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Published on 10/08/2018 2:15:42 PM | Source: Kedia Commodity Ltd

Castor seed is getting support at 4646 and below same could see a test of 4613 level - Kedia Commodity

Posted in Commodities Reports| #Kedia Commodity Ltd #Commodity Tips

Menthaoil

Menthaoil settled up due to bullish demand outlook from domestic market as well as exporters. Spot markets are also witnessing strong consumption demand amid restricted supplies. Bumper crop harvest has been discounted in the market and market is moving upwards on rising demand from end users. Arrivals in Sambhal stood at 400 drums compared to 350 drum a day ago while in Barabanki supplies rose to 500 drums from 450 drums a day earlier. According to preliminary estimates, mentha oil production in 2018-19 would be 40,000-45,000 ton against last year's production of 35,000 tons.

There could be chances of crop damage to certain extend due to unfavourable weather condition. Besides, farmers are likely to hold back the stocks as the present prices are not remunerative for them. However, in recent years, the growth in production and consumption of synthetic mentha has influenced the demand for natural mentha. As per sources, India contributes around 80% to the total global mentha oil production. Total global production stood at around 48,000 tonnes, out of which India produces between 30,000-40,000 tonnes.

According to estimates, mentha oil production in India for crop year 2016-17 will be around 38,000 tonnes.   Menthaoil on MCX settled up 3.64% at 1644, technically market is under fresh buying as market has witnessed gain in open interest by 0.34% to settled at 1465 while prices up 57.7 rupees, now Menthaoil is getting support at 1615 and below same could see a test of 1586.1 level, And resistance is now likely to be seen at 1658.4, a move above could see prices testing 1672.9.                  

Soyabean

Soyabean prices gained tracking firmness in overseas prices with the market underpinned by forecasts of hot and dry weather in parts of the U.S. Midwest. However, upside seen limited on projection of favourable weather triggered expectation of higher supply while demand from crushers is declining.  There was additional support for the soybean market from soaring Chinese domestic prices, which fuelled expectations that Beijing will accelerate buying of U.S. supplies despite a trade war between the two nations. U.S. soybean shipments to the world's top importer could revive later in the year after China draws down available supplies in top exporter Brazil.

China’s soybean imports in July fell from a month ago, customs data showed, as processors slowed purchases after building up a record inventory of the oilseed in preparation for hefty import tariffs on U.S. shipments introduced last month. China, the world’s largest soy buyer, brought in 8.01 million tonnes of soybeans in July, down 8 percent from 8.70 million tonnes in June, figures from the General Administration of Customs of China showed. The figures were down 20.6 percent from last year’s 10 million tonnes, the highest arrivals on record as ports at the time cleared a months-long backlog of cargoes.

Indian government increased export subsidy on soymeal from 7% to 10% to make it competitive in international market. Soyabean on NCDEX settled down -0.06% at 3350, technically market is under long liquidation as market has witnessed drop in open interest by -3.33% to settled at 51660 while prices down -2 rupees, now Soyabean is getting support at 3333 and below same could see a test of 3317 level, And resistance is now likely to be seen at 3365, a move above could see prices testing 3381.        

Turmeric

Turmeric prices dropped on sluggish demand and hopes of higher sowing. Demand for turmeric in the local mandis is sluggish from traders as farmers are not selling good quality product. Turmeric prices were lower as sowing is expected to be higher this year and stocks are comfortable. In Telangana, turmeric acreage rose to 46,692 hectare until August 1 from 41,715 hectare a year ago, State Government data showed. Overall area under turmeric may increase by 10-15% yearly mainly due to rise in acreage in Telangana.

Spot turmeric prices decreased at the markets in Erode as there were limited bags offered for sale. Only 2,500 bags of turmeric arrived and 70 per cent were sold. Though the traders did not receive any fresh upcountry orders, they purchased good number of bags for their local supply as medium quality turmeric arrived for sale. Finger variety was down at the Regulated Marketing Committee by Rs. 300 a quintal and Rs. 250 a quintal at the Erode Cooperative Marketing Society, while root variety lost Rs. 500 and Rs. 200 at the Regulated Marketing Committee and at the other two markets respectively.

At the Erode Turmeric Merchants Association, the finger turmeric was sold at Rs. 5,388-8,333 a quintal; root variety at Rs. 5,055-7,377. Of the 2,171 bags on offer, 897 found takers. Turmeric on NCDEX settled down -0.77% at 7198, technically market is under long liquidation as market has witnessed drop in open interest by -0.03% to settled at 16390 while prices down -56 rupees, now Turmeric is getting support at 7161 and below same could see a test of 7125 level, And resistance is now likely to be seen at 7253, a move above could see prices testing 7309.                

Jeera

Jeera prices ended with gains on robust demand and lower output this year. Jeera demand in the physical market is robust, ahead of festive season which has extended the gain in prices. Jeera prices were higher on lower output this season while the stock is also less. India's cumin seed output fell to 489,000 ton from 503,000 ton a year ago and as a result stocks with traders and farmers are said to be lower. According to export data released by Commerce ministry, exports in May surged 96% on year to 27,790 tonnes. Moreover, country exports about 87,115 tonnes of Jeera during Mar-May 2018. Jeera arrivals during July are pegged at 8,700 tonnes compared to 3,800 tonnes last year for same period.

India is expected to export a record 175,000 tn of jeera in 2018-19 (Apr-Mar), primarily because supply from its competitors has taken a hit making it the sole supplier of the largely sought after spice, trade officials said. Supply of jeera from Syria and Turkey--India's main rivals in the global jeera export market--has been hit both in terms of quantity and quality due to adverse weather, according to exporters. Having hit a record high of 155,000 tn in 2014-15, jeera exports fell to 97,790 tn in 2015-16, and 143,670 tn in the year ended March, according to data from Spices Board India.

Jeera on NCDEX settled up 0.12% at 20140, technically market is under fresh buying as market has witnessed gain in open interest by 5.6% to settled at 7752 while prices up 25 rupees, now Jeera is getting support at 19968 and below same could see a test of 19797 level, And resistance is now likely to be seen at 20293, a move above could see prices testing 20447.   

Ref soyoil

Ref soyoil dropped amid selling pressure and lack of support due to weak demand in spot markets. Demand for soy oil remained muted in the spot markets, despite beginning of festival season. However, report of good stocks with importers put pressure on prices. Increase in acreage of soybean and hopes of higher output may put pressure on prices. India's soybean sowing grew 10.62% to 10.95 million hectare due to favourable weather conditions and higher prices in the open market. Stocks of edible oil in ports and pipeline are estimated at 2.52 mt as on July 1 compared to 2.28 mt a year ago while lower than 2.66 mt in May.

As per the data from SEA, India's vegetable oil imports during June dropped 23% to 10.4 lakh tons (lt) compared to 13.4 lt in the same period a year ago. While imports for Nov-June fell by 2.2% to 96.4 lt compared to 98.6 lt on year. Edible oil imports fell to 10.07 lt in June compared to 12.9 lt in the same period a year ago on lower crude oil prices. Soyoil degummed imports fell marginally to 288,519 tons compared to 290,904 tons. For the second fortnight of July, the base import price of crude soyoil has been cut to $743 per tn from $750 per tn by the govt which is lowest since Jan 2016.

Ref.Soya oil on NCDEX settled down -0.31% at 731.8, technically market is under fresh selling as market has witnessed gain in open interest by 7.31% to settled at 41230 while prices down -2.25 rupees, now Ref.Soya oil is getting support at 730 and below same could see a test of 729 level, And resistance is now likely to be seen at 734, a move above could see prices testing 737.

Crude palm oil

Crude palm oil dropped tracking weakness in spot demand and overseas prices amid higher domestic stocks. Palm oil end-July stockpiles is expected to rise 7 percent to 2.34 million tonnes, while production was seen up 15.9 percent to 1.54 million tonnes. Meanwhile, exports were also forecast to gain 0.9 percent to 1.14 million tonnes. Malaysian palm oil prices are set to average 2,410 ringgit ($591) a tonne in 2018, the Malaysian Palm Oil Council (MPOC) forecast, down about 14 percent from last year's average prices. The MPOC also forecast palm oil output in Malaysia, the world's second largest producer, at 20.3 million tonnes in 2018, above last year's 19.92 million tonnes due to better yields.

"For the second half of 2018, palm oil production is expected to be higher, contributed by the peak months in October and November," the MPOC said. Malaysia's palm oil stocks are expected to have risen to their highest in five months at end-July, a second straight gain as output growth outpaced exports. Palm oil stocks in the world's No.2 producer grew 7 percent in July to 2.34 million tonnes from the previous month, highest since February, according to a median estimate from eight planters.  

CPO on MCX settled down -0.54% at 591.9, technically market is under long liquidation as market has witnessed drop in open interest by -2.2% to settled at 6831 while prices down -3.2 rupees, now CPO is getting support at 589.8 and below same could see a test of 587.8 level, And resistance is now likely to be seen at 594.4, a move above could see prices testing 597.  

Mustard seed

Mustard seed prices dropped tracking weakness in spot demand on profit booking after prices gained amid lower arrivals in the spot markets. However, millers are reluctant to make fresh deals as demand from oil mills have not picked up and there is ample availability in the market due to poor crushing during June and July. Crushing of mustard seed fell for the second month in a row in July to 450,000 ton across India from 650,000 ton a month ago. NAFED offered 9,724 ton of mustard seed for sale in various markets of Gujarat and could not find buyers due to high base prices.

India's rapeseed meal export swelled to 369,646 ton during April-July 2018 from 165,609 ton a year ago on the back of good buying from Vietnam and Thailand, data from Solvent Extractors Association of India showed. Mustard production in the country is seen at 6.6 mln tn in 2017-18 (Jul-Jun), marginally lower than 6.7 mln tn harvested in the previous year. A fall in area in 2017-18 can be attributed as the main reason for a smaller crop. Acreage under mustard in the country was at 6.7 mln ha against 7.1 ml ha in 2016-17.

Rmseed on NCDEX settled down -0.68% at 4106, technically market is under fresh selling as market has witnessed gain in open interest by 6.67% to settled at 116480 while prices down -28 rupees, now Rmseed is getting support at 4089 and below same could see a test of 4073 level, And resistance is now likely to be seen at 4134, a move above could see prices testing 4163.                    

Cardamom

Cardamom settled up as there are fears of damage to standing crops and delay in new crop supplies. Rains have also impacted the new crops and supplies from the fresh crop would get momentum by the third week of this month, though scattered supplies have begun to pour in some of the auction centres. Stockists did not make buying on hopes of higher output and early commencement of new crop supplies. Heavy monsoon rainfall that has caused damage to plantation thereby resulting in crop loss and downward revision of earlier made higher crop estimates.

At the Vandanmedu auction centre, supplies were at 21 MTs; lower by 22 MTs that traded at avg. auction prices of Rs.982/kg, higher by Rs.31 while max price superior quality material fetched was at Rs.1256/kg. According to Spices Board, cardamom exports during 2017-18 hit all time high at 5680 MTs valued at Rs.60908 lakhs. Harvesting activities are also likely to be delayed due to heavy rains that will lead to delayed arrivals of fresh crop to auctions. Light to moderate rainfall is most likely in many places of Idukki district until 9th Jul.

Despite record higher exports in 2017-18, exports figure in 2018-19 may not touch that volume as there are issues regarding pesticide to the stocks exported to Saudi Arabia. Cardamom on MCX settled up 2.99% at 1125, technically market is under short covering as market has witnessed remain unchanged in open interest by 0% to settled at 106 while prices up 32.7 rupees, now Cardamom is getting support at 1108.4 and below same could see a test of 1091.7 level, And resistance is now likely to be seen at 1133.4, a move above could see prices testing 1141.7.        

Cotton

Cotton gained on anticipation of lower production due to reports of pink bollworm in major producing belts of Maharashtra. A few enquiries for exports, particularly from China, is supporting the market. China is expected to purchase more cotton from India as country's buying is fuelled by 25% tax on fibre coming from United States, reports said. China may purchase 2.5-3.5 million bales in November, December and January. Meanwhile, cotton demand for about 4 million bales is expected from Bangladesh and Vietnam.  

Cotton Association of India (CAI) has estimated domestic cotton consumption at 32.4 million bales, while exports are seen at 7 million bales. Cotton sowing in Gujarat, the largest grower of the fibre crop reached 2.65 million hectares as on August 6, which is about 10,000 hectares more than last year. The Cotton Advisory Board (CAB) has said that India’s cotton exports are likely to increase by 20% during the current cotton season of October, 2017 to September, 2018, over last year. It added that exports are expected to touch 70 lakh bales by September this year.

From October, 2017 to April 2018, the total amount of cotton exported from India was 51.21 lakh bales. The board has estimated the cotton production for the current cotton season 2017-18 (October 2017 to September 2018) at 370 lakh bales. Cotton on MCX settled up 0.17% at 24000, technically market is under short covering as market has witnessed drop in open interest by -0.15% to settled at 4028 while prices up 40 rupees, now Cotton is getting support at 23890 and below same could see a test of 23780 level, And resistance is now likely to be seen at 24070, a move above could see prices testing 24140.   

Castor seed

Castor seed dropped as higher supplies at the spot market amid limited demand scenario weighed. Sowing activities is being very dull in the current season and only half of last year area is covered till date. Lack of sowing interest for castor may be due to the higher MSP prices of other crops. Rainfall is likely to be isolated to scattered in Gujarat region. As per latest sowing data, area under castor seed was at around 1.50 lakh hec that is lower by 44.73% Y/Y and 35% than the normal area. India’s monsoon rains, the lifeblood of its economy, should recover in August and September from below-average levels at the start of the season, the weather office said, supporting farm income and broader economic growth.

The farm sector accounts for about 14 percent of India’s $2 trillion economy and employs more than half of the country’s 1.3 billion people. India received below average rainfall in the first two months of its annual June-September monsoon season, according to India Meteorological Department (IMD) data. “The rainfall for the country as a whole during the second half of the season is likely to be 95 percent of the long-period average,” the IMD said.

A spell of good rains could keep a lid on inflation by holding down food prices, potentially tempting Prime Minister Narendra Modi to bring forward general elections due in May 2019. Castor on NCDEX settled down -1.08% at 4679, technically market is under fresh selling as market has witnessed gain in open interest by 4.59% to settled at 146030 while prices down -51 rupees, now Castor is getting support at 4646 and below same could see a test of 4613 level, And resistance is now likely to be seen at 4740, a move above could see prices testing 4801.              

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