monday. Food minister KV Thomas on Thursday said the government is likely to take a decision on decontrolling the sugar industry before the Budget. Food ministry has proposed dispensing with the regulatory release mechanism and abolishing the levy system. India has fixed FRP (Fair and Remunerative Price), the price sugar mills must pay to cane growers at 210 rupees per 100 kg in the 2013/14 year, compared to current years 170 per qtl. Higher floor price increases the cost of production as the raw material cost constitute the major part of cost of production of sugar. This should actually increase the prices of sugar. Raw sugar futures on ICE as well as Liffe white sugar traded on a positive note and settled 0.64% and 1.65% higher respectively on Monday due to lack of sellers in Brazil due to Carnival holiday.
Market Highlights
Unit Sugar Spot- NCDEX (Kolhapur) Sugar M- NCDEX Feb'13 Futures Rs/qtl Last 3187
as on Feb 11, 2013 % Change Prev. day WoW 0.17 -1.27 MoM -1.73 YoY 7.38
Rs/qtl
3050
0.96
-0.55
-4.72
5.32
Source: Reuters
International Prices
Unit Sugar No 5- LiffeMar'13 Futures Sugar No 11-ICE Mar '13 Futures $/tonne $/tonne Last 488.5 409.78
as on Feb 11, 2013 % Change Prev day WoW 0.64 1.65 -2.01 -1.55 MoM -4.68 -2.74 YoY -25.64 -25.16
.Source: Reuters
Source: Telequote
Technical Outlook
Contract Sugar Mar NCDEX Futures Unit Rs./qtl Support
3040-3065
Outlook
Sugar futures are expected to trade on a positive note today due to bargain buying. Prices may consolidate at the lower levels as markets may adopt a wait and watch policy expecting government to take decision levy sugar mechanism, one of the major reforms of sugar decontrol. The hike in cane price and thereby increase in sugar production cost may also support prices as this may force government to take some measures to increase sugar prices.
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Agricultural Commodities
Oilseeds
Soybean: Soybean futures declined yesterday tracking weaker
international markets as the USDA monthly crop report released on Friday pegged higher global ending stocks. The Spot settled marginally higher by 0.06% while the March Futures settled 2.04% lower on Monday. Oil meal exports rose by almost 40 per cent to 7.68 lakh tonnes in January this year, industry body Solvent Extractors Association of India said. The export of oil meals, however declined by 18 per cent to 36.79 lakh tonnes in the first 10 months of this fiscal compared to 44.85 lakh tonnes in the year-ago period. The country exported 25.36 lakh tn soybean meal in first 10 months compared to 30.82 lakh tn in the same period last year which showing a decline of 17.72%. According to the second advance estimates, 2012-13 oilseed output is pegged at 29.4 mn tn, down by 1.1%, while soybean output is pegged higher at 12.9 mn tn, up 3.2%.
Market Highlights
Unit Soybean Spot- NCDEX (Indore) Soybean- NCDEX Feb '13 Futures Ref Soy oil SpotNCDEX(Indore) Ref Soy oil- NCDEX Feb '13 Futures Rs/qtl Rs/qtl Rs/10 kgs Rs/10 kgs Last 3327 3250 730.8 721.4
as on Feb 11, 2013 % Change Prev day 0.06 -1.56 -0.47 -0.39 WoW -1.36 -2.39 -3.33 -2.86 MoM 4.46 5.31 -0.25 -0.57 YoY 32.44 30.21 4.13 3.63
Source: Reuters
as on Feb 11, 2013 International Prices Soybean- CBOTMar'13 Futures Soybean Oil - CBOTMar'13 Futures Unit USc/ Bushel USc/lbs Last 1432 51.24 Prev day -1.45 -0.37 WoW -3.85 -3.52 MoM 0.47 4.83
Source: Reuters
International Markets
Soybean futures on the CBOT corrected sharply extending Fridays fall as USDA raised its forecast of global 2012/13 soybean ending stocks above 60 million tonnes, up from 59.46 million in January and settled 1.45% lower on Monday. Upward revision in Brazils soy output is offset by downward revision in the Argentina production. However, persistent dry, hot weather in much of Argentina is hurting 2012/13 crops as they enter crucial growth stages, and rains are needed to safeguard potential yields, the countrys agriculture ministry said last week. Thus output may be revised down further. China, the world's largest soy buyer, imported 4.78 million tonnes of soybeans in January, down 18.8 percent from 5.89 million tonnes in December
as on Feb 11, 2013 % Change Prev day WoW 0.40 -0.33 -1.27 -0.44
Unit
CPO-Bursa Malaysia Feb '13 Contract CPO-MCX- Feb '13 Futures
MYR/Tonne Rs/10 kg
Source: Reuters
RM Seed
Unit RM Seed SpotNCDEX (Jaipur) RM Seed- NCDEX Apr'13 Futures Rs/100 kgs Rs/100 kgs Last 4095 3388 Prev day -2.50 -0.09
Refined Soy Oil: Ref soy oil March settled 0.85% lower yesterday
taking cues from weak international markets while MCX CPO settled 0.33% lower tracking weak edible oil segment. The head of the Solvent Extractors' Association of India has proposed India should raise the duty on crude edible oil imports to 10 percent from the recently revised 2.5 percent. India's palm oil imports rose 27.4% on month at 783,091 tn in December, boosted mainly by poor domestic supply of alternatives and attractive overseas prices due to record stocks in key supplier Malaysia.
Outlook
Soybean complex may open higher due to short coverings at lower while, but it may correct towards the later part of the day taking cues from the weak international markets as USDA report raised its forecast of ending stocks. Mustard seed is expected to trade downwards on higher output expectations. CPO is expected to trade sideways during the intraday.
Source: Telequote
Technical Outlook
Contract Soy Oil Mar NCDEX Futures Soybean NCDEX Mar Futures RM Seed NCDEX Apr Futures CPO MCX Feb Futures Unit Rs./qtl Rs./qtl Rs./qtl Rs./qtl
valid for Feb 12, 2013 Support 689-692 3120-3145 3350-3370 444-448 Resistance 698-702 3210-3250 3400-3420 453-456
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Agricultural Commodities
Black Pepper
Pepper March Futures recovered sharply from lower levels on account of low stocks, thin supplies and delayed harvesting due to lack of skilled laborers. Some improvement in the arrivals of the fresh crop led to a decline in the prices earlier last week. Good winter demand also supported the prices. Food Safety and Standards Authority of India sealed the entire quantity of pepper stored in six warehouses in Kerala of about 8,000 tonnes. Harvesting of the fresh crop is going in and is expected to gain momentum in the coming days. Exports demand for Indian pepper in the international markets is also weak due to price parity. The Spot settled lower by 0.43% while the March Futures settled 1.33% higher on Monday. According to a circular issued by NCDEX on 09/02/2013, launch of June 2013 expiry contract in Pepper which is scheduled on February 11, 2013, has been postponed till further notice. The revised launch date will be announced in due course. Spices Board has announced plans to import high yielding Madagascar variety that was behind the record productivity in Vietnam. It could raise productivity of Indian pepper from 2,000 kg/ha to 7,000 kg/ha. Pepper prices in the international market are being quoted at $8,000/tn(C&F Europe). Vietnams 550 GL is quoted at $6,500/tn, Malaysia and Indonesia Austa variety are quoted at $7,000/tn and Brazil black pepper is quoted at $6,600/tn.
Market Highlights
Unit Pepper SpotNCDEX (Kochi) Pepper- NCDEX Feb'13 Futures Rs/qtl Rs/qtl Last 40181 38720 % Change Prev day -0.43 -0.03
as on Feb 11, 2013 WoW -1.03 -0.24 MoM 4.20 8.08 YoY 28.76 31.59
Source: Reuters
Technical Outlook
Contract Black Pepper NCDEX Mar Futures Unit Rs/qtl
Outlook
Pepper is expected to recover today on account of low stocks coupled with thin arrivals may limit sharp downside. Winter buying demand may also support prices at lower levels. However, any improvement in arrivals will cap sharp upside.
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Agricultural Commodities
Jeera
Jeera Futures traded on a mixed note yesterday and settled marginally higher by 0.29% while the spot remained lower and settled 1.2% lower on commencement of arrivals of the new crop. The arrivals of new crop is around 300-400 bags/day and is expected to gain momentum in the coming days. Some export demand from Bangladesh was reported last week. Higher sowing as well as conducive weather in Gujarat, the main jeera growing region has increased output expectations. Sowing is complete. According to Gujarat State Agri Dept. sowing in Gujarat is reported at 3.244 lakh ha till Jan, 2013 compared with 3.64 lakh ha last year. In Rajasthan, sowing is expected to increase by 10-15%. According to markets sources about 75% exports target has already been achieved due to a supply crunch in the global markets. Supply concerns from Syria and Turkey still exists. Expectations are that export orders may still be diverted to India from the international markets due to lack of supplies from Syria on back of the ongoing civil war. Production in Syria and Turkey is being reported around 17,000 tonnes and around 4,000-5,000 tonnes, lesser than expectations. Jeera prices of Indian origin are being offered in the international market at $2,950-2,975 tn (c&f) while Syria and Turkey are not offering. Carryover stocks of Jeera in the domestic market is expected to be around 5-6 lakh bags.
Market Highlights
Unit Jeera Spot- NCDEX (Unjha) Jeera- NCDEX Mar '13 Futures Rs/qtl Rs/qtl Last 13697 13138 Prev day -1.20 0.29
as on Feb 11, 2013 % Change WoW -2.79 -4.40 MoM -5.09 -4.30 YoY -8.23 -8.23
Source: Reuters
Market Highlights
Prev day 1.13 0.90
Unit Turmeric SpotNCDEX (N'zmbad) Turmeric- NCDEX Apr '13 Futures Rs/qtl Rs/qtl
Outlook
Jeera is expected to continue to trade on a mixed note. Prices may decline on the back of commencement of arrivals of the new crop. Higher sowing figures coupled with conducive weather in Gujarat may also pressurize prices. However, overseas demand at lower levels may support prices. Demand from domestic traders and millers may also support prices at lower levels. In the medium term, prices are likely to stay firm as Syria and Turkey have stopped shipments.
Turmeric
Turmeric Futures traded on a positive note due to demand from local buyers. Prices have corrected from higher levels due to higher carryover stocks. There are reports of some crop damage in Erode region. Expectations are that production may be lower by 40-50%. Production is expected around 55 lakh bags. It is estimated that next years carryover stocks would be around 10 lakh bags. There are reports that Turmeric Farmers Association of India have decided to fix their own MSP of Rs.10000/qtl. The Spot as well as the Futures settled 1.13% and 0.9% higher on Monday.
Source: Telequote
Technical Outlook
Unit Jeera NCDEX March Futures Turmeric NCDEX April Futures Rs/qtl Rs/qtl
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Agricultural Commodities
Kapas
After witnessed sharp decline, NCDEX Kapas recovered 0.62% on Saturday taking cues from the international markets which rose after the release of USDA monthly report. MCX Cotton also settled 0.6% higher on Saturday. Prices have declined initially on the back higher availability of cotton amid dull demand. Cotton supplies from the new crop in the domestic markets until Jan. 20 fell were down at 134 lakh bales, from 144 lakh bales a year earlier. However, gap has narrowed down with increasing pace of arrivals. The Cotton Advisory Board, which met in Mumbai on Wednesday, has estimated cotton production this season (Oct 2012 to Sep 2013) will be 330 lakh bales against the previous estimates in October at 334 lakh bales. Also, exports and domestic consumption has been revised upward to 253 and 80 lakh bales respectively from 250 and 70 lakh bales estimated earlier. As on January 9 this year, nearly 38 lakh bales were registered for exports. ICE Cotton settled 1.56% higher on Friday as USDA report trims US stocks. Prices have also traded on a bullish note on hopes of demand from China. Concerns about the quality of cotton to be released by China also supported the prices.
Market Highlights
Unit Rs/20 kgs Rs/Bale Last 905 17040
as on Feb 11, 2013 % Change Prev. day WoW 2.09 2.49 1.01 2.47 MoM -3.57 2.47 YoY #N/A -5.39
Source: Reuters
International Prices
ICE Cotton Cot look A Index Unit USc/Lbs Last 82.92 81.35
as on Feb 11, 2013 % Change Prev day WoW 0.30 1.44 0.00 0.00 MoM 10.27 0.00 YoY -9.40 -29.20
Source: Reuters
Source: Telequote
Outlook
Kapas prices may trade with upward bias during the intraday on account of bargain buying. However, sufficient supplies in the domestic markets and lower export demand expectations may pressurize prices. Also, international prices which had gained sharply in the last two weeks are due for correction amid rising certified stocks, and Chinese lunar New Year approaching.
Source: Telequote
Technical Outlook
Contract Kapas NCDEX April Futures Cotton MCX Feb Futures Unit Rs/20 kgs Rs/bale
valid for Feb 12, 2013 Support 875-890 16750-16900 Resistance 916-930 17200-17340
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