Agri Commodities report
March 16, 2017
Jeera
Highlights:


After the recent continuous dips in prices from
rising stocks and low demand, market picked up for
the Agri sector yet again as
demand started rising on
the export front. Lower
arrivals at these low rates
too supported prices. However exports still got somewhat
adversely
affected
due to a firm Rupee.

Short term trend looks very
volatile but markets seem
to find some strong sup-

port at these lower levels
for most counters. Firmness in International markets too supported prices
for oil complex and Kapas/
cotton as an overall firm
sentiment ruled the mar-

ket.
Short covering supported falling
rates for Jeera to some extent
even as higher arrivals of new
crop amidst lack of export and
domestic demand kept trend
down as stock levels started
picking up. Falling Dollar vs Rupee
further pressurized prices. Improved production prospects
limited the uptrend while falling
stocks supported prices. Export
demand are yet to pick up strongly as traders wait for dips. Exporters have been waiting for some
more fall in new crop rates before
initiating fresh demand– even as
long term trend remains positive.
Overall, arrivals are reportedly on
lower side but till they continue,
any strong upside would be limited—as per traders.
corresponding duration of
previous year. A strong Dollar
vs Rupee had been assisting
export demand.


As per latest Govt estimates for
Gujarat, production there is expected to fall to 2.12 lakh tons in
2016-17 vs 2.38 lakh tons in 201516. However it is much lower than
the normal production seen in
2013-14 at 3.46 lakh tons there.
Sown area has fallen to 2.79 lakh
ha vs 2.86 lakh ha.
As per Spice Board of India, exports during April-Sept 2016 rose
49% in quantity and value than
Falling stocks in domestic and
low stocks in International
markets could support prices in
long term. Adverse report on
production and export front
and low stocks from Turkey
and Syria created possibilities
of export demand shifting
further to India. A falling Rupee is also beneficial for exporters. As exports start rising,
this will start affecting price
movement strongly.
India's total carryover stock is
estimated between 0.7-0.8
million bags versus 2.5 million
bags a year ago. Export during
April to Sept has fallen by 48%
to only 46,700 tons vs 89,700
tons same period last year.
Spice board had kept a target
export of 1 lakh tons in 201516. In 2015-16, exports were at
1.55 lakh tons. Spices exports
meanwhile have risen a lot in
March to Rs 1780.83 Cr vs Rs
1473.45 Cr last year.
NCDEX Jeera April
Close
16860
S1
16765
S2
16660
R1
16975
R2
17120
Inside this issue:
Turmeric
1
Turmeric
1
Mentha Oil
2
Cotton / Kapas
2
Guargum
2
Ref Soy Oil
3
Soybean
3
RM Seed
3



Moderate weakness persisted
for Turmeric as higher arrivals
and low demand pressurized
prices. Rising arrivals of new
crop in Telengana and Maharashtra kept uptrend limited. Expected further pick up in demand for new crop in coming
weeks could support prices in
medium term as traders rule out
too much fall in rates.
Long term looks positive however as exports are expected to
recover for the new crop once
arrivals slow down.
Fundamentals remained strong
on falling stocks also. So With
Spices exports rising, prices can
find some support from that
factor. Long term trend remains
bullish.


Production forecast of 20152016 was lowered by Govt from
11.90 lakh tons to 8.52 lakh tons,
amidst falling stocks. Reports of
drought in Maharashtra and AP
have caused production to fall in
these states.
From April-Dec 2015-16, exports
rise 6% to 68500 tons vs 64786
tons last year. Lack of good
quality produce amidst falling
production and falling stocks
could act as sup-porting factors,
which can keep futures above
strong support levels. Any pick
up in export and domestic demand from North India (as anticipated) shall pro-vide a good
opportunity for buyers in medium term.
Research Team
Ajitesh Mullick
+91120 6795530
[email protected]
AVP-Retail Research
Abhijeet Banerjee
+91120 6795529
[email protected]
Sr. Research Analyst-Retail Research
E-mail ID: [email protected]
Disclaimer: www.religareonline.com
NCDEX T urmeric Ap ril
Close
6522
S1
6484
S2
6416
R1
6588
R2
6644
REL/RCL/CRD/TM/06/01
Jeera
Agri Commodities—Fundamentals
Mentha Oil

MCX Me nt ha Oil Marc h
Close
1002
S1
988
S2
976
R1
1012
R2
1018

Weakness persisted for Mentha
as it neared the psychological
support of 1000. Falling Dollar vs
Rupee amidst lower trading
activities in mandis kept pressure
on the prices. With elections
getting over in UP, trading activities are however expected to pick
up in coming days, lending some
support to the prices.

Low arrivals amidst expected fall
in acreage for sowing next year
(due to 25% price hike in wheat)
may spur prices further in coming
days however. Sources mentioned that nearly 14500 MT of
mint products were exported in
six months of the current financial year. This implies that export
demand for complete financial
year can be between 27000 and
29000 MT quite cheaper, versus
23000 of total exports last year.

Farmers are keeping most of the
stocks in their hands. Most buyers
are willing to buy at these levels.
Since farmers are keeping most of
stocks, thus whenever requirement
arises, industry people will be
purchasing from them. This will be
another bullish factor. Indian markets had re-ported higher sowing
for current year.
sowing over last couple of weeks
have ensured prices falling for
the commodity, as low demand
further pressurized market sentiments.

Traders had estimated earlier total
production in the range of 3500037000 tons for this year, and currently it appears that the average
estimate might be reduced to
30000 tons due to lower plantings
on falling prices in the last two
years. Trade sources estimate that
total area under Mentha planting
has dropped by 20% to 1.75 lakh ha
this season resulting into a proportionate fall in Mentha oil production this year. However, a pick up in
As per latest reports Mentha Oil
export in 2014-15 has surpassed
targeted 21000 tons by 23% at
25750 tons. Ex-port in 2013-14
was 24500 tons. Higher carryover
stocks and lack of strong demand
prevented strong upside movement.
Cotton / Kapas

MCX Cotton Marc h
Close
21310
S1
21240
S2
21180
R1
21420
R2
21540


2016/17 U.S. cotton forecasts show
higher production and exports relative to last month. Production is
raised 271,000 bales to 17.2 million.
The final estimates for this season’s
U.S. area, yield, and production will
be published in the May 2017 Crop
Production report. Domestic mill use
is unchanged from last month, but
exports are raised 0.5 million bales
to 13.2 million based on recent very
strong sales and shipments. U.S.
exports are projected to capture
nearly 37 percent of world trade, a 7year high. Ending stocks are lowered
300,000 bales to 4.5 million. The
projected range for the marketing
year average price received by producers of 67.0 to 70.0 cents per
pound is reduced 1 cent on the
upper end, as the reported average
price for January fell below previous
expectations.
After the recent dips in prices from
profit booking at these very high
levels, markets again picked up for
Cotton as International markets too
firmed up on rising export demand
from China. Improved production
prospects in domestic markets had
pressurized prices to some extent.
As per 2nd Govt advanced estimates, despite lower area coverage
during 2016-17, higher productivity
of Cotton has resulted into higher
production of 32.51 million bales
(of 170 kg each) as compared to
30.01 million bales during 2015-16.
Latest reports from Cotton Assn of
India (CAI) predicts 2016-17 crop
unchanged at 341 lakh bales but
consumption to rise to 295 lakh
bales vs previous estimate of 290
lakh bales.
Latest USDA report : This month’s

tion is raised slightly this month
due to the revision in US, while
world consumption is virtually
unchanged. Consumption is raised
for Indonesia and Vietnam and
reduced for Turkey and other
countries. World beginning stocks
are raised marginally due to higher
estimated 2015/16 production in
Australia. Forecast world trade is
raised slightly, with imports and
exports revised for several countries based on activity to date.
World ending stocks are now
projected at 90.5 million bales,
nearly 600,000 bales above last
month.
The forecast 2016/17 global produc-
Guar gum

NCDEX G uarg um Ap ril
Close
8170
S1
8108
S2
8056
R1
8276
R2
8340

Markets fired up again for Guar
after the recent dips from profit
booking as exports got adversely
affected at the higher levels. Overall fundamentals remained strong.
Exports reportedly got adversely
affected at the higher levels and
traders anticipate some more dips
to the prices in the short term.
Overall fundamentals still remain
strong however.
Delayed arrivals of rains and low
prices over last 2 years have
prompted farmers to switch to
other crops. This may have a long
term bullish impact on prices—
provided crude oil rates pick up and
exports too. As per Govt sources,
exports for Apr-Nov 2016 was at
2,31,444 tons vs 2,09,361 tons same
period last year. In Nov 2016, it rose
significantly to 35,842 tons.


As per APEDA, Guargum exports for
Jan 17 at 44000 tons vs 26000 tons in
Jan 16. For Apr-Jan 2016-17 exports
stood at 3.22 lakh tons vs 2.71 lakh
tons same period earlier year. Guarseed production expected to fall
27% to 14.25 lakh tons
As per APEDA, in the Financial year
2015-2016 exports were at 365,097
tons vs 665,109 tons in 2014-15 – a
fall of 45%. In Rajasthan, 2013-14
production was reportedly more
than 28 lakh tons and 2014-15 production nearly 28 lakh tons. As per its
3rd Advanced estimates, 2015-16
production likely at 22,23,474 tons vs
20,83,734 tons as per its 2nd advanced
estimates for the state. It has set the
2016-17 production lower at 20.80
lakh tons with acreage lower at 40
lakh ha vs 47.87 lakh ha.

As per latest reports from Rajasthan Govt, 2016-17 production is
reported at 14.25 lakh tons vs
22.23 lakh tons last year. For
Gujarat, as per its estimates, 201617 production is estimates at 2.42
lakh tons vs 1.86 lakh tons in 201516. Sowing area has risen to 3.52
lakh ha.
Agri Commodities—Fundamentals
Ref Soy Oil


NCDEX So y Oil Ap ril
Close
633.8
S1
631
S2
628.8
R1
636
R2
639.4
Subdued local demand amidst fall in
International prices kept pressure on
the prices. Bearish cues from the
latest USDA report maintained bearish tone in global oil complex markets. NCDEX Apr Soya oil settled on a
lower note and below a strong support region of 635-640.
Estimates report, the U.S. Department of Agriculture forecast Brazil’s
soybean crop in the current year at a
record 108 million tonnes, up 4%
from its prior forecast and above the
latest official forecast from Brazil of
107.6 million tonnes.

Soya oil prices had been moving
lower since past few sessions mainly
due to weakness in US and domestic
soybean markets apart from bearish
trend in Malaysian palm oil. The
USDA report released this month and
previous month did not provide any
fresh positive advice and this continues putting pressure over domestic
soya oil prices. In its March 9 World
Agricultural Supply and Demand
bean meal disappearance while
exports were lowered on increased production and exports
for Brazil, the USDA said.

The crop in Brazil is more than 50%
harvested as per the Department’s
report. At the same time, the USDA
raised its forecast of U.S. soybean
carryover on Sept. 1, 2017, by 15
million bushels from February to 435
million bushels, based on an expected 10-million-bushel increase in
domestic crush, at 1.940 billion bushels, and a 25-million-bushel decrease
in exports, at 2.025 billion bus. Crush
was raised based on increased soy-

Sources say that the soybean
crop yields out of South America
are looking very good, and all
those weather concerns heard
earlier are not concerning at this
moment.
On the whole the short term
trend looks volatile but any
strong recovery in prices seem
unlikely.
Soybean

NCDEX So ybea n April
Close
2886
S1
2872
S2
2856
R1
2908
R2
2928

17. Soybean estimate has been raised
at 141 lakh tonnes. This keeps prices
in downward trend in present term.
US Agriculture Department’s reports
say that the U.S. will end season 2016
with a large carryout, estimates of
Brazilian 2016 production are still
rising, and U.S. planting will be at
record levels in 2017.
Good Monsoon predictions from IMD
amidst lack of strong demand in the
domestic markets and weakness in
International markets checks the
upside movements these days. But
traders expect present offers
to
support soymeal export in upcoming
weeks. Sources now say that any sharp
fall in price levels in spot will be beneficial for stockists to negotiate for
fresh purchase transactions. Due to
lower prices, soymeal exports share
might pick up soon. These factors shall
be supportive for prices in coming
weeks.

As per SOPA soymeal exports till
January 2017 has increased year on
year. These aspects will be beneficial
in supporting the market in near
future. The news flow of late has
turned decidedly more bearish. The
2nd advanced estimate reported
record food grain production in 2016-
25 million bushels to 2,025 million
with increased production and
exports for Brazil. Soybean stocks
are projected at 435 million bushels,
up 15 million from last month. With
increased crush, soybean oil production, exports, and ending stocks are
forecast higher.

As per the latest USDA report: the
U.S. soybean supply and use changes
for 2016/17 include higher crush,
lower exports, and increased ending
stocks compared with last month’s
report. Sources say that the soybean
crop yields out of South America are
looking very good, and all those
weather concerns heard earlier are
not concerning at this moment.
Soybean crush is raised 10 million
bushels to 1,940 million on increased
domestic soybean meal disappearance. Soybean exports are reduced
India’s soybean meal exports was
estimated to rise to 1.8 MMT in
MY2016/17 in the previous report,
taking in account a larger harvest
and growing crush leading to greater exportable sup-plies. The U.S.
season-average soybean price range
for 2016/17 is projected at $9.10 to
$9.90 per bushel, un-changed at the
midpoint from last month.
RM Seed

NCDEX RM Seed April
Close
3827
S1
3812
S2
3802
R1
3848
R2
3872

Increased production prospects has
created a bearish impact in recent
times. The current level of inventory
of domestic mustard seems to be
sufficient to balance the daily requirements while harvest season is
nearing. Mustard trade is range
bound these days. Prevalent weak
tone in spot markets and talks of a
higher production this season keeps
sentiments eased but the downside
in futures is capped since selling
interest fails to improve at lower
offers.
Market in the short term will depend on demand prospects and
weather impact on the crop, which is
about to be harvested in full swing.
Forecast of Oilseed production at
record levels kept sentiments eased.
The Government’s Final Sowing
report for mustard was released few
weeks back. The report showed a
likely increase of roughly 9 percent in
production against last year— another bearish driver. On the other hand
second advanced estimate released
last to last week showed that production of mustard is expected to be
7.91 mt, 1.11 mt more than last year.

Considering the given factors the
near medium term trend will be
negative for mustard. Nevertheless
with prices hovering near quite lower
and still there is some time left for
supply season to begin, traders expect market the downside to be
limited for next 2-3 weeks at least.
Reviewing the global scenario, the
latest USDA report stated that US
Oilseed production is projected down
0.6 million tons to 554.2 million, with
lower soybean production only partly
offset by higher sunflower seed,
rapeseed, and cottonseed. Similarly
global oilseed stocks are projected
lower, mostly reflecting reduced
soybean stocks for Argentina and
reduced rapeseed stocks for Canada.

Sowing till now has been above last
year. As of now we foresee possibility
of yields or productivity to improve
for the upcoming crop. It should be
noted that weakness in soybean and
talks of a better crop size versus last
year might encourage sellers’ entry at
higher levels in coming weeks.
Agri Commodities—Technicals
Commodity
Exchange
Contract
Soybean
NCDEX
April
2886
2872
2856
2908
2928
Sideways opening,
may recover later
RM seed
NCDEX
April
3827
3812
3802
3848
3872
Sideways opening,
may recover later
Castor seed
NCDEX
April
4362
4332
4312
4396
4444
Sideways opening,
may recover later
Ref Soy Oil
NCDEX
April
633.8
631
628.8
636
639.4
Bearish opening, may
recover later
CPO
MCX
April
513.8
511
508.6
516
520.6
Sideways weak opening, may recover later
Jeera
NCDEX
April
16860
16765
16660
16975
17120
Sideways weak opening, may recover later
Turmeric
NCDEX
April
6522
6484
6416
6588
6644
Sideways weak opening, may recover later
Dhaniya
NCDEX
April
6825
6774
6722
6916
7040
Sideways opening,
may recover later
Cardamom
MCX
April
1395
1380
1372
1408
1416
Sideways opening,
may recover later
Kapassrnr
NCDEX
April
Cotton
MCX
Cocudakl
Close
S1
S2
R1
R2
Expected Intraday
Trend
1065
1056
1047
1076
1088
Bullish opening, may
fall later
March
21310
21240
21180
21420
21540
Bullish opening, may
fall later
NCDEX
April
2229
2212
2202
2248
2266
Bullish opening, may
fall later
Mentha Oil
MCX
March
1002
988
976
1012
1018
Bearish opening, may
recover later
Guargum5
NCDEX
April
8170
8108
8056
8276
8340
Sideways firm opening, may fall later
Guar seed
10MT
NCDEX
April
3852
3814
3776
3888
3948
Sideways firm opening, may fall later