Published on 27/03/2017 5:28:29 PM | Source: Angel Commodities Pvt Ltd
We expect MCX March contract to trade higher - Angel Commodities
Jeera / Cumin
* Jeera futures jumped higher last week on good physical and export demand coupled with lower supplies. The most-active Apr’17 delivery contract closed 7.2 % higher to settle at Rs. 17,935 per quintal. Market participants are expecting good exports demand in coming months.
* The arrivals have declined last week in the physical market. As per Agmarknet data, during Mar 20-25 about 10,867 tonnes of jeera arrived compared to 12,331 tonnes during previous week same period.
* Jeera stocks in NCDEX warehouses as on 26-Mar-17 is about 469 tonnes lower from 1,459 tonnes last year in March .
* On the export front, India in 2016-17 is likely to cross 1.2 lakh tonnes against 94,352 tonnes a year ago while the exports increase by 36.7% to 93,724 tonnes in first 9 month of marketing year 2016/17 as per the data release by Dept of commerce, GOI. Vietnam is the largest importer in 2016/17, crossing last year’s import figures by 517 % to 28,936 tonnes.
* As per second advance estimates for 2016/17, production of Jeera in Gujarat is forecasted at 2.21 lakh tonnes, down almost 11% compared to last year production of 2.38 lakh tonnes.
* We expect NCDEX April contract to trade higher towards 18,400/18,500 (CMP: 18,175) on expectation of good physical and export demand and lower production estimates.
* Cotton on MCX closed lower last week as physical demand continue to increase in the current season on expectation of good yarn exports.
* The cotton arrivals are in full swing and gap of arrivals compared to last year has narrowed down. South Indian Textile mills have started to import cotton from West Africa and the US as the landed costs are on par with the prevailing market price in the country.
* As on Mar23, 2017 about 257 lakh bales of cotton have arrived in the domestic market compared to 248.44 lakh bales last year same period. Maharashtra is leading the arrivals figures at 70.7 lakh bales followed by Gujarat at 60.6 lakh bales.
* As per Agmarknet, the arrivals decline by about 30% in March to 4.93 lakh tonnes of cotton in the domestic physical market during March 1-25 period compared to 7.05 lakh tonnes in the previous month in February.
* Cotton Advisory Board (CAB), has estimated that cotton imports would be 17 lakh bales in 2016-17 season but imports might touch 30 lakh bales at the end of the season, if the present trend of import continues
* ICE cotton futures closed lower last week, on fund selling ahead of the index fund roll periods and USDA prospective planting report.
* Weekly export sales data from the U.S. government showed net upland sales totaled 328,200 running bales for the week ended March 16, up 4 from the previous week but but down 7% from the prior 4- week average.
* Demand for cotton from China’s huge stockpile is waning just a week after the government restarted daily auctions. China sold only 70% of cotton offered from state stockpiles in the second week down from the 98% average for the first week of auctions, according to the government’s China National Cotton Exchange website.
* The data from the Commodity Futures Trading Commission (CFTC) showed that is no change in net long positions by the managed money in the week to Mar 21 in cotton futures and options and steadied at 105, 608 contracts.
* We expect MCX March contract to trade higher towards Rs.22,000/ 22,100 (CMP: 21,380/ bale) on reports of good domestic demand and expectation of improved exports. However, good supplies in the domestic market as imports have been good. There are higher stock positions with the farmers and stockists which may pressurize prices.
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