“edible oil complex is oversupplied, short term trend may ... · pdf filespecial report...

Intime Multi Commodity Company LimitedPh: 02240273673/678 Email: [email protected] website: www.fortune.co.in of 10

Special ReportOversupplied Edible oil Complex

Tuesday, December 08, 2015

“Edible Oil complex is oversupplied,short term trend may remains

negative”

Intime Multi Commodity Company LimitedPh: 02240273673/678 Email: [email protected] website: www.fortune.co.in Page 1 of 10




negative”

Intime Multi Commodity Company LimitedPh: 02240273673/678 Email: [email protected] website: www.fortune.co.in Page 1 of 10




negative”




Soybean Monthly Chart (1 Year) Soy oil Monthly Chart 1 Year

Ltp High Low3689 4412 3062

Prv. Close Net Chng % Chng3366 323 +9.59

Ltp High Low628 678.5 559.2

Prv. Close Net Chng % Chng638.05 10.05 -1.5%

RM Seed Monthly Chart (1 Year) CPO Monthly Chart 1 Year

Ltp High Low4669 5156 3252

Prv. Close Net Chng % Chng4295 374 +8.70

Ltp High Low411 474.5 351.8

Prv. Close Net Chng % Chng460.6 49.6 -10.76

One Year Price Movement




Month OPEN HIGH LOW CLOSE 6 M 5 M 4 M 3 M 2 M 1 MDec-15 4794 4820 4627 4663 11% 11% 9% 6% -5% -2%Nov-15 4979 4979 4580 4748 12% 13% 13% 11% 7% -4%Oct-15 4430 5156 4415 4928 29% 16% 17% 17% 16% 12%Sep-15 4275 4464 4185 4418 30% 16% 4% 5% 5% 4%Aug-15 4180 4304 4029 4266 26% 25% 12% 0% 1% 2%Jul-15 4238 4298 4072 4197 25% 24% 23% 10% -1% 0%Jun-15 4252 4334 3972 4207 26% 24% 23% 10% -1%May-15 3858 4299 3858 4249 27% 25% 25% 11%Apr-15 3415 3887 3409 3822 14% 13% 12%Mar-15 3405 3450 3335 3407 2% 1%Feb-15 3341 3440 3252 3386 1%Jan-15 4269 4293 3290 3345

Month OPEN HIGH LOW CLOSE 6 M 5 M 4 M 3 M 2 M 1 MDec-15 399 421.8 396.4 411 -9% -2% 14% -3% 3% 7%Nov-15 409.9 412 372.3 382.4 -16% -15% -8% 6% -10% -5%Oct-15 418.5 437.5 400.5 400.8 -8% -12% -11% -4% 11% -6%Sep-15 377.4 426.4 371.3 425.7 -2% -2% -7% -6% 2% 18%Aug-15 415.2 415.2 351.8 360.5 -23% -17% -17% -21% -20% -14%Jul-15 448.9 449 417.5 417.6 -2% -10% -4% -4% -9% -7%Jun-15 462 468.8 446.8 451.4 6% -3% 4% 4% -1%May-15 437.2 459.2 435 456.8 7% -2% 5% 5%Apr-15 435.2 447 426.5 435.4 2% -7% 0%Mar-15 467.5 474.5 433.3 434.4 2% -7%Feb-15 436 470 433.7 466.1 10%Jan-15 460.5 473.9 423.4 425

Month OPEN HIGH LOW CLOSE 6 M 5 M 4 M 3 M 2 M 1 MDec-15 619.6 641.4 618.7 634.5 8% 10% 11% 6% 2% 3%Nov-15 623.3 630.5 586.1 618.7 1% 5% 8% 8% 3% -1%Oct-15 599.5 654.15 599.5 623.55 7% 2% 6% 9% 9% 4%Sep-15 575.8 608.35 559.25 598.05 2% 3% -2% 2% 4% 4%Aug-15 571.3 586.4 562 574.15 -4% -2% -1% -6% -2% 0%Jul-15 589 590.5 565 574.7 -7% -3% -2% -1% -6% -2%Jun-15 613 627.4 575.2 588.15 -5% -1% 1% 1% -4%May-15 583.5 614.55 580.3 613 -1% 3% 5% 5%Apr-15 585.5 610.15 581.1 582.5 -6% -2% 0%Mar-15 598 606 571.8 583.6 -6% -2%Feb-15 618 634.95 590 595.4 -4%Jan-15 633.75 678.5 607 620.1

Month OPEN HIGH LOW CLOSE 6 M 5 M 4 M 3 M 2 M 1 MDec-15 3839 3850 3646 3684 3% 14% 14% 7% -4% -4%Nov-15 3820 3975 3725 3819 -4% 7% 18% 18% 11% 0%Oct-15 3451 4121 3451 3836 -6% -4% 8% 18% 19% 12%Sep-15 3231 3486 3141 3439 0% -16% -14% -3% 6% 7%Aug-15 3221 3460 3062 3224 -5% -6% -21% -19% -9% 0%Jul-15 3621 3689 3222 3239 -5% -4% -6% -20% -19% -9%Jun-15 4025 4160 3408 3560 5% 5% 4% -13% -11%May-15 4170 4412 3922 3981 17% 18% 16% -2%Apr-15 3450 4142 3447 4070 20% 20% 18%Mar-15 3390 3466 3322 3437 1% 2%Feb-15 3395 3511 3362 3379 -1%Jan-15 3338 3470 3292 3405

Monthly OHLC PerformanceSoy Bean

Soy Oil

CPO

RM SEEDMonthly OHLC Performance

Monthly OHLC Performance

Monthly OHLC Performance

Performance




Soybean

The Agriculture Ministry has proposed further hike in import duty of edible oils by 5% in abid to protect the interest of farmers.

The Ministry has proposed increase in import duty on crude edible oils to 17.5% and onrefined edible oils to 25% from the existing level.

During the first two month of the current oil year (October-November 2015), total soymealexports remained 13,147 tons as against 1.40 lakh tons of the previous year, registering adecrease by 90.64%, said the Soybean Processors Association of India (SOPA).

India's soy oil imports surged to 405,186 MT in September compared to 218,599 MT for thesame period a year ago, SEA.

India soymeal exports in the month of October dropped 85.42% from a year earlier on higherprices of the soybean in the local market, SEA.

As per COOIT, India is likely to produce 72 lakh MT of soybeans in 2015, a dip of 15.3 %over the last year, because of patchy rains in the top two producing states.

Brazil newly planted soybean crop is hit by the rust fungus and the incidences nearlydoubled compared the previous season mainly due to heavy rains in the South caused by ElNino.

Weekly U.S. soybean sales of 878,300 MT were down 25% from the previous week and wereat the low end of trade estimates ranging from 800,000 to 120 lakh MT, USDA.

Turkish soybean area and production for market year 2015 are estimated at about 25,000hectares and 90,000 MT, USDA.

Brazil has exported 1.13 million tons of soy meal in November 2015 compared to 0.98 millionduring the corresponding period last year and 1.4 in October 2015.Higher exports atcompetitive price have been supportive for the major importers like China and South EastAsian countries.

Latest Fundamental Update




Mustard

The area sown under oilseeds was lower at 61.89 lakh ha against 69.01 lakh ha last year.Acreages under rapeseed-mustard continued to be lower at 54.17 lakh ha against 60.91lakh ha. The slower pace of sowing has triggered concerns among the edible oil industry.

India's farmers have so far planted rapeseed on 49.3 lakh hectares, down 15.3 % from ayear earlier, as the first back to back drought in three decades has drained the soil ofprecious moisture, Ministry of Agriculture.

In Rajasthan, around 23.07 Lakh hectares has been sowed under RM Seed till 30thNov’2015. Last year during this time the acreage was around 25.26 Lakh ha.

Area coverage of RM seed this year is lower by 11.56 lakh ha compared to correspondingperiod of Rabi 2014-15 as on 17 Nov 2015. Till 19 Nov, 42.5 lakh ha of area is sowncompared to 54.1 lakh ha last year same time.

The shipment of rapeseed meal exports plunge by more than 94% in October to mere 3,079MT compared to 60,211 MT in September.

India's Mustard seed output looks likely to fall this year as poor soil moisture and highertemperatures as the acreage is expected to be down 10-15% compared with last year. So farplanted Mustard seed on 49 lakh hectares.

Russia has substantially reduced rapeseed exports due to rapeseed crop failure and theincreased interest of crushers to this crop.




U.S. oilseed production for 2015/16 is forecast at 117.7 million tons, up 2.5 million from theprevious estimate on increased soybean production. Soybean production is forecast at arecord 3,981 million bushels, up 93.6 million on higher yields.

The soybean yield is forecast at 48.3 bushels per acre, up 1.1 bushels mainly on gains forIowa, Illinois, and Minnesota. Soybean supplies are projected up 2 percent from the Octoberforecast. Soybean crush is raised 10 million bushels to 1,890 million on higher meal exports.Soybean exports are also raised with additional supplies. Ending stocks are raised 40million bushels to 465 million. If realized, ending stocks would be the highest since2006/07.

Soybean oil balance sheet changes for 2015/16 include increased beginning stocks andproduction, reduced imports and domestic disappearance, and increased exports and endingstocks. Higher beginning stocks reflect final soybean oil stocks for 2014/15 as reported inthe November 2015 NASS Oilseed Crushings report.

Domestic disappearance for 2015/16 is reduced in line with lower domestic use estimatedfor 2014/15. Soybean oil ending stocks for 2015/16 are projected at 2,295 million pounds,up 265 million from last month’s forecast.

Soybean and soybean meal prices for 2015/16 are reduced this month. The U.S.seasonaverage

soybean price range is projected at $8.15 to $9.65 per bushel, down 25 cents on both endsof the range. Soybean meal prices are projected at $300 to $340 per short ton, down $10.00on both ends. Soybean oil prices are projected at and 27.5 to 30.5 cents per pound,unchanged from last month.

US Production Surplus




Global oilseed production for 2015/16 is projected at 531.0 million tons, down slightly fromlast month. Lower sunflowerseed, and cottonseed production account for most of the changewith nearly offsetting increases projected for soybeans and rapeseed. Global soybeanproduction is projected at 321.0 million tons, up 0.5 million, with the larger U.S. crop onlypartly offset by reductions for India, South Africa, and Uruguay.

The India soybean crop is reduced 1.5 million tons to 9.5 million on lower projected yields.Inconsistent rainfall during the growing season and late-season heat results in below-average yields for the third consecutive year. Global rapeseed production is raised to 67.1million tons.

Increased production projected for Canada is only partly offset by reductions for Australia,Pakistan, and Russia. Global sunflowerseed production is reduced 0.8 million tons to 39.7million on lower forecasts for Argentina, Pakistan, and EU. Other changes include reducedcottonseed production for several countries including Pakistan, China, and EU.

Global oilseed trade for 2015/16 is projected at 147.0 million tons, up 2.6 million from lastmonth.

With higher soybean imports projected for China, exports are raised for the United States,Brazil, and Argentina. Canada rapeseed exports are also raised with increased Chinaimports.

Global oilseed ending stocks are projected at 94.1 million tons, down 2.2 million from lastmonth. Soybean stocks account for most of the change with reductions for Argentina, Brazil,South Africa, India, and Canada only partly offset by an increase for the United States.

Global Soy Production




The election of an agriculture-friendly president in Argentina may not unleash the floodof soybeans for export that many investors expect, US officials said, proving cautious onideas of improved output prospects too.

The agriculture reforms, including a cut of 5 points to 30% in Argentina's soybean exporttax, that president elect Mauricio Macri is seen unveiling "immediately" after taking officeon December 10 "are expected to boost soybean sales", the US Department of Agriculturebureau in Buenos Aires said.

These changes could spur exports of soybeans in the short term as producers moveforward with sales that have been held up in anticipation of policy changes," the bureausaid, flagging talk that the soybean market is poised for an "unloading of Argentinesoybean supplies

Global oilseed markets have speculated that president-elect Macri's victory and its policyramifications will result in massive soybean sales

World Soybean market is expected to remain over supplied next year

World Soybean demand may remain sideways on slowing economic concern

Domestic fundamentals are also supporting a negative bias for short to medium term

Market has formed short term top recently, may not trade higher if current fundamentalcontinue.

Fear of Argentine Soybean Supply

Conclusion




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