NCDEX guar seed surges on firm export demand
Guar Complex witnessed the highest weekly gains of around 27% owing to robust exports and expectations that stocks might decline in the long run caused by firm exports. Expectations of tight supplies in the long run owing to lower output have led to whopping 120% rise in Guar prices since last 2 months.
Forward Market Commission on Friday, January 14, 2012 has imposed additional special cash margin of 10% to be collected in cash. Further the already imposed non cash margin of 15% will be converted to cash margin. This will be effective from January 16, 2012.
Before imposing the additional special margin, FMC on Wednesday January 11, 2012 took another measure to curb the rising price of Guar seed and gum viz- Cut in position limits w.e.f. FMC on 11th January, 2012, directed the exchanges to cut position limit in Guar seed by 20% for brokers and clients and in Guar gum by 40% for brokers. Position limit in Guar gum for clients remain unchanged.
The revision aggregate position limit in Guar seed for member would be 1200 lots and for client 240 lots and for the near month contract member limit would be 400 lots and client limit would be 80 lots.
The revision aggregate position limit in Guar gum for member would be 300 lots and for client 100 lots and for the near month contract member limit would be 60 lots and client limit would be 20 lots.
According to the second advance estimates from Rajasthan farm department, Guar seed output has been revised upward from 11.36 lakh tonnes to 12.09 lakh tonnes and area covered has been revised upward at 30.9 lakh ha against 29 lakh hectares in the first advance estimates.
Production
After harvesting a record 15 lakh tonnes of Guar crop in Rajasthan in 2010-11season (Oct 10- Sep 11), output in the current season has declined to around 12.09 lakh tonnes (Second advance Estimates).
Despite higher production prices had touched record levels of Rs 4770 per qtl in2010-11 on the back of robust exports which doubled from 2.1 lakh tonnes to 4.03 lakh tonnes in 2010-11.
In the current season 2011-12, which started in October 2011, output is estimated 25% lower than previous year, while exports continue to remain firm registering 68% growth during the first 6 months of FY 2011- 12 (Apr 11-Mar -12). Further. Carryover stocks of Guar in the current season is at lowest levels around 1.5-2 lakh tonnes against normal 4-4.5 lakh tonnes.
Thus, with lower carryover stocks and drop in 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
Exports of Guar gum from April to September 2011 stood at 2.86 lakh tn a rise of 68 % compared to 1.70 lakh tn during the same period last year. In 2010-11 fiscal, Guar gum exports were almost doubled to 4.03 lakh tonnes.
Courtesy: Angel Commodities
NCDEX chana rises on lower acreage
Chana prices witnessed mixed trend and settled 0.96% and 0.75% higher w-w. Lower area covered under Chana till date is controlling prices from falling sharply. As the Rabi sowing season is almost nearing its end, area covered under the Pulses and Chana are probably to miss the target.
According to the Rajasthan farm department’s first advance estimates for Rabi crops, Chana output is estimated 7.8% lower at 14.75 lakh tonnes in 2011-12 season against 16 lakh tonnes in 2010-11.
Rajasthan is the third largest Chana producing state in India contributing around 10-12% share in total Indian Chana output after MP and Maharashtra. Although sowing of Chana is higher in Rajasthan, unfavorable climate is expected to lower the yield of the Chana crop in the coming season harvesting of which would begin in February in Rajasthan.
Chana sowing across India as on January 13th 2012 is 5.23% down at 8.722 million hectares as compared to 9.22 million hectares in the same period previous year. Highest decline in area is witnessed in Maharashtra where sowing is down 23%, while in Karnataka it is down by 19%.
Crop progress and Production
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 and thus acreage has declined drastically.
Further, unfavorable weather in Central and Southern India may lower Chana yield in the coming season. Except in Rajasthan, all other major producing states i.e MP, Maharashtra, Karnataka and AP are likely to witness a fall in output in the coming season harvesting of which would begin after mid January.
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.
Although government has targeted higher Rabi Pulses output, it is difficult to achieve the same taking into consideration the sowing progress and prevailing weather conditions.
Courtesy: Angel Commodities
NCDEX sugar settles higher on hopes of exports to pickup
Possibility of further exports approval and discussion on the decontrol led sugar prices to settle 1.6% higher w-w. Discussion on decontrol of sugar and levy sugar is scheduled on January 16, 2012.
Sugar recovery in Maharashtra during October 2011-December 2011 stood at 10.35% as compared to 9.80% in the same period previous year.
However, Sugar recovery in U.P. is lesser at 8.47% till 3rd January 2012 as compared to 8.73% in the same period previous year.
The government has released lower monthly quota for the month of January at 17.16 lakh tonnes which includes 2.16 lakh tonnes of levy quota and 15 lakh tonnes of non levy quota. The quota for January is much lower compared to January 2011 monthly quota of 19.18 lakh tonnes and last month’s quota of 19.07 lakh tonnes.
According to the Food Minister, Ministry is planning to discuss with States, the Finance and Agriculture Ministries on removing some of the controls such as doing away with the mandatory obligation to offer sugar for the public distribution system (PDS) in the New Year(Source: Hindu Business Line.
Liffe and ICE raw sugar Futures settled 0.24% and 2.45% higher respectively on Friday on account of short coverings.
Domestic Sugar updates
Sugar output in Maharashtra rose 18.8% between Oct 01 and Dec 31, 2011 to 27.5 lakh tonnes. The output was earlier down by 6%. According to ISMA, India is likely to have crushed 14.4 mln tn cane during Oct 1-Nov 23 and produced 7.58 mln tn sugar vs 6.46 mil tn during the current crushing season.
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 has crushed 9.4 mn tn cane this season against 3.3 mn tn a year ago. 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 from the start of the season to January 01,2012 stood at 31.2 million tonnes down 7% for this time a year ago. Total 2011-12 crush of sugar stood at 492.23 million tonnes down 11% from a year earlier.
Swiss sugar consultancy Kingsman lowered its global 2011-12 sugar surplus estimate by 940,000 tn to 8.22 mln tn.
Courtesy: Angel Commodities
NCDEX soybean drops on subdued spot demand
NCDEX February soybean futures ended in red as lower demand at prevailing prices. As per WASDE, USDA which is released on January 12, 201, U.S. oilseed production for 2011/12 is estimated at 91.2 million tons, up 0.2 million tonnes from last month. Soybean production is estimated at 3.056 billion bushels, up 10 million based on increased yields.
The soybean yield is estimated at 41.5 bushels per acre, up 0.2 bushels from the previous estimate. Global oilseed production for 2011/12 is projected at 457.4 million tons, down 0.3 million tonnes. Global soybean production is projected at 257 million tons, down 2.2 million mostly due to lower production forecasts for South America.
The Argentina soybean crop is projected at 50.5 million tons, down 1.5 million due to lower projected area and yields. The Brazil soybean crop is reduced 1 million tons to 74 million reflecting hot, dry conditions in recent weeks. Global oilseed ending stocks are projected at 74.8 mln tons, down 0.7 million tons.
Rape/mustard Seed: NCDEX April RM Seed futures ended slightly lower as weakness in other oilseeds and vegetable oil for short term (2-3 days). However, for long term perspective, RM seed is expected to trade higher as lower production estimates of RM Seed as lower sowing acreage coupled with crop damage report.
As per PIB, Total area under oilseeds cultivation is reported to be 80.96 lakh ha against 85.5 lakh ha last year as January 13, 2012. The country's RM seed sowing has totaled 64.83 lakh ha as on January 13, 2012, down 4.96% from 68.21 lakh ha in the year-ago period. RM seed accounts for about 70% of India's winter-season oilseed output.
Refined Soy Oil: NCDEX February refined soy oil futures ended slightly lower on account of lower demand at prevailing prices and weak overseas market. As per Solvent Extractors Association of Inida, India imported 654,714 tonnes edible oil in December, down around 21% from the month of Nov 2011. In the first two months of the current oil year (November- December), edible oil imports were at 14.82 lakh tonnes as against 13.82 lakh tonsa year ago.
Current stock of edible oils as on 1st January, 2012 at various ports is estimated at 620,000 tons (CPO 420,000 tons, RBD Palmolein 100,000 tons, Degummed Soybean Oil 35,000 tons and Crude Sunflower Oil 65,000 tons) and about 720,000 tons in pipelines.
Total stock, both at ports and in pipelines is increased by 40,000 tons to 1,340,000 tons. During Nov. & Dec. 2011, Import of refined oil (RBD Palmolein) up 22% and reported at 217,091 tons compared to 178,259 tons during the same period of last year. Share of refined oil has increased to 15%, while crude oil is 85% and reported at 12.65 lakh tons compared to 12.04 lakh tons during corresponding period of previous year. During Nov. & Dec 2011 Palm Oil import has increased to 1,293,378 tons compared to 1,195,967 tons during the same period of last year. Also, Soft oils import has increased to 189,020 tons compared to186,489 tons last year.
Courtesy: Angel Commodities
NCDEX pepper tumbles on weak export demand
Fragile demand from the overseas and domestic buyers led Spot pepper prices and Futures to settle 2.8% and 3.47% lower w-w.
Demand from the overseas and domestic buyers remains dull currently as buyers remain absent from the market. Fresh arrivals from the domestic will gain momentum at the end of the month (January 2012).
Indian parity in the international market is being offered at $6,300/tonne while Vietnam is offering its ASTA pepper at $6,775/qtl.
Exports
According to Spices Board of India, exports of pepper during April 2011- November 2011 stood at 17,000 tonnes as compared to 11,850 tonnes in 2010-11, rise of 43.6%.
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 Kochi market stood at 8 tonnes while offtakes stood at 4 tonnes on Saturday.
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). Domestic consumption of Pepper in the world is expected to grow by 3.03% to 1.25 lakh tonnes while exports are likely to grow by 1.48% to 2.46 lakh tonnes in 2012. (Source: Peppertradeboard)
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 jeera gains on falling arrivals
Declining arrivals amidst improved offtakes led Spot prices of Jeera and Futures to settle 0.15% and 0.14% higher respectively w-w.
According to Gujarat farm ministry, area sown under jeera till January 9, 2012 stood at 3.649 lakh hectares (lh) up 49.2% as compared to last year while area covered in Rajasthan till date is expected to be 3.03 lakh hectares as compared to 3.30 lakh hectares in the same period 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 arrivals of 4,000 bags while offtakes stood at 7,700 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-November 2011 stood at 26500 tonnes as compared to 20,750 tonnes in 2010-11, an increase of 27.7%.
Courtesy: Angel Commodities
NCDEX turmeric weakens on poor domestic demand
Lacklustre demand from the domestic and overseas buyers led Spot Turmeric and Futures to settle 1.04% and 2.02% lower respectively ww.
Production, Arrivals and Exports
Arrivals in Nizamabad mandi stood around 1,000 bags while Erode mandi witnessed arrivals of 10000 bags 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- November 2011 stood at 58,000 tonnes as compared to 35500 tonnes in 2010-11, rise of 56%.
Targets set by the Spices Board have already been met till October 2011. Exports are expected to touch new historical levels in 2011-12.
Courtesy: Angel Commodities
India soy complex settles lower on global cues
Soybean prices marginally declined at the futures platform owing to the rollover of contracts as the expiry is fast approaching. CBOT soybean and oil also closed steeply down on Friday due to stronger dollar index.
Weather recovered over major regions of South America which also kept prices under pressure across the globe.
Soy oil prices declined on Saturday owing to the weak closing at CBOT due to broad based sell off in soy complex on Friday.
Domestic demand for oil is reported to be sluggish which further kept the prices lower. Weakness in crude oil prices also help edible oils prices lower across the globe.
Mustard seed prices declined on Saturday owing to weakness in the soy complex. Good demand for meal and oil limited the down fall. Activities were very limited due to regional festivals. Weather conditions are raising concerns which limited the down fall.
Courtesy:Karvy Comtrade Ltd.
Precious metals settle higher on global economic worries
On a weekly basis, spot gold prices surged almost 1.5 percent on the back of upbeat sentiments in the global markets.
It hit a high of $1661/oz and ended at the level of $1638/oz last week. On the MCX, Gold February contract declined around 1.2 percent and touched a low of Rs.27,390/10 gms in the last week.
The Indian Rupee appreciated sharply by almost 2.5 percent last week and a stronger Rupee acted as a negative factor for metal on the domestic bourses.
Additionally, the news of a sharp rise in China’s gold imports indicated improved demand from the world’s second largest consumer of gold and this also provided support for prices.
The country is preparing for the Lunar New Year this month which is a key gold-buying period.
Silver
Taking cues from rise in gold prices along with upside in base metals, spot silver prices rallied 3.5 percent last week.
The white metal touched a high of $30.64/oz and ended its trading session at $29.71/oz last week.
On a w-o-w basis, MCX Silver March contract rose marginally by 0.3 percent as sharp gains were resisted due to appreciation in the Indian currency and touched a high of Rs53,400/kg during the week.
Courtesy: Angel Commodities
Crude oil tumbles on rising US inventories
On the weekly basis, Nymex crude oil prices declined sharply by 2.8 percent taking cues from rise in US crude oil inventories coupled with delay of ban on Iranian crude oil imports by the European Union. Additionally, a stronger dollar during the week also acted as negative factor for the commodity.
Oil prices touched a low of $97.70/bbl during the week and closed at $98.70/bbl on Friday. On the MCX, prices declined almost 5 percent on account of a stronger Rupee and closed at Rs.5082/bbl after touching a low of Rs.5065/bbl during the week.
Natural Gas
Nymex natural gas prices declined sharply around 14.6 percent in the last week, on the back of warmer than expected weather conditions in the US which led to demand concerns for natural gas.
Additionally, a stronger dollar during the week also added pressure to the commodity. Prices touched a low of $2.621/mmBtu during the week and closed at $2.625/mmBtu on Friday. On the MCX, prices declined by 14.8 percent last week and closed at Rs.138.4/mmBtu on Friday.
Courtesy: Angel Commodities
Base metals edge higher on positive China's economic data
The base metals complex traded on a positive note last week on the back of upbeat sentiments in the global markets due to a successful Spain and Italy’s bond auctions.
Favorable economic data from China during the week also acted as a supportive factor for metal prices. However, appreciation in the Indian Rupee capped sharp gains on the domestic platform last week.
Copper
Copper was the top performer amongst the base metals pack last week, as the metal rose sharply by 5.7 percent on the LME and around 3.4 percent on the MCX.
Sharp fall in the LME copper inventories, rise in copper imports from China and upbeat sentiments in the global markets acted as a positive factor for the red metal prices.
On a weekly basis, copper inventories declined 3.1 percent to 356,825 tonnes on the LME warehouses.
Copper touched a high of $8117/tonne last week and closed above the crucial level of $8000/tonne on Friday.
On the MCX, Copper February contract touched a high of Rs420.20/kg and closed at Rs415.90/oz last week.
Courtesy: Angel Commodities