Date: 26-09-2017 NCML Commodity Market Monitor HOME NCoMM NCML COMMODITY MARKET MONITOR Cotton | Sugar | Soybean | RM Seed | Castor seed | Turmeric | Jeera | Pepper OUTLOOK OTHER DATA Sowing progress | Monsoon Situation | Advance estimates | Kharif MSP WEEKLY ONLINE QUIZ Click on the link to participate Participate in our weekly quiz and get a chance to win Amazon gift coupons. Winners will be announced in next report and rewarded.
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NCoMM NCML COMMODITY MARKET MONITOR · Date: 26-09-2017 NCML Commodity Market Monitor Price Drivers 22 Price Trend & Technicals With expectations of higher production this year, higher
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As expected, the cotton prices after trading in a thin range for a
prolonged period of time finally lost support and slipped sharply on
expectation of higher production and record high imports this year.
For the coming days we expect prices to continue trading under
pressure and move closer to the important support mark of Rs
18550. Expected rise in export demand will lend some support to the
prices around those levels. On the other side immediate resistance
can be seen around Rs 19800 odd levels but considering the current
negative momentum the chances of prices testing the resistance
level in looking highly unlikely.
IMPORTANT LEVELS
S2 S1 CMP R1 R2
18170 18550 19246.9 19800 20300
Outlook: Prices will continue to trade under pressure and will move closer to Rs 18550 mark.
• Other cotton producers like Brazil and Australia may find it difficult to match the price offered by India, where a bumper harvest is likely. The
government has fixed cotton production target at 35.5 million bales (170 kg each) for 2017-18. ICRA has projected India to produce 36 million bales
of cotton in 2017-18. As per government’s 4th advance estimates, India’s 2016-17 cotton production stood at 33.09 million bales in 2016/17.
• As on 22nd September 2017, the area sown under cotton has reached to 121.56 lakh hectares, which is 18.68% higher than 102.56 lakh hectares sown
last year till date and 5.95% higher than normal till date. Farmers have shifted to cotton from various crops across states due to higher realisation
last year.
• Cotton producing under-irrigated belt of Vidarbha and Eastern Madhya Pradesh has received below average rainfall, posing a threat to farmers
who have increased planting of the fibre on the back of a surge in demand. But the rainfall here has been forecasted to show recovery.
• India’s cotton imports, estimated at an all-time high of 30 lakh bales in 2016-17 against 20 lakh bales in 2015-16 are likely to fall in the coming season.
• According to the latest report by ICAC, world’s cotton area is likely to increase by 9% to 31.9 million hectares in 2017-18. Global cotton production to
rise by 9% from 23.07 million tonnes in 2016-17 to 25.14 million tonnes in 2017-18. Wherein, China, and Pakistan are projected to produce 5.2 million
tonnes (7% higher y-o-y) and 2 million tonnes (17% higher y-o-y) of cotton respectively.
• Although production forecast for the United States was 4.5 million tonnes, a rise of 20%, the impact of the recent hurricanes, Harvey & Irma, is yet
to be fully assessed as per ICAC. It now appears that there had been significant damage to US crop which will be incorporated in next estimates.
• Overall score of 2.9 shows consolidation to mild bearishness in cotton prices.
Fundamental Summary
Price Drivers Impact Weightage Score (1-5)*
Rise in export demand due to countries buying cotton from India post hurricane damage in US
Bullish 15% 4
Significantly higher cotton area sown Bearish 25% 2
Higher production estimate Bearish 20% 2
Inadequate rainfall in cotton belt of Vidarbha and MP Bullish 20% 4
Heavy monsoon rains this year have expectedly damaged castor
crop, which are keeping the price sentiments positive. Decline in
the sowing numbers and good international demand for the meal
are all supportive for the prices. Some more upside can be seen in
the coming days pushing prices higher towards the important
resistance of Rs 4705. Fresh strength can be seen emerging only on
a successful invalidation of that level. On the other side a decline
below Rs 4550 may lead exert some more selling pressure on
prices pulling it down towards Rs 4310.
IMPORTANT LEVELS
S2 S1 CMP R1 R2
4310 4550 4625 4705 4775
Outlook: Prices will trade with sideways to downward bias till Rs 4705 level is not breached.
• According to the latest sowing report, kharif castor sowing acreage for
2017-18 is recorded at 8.17 lakh hectares which is 2.62 per cent lower
than the 8.39 lakh hectares in the same corresponding period last year.
Lower sowing acreage may have slightly bullish impact on the prices.
• According to the market participants, farmers are still holding castor
crop in expectation of getting higher prices in the coming months.
Farmers may not bring castor crop at lower domestic prices.
Mandi Price in Rs/ Quintal
22-09-2017 15-09-2017 % change
Kadi 4525 4550 -0.55
Rajkot 4200 4250 -1.18
Deesa 4643.9 4685.45 -0.89
• According to the traders of Gujarat, area of castor in Gujarat for 2017-18 may be equal or slightly higher than last year. However, as castor crop is
sown late this year as compared to normal sowing time, this may affect the yield of the crop. So, they are expecting same production of castor
crop this year as of last year.
• India’s castor meal exports in the month of August were 1.132 thousand MT, lower by 77.95 per cent against 5.134 thousand MT in July 2017.
India’s castor meal exports in the period April-August 2017-18 were 1.56 lakh MT as against 1.79 Lakh MT during the same period in 2015-16. Lower
export demand may have marginally bearish impact on the domestic prices.
• India’s castor oil export in the month of May is recorded at 43.97 thousand MT which is 20.84 percent lower than export of 55.55 thousand MT
of April 2017. Lower export demand may have marginal bullish impact on the prices.
• According to the government’s fourth advance estimate, Castor seed production is estimated at 14.21 lakh metric tonne for 2016-17 which is
18.89 per cent lower than the final production estimate of 17.52 lakh metric tonne of 2015-16. Moreover, according to SEA, all India castor seed
production is estimated at 10.61 Lakh MT for 2016-17 which is 25.43 per cent lower than last year production estimate of 14.23 Lakh metric
tonnes. Lower production estimate might have bullish impact on the prices.
• Overall score of 3.2 shows range bound to slightly firm movement in the coming days.
After rising sharply over the past few weeks the positive
momentum in the prices have started to show some signs of
fizzling out. However the undertone is still strong and prices may
resume its rising streak after a brief phase of consolidation. On a
breach of the key resistance of Rs 7770 prices will expectedly see
fresh buying in the spice pushing it towards Rs 8270. Any sharp
correction from here can take place only if the sentiments
strengthen towards the expectation of higher yield. Major
supports is seen standing at Rs 7200 towards which the prices can
slip on a breach of Rs 7360.
IMPORTANT LEVELS
S2 S1 CMP R1 R2
7200 7360 7600 7760 8270
Outlook: Prices will moderate and move closer to Rs 7360.
Fundamentals- Domestic & International TURMERIC
• Turmeric markets remained weak tracking subdued demand. As per
Nizamabad traders business activities are dull in the market despite of
festival season as Turmeric is used worldwide during this period in various
religious rituals. Buyers are hesitant to make any bulk deals in Turmeric
due to uncertainty about liquidation of stocks with APmarkfed. Andhra
Pradesh market federation procured around 48,500 metric tonnes.
• According to traders, activity in Erode market reported limited trade inquiries from overseas buyers. Turmeric stocks in Erode is good i.e, around 8-10 lakh bags (70kg each), but not in other trading centres, which is likely to lend support to the Turmeric prices.
Mandi Turmeric: Price in Rs/ Quintal
22-09-2017 15-09-2017 % change
Nizamabad 7600 7674 -0.96
Sangli 7500 7650 -1.96
Jaipur 8500 8550 -0.58
• Turmeric crop prospects has improved after good rainfall in Turmeric growing belts earlier this months, which has prompted buyers to do only
need-based buying. However, downside in the commodity is limited due to lower stocks in the country.
• As per the Telangana Agriculture Department, Turmeric acreage as on 13th September 2017 was reported lower at 0.45 lakh hectares as
compared to 0.46 lakh hectares same period last year. Turmeric acreage improved in Vikarabad, Nizamabad and Warangal districts.
• According to the Department of Agriculture Andhra Pradesh, as on 20th September Turmeric acreage in the state stood at 0.15 lakh hectares as
against 0.14 lakh hectares last year same period.
• Turmeric production for the next season is estimated to be as good as last season with the producing regions in southern India experiencing
good rainfall in the past few weeks. Sowing of the commodity was last seen marginally lower than the preceding year but the higher rainfall is
expected to boost the yield. Turmeric production would be lower in Tamil Nadu, but would be more than compensated from Maharashtra and
Andhra Pradesh as per Trade sources. As per the Spices Board of India, Turmeric production in 2016-17 in the country estimated at 10,51,160
tonnes as against 9,67,060 tonnes in 2015-16.
• According to the lastest data from Department of Commerce, Turmeric exports during April-June 2017-18 stood at 35,360.56 metric tonnes as
against 37,335.01 metric tonnes same period last year. Turmeric exports in the month of June 2017 was 10361.01 tonnes as against 13,215.69
tonnes in June 2016. India exported 125,536.43 metric tonnes in 2016-17.
• With overall fundamental score of 2.8 Turmeric is likely to remain in consolidating mode with slight bearish tone mainly on subdued demand.
Fundamental Summary
Price Drivers Impact Weightage Score (1-5)*
Subdued domestic and export demand Bearish 15% 2
Improved rainfall in Turmeric growing belts Bearish 25% 2