agri-commodities daily report 0.79 -2.70 -1.61...

Monday| Oct 03, 2016

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Agri-Commodities Daily Report

Content News in Brief

Sugar

Oilseeds

Edible Oils

Spices

Cotton

As on 30 -Sep-2016

Commodities Daily Weekly Monthly Yearly

Cardamom 2.13 2.01 0.37 42.38

Maize 2.10 6.50 14.77 12.59

Kapas 1.24 1.12 2.04 0.63

Mentha 1.06 -1.98 -3.16 -3.56

Soybean 0.90 1.06 -2.15 -20.36

Guar seed 0.85 -2.15 4.77 -6.22

Mustard 0.79 -2.70 -1.61 -7.62

GuarGum 0.76 -4.47 7.80 -18.75

Cotton 0.51 -1.93 0.40 23.00

Jeera 0.06 0.87 -3.86 6.59

CPO -0.02 0.14 7.34 37.72

Ref Soy Oil -0.02 -0.02 2.04 2.41

Sugar -0.09 -0.34 -0.49 25.48

Turmeric -0.75 4.39 -1.78 -10.40

Coriander -1.07 0.48 -5.99 -32.03

% Change Commodity Exchange Contract Trend

Spice Complex

Jeera NCDEX Oct Sideways

Turmeric NCDEX Oct Up

Coriander NCDEX Oct Up

Cardamom MCX Oct Down

Edible Oil Complex

Soybean NCDEX Oct Up

Mustard Seed NCDEX Oct Sideways

Ref Soy Oil NCDEX Oct Up

CPO MCX Oct Sideways

Others

Sugar NCDEX Oct Down

Kapas NCDEX Apr’17 Down

Cotton MCX Oct Down

Cotton Oilseed Cake NCDEX Dec Down

Wheat NCDEX Oct Sideways

MaizeKhrf NCDEX Oct Sideways

Barley NCDEX Oct Sideways

Mentha Oil MCX Oct Down

Guar Gum NCDEX Oct Sideways

Guar Seed 10 NCDEX Oct Sideways

Technical Trend – 03-Oct-2016 Agri-Commodity Heat Chart




News in brief Seasonal rainfall (01 Jun – 29 Sep)

(Source: IMD) Monsoon in India officially ends; Rainfall at 3% below LPA The four-month-long (June-September) southwest monsoon came to an end on Friday with India Meteorological Department (IMD) stating that overall rainfall across the country had been 3% below the benchmark Long Period Average (LPA) and so in ‘normal’ category. Rainfall in the 96-104% range of LPA is considered normal. In the last two years, the country had received ‘deficient’ monsoon rains. The quantum of rainfall received during monsoon session was below the IMD’s earlier prediction of cumulative rains of 106% of LPA. Met officials said the monsoon has not withdrawn entirely from the north region which is about two weeks behind the schedule. “Heavy to very heavy rain is expected over Vidarbha, north Madhya Maharashtra, Marathwada, Konkan & Goa and Telangana,” the Met department stated in its prediction for the next couple of days. With the exception of Punjab, Gujarat region and coastal Karnataka where rainfall has been ‘deficient’, most of the regions across the country have so far received ‘normal’ or ‘excess’ monsoon rains. (Source: FE)

Sugar prices at 3-year high ahead of festivals, new month Sugar prices soared to trade at fresh three-year high surging by up to Rs 50 to Rs 4,150 per quintal at the wholesale market in the national capital today following increased demand ahead of festive season amid tight supplies from mills. Marketmen said increased offtake by bulk consumers ahead of auspicious "Navratras", beginning tomorrow supported by tight supplies from mills, mainly lifted the sweetener prices to trade at fresh three-year highs. Moreover, reports of bullish trend overseas and reports of lower domestic output too gave push to the surging prices, they added. (Source: PTI)

Rabobank sees ICE raw sugar averaging at 18 cents/pound in 2017 Raw sugar prices that have been on the bull side this year may see a correction next year and prices may average to 18 cents per pound in 2017, Kelvin Chow, Analyst with Rabobank, said. "While we say this we have to be aware that firstly there is huge money lying there ready to be liquidated. That would pull downwards," Chow told Cogencis. Talk of US Federal Reserve increasing interest rates would dampen the appetite for

hedge funds to reduce their positions and "rush for dollars". "They (hedge funds) would start liquidating their positions then. And we see them chasing the market down. That is when we will see prices correcting," he said. Anticipation of higher sugar output in India in 2017-18 may also dent global raw sugar prices, he said. For 2016-17, Chow sees India's sugar output to fall to 23.3 mln tn, from 27.0 mln tn a year ago. Tight supply situation could lead to sugar imports in the country, he said. (Source: Cogencis) With sugar prices up, cane farmers hope for better year The sugarcane department has maintained that there was slump in the sugar market for the last three years. As a result cane prices were not raised. Farmers had to face economic hardships as sugar mill owners were unable to pay their dues on time. With sugar prices going up farmers are hopeful that this might be an indication of better business this year. According to Rajendra Singh, state secretary, Bhartiya Kisan Union, "This year the sugar market is looking up. We are happy and hopeful that sugarcane prices will also go up and in the upcoming season payment will be on time." Singh added, "We have raised our demand that sugarcane prices be increased from Rs 280 to 350 per quintal." (Source: TOI)

For first time ever, Maharashtra may beat Gujarat in cotton production Cotton ginners in Maharashtra are expecting a good season ahead, though cotton arrivals are likely to be delayed by a fortnight because of incessant rains in the Marathwada region. This time, though there have been very heavy rains in the Marathwada region, the crop should not be affected and perhaps for the first time, and Maharashtra may overtake Gujarat in terms of production at about 1 crore bales, Pradeep Jain, president, Khandesh Gin/Press Factory Owners Association, said. Usually, Maharashtra produces around 60-70 lakh bales and around 20 lakh bales are sold to Gujarat. But this time, there could be a bumper production because of the good rains, he said. (Source: FE)

Government to further import 1.70 lakh tonnes of pulses The government today approved further import of 1.70 lakh tonnes of masoor and tur dals for buffer stock to boost domestic supplies and check prices. Besides, cooperatives NCCF and Nafed have been asked to sell tur and urad through their outlets in cities other than Delhi Rs 105 per kg and Rs 120 per kg, respectively. The Centre has also decided to provide milled pulses to states for further distribution in the retail market. These decisions were taken in the Price Stabilization Fund Management Committee meeting, chaired by Consumer Affairs Secretary Hem Pande here today. In the meeting, it was informed the number of centres has been increased to 417 for procurement of pulses at the MSP directly from farmers and more will be opened if required, it said. It may be noted that prices of some pulses like moong in the domestic market have fallen below the MSP and the government has started the procurement operation at the MSP to protect the interest of farmers. (Source: PTI)

CAI projects 336 lakh bales cotton crop for 2016-17 Kharif cotton crop is likely to be at the same level as that of last year, the Cotton Association of India (CAI) said on Tuesday. The trade body has retained the cotton crop estimates for the year 2016-17 season at 336 lakh bales (of 170 kg each). The cotton crop estimates released for August is unchanged against the previous month. As per CAI data, for the year 2015-16, cotton crop was a tad higher at 337.75 lakh bales. The projected balance sheet drawn by CAI estimated total cotton supply for the cotton season 2016-17 at 398 lakh bales, while the domestic consumption is estimated at 309 lakh bales thus leaving an available surplus of 89 lakh bales. (Source: HBL)




Market Highlights - Sugar

% Change Unit Last Prev. day WoW MoM YoY

Sugar Spot ₹/qtl 3630 -0.79 0.28 -0.46 41.80

Sugar M- NCDEX Oct’16

₹/qtl 3482 -0.09 -0.34 -0.49 25.48

ICE-Europe Sugar No 5- Dec’16

$/tonne 597.2 -0.91 0.84 9.52 61.41

ICE-US Sugar No 11- Oct’16

Usc/lbs 22.53 -1.01 1.81 9.80 85.13

Source: Reuters

Price Chart – Sugar M NCDEX Oct’16 contract

Source: Reuters

Sugar Spread Matrix

Closing 20-Oct-16 20-Dec-16 20-Mar-17

Spot 3630 -148 -29 201

20-Oct-16 3482 0 119 349

20-Dec-16 3601 - 0 230

20-Mar-17 3831 - - 0

Daily NSMV6 01-08-2016 - 04-10-2016 (BOM)

Cndl, NSMV6, 30-09-2016, 3,480.00, 3,505.00, 3,480.00, 3,482.00

-1.00, (-0.03%)

Price

INR

100B

3,400

3,500

3,600

3,482.00

01 08 16 22 29 05 12 19 26 03August 2016 September 2016

Sugar

Sugar Futures prices closed down during the week despite good demand

in the physical market. the futures market was under pressure as

Exchange has imposed special margin on 10% on long side for Oct

contract and 25% on all other running contract. The most-active October

sugar contract closed 0.34% lower last week to settle at 3,482 per

quintal.

According to Louis Dreyfus Commodities, India may import around 1 mt

sugar in the new season that begins Oct 1. Moreover, according to a

notification by the Director General of Foreign Trade, country has

allocated the export quota of 10,000 tonnes of white sugar to the

European Union in 2016-17 (Oct-Sep) under the duty-free preferential

quota.

As per ISMA’s first advance estimate, sugar production in 2016-17 is

pegged at 234lakh tonnes (lt) and with carry over stock of 75 lt from

2015-16 SS, there will be enough sugar available for next year to meet

the domestic demand of about 256 lt. ISMA predicted carry forward

stocks of around 52 lt for 2017-18 sugar season, as on 1st October, 2017.

Based on the September 2016 satellite images, ISMA has estimated the

total cane acreage at 49.99 lakh hectares, which is about 5% less than

2015-16 SS. The total cane acreage in Maharashtra is estimated to be

8.10 lh, down 23% while in UP the acreage is more or less same at 23.10

lac ha compared to last. Sugar production in Maharashtra during 2016-17

SS, is estimated at 62.7 lac tons, 25% less than actual sugar production in

2015-16 SS.

Global Updates

ICE raw sugar futures turned sharply lower on Friday on technical selling

but the prices closed higher on week. Sugar prices briefly firmed when

data from Brazil cane industry group Unica showed the country's main

center-south crush reached 37.6 million tonnes in the first half of

September, below market estimates for the second consecutive

fortnight. The non-commercial dealers increased net long position in raw

sugar futures and options by 4,386 contracts to 290,985 contracts, the

third straight rise and the highest level since data became publicly

available in 2006.

Robobank projected a global deficit of 7.2mt in the upcoming 2016/17

season after a 7.9mt shortfall in the current season. Meanwhile, Platts

Kingsman raised its forecast for an anticipated global sugar deficit in the

2016/17 season (October/September) by 570,000 tonnes to 6.45mt.

Earlier, the International Sugar Organization (ISO), in its first full

assessment of the forthcoming 2016-17 season, forecast a global sugar

deficit of 7.05 mt.

Outlook

We expect sugar prices may trade down on good physical supplies from

mills are continuing in the physical market due to imposed stock limit on

mills. Increased margin by the exchange also pressurize prices in the

futures market. Global prices are supportive due to the expectation of

weak cane crush this season in the key center-south region of top grower

Brazil and an increase in the size of the global sugar deficit forecast.

Technical Outlook

Contract Unit Support Resistance

Sugar NCDEX Oct’16 ₹/qtl 3430-3455 3500-3520




Market Highlights - Oilseeds

% Change

Unit Last Prev day WoW MoM YoY

Soybean Spot- NCDEX ₹/qtl 3216 0.78 -6.02 -7.16 -7.82

Soybean- NCDEX Oct’16 ₹/qtl 3235 0.90 1.06 -2.15 -20.36

Soybean-CBOT Nov’16 USc/Bsh 954.0 0.39 -0.10 0.34 6.95

RM Seed Spot- NCDEX ₹/qtl 4800 -0.33 -3.03 -1.03 4.31

RM Seed- NCDEX Oct’16 ₹/qtl 4571 0.79 -2.70 -1.61 -7.62

Source: Reuters

Price Chart –Soybean NCDEX Oct’16 contract

Source: Reuters

Soybean Spread Matrix

Closing 20-Oct-16 18-Nov-16 20-Dec-16

Spot 3216 19 43 91

20-Oct-16 3235 0 24 72

18-Nov-16 3259 - 0 48

20-Dec-16 3307 - - 0

Price Chart –Mustard NCDEX Oct’16 contract

Mustard Seed Spread Matrix


Spot 4800 -229 -116 -139

20-Oct-16 4571 0 113 90

18-Nov-16 4684 - 0 -23

20-Dec-16 4661 - - 0

Daily NSBV6 01-08-2016 - 04-10-2016 (BOM)

Cndl, NSBV6, 30-09-2016, 3,199.00, 3,243.00, 3,185.00, 3,235.00

+24.00, (+0.75%)

Price

INR

100B

3,200

3,300

3,400

3,500

3,235.00


Daily NRSV6 27-07-2016 - 04-10-2016 (BOM)

Cndl, NRSV6, 30-09-2016, 4,535.00, 4,577.00, 4,512.00, 4,571.00,

+33.00, (+0.73%)

Price

INR

100B

4,500

4,600

4,700

4,800

4,900

4,571.00


Soybean Soybean futures closed higher on week due to lower level buying by

the market participants. The most-active Oct’16 delivery contract

closed 0.90% higher last week to settle at Rs. 3,235 per quintal. Dry

weather forecasted in the soybean growing areas of Rajasthan,

Maharashtra and Madhya Pradesh, which will aid the harvesting.

Acreage under soybean in the country was at 114.7 lh, down 1.3%

than last year but higher than the five-year average of 106. lh ha for

the period. The SOPA has estimated India’s 2016-17 soybean

production to be around 10 mt, up from 7.5 mt in 2015-16 but USDA

recently revised the production down by about 14 lt to 97 lt. Soybean

prices are at lower levels for the year due to low crushing and limited

meal export demand. During the April-August 2016 period, India’s

soybean meal exports recorded a 62% decline to 63,522 tonnes.

Global update

U.S. soybean eased on Friday, set for a third week of decline on

prospects for higher yields than estimated by the U.S. Department of

Agriculture, although strong demand kept a floor under the market.

Based on 1 June, 2016, stocks and June-August exports and crush data,

U.S. soybean stocks as of 1 September, 2016, is higher than market

expectations. The US soybean harvest is currently running a little

behind schedule, but progress should improve with some drier

weather this week.

Outlook

We expect Soybean prices to trade higher today due to good demand

for the new crop. The forecast of dry weather in Rajasthan, MP and

Maharashtra will aid harvesting of new season crop. However, cut in

edible oil imports taxes and lower export demand for soymeal may

keep prices under check.

Rape/mustard Seed

Mustard seed futures end this week in negative due to want of

physical demand but traded higher on Friday on bargain buying by

market participants. The Oct’16 contract ended 2.70% down last week

to settle at Rs. 4,571/quintal. The country's production of rapeseed, is

expected to rise 6.3 mt, up 12.5 % from a year earlier. The demand for

mustard may pickup in physical market due to approaching winter.

Global updates

There are reports of timely rains in EU rapeseed crops, which will

enhance production after dry weather during sowing season.

According to latest USDA report, rapeseed crop is lowered for the

European Union and Russia, offsetting a modest increase in Canada.

Widespread showers over in Europe boosted rapeseed crop

development after, but drought prompted farmers to sow less. The

world production is forecasted at 66.86 mt for 2016/17 season. Canada

rapeseed exports up 0.2mt to 9.6 mt, on strong global demand.

Outlook

We expect mustard seed may trade sideways on more correction

expected on reports of good acreage in the coming rabi season.

However, crushing demand from the industrial buyers may support

prices during the sowing season during Oct-Nov.

Technical Levels


Soybean NCDEX Oct’16 ₹/qtl 3175-3200 3270-3290 RM Seed NCDEX Oct’16 ₹/qtl 4470-4500 4600-4640




Market Highlights- Edible oils

% Change

Unit Last Prev day WoW MoM YoY

Ref Soyoil Spot - Mumbai

₹/10 kg 657.5 0.38 -1.13 1.94 11.4

Ref Soy oil- NCDEX Oct’16

₹/10 kg 655.7 -0.02 -0.70 2.04 2.4

Soybean Oil- CBOT-

Dec’16

USc/lb 33.44 0.30 -0.36 0.91 23.4

CPO-Bursa Malaysia - Dec’16

MYR/Tn 2636 0.76 -1.49 4.35 14.3

CPO- MCX – Oct’16 ₹/10 kg 582.0 -0.02 0.14 7.34 37.7

Source: Reuters

Price Chart –Ref Soy Oil NCDEX Oct’16 contract

Refined Soy Oil Spread Matrix


Spot 657.5 -1.8 3.95 7.2

20-Oct-16 655.7 0 5.75 9.0

18-Nov-16 661.45 - 0 3.3

20-Dec-16 664.7 - - 0.0

Price Chart –Crude Palm Oil MCX Sep’16 contract

Source: Reuters

CPO Spread Matrix

Closing 30-Sep-16 28-Oct-16 30-Nov-16

30-Sep-16 582 0 -41.9 -69.7

28-Oct-16 540.1 - 0 -27.8

30-Nov-16 512.3 - - 0

Daily NSOV6 29-07-2016 - 04-10-2016 (BOM)

Cndl, NSOV6, 30-09-2016, 653.20, 657.90, 653.20, 655.70, -0.30, (-0.05%) Price

INR

10B

620

630

640

650

660655.70


Daily MCAU6 27-07-2016 - 04-10-2016 (BOM)

Cndl, MCAU6, 30-09-2016, 581.8, 582.7, 581.6, 582.0 Value

480

510

540

570

600

582.0


Refined Soy Oil

Refined soy oil closed lower last week tracking international edible oil

prices. Moreover, prices in spot markets were also down due to cut in

import taxes for the edible oil by the government. The most active Ref

Soy oil Oct’16 expiry contract closed 0.70% down last week to settle at

Rs. 655.7/10 kg. India has cut import taxes on both crude palm oil and

refined edible oils by 5% points to 7.5 and 15 % respectively.

For the first half of October government increases the tariff value of

crude soy oil to $827/tonnes or 1.22% compared to previous fortnight.

Government fixes the tariff value every fortnight. Base import prices of

edible oils revised every fortnight taking into account the prices in

international markets, as well as changes in the foreign exchange rate.

As per SEA data, India's edible oil imports fell 8.4% to 1.25 mt in

August, while cumulative imports in the first 10 months of the current

oil rose 4.0% to 12.04 mt. India Aug crude soyoil import 333,599

tonnes, lower by 18 % compared to 406,116 tonnes year ago.

Outlook Soy oil futures may trade higher today on technical buying by the

market participants. However, good physical supplies in the domestic

market due to lowering the import duty on edible oils and decreasing

tariff values of crude soy oil may pressurize prices.

Crude Palm Oil

CPO Futures closed higher last week due to good demand in the

domestic market. The most active CPO Sep’16 expiry closed higher by

0.78% to settle at Rs. 543.5 per 10 kg. The tariff value of RBD palmolein

increase 6.1% for the 1st

half of October compared to last fortnight.

However, tariff value for CPO increase by only $1 /tonnes to $767.

India's palm oil imports in 2016/17 are likely by rise 9% to 9.24mt from

a year earlier, as a growing population and higher income levels drive

up edible oil consumption. Palm oil imports by India fell for a fourth

month in August dropped by 16% to 540,633 metric tons in August

from a year earlier. However, SEA data showed imports of palm oil

almost doubled to 2.2 mt in Nov-Aug, compared with 1.3 mt a year

ago.

Malaysian palm oil futures closed lower last week on lower exports

figures but recovered during last two days – Thursday and Friday,

tracking gains in rival oilseed soya. Palm oil shipments from Malaysia,

the world's second largest palm producer, fell nearly 16 percent in the

September 1-25 period from the corresponding period last month.

Export of palm oil products are expected to slip this month on weaker

demand from top consumers China and India, as expect demand to be

slow cold temperatures solidify the tropical oil.

Outlook

We expect CPO to trade sideways on higher imports of edible oil as

import taxes in the country is reduced. Lower import taxes may

encourage cheaper edible oil dumping in the domestic market from

world markets.

Technical Outlook


Ref Soy Oil NCDEX Oct’16 ₹/qtl 648-652 659-663 CPO MCX Oct’16 ₹/qtl 532-537 544-548




Market Highlights - Spices % Change

Unit Last Prev day

WoW MoM YoY

Jeera Spot- NCDEX ₹/qt

l

18069 -0.19 0.38 -3.89 11.61

Jeera- NCDEX Oct’16 ₹/qt

l

17295 0.06 0.87 -3.86 6.59

Turmeric Spot- NCDEX ₹/qt

l

7579 0.00 1.80 -2.89 -3.65

Turmeric- NCDEX Oct’16 ₹/qt

l

7186 -0.75 4.39 -1.78 -10.40

Source: Reuters

Technical Chart – Jeera NCDEX Oct’16 contract

Jeera Spread Matrix


Spot 18069 -774 -589 -434

20-Oct-16 17295 0 185 340

18-Nov-16 17480 - 0 155

20-Dec-16 17635 - - 0

Price Chart – Turmeric NCDEX Oct’16 contract

Source: Reuters

Turmeric Spread Matrix


Spot 7579 -393 -349 -299

20-Oct-16 7186 0 44 94 18-Nov-16 7230 - 0 50 20-Dec-16 7280 - - 0

Daily NJEV6 27-07-2016 - 04-10-2016 (BOM)

Cndl, NJEV6, 30-09-2016, 17,270.00, 17,350.00, 17,225.00, 17,295.00,

+60.00, (+0.35%)

Price

INR

100B

17,000

18,000

19,000

17,295.00


Daily NTMV6 05-08-2016 - 04-10-2016 (BOM)

Cndl, NTMV6, 30-09-2016, 7,258.00, 7,258.00, 7,162.00, 7,186.00,

-62.00, (-0.86%)

Price

INR

100B

6,800

7,200

7,600

7,186.00

08 16 22 29 05 12 19 26 03August 2016 September 2016

Spices Jeera Jeera futures gain during the last week as physical demand increases

for the domestic consumption. NCDEX Oct’16 Jeera closed 0.87% up

during last week to close at Rs 17,295 per quintal. The physical

demand is picking up as the stocks are dwindling. According to the

trade sources, jeera exports may have raise by 29% to 58,000 tonnes

in Apr-Aug compared to last year figure of 45,000 tonnes.

{{

According Department of commerce data, the exports of Jeera in the

first three months (Apr-Jun) of 2016-17 is at 44,023 tonnes, higher by

71.7% compared to last year same time. In the first three months of

new financial year, jeera exports has achieved about 46% of last year’s

export volume due to good demand from Vietnam and Bangladesh. In

Jun country, exports 9,859 tonnes of jeera, which is lower by 52 %,

compared to May (20,383 tonnes) but 39% higher y/y (7,064 tonnes).

As per 4th

advance estimate of Gujarat State for 2015-16, production is

pegged at 2.38 lt compared to 1.97 lt in 2014-15. In 2013-14,

production was 3.46 lt.

Outlook

We expect Jeera futures to trade sideways as physical demand seems

to be steady, as export demand is not picking up at higher levels.

Moreover, the stock positions are dwindling with the traders and

stockists but expectation of better crop next year is pressurizing

prices.

Turmeric

Turmeric futures closed higher on week due to reports of good

demand from up-country buyers and forecast of heavy rains in

Telangana and Maharashtra, which may damage standing turmeric

crop. Turmeric Oct’16 delivery contract on NCDEX closed 4.39% higher

to settle at Rs 7,186 per quintal. However, lowering export demand in

recent months is pressurizing prices.

The prices of turmeric are moving sideways to higher due to mixed

fundamentals of good sowing acreage coupled with declining supplies

and forecast of higher rains in the turmeric growing state of

Telangana. The demand from the industrial buyers will support the

prices just before new season harvesting.

Turmeric acreage in Telangana as on 28 Sep was up 12% at 46,000

hectares as compared to 41,000 hectares last year. Sowing of turmeric

is over in 95% of normal area and up by 107 % of normal sowing area.

As per dept of commerce data, country exported about 32,834 tonnes

of turmeric during April-June period up by 32% compared to same

period last year.

Outlook

We expect turmeric may trade higher on expectation of pickup in

domestic demand due to festival demand and forecast of heavy rains

in turmeric growing areas. However, the prices may stabilize due to

higher sowing acreage in the current season.

Technical Outlook

Unit Support Resistance

Jeera NCDEX Oct’16 ₹/qtl 16940-17080 17400-17555

Turmeric NCDEX Oct’16 ₹/qtl 7050-7120 7280-7380




Kapas

Cotton complex prices recovering during the last week due to forecast of

lower production and reports of pest damage in Gujarat. Moreover,

chances of heavy rains in western and South India in 1st

half of October

may crop damage cotton crop in the states of Maharashtra, Telangana

and Andhra Pradesh. During the last week, NCDEX Kapas for Apr’17

closed higher by 1.12% while MCX Oct’16 cotton closed higher by 0.51%.

However as new season cotton started to arrive in the physical market.

As per, the Cotton Association of India (CAI), the apex trade body of the

fibre crop, The trade body has retained the cotton crop estimates for the

year 2016-17 season at 336 lakh bales (of 170 kg each). The projected

balance sheet drawn by CAI estimated total cotton supply for the cotton

season 2016-17 at 398 lakh bales, while the domestic consumption is

estimated at 309 lakh bales thus leaving an available surplus of 89 lakh

bales.

Domestic update

As per latest estimate by government, cotton is planted in 105.6 lh in the

country, down by 11.6% against 116 lh last year as on 23 Sep. In Gujarat,

the top cotton producing state, the crop had been across 23.8 lh ,down

13.8% from a year ago. In Maharashtra, the largest area under cotton,

the acreage was at 38.0 lh, slightly down from around 38.2 lh a year ago.

According to USDA, cotton production in the country expected at seven-

year low in 2016-17 of 5.8 mt due to lower area under cultivation and

pest attacks in top producer states. India’s exports will be at their lowest

level since 2008/09 falling 30 % or 1.9 million bales in 2015-16.

Global Cotton Updates

Cotton futures bounced back on Friday, after touching a two-week low

earlier in the session, pushed up by short-covering and a weaker U.S.

dollar. Speculators raise net long position by 7,582 contracts to 82,620 in

week to Sept. 27, the highest in over seven weeks.

For the week ended Sept. 22, net upland sales totaled 91,600 running

bales, down about 54 percent from the prior week. Cotton fallen over 3

% this week now on track for its biggest weekly decline primarily due to

speculator selling and fading weather concerns in the US. The U.S. cotton

harvest has just begun with 6% of cotton harvested as of the week ended

Sept. 18 compared to a five-year average of 7%.

According to USDA’s weekly crop progress report, U.S. cotton condition

inched marginally higher in the week ended Sept. 18 as boll opening

remained behind a year ago and the five-year average. Cotton

considered good to excellent crept up a percentage point to 48 percent.

A year ago, good to excellent was 52%.

Outlook

We expect cotton prices may trade sideways to down as market is

expecting new season crop in few weeks and the forecast of dry weather

across cotton sowing states Gujarat and Maharashtra, which will

facilitate good harvesting. Moreover, mixed cotton prices in International

market may also guide domestic prices.

Technical Outlook


Kapas NCDEX April ’17 ₹/20 kgs 868-880 915-930

Cotton MCX Oct’16 ₹/bale 19400-19600 19980-20200

Market Highlights- Cotton

% Change

Unit Last Prev. day WoW MoM YoY

NCDEX Kapas Apr ‘17 ₹20 kgs 901 1.24 1.12 2.04 0.63

MCX Cotton Oct’16 ₹/Bale 19840 0.51 -1.93 0.40 23.00

ICE Cotton Dec ‘16 USc/Lbs 68.08 0.52 -2.84 2.70 14.44

Cotton ZCE Yuan/t 15015 -0.89 2.28 13.58 20.60

Source: Reuters

Price Chart - Kapas NCDEX Apr ‘17 contract

Price Chart - Cotton MCX Oct’16 contract

Source: Reuters

Cotton Spread Matrix


31-Oct-16 19840 0 -1070 -1290

30-Nov-16 18770 - 0 -220

30-Dec-16 18550 - - 0

Daily NKKJ7 04-08-2016 - 04-10-2016 (BOM)

Cndl, NKKJ7, 30-09-2016, 891.00, 902.50, 887.00, 901.00,

+12.00, (+1.35%)

Price

INR

20B

900

950

901.00

08 16 22 29 05 12 19 26 03August 2016 September 2016

Daily MCOTV6 01-08-2016 - 04-10-2016 (BOM)

Cndl, MCOTV6,

30-09-2016, 19,780.00, 19,890.00, 19,670.00, 19,840.00,

+150.00, (+0.76%)

Price

INR

19,500

20,000

20,500

21,000

21,500

22,000

22,500

19,840.00





Prepared By

Anuj Gupta A.V.P - Research [email protected] (011) 49165954

Ritesh Kumar Sahu Research Analyst – Agri-Commodities [email protected] (022) 2921 2000 (Ext 6165)

Angel Commodities Broking Pvt. Ltd.

Registered Office: G-1, Ackruti Trade Centre, Rd. No. 7, MIDC, Andheri (E), Mumbai - 400 093.

Corporate Office: 6th Floor, Ackruti Star, MIDC, Andheri (E), Mumbai - 400 093. Tel: (022) 2921 2000

MCX Member ID: 12685 / FMC Regn No: MCX / TCM / CORP / 0037 NCDEX: Member ID 00220 / FMC Regn No: NCDEX / TCM / CORP / 0302

Disclaimer: The information and opinions contained in the document have been compiled from sources believed to be reliable. The company does not warrant its accuracy,

completeness and correctness. The document is not, and should not be construed as an offer to sell or solicitation to buy any commodities. This document may not be reproduced,

distributed or published, in whole or in part, by any recipient hereof for any purpose without prior permission from “Angel Commodities Broking (P) Ltd”. Your feedback is

appreciated on [email protected]

agri-commodities daily report 0.79 -2.70 -1.61...

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