NCDEX Agro Commodities Witness Heavy Selling In Last Few Sessions
Refined Soy Oil futures in NCDEX have witnessed sharp corrections since the last few weeks. Soy oil prices at CBOT have also slumped significantly which have had a strong impact on global market sentiments. Agro Commodities Trading in NCDEX witnessed sharp declines in most commodities for the last few sessions on improved rains in India. NCDEX Turmeric Futures may garner support at lower levels amidst expectations of a strong festive demand. Weak rains in the growing areas of Andhra Pradesh have been pressurizing the market sentiments so far & creating apprehensions of a fall in acreage of Turmeric. With arrivals slowing down and moderate rise in export and domestic demand being noted, this could support the rates in the short to medium term. Though exports are likely to pick up in coming weeks, high levels of existing stocks could keep prices from sharply soaring again as seen 2 years ago. Firmness in Spices over next few months cannot be ruled out with rising exports and a pick up in domestic demand. The NCDEX – National Commodity & Derivatives Exchange Limited as on September 20, reduced the existing special margin of 15% (in cash) on the long side to 5% (in cash) on all the running contracts and yet to be launched contracts of Rape Mustard Seed.
NCDEX Chana futures:
NCDEX Chana futures have been the most bearish & have witnessed heavy selling on improvised rainfall & recovery in Monsoon activities in the North-West and more importantly in the Central parts of India. Short term downslide trend may have been triggered as speculators indulged in profits-booking spree due to increased rains, but lower Pulses production this year could keep the long term trend firmly up, especially with the big Indian festive seasons around the corner. Festive Demand for Chana can be expected to push Chana Prices beyond the recently seen highs of the past few months. The cut in special margin by NCDEX on long contracts to 10% from 20% on running and yet-to-be-launched contracts by exchange authorities, has yet failed to have any immediate impact on the trading. Annually, India consumes more than 20 million tons of beans and pulses. Farmers in India could only produce 17 million tons, even with favorable weather last year. As a result, India needs to import millions of tons per year from Myanmar and other beans and pulses producing countries. But this year import of pulses and seeds by India from Myanmar is likely to be hit by poor rains say traders in the region. Deficiency in rainfall has caused lower production acreage of pulses and seeds in Myanmar. Production of pigeon pea (toor) would be reduced by more than 20%. The production of sesame, toor (pigeon pea) and matpe (black gram) and others have significantly fallen due to lack of rain in upper Myanmar. On the other hand, severe flood has covered the rice growing areas of lower Myanmar.
NCDEX Soybeans & Soy Oil:
Selling is likely to continue in Soybean futures on the heels of supplies in domestic mandies along with weak prices of soymeal. The NCDEX Soybean futures shaved off by almost Rs 300 per quintal in the last week. Traders mentioned that the total arrival of new soybean in the mandies of Maharashtra such as Sholapur, Latur and Akola added selling pressure in domestic market. The total arrivals of around 20000-25000 bags were reported in the last trading with the price range of Rs 3000-3400 per quintal, down almost Rs 300 per quintal in the last week.
The oilseeds crop size is estimated at 18.78 million tonnes against 19.38 million tonnes the 5- years Average Production. The oil seeds complex is likely to drift further lower on the back of bearish global cues. CBOT Soy Oil December contract quoted yesterday at $53.99. CBOT November Soybeans finished the last session down 11 3/4 at 1610 cents per bushel and December Soybean Oil finished down 0.66 at $54.17 per pound. November soybeans traded lower into the close and the complex saw double digit losses for most of the day. Soybean meal and oil were also weaker on the day. Negative outside markets and better than expected yields continue to weigh on futures but strong underlying support is coming from a favorable demand outlook over the next 3-6 months. Export inspections for the week ending September 20th were reported at 12.12 million bushels vs. 9.96 the week prior. Cumulative inspections for this crop year are running 3.1% of the USDA estimate vs. the 5 year average of 3.9%. Favorable weather conditions in South America have added ammo to the bear camp to start the week and more rainfall is expected this week and in the 11-15 day period for northernBrazil. It’s being reported that planting has begun inBraziland 2012/13 soy sales held steady at 46% from the previous week following the recent decline in prices. Many traders believe the US Soybean harvest will be near 20% complete as per today’s Harvest Progress report. Good weather this week and a drier long term outlook will continue to keep the harvest pace above historical levels which could be viewed as a short term negative for prices by some.
MCX Cardamom Futures:
Buoyancy might continue in Cardamom MCX Futures due to weak production estimates of the current year along with some exporters demand at lower levels. The MCX Cardamom futures spurted by almost Rs 50 per kg in the last two trading day. In the current year, the total production of cardamom production is likely to reach only 14000-14500 tonnes , down almost 8000 tonnes from the last year due to poor weather conditions during the crop formation period. Therefore, poor supplies have encouraged strong bargain buying at the lower levels. The spot prices of cardamom 8 mm and best quality were trading in the range of Rs 750-950 per kg in the last trading, up almost Rs 20 per kg from the previous trading . While the total daily arrivals were reported around 35 tonnes , down 75 tonnes from the last day. The MCX Agro Cardamom October Benchmark contract augmented by almost Rs 37 per kg to close at Rs 1023.20 per kg in the last trading session. The benchmark contract pared 120 contracts in open interest witnessing some short covering. Technically, prices are likely to witness some buying around Rs 1000-1010 per kg while resistances are likely at Rs 1040-1055 per kg.
NCDEX Chilly Futures:
Bearish trend might continue in chilly futures due to fresh harvesting of chilly crop in Madhya Pradesh Pradesh along with strong carryover stocks in major producing states. The NCDEX Chilly futures pared almost 1% in the last trading. Most of the areas in Madhya Pradesh have reported the harvesting of new chilly crop with the new arrivals of around Rs 100-200 bags. The overall harvesting activity might gain momentum from mid- October. Market sources estimated the total chilly stocks in the range of 55-56 lakh bags in the entire major producing states. The total daily arrivals of chilly reported at around 30 thousand bags at Guntur mandi in the last trading. While the spot prices of chilly S334- quality were trading at Rs 5100-5500 per quintal and Teza New quality at Rs 7100-7400 per quintal , down almost Rs 100 per quintal from the last day. The NCDEX October Chilly contract declined by almost Rs 50 per quintal to settle at Rs 5360 per quintal in the last trading session. The NCDEX Chilly futures wilted almost Rs 150 per quintal in the last three trading days. The contract added 1000 positions in open interest indicating fresh shorts by traders at higher levels. Technically, prices are likely to witness some selling around Rs 5500-5520 per quintal while supports are likely at around Rs 5280-5300 per quintal.
NCDEX Jeera Futures Trade:
Jeera futures are likely to witness some more selling from higher levels due to weak demand in local mandies along with prospects of strong Jeera production in the coming season. The NCDEX Jeera futures plunged by more than Rs 100 per quintal in the last trading session. With the anticipation of strong price escalation in Jeera in the current season due to strapping export demand prompted the heavy stocking of Jeera during the April- August period. Therefore, not much demand by stockiest and physical traders was reported at current levels. Moreover, heavy rainfall in the major Jeera producing states such as Rajasthan and Gujarat also raised the prospects of bumper Jeera production in the coming year. The total arrivals remained unchanged at 4,000 bags in the last trading session, while demand was seen at around 4,000 bags against 5,000 bags. The spot Jeera prices were trading steady in the range of Rs 13,500-14,000 at Unjha Mandi. Best quality was trading steady in the range of Rs 14,500-15,000 per quintal. The NCDEX October Jeera contract slumped by almost Rs 112 per quintal to settle at Rs 13507 per quintal in the last trading. The NCDEX futures touched the intraday lows of Rs 13250 per quintal and dropped 900 positions in open interest indicating some profit taking by traders. Technically, prices are likely to witness some selling around Rs 13820-13850 per quintal while supports are likely at around Rs 13400-13420 per quintal.
NCDEX Wheat Futures:
NCDEX Wheat futures are likely to witness some pressure from higher levels due to liquidation of government wheat stocks in domestic market along with dearth of buying interest amongst millers and exporters. The NCDEX Wheat futures slumped by almost Rs 43 per quintal in the last week. As per official sources, the Food Ministry is planning to sell additional 5 million tonne wheat in the open market to bulk consumers like flour millers and biscuit makers in order to upload spiraling domestic prices and also offloading the surplus stock at higher levels. If the current wheat proposal approves by government then the total quantity of wheat to be sold would reach 8 million tonne in the current fiscal year. The base prices of the wheat will be Rs 1285 per quintal as decided by the government in August 2012. This will help the government to curb the domestic price escalation of wheat. The spot prices of were trading in the range of Rs 1450-1600 per quintal in the major mandies of Uttar Pradesh and Gujarat , down almost Rs 50 per quintal in the last week. Consequently, the NCDEX October Delivery pared Rs 43 per quintal in the last week to close at around Rs 1524 per quintal in the last week. Technically, prices are likely to witness some selling around Rs 1535-137 per quintal with the downside target of Rs 1510-1512 per quintal.
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