Mixed Sentiment on NCDEX Commodities

Spot prices of Turmeric continued to trade weak on account of increased arrivals amidst lower offtakes and settled 1.54% lower on Friday. Futures traced the Spot prices and settled at the lower freeze yesterday. Long liquidation by the market participants as the contract nears expiry also led prices to close down yesterday.

Production, Arrivals and Exports

Arrivals in Nizamabad and Erode mandi stood at 1,500 bags and 10,000 bags respectively on Friday.

Turmeric production for the year 2011-12 is projected at historical high of 82 lakh bags (1 bag= 70 kgs) compared to 69 lakh bags in 2010- 11. Erode is expected to produce45 lakh bags of turmeric a rise of 29% as compared to previous year. According to Spices Board of India, exports of Turmeric during April 2011- October 2011 stood at 50000 tonnes as compared to 32000 tonnes in 2010-11, rise of 56%.

Courtesy: Angel Commodities


NCDEX jeera weakens on selling pressure

eera futures traded firm in the early part of the trading session but declined towards the end and settled 0.27% lower on Friday. However, Spot prices ended in green owing to increased exports and reports of unfavorable weather conditions prevailing in the major growing areas.

According to Gujarat farm ministry, area sown under jeera till December 13, 2011 stood at 2.32 lakh hectares (lh) up 26.68% as compared to last year. Carryover stocks of jeera is expected to be around 9-10 lakh bags as compared to 4-5 lakh bags in the last year.

Prices in the global markets of Indian origin are quoting around $2,800-2,950/tn while Syrian origin is quoting at $3,100-$3,150/tn.

Production, Arrivals and Exports

Unjha markets witnessed steady arrivals of 3,000 bags amidst off takes of 5,000 bags on Friday.

Production of jeera in 2011-12 is expected to be around 35 lakh bags as compared to 29 lakh bags in 2010-11. (Each bag weighs 55 kgs). (Source: spot market traders). According to Spices Board of India, exports of Jeera during April 2011-Ocotber 2011 stood at 20500 tonnes as compared to 19,800 tonnes in 2010-11, an increase of 3.5%.

Courtesy: Angel Commodities


NCDEX pepper settles higher on weak arrivals

Spot pepper prices remained firm for the fifth consecutive session owing to demand from the local stockists amidst lower arrivals. Prices at the Spot and near month Futures settled 0.25% and 0.72% higher respectively on Friday. Far month Pepper futures however, settled 0.03% down yesterday anticipating fresh arrivals from domestic market.

Supply disruptions were noticed on account of ongoing agitations in Kerala with regard to Mullaperiyar dam which are supporting prices.

Pepper stocks with Vietnam are expected to be around 10 thousand tonnes while that in India is expected to be 12 thousand tonnes. Indian parity in the international market was at $7,325-7,450(c&f) a tonne and remained competitive while Vietnam 550 gl was quoting its pepper at $7,250 per tonne (fob).

Exports

According to Spices Board of India, exports of pepper during April 2011- October 2011 stood at 13750 tonnes as compared to 10350 tonnes in 2010-11, rise of 32.8%.

According to International Pepper Community (IPC) exports of black pepper during January to October 2011 from six major exporting countries (Brazil, India, Indonesia, Malaysia, Vietnam and Sri Lanka) was around 2.04 lakh tonnes a decline of 4.6% as compared to 2.14 lakh tonne in the same period last year.

Exports from Indonesia posted significant decrease of 40% as compared to previous year. Exports stood at 29,000 tonnes as compared to 48,500 tonnes in the last year.

During Jan to Oct 2011, Brazil exported 25,331 tonnes of pepper a rise of 4.74% as compared to previous year. U.S. remained the major destination of the pepper imports.

Production and Arrivals

Arrivals of pepper in the domestic mandi on Friday stood at 16 MT as compared to 8 tonnes on Thursday while offtakes on the other hand stood at 35 tonnes.

Global Pepper production in 2012 is expected to increase 7.2% to 3.20 lakh tonnes as compared to 2.98 lakh tonnes in 2011 with sharp rise of 24% in Indonesian pepper output and in Vietnam by 10%. Pepper production in Vietnam and Indonesia is projected at 1.10 lakh tonnes while that in Indonesia is projected to be 41 thousand tonnes. (Source: Financial Express).

On the other hand production of pepper in India in 2011-12 is expected to be scale down further by 5% to 43 thousand tonnes as compared to 48 thousand tonnes in the last year.

Courtesy: Angel Commodities


NCDEX soybean drops on global cues

NCDEX January soybean futures ended in red on account of weak overseas market. Total arrivals of soybean in Madhya Pradesh were 1.30 lakh bags, Maharashtra was 60,000 bags and Rajasthan was 45,000 bags(Bag=90-100 Kg). Soybean prices in Indore were at Rs2,210- 2,260/qtl (auctions in Mandi) and plant delivery was quoted Rs2,300- 2,340/quintal. Brazil officials pegged the 2011/12 soybean crop at just 71.29 million tonnes, which is down 5.4% from last year due to weather concern.

USDA’s weekly export figures released on December 15, 2011, which shows that the net weekly export sales for soybeans came in at 468,600 metric tonnes which was slightly below trade expectations. China was the largest buyer of 354,200 tonnes. Cumulative soybean sales stand at 63.7% of the USDA forecast for 2011/2012 (current) marketing year versus a 5 year average of 68.5%.

Meal sales came in at 103,700 metric tonnes for the current marketing year and 3,600 for the next marketing year for a total of 107,300. Net oil sales came in at 5,500 metric tonnes which was near the low end of expectations.

As per local statistics bureau, soybean output in China's Heilongjiang province, the top-producing area, fell 7.5% to 5.42 million metric tons this year.

Rape/mustard Seed

NCDEX January RM Seed futures ended in green on fear lower yield as unfavorable weather condition for crop. Sowing acreage of Rabi oilseeds in India was 7.56 million hectare as compared to 8.15 million hectare a year ago.

Oilseeds area in the Maharashtra declined 23% to 207,000 ha, with safflower acreage falling 17.4% to 121,600 ha. The government is aiming total mustard acreage of 7.55 mln ha this year and output at a record 8.19 million tonnes this rabi season.

Last year, farmers had harvested 7.67 mln tn of the oilseed. Mustard seed accounts for about 70% of India's winter-season oilseed output. As per WASDE (USDA) monthly supply & demand report which is released on December 09, 2011 shows that the Canada rapeseed production raised 1.3 million tons to 14.2 mln based on the latest survey results from Statistics Canada.

Refine Soy Oil

NCDEX December refined soy oil futures ended in red as lower export figures of Malaysian Palm Oil. As per SGS ( a cargo surveyor ), Malaysia's palm oil exports in the first 15 days of December fell 19% from a month earlier, to 649,138 metric tons.. As per Solvent Extractors Association of India, India imported 827,684 tonnes of vegetable oils in the first month of oil marketing year (November to October), up 27 percent from 652,262 tonnes a year ago. Marker share of palm oil imports was about 90% of total vegetable oil imports. However, soybean oil’s share was less than 1% and rest was sunflower oil. India imports palm oil from Indonesia and Malaysia and a small quantity of soy oil from Argentina and Brazil.

According to the Malaysian Palm Oil Board, the Malaysia's palm oil output and inventories fell 15% and 1.5% on month, respectively, in November, while exports declined 10%.

Courtesy: Angel Commodities


NCDEX sugar declines on weak fundamentals

Sugar settled range bound on lack of fresh fundamentals to trigger the prices. Sufficient supplies and lower demand from the bulk manufactures amidst winter season kept spot prices steady.

Government has released 19.1 lakh tonne (tn) of Sugar for the month of December which includes 2.07 lakh tn of levy quota, 17 lakh tn of non levy quota and 600 tn of Sugar refined from imported raw.

The Food Ministry has issued permits for the export of nearly 37,000 tonnes of sugar so far out of the one million tonnes that the government has allowed for overseas shipment in the ongoing 2011-12 marketing year.

Liffe white sugar and ICE Raw settled 0.57% and 1.45% up respectively.

Domestic Sugar updates

According to ISMA, India is likely to have crushed 14.4 mln tn cane during Oct 1-Nov 23 and produced 1.3 mln tn sugar during the current crushing season. Maharashtra Oct 1-Dec 8 sugar output is up at 1.45 mln tn vs 1.31 mln yr ago due to higher recovery at 9.8% from 9.344% last year.

Indian Sugarcane production is estimated higher by 0.9% at 342 mn tn for 2011-12 season starting October 1, 2011. ISMA has projected sugar production at 26 million tonnes for 2011-12.

With the opening stocks of 6 mn tn, domestic Sugar supplies are estimated at 32 mn tn against the domestic consumption of around 23 mn tn. Thus there is a wide scope for exports from India.

Global Sugar Updates

Thailand sugar output could reach to 9.9 million tonnes in 2011-12 compared to 9.64 million tonnes in 2010-11.

According to UNICA, Sugar output in Brazil's center-south in the first half of November fell 13.8 percent from a year ago, as more mills ended crushing the 2011/12 cane crop. Sugar production in the period totaled 1.26 million tonnes, compared with 1.46 million tonnes a year earlier.

Swiss sugar consultancy Kingsman today lowered its global 2011-12 sugar surplus estimate by 940,000 tn to 8.22 mln tn, due to higher projection for consumption than earlier estimated.

Courtesy: Angel Commodities


NCDEX chana edge higher on lower acreage

Chana futures which declined in the early part of the session, settled higher 1.01% on Friday on reports of lower acreage under Chana as well as Pulses.

Further, concerns over unfavorable weather in AP, Maharashtra etc is seen supporting Chana prices in the short term.

The area under pulses has been marginally lower on account of lack of rains. Area under gram, a dominant pulse crop has been lower at 83.55 lakh ha against 86.36 lakh ha in corresponding last year. States such as Chhattisgarh and Rajasthan have reported a higher area under pulses, while Maharashtra and Karnataka have reported lower areas due to dry conditions.

Forward Market Commission (FMC) has scrapped special margin of 10% on Chana on long side on all running contracts with effect from Friday December 09, 2011.

Sowing progress and Production

Indian government is targeting total pulses output of 17 mln tn in the current crop year that started July 2011, down marginally from last year's record production of 18.09 mln tn on account of 10% decline in Kharif.

Pulses output.

However, Rabi Pulses output is targeted higher on higher area and conducive weather

Chana is the main Rabi Pulse crop grown in India, sowing of which is done during October-December, and harvesting begins in January. Sowing of Chana began on a brisk note; however, the progress was not satisfactory in Maharashtra, Karnataka, UP, Bihar and AP where acreage is down by 16.4%, 12.4%, 10.3%, 27.5% and 5.7% respectively.

According to the first advance estimates, Kharif Pulses output for 2011- 12 season is down by 9.6% at 6.43 mt. Tur output estimates is up by 0.35% while moong & Urad is down by 21% & 16% respectively. Kharif Pulses sowing is down by 9% as on 23rd September, 2011. 109.41 lakh ha has been covered against 120.3 lakh ha in the last year.

Courtesy: Angel Commodities


NCDEX guar seed plunges on profit booking

After hitting 4% upper limit in the last four consecutive sessions, Guar seed and Guar gum prices settled at 4% lower limit on Friday on imposition of further special margin of 10% over and above the existing 10% special margin imposed earlier this week. The complex witnessed a highly volatile session with prices initially hitting an upper circuit and then settling at lower circuit towards the end.

Market also witnessed panic selling towards the end after the reports of discrepancies in the latest export figures released by the APEDA (Agricultural & Processed Food Products Export Development Authority) As per the NCDEX circular dt 16/12/2011, further Special Margin of 10% in cash on the Long side of Guar seed and Guar gum will be imposed w.e.f. from Monday, December 19, 2011 on all running and yet to be launched contracts.

Indian Guar gum Association has sought the FMC’s intervention so as to curb rising Guar seed and Gum prices. They clarified that the price surge is not only defeating the futures trade, but also hurting the export prospects. (Newswire 18)

Harvesting of Guar in Haryana and Punjab is almost complete and Arrivals of late sown Guar crop is ongoing Rajasthan. Daily average arrivals stood around 1 lakh bags compared to 1.3-1.4 lakh bags last week.

Production

Guar seed output in Rajasthan is estimated at 11.36 lakh tonnes for 2011-12 season, down by 25% compared to 15.46 lakh tonnes in 2010-11 (Rajasthan Farm Dept). Production of Guar in Haryana and Gujarat is expected to be 0.2 lakh tonnes and 0.07 lakh tonnes respectively in 2011- 12.

Thus, with lower carryover stocks and lower output the supplies would not be sufficient in the long run if Guar gum export trend continue to remain the same as last year, thus supporting the upside rally in the longer term.

Exports

According to Agriculture and Processed Food Products Export Development Authority, Indian Guar gum exports for the period April- March 2010-11 surged by 84% and stood at 4,03,007 tonnes as compared to 2,18,473 tonnes during the last year.

Exports of Guar gum from April to July of the current fiscal year 2011-12 stood at 1.93 lakh tn a rise of 82% compared to 1.02 lakh tn during the same period last year. However, the latest figures from April to August are 5% lower than the April – July number published last month. This has created panic in the markets.

Courtesy: Angel Commodities