Commodities Daily Report
Tuesday| May 17, 2016
`
Agricultural Commodities
Content
News in Brief
Chana
Sugar
Oilseeds
Edible Oils
Spices
Cotton
Prepared by
Anuj Gupta – A.V.P - Research
Anuj.gupta@angelbroking.com
(011) 49165954
Ritesh Kumar Sahu – Analyst
riteshkumar.sahu@angelbroking.com
(022) 2921 2000 (Ext 6165)
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Commodities Daily Report
`
Tuesday| May 17, 2016
Agricultural Commodities
News in brief
Met predicts heavy rain in parts of TN, Kerala
The India Met Department has extended its watch for a depression in the
South-West Bay of Bengal by another day as convection (process of
cloud-building) around a preparatory system failed to measure up to
mark. Earlier, it had expected the existing well-marked low-pressure area
to become a depression by Monday and further into a deep depression
by Tuesday. It was expected that the deep depression would cross the
South-East coast of Tamil Nadu between Pamban and Nagapattinam the
same day. The Met has is apparently revising the schedule now. On
Monday, the Met said that the well-marked ‘low’ has moved slightly
north from the previous day’s coordinates to settle over Sri Lanka,
adjoining Gulf of Mannar and South-West Bay of Bengal. It may not cross
the Pamban-Nagapattinam stretch, but instead may move northnorthwest-ward over the waters towards the North Tamil Nadu coast
(around Chennai). (Source: HBL)
tonnes, but the final harvest results in Thailand and China were worse
than the ISO's earlier expectations. (Source : Reuters)
Vegoil import surges 168% in November-April
India’s refined oils imports surged alarmingly high during the first six
months of the oil marketing year – November to October – leaving the
refining industry nervous. Comparatively, lower landed cost of refined
oils against that of the crude oils pushed up refined oil imports by 168
per cent to 13.23 lakh tonnes (lt) during November 2015 to April 2016
period as against 4.92 lt in the same period previous year, data by
Solvent Extractors’ Association of India (SEA) revealed. The overall import
of vegetable oils during the first six months of the current oil year 201516, increased by 17 per cent growth from 6,466,902 tonnes in the same
period last year to 7,557,169 tonnes now. Higher import of refined oils is
hurting the domestic refining industry, which is facing severe crisis of
under utilisation of capacity and is on the verge of closure. (Source: HBL)
Indonesia April palm oil output likely fell to 14-month low -Reuters
survey
Indonesia's crude palm oil output (CPO) in April probably declined to the
lowest in 14 months because of forest fires and drought caused by the El
Nino weather pattern, though exports probably rose, according to a
Reuters survey. April CPO production probably fell to 2.132 million
tonnes, down from 2.15 million tonnes in March, according to the
median estimate in a survey of three industry associations, a state palm
research firm and one of the country's largest planters. That would be
the eighth month of consecutive declines and the lowest monthly output
since the survey results of February 2015. Indonesia, the world's top
palm oil producer, is likely to see output fall by about 2 million tonnes in
2016, while production in Malaysia, the No. 2 supplier, will decline by 1.2
million tonnes, Singapore-based trader Olam International said on Friday.
(Source: Reuters)
World 2016-17 sugar deficit to rise to 7.3 mln tonnes - Platts Kingsman
Closely watched sugar analyst Platts Kingsman on Monday raised its
forecast for a global supply deficit in the 2016/17 season beginning Oct. 1
to 7.67 million tonnes from 6.38 million tonnes previously, on a lower
output outlook for Thailand. That would be up from a 5.48-million-tonne
deficit in the current 2015/16 crop year, a figure that Kingsman revised
lower from a prior projection of 7.67 million tonnes amid higher
expectations for Brazil production. The consultancy pegged Brazil's sugar
output in the current harvest at 36.4 million tonnes of a cane crush of
638 million tonnes, as mills dedicate more of their production to sugar
for instead of ethanol. (Source: Reuters)
Malaysia's Felda says 2016 palm output to drop 17 pct as El Nino bites
Malaysia's Felda Global Ventures Berhad, the world's third largest palm
plantations operator, said its palm oil output would likely drop 17
percent this year as dry conditions from the El Nino weather pattern hit
crops. A broad decline in harvests around the key-producing region of
Southeast Asia will boost crude palm oil prices by up to 10 percent by
August and then by as much as 20 percent further down the road, Felda's
newly-appointed chief executive Zakaria Arshad said on Monday. "Lower
yields are due to the El Nino effect," Zakaria said at a media briefing. The
El Nino weather phenomenon dries fields across swathes of Asia.
(Source: Reuters)
ISO narrows global sugar deficit forecast for 2016/17
The International Sugar Organization (ISO) on Friday forecast a narrowing
global deficit in 2016/17 with production expected to increase in Europe,
Brazil and Thailand. The London-based body forecast a deficit of about
3.8 million tonnes, compared with a deficit of 6.65 million tonnes in
2015/16. The 2016/17 figure also incorporates rising consumption and
expectations for further decreases in output in second-biggest producer
India, the ISO said in its latest quarterly report.
For 2015/16, Brazil’s projected output has been increased by 1 million
Palm oil imports up marginally in April
Palm oil imports rose marginally to 7,29,536 tonnes in April this year on
sharp jump in shipments of refined palm oil, industry body Solvent
Extractors Association (SEA) said today. India, the world's leading
vegetable oil buyer, had imported 7,25,088 tonnes of palm oils in April
2015. Palm oils make up more than 65 per cent of the country's total
vegetable oil imports. Of late, there has been a sharp increase in the
import of RBD palmolein. "The alarming increase in import of RBD
palmolein (refined palm oil) is seriously hurting the domestic refining
industry. This situation has arisen due to the fact that currently the
landed cost of RBD palmolein is lesser than crude palm oil (CPO)," SEA
said in a statement. (Source: BS)
Global models predict storm in southern Arabian Sea next week
Global weather models suspect a storm may be evolving over the
Maldives-Lakshadweep region in a week’s time, which could affect the
timely onset of the Indian monsoon. Storms forming during mid-May or
later have the effect of unsettling the build-up phase of the monsoon,
which normally hits Kerala on June 1. The European Centre for MediumRange Weather Forecasts says that by May 16, a preparatory lowpressure area would have moved in closer to Sri Lanka and Kanyakumari.
Pune-based Indian Institute of Tropical Meteorology agrees, saying a
‘low’ is likely to form over South Arabian Sea (Maldives-Lakshadweep) by
mid-May. (Source: HBL)
China soybean imports set new April record
Chinese soybean imports surged 33 percent higher in April from a year
ago, setting a monthly record, amid strong demand for soymeal and
soyoil. Iron ore imports also climbed last month on a recovery in steel
production in the second quarter. China imported 7.07 million tonnes of
soybeans in April, up 15.9 percent compared to the previous month,
preliminary figures issued by the General Administration of Customs
showed on Sunday. This is a record for April imports. March imports
were also a monthly record and soybean imports have surged in 2016 on
rising demand for soymeal for hog farms in China. For the first four
months of the year, imports have climbed 11.4 percent from a year ago
to 23.33 million tonnes. (Source: Reuters)
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Commodities Daily Report
Tuesday| May 17, 2016
`
Agricultural Commodities
Chana
Chana futures gain yesterday on expectation of tight supplies in coming
months amid lower production and expensive imports. Chana futures for
Jun delivery closed 1.62% higher to settle at Rs 5,792 per quintal. In the
third advance estimates (May 2016), chana production is revised
nd
downwards to 7.5 mt from 8 mt forecasted in 2 estimate (Feb 2016).
Country imported over 79,000 lt of chana in Feb 2016 higher than 38,000
tones imports last year in Feb. India has imported 9.93 lt of Chana until
February in the current financial year (Apr 2015-Feb 2016). To control the
prices, centre has asked states to impose stock holding limits for traders
on all varieties of pulses in order to curb hoarding. To control speculation
in pulses futures, agri-commodity bourse NCDEX hiked the cash margin
to 45% on chana (gram) buyers and 10% on sellers.
Outlook
Market Highlights
As on May 16, 2016
% change
Unit
₹/qtl
₹/qtl
Chana Spot - NCDEX
Chana- NCDEX Jun’16
Last
5928
5886
Prev day
1.93
1.62
WoW
2.51
3.52
MoM
4.01
7.49
YoY
27.91
24.47
Source: Reuters
Spread Matrix
Closing
5928
5804
5886
5960
Spot
20-May-16
20-Jun-16
20-Jul-16
20-May-16
-124
0
-
20-Jun-16
-42
82
0
-
Technical Chart - Chana
20-Jul-16
32
156
74
0
NCDEX May contract
We expect chana prices to trade higher on anticipation of lower stock in
the domestic market. Moreover, higher demand and lower supplies may
keep the prices higher.
Technical Levels
Valid for May 17, 2016
Contract
Unit
Support
Resistance
Chana NCDEX Jun’16
₹/qtl
5775-5840
5935-5970
Sugar
Sugar Futures gain yesterday because of good physical demand coupled
with reports of lower production estimated in current season. However,
stock limits for traders keep pressure on sugar prices. Sugar Jul futures
closed 0.17% higher to settle at Rs. 3,540 per quintal. In current sugar
year (Oct-Sep) sugar mills have produced 246.03 lt of sugar, down 11% as
compared to 276.04 lt produced in 2014-15 SS at the same
corresponding period.
Moreover, India is likely to start the 2016/17 marketing year on Oct. 1
with 7 mt in carry-forward stocks, down 21.3% from a year ago. To
control the domestic prices, India may scrap an order that requires sugar
mills to export mandatory 3.2 mt of excess supply. Moreover, to curb
speculation, NCDEX has imposed special and additional cash margins of
5% each on all sugar contracts.
Global Updates
Raw sugar futures on ICE firmed on Monday despite record Brazilian cane
crush data. Brazil's center-south sugar mills crushed 36.07 mt of cane in
the second half of April. However, there were some bearish signals
comes as the International Sugar Organization forecast a narrowing
global deficit in 2016/17, with production expected to increase in
Europe, Brazil and Thailand. Moreover, in Brazil there will be a brisk
crush in the center-south of the country in the second half of April.
Source: Telequote
Market Highlights
Sugar Spot
Sugar M- NCDEX
Jul’16
ICE-Europe Sugar No
5- Aug’16
ICE-US Sugar No 11Jul’16
As on May 16, 2016
Unit
₹/qtl
₹/qtl
$/tonne
Usc/lbs
% Change
YoY
41.10
46.77
Last
3610
3540
Prev. day
0.13
0.17
WoW
-0.21
-0.03
MoM
-1.43
-5.32
480.7
0.54
3.89
7.39
29.88
16.89
0.90
6.36
8.69
30.32
Source: Reuters
Sugar Spread Matrix
Spot
20-May-16
20-Jul-16
20-Oct-16
Closing
2975
3345
3540
3641
Technical Chart – Sugar M
20-May-16
370
0
-
20-Jul-16
565
195
0
-
20-Oct-16
666
296
101
0
NCDEX Jul’16 contract
There is strong demand for white sugar from China, which has buoyed
the global white sugar premium. Moreover, Unica said sugar output is
likely to be the highest in the past three years at 33.5 million to 35
million tonnes.
Outlook
We expect sugar to trade sideways to higher on mixed fundamentals of
forecast of lower production and imposition of stock limit by the
government. However, the prices may try to consolidate at current levels
as government scrap mandatory export quota.
Source: Telequote
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Commodities Daily Report
Tuesday| May 17, 2016
`
Agricultural Commodities
Technical Outlook
Valid for May 17, 2016
Contract
Sugar NCDEX Jul’16
Unit
₹/qtl
Support
3520-3530
Market Highlights
As on May 16, 2016
Resistance
3550-3560
Soybean
Soybean futures rose on Monday on speculation a late start to the
monsoon might delay sowing. Soybean Jun’16 contract closed 0.70%
higher to settle at Rs. 4,015 per quintal. USDA forecasts India soybean
production for 2016/17 at 11.70 mt, up 58% from last year. The
increase is based on the assumption of normal yields. In 2015-16, SOPA
forecast production at 69.29 lt but government in third estimate
forecasts 89.2 lt.
Global update
CBOT soybean futures eased for the fourth consecutive session on
Monday, weighed down by slowing export demand and profit taking by
investment funds. The soybean sales were down considerably from the
previous week with old-crop business off 74% and new-crop sales of
253,506 bushels down sharply from last week’s 15.8 million. There are
expectations that US farmers might switch from corn or spring wheat
to soybeans. According to the WASDE report, U.S soybean production
for 2016/17 is projected at 103.4 mt, down 0.35 mt from the previous
year on lower harvested area and yields. US Soybean exports are
forecast at 51.3 mt, up 3.95 mt from the revised 2015/16 projection.
However, global soybean production in 2016/17 is forecast to rise to a
record 324 mt.
Soybean Spot- NCDEX
Soybean- NCDEX Jun’16
Soybean-CBOT Jul’16
RM Seed Spot- NCDEX
RM Seed- NCDEX Jun’16
Unit
₹/qtl
Last
4087
% Change
Prev
day
WoW
-0.05
-0.97
MoM
-3.13
YoY
3.94
-3.67
₹/qtl
4015
0.70
-1.86
-6.06
USc/Bsh
1064.5
-0.05
3.70
10.54
9.18
4525
1.16
-1.20
-2.27
11.32
4438
0.29
-1.66
-4.33
7.61
₹/qtl
Usc/lbs
Source: Reuters
Soybean Spread Matrix
Spot
20-May-16
20-Jun-16
20-Jul-16
Closing
4087
3882
4015
4073
20-May-16
-205
0
-
20-Jun-16
-72
133
0
-
20-Jul-16
-14
191
58
0
Mustard Seed Spread Matrix
Spot
Closing
4525
20-May-16
-139
20-Jun-16
-16
20-Jul-16
62
20-May-16
4386
0
123
201
20-Jun-16
4509
-
0
78
20-Jul-16
4587
-
-
0
Technical Chart –Soybean
NCDEX Jun’16 contract
Outlook
We expect Soybean prices to trade sideways to down on anticipation
of low physical demand on reports of higher refine oil imports.
Moreover, lower meal exports to keep the prices in check.
Rape/mustard Seed
Mustard seed futures closed higher on Monday as market participants’
buys at lower prices due to good demand from stockists amid lower
arrivals. The June delivery contract ended 0.29 % higher at Rs. 4,438
per quintal. Forecast of good monsoon may pressurize oilseeds on
expectations that there will be bumper crop in next season. However,
there is steady demand from oil mills as there are higher imports of
edible oils.
Source: Telequote
Technical Chart –Mustard Seed
NCDEX Jun’16 contract
Global updates
The European Union’s rapeseed harvest will fall this summer after frost
hit crops in Poland while insect damage is causing concern in France
and Britain. According to latest Apr’16 USDA report, global rapeseed
production is forecast to decline in 2016/17 to 66.15 mt. In 2015-16,
the production is pegged at 68.23 mt.
Outlook
We expect mustard seed to trade sideways to higher as physical
demand may revive on dwindling supplies. The oilseed prices have
been weighing down by good monsoon predictions.
Technical Levels
Source: Telequote
Valid for May 17, 2016
Contract
Unit
Support
Resistance
Soybean NCDEX Jun’16
RM Seed NCDEX Jun’16
₹/qtl
₹/qtl
3970-4000
4360-4400
4045-4070
4470-4500
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Commodities Daily Report
Tuesday| May 17, 2016
`
Agricultural
Refined
Soy Oil Commodities
Refined soy oil futures closed down on profit booking and report of
higher imports on vegetable oil. However, there is a steady physical
demand from stockists amid increase retail demand ahead of
festival season. Ref Soy oil Jun’16 expiry closed 0.38 % lower to
settle at Rs. 653.0/ 10 kg.
As per latest SEA data, lower landed cost of refined oils against that
of the crude oils pushed up refined oil imports by 168 % to 13.23 lt
during November 2015 to April 2016 period as against 4.92 lt in the
same period previous year. Moreover, Import of soyoil during Apr
increased by over 86 per cent to 3.5 lt in April from 1.87 lt in the
year-ago period
Market Highlights
As on May 16, 2016
% Change
Ref Soy oil- NCDEX
May’16
Soybean Oil- CBOTJul’16
CPO-Bursa Malaysia Jul’16
CPO- MCX – May’16
Unit
₹/10 kg
Last
653.0
Prev day
-0.38
WoW
-1.58
MoM
-2.58
YoY
6.9
USc/lb
32.79
0.89
-0.12
-4.21
-1.0
MYR/Tn
2587
0.00
-2.82
-3.04
18.1
₹/10 kg
546.6
-0.13
-1.90
-1.66
21.8
Outlook
Source: Reuters
Soy oil futures may trade lower on sufficient stocks of soyoil coupled
with steady domestic demand in the country due to higher imports
during the last one year.
Crude Palm Oil
CPO Futures closed down on reports of higher imports and steady
demand. CPO May’16 expiry closed lower by 0.13% to settle at Rs.
546.6 per 10 kg.
According to latest data released by SEA, The import of RBD
palmolein have risen sharply to 13.23 lakh tonnes in the first six
months of the current oil year ending October 2016 from 4.92 lt in
the year-ago period. In April 2016, Palm oil imports rose marginally
to 7,29,536 tonnes in April on sharp jump in shipments of refined
palm oil. Among palm oil products, import of RBD palmolein rose by
74 per cent to 3,25,902 tonnes in April 2016 from 1,87,534 tonnes in
the year-ago period.
Refined Soy Oil SpreadMatrix
20-May-16
20-Jun-16
20-Jul-16
Closing
637.75
653
658.95
20-May-16
0
-
20-Jun-16
15.25
0
-
20-Jul-16
21.2
6.0
0.0
CPO Spread Matrix
Closing
31-May-16
30-Jun-16
31-Jul-16
31-May-16
546.6
0
-5.6
-10.5
30-Jun-16
541
-
0
-4.9
31-Jul-16
536.1
-
-
0
Technical Chart –Ref Soy Oil
NCDEX Jun’16 contract
Malaysian palm oil closed unchanged after increasing during early
trading on Monday as a weaker ringgit spurred buying and data
showed exports continued to grow in the first half of May.
Malaysian palm oil shipments rose 14-16 percent in the first half of
May compared with the same period a month ago. A weaker ringgit
versus the U.S. dollar also supported palm oil prices since as it
makes the vegetable oil cheaper for holders of foreign currencies.
Malaysian data showed production rose 6.7 % from March to 1.30
mt, compared with a 13.2 % jump to 1.69 mt in April last year.
Malaysian end-stocks may drop 3.5 % to a 14-month low of 1.82 mt
in April on good export demand.
Technical Chart –Crude Palm Oil
MCX May’16 contract
Global output may be smaller than previously expected and fall to
61.25 mt tons this year, the first decline in over 20 years, industry
researcher Oil World said in a May 3 report.
Outlook
We expect CPO prices to trade sideways to lower on reports of
higher imports and steady demand. There is expectation of more
correction in coming days. There are sufficient stocks due to record
imports in country.
Technical Outlook
Valid for May 17, 2016
Contract
Unit
Support
Resistance
Ref Soy Oil NCDEX Jun’16
CPO MCX May’16
₹/qtl
₹/qtl
647-650
538-542
655-660
550-553
Source: Telequote
www.angelcommodities.com
Commodities Daily Report
Tuesday| May 17, 2016
`
Agricultural Commodities
Spices
Market Highlights
Jeera
Jeera futures continue its downtrend as demand for jeera exports
down due to higher prices. Moreover, higher arrivals in physical
market also bearish for jeera. The Jun Jeera contract traded on NCDEX
closed 1.19% lower to close at Rs 16,430 per quintal.
Market players are still expecting some more export enquiries on
reports of good quality jeera production this year but the demand is
still lower. As per the final rabi sowing report, Gujarat has planted
more cumin compared to last year sowing progress. Jeera is planted in
about 10.8% more area at 2,95,400 hectares compared to 2,66,700
hectares last year same time.
{{
Production and Exports
As per third advance estimate of Gujarat State for 2015-16, production
is pegged at 2.13 lt higher by about 7% forecasted in revised fourth
advance estimate of 1.97 lt. In 2013-14, production was 3.46 lt.
According to Dept of Commerce data, the export of jeera during first
11 month of 2015-16 (Apr-Feb) is 78,965 tonnes compared to 1.46 lt
exported last year same period. The exports for 2015-16 shows a
declining trend compared to last year. Devaluation of currencies in the
buying countries and appreciation of Indian currency combined with
high prices have led to a steep decline in jeera exports in 2015-16.
As on May 16, 2016
Unit
Jeera Spot- NCDEX
Jeera- NCDEX Jun’15
Turmeric Spot- NCDEX
Turmeric- NCDEX Jun’16
₹/qt
₹/qt
l
₹/qt
l
₹/qt
Closing
16966
16280
16430
16595
Prev
day
-0.65
16430
8713
8086
-1.91
0.00
-0.42
-3.13
0.00
-0.61
l
l
Jeera Spread Matrix
Spot
20-May-16
20-Jun-16
20-Jul-16
Last
16966
% Change
WoW
MoM
-0.05
5.27
-0.30
0.38
-3.51
YoY
-3.86
-10.13
9.37
6.21
Source: Reuters
20-May-16
-686
0
-
20-Jun-16
-536
150
0
-
20-Jul-16
-371
315
165
0
Turmeric Spread Matrix
Closing
20-May-16
20-Jun-16
20-Jul-16
Spot
8713
-201
-627
-597
20-May-16
20-Jun-16
20-Jul-16
8512
8086
8116
0
-
-426
0
-
-396
30
0
Technical Chart – Jeera
NCDEX Jun’16 contract
Technical Chart – Turmeric
NCDEX Jun’16 contract
Outlook
We expect Jeera futures to trade sideways on increasing demand and
steady arrivals. Market players are expecting good export demand on
reports of good quality jeera production this year. Jeera prices may
look to consolidate, as there is a tendency of lower demand at higher
prices.
Turmeric
Turmeric futures closed lower yesterday on thin trading because of
less trading activities due to election fever. Moreover, market
participants may get active at lower levels on anticipation of good
sowing in next season on forecast of good rains. The Jun delivery
contract on NCDEX closed 0.42% down to settle at Rs 8,086 per
quintal.
Turmeric arrivals have been higher in Feb and March compared to last
year as per agmarknet data. New season crop has hit the markets and
continue to peak in current month but majority of arrivals are of
medium quality.
As per dept of commerce data, turmeric exports for the period April
2015- Feb 2016 is pegged at 77,081 tonnes while the export for the
2014-15 was 83,713 tonnes for the same period.
Outlook
Source: Telequote
We expect turmeric prices to trade sideways to down on expectation
of lower demand and trade. Turmeric supplies may slow down, as
farmers may not sell at lower prices. Good demand from traders and
stockists may keep the prices supportive.
Technical Outlook
Valid for May 17, 2016
Jeera NCDEX May’16
Unit
₹/qtl
Support
16070-16230
Resistance
16680-16970
Turmeric NCDEX May’16
₹/qtl
7970-8030
8150-8210
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Commodities Daily Report
Tuesday| May 17, 2016
`
Agricultural Commodities
Kapas
Cotton complex traded higher yesterday on absence of quality produce
in the domestic market coupled with good demand from domestic mills.
NCDEX Kapas for Apr’17 closed higher by 1.32 % while MCX Jun’16
cotton closed 0.93% lower.
Domestic update
rd
In the 3 advance estimate by government, production of Cotton
estimated at 30.52 million bales (of 170 kg each) is also lower by 4.28
million bales than its production of 34.805 million bales during 2014-15.
Earlier, Cotton Association of India (CAI) has cut production estimate to
341 lakh bales (of 170 kg each) of the fiber in the 2015/16 season that
started on October 1, from 342 lakh bales estimated last month.
The arrivals of cotton during the ongoing 2015-16 season continue to lag
last year. CAI data revealed the arrivals during 2015-16 season up to the
end of March 2016, which are estimated at 280.15 lakh bales are lower
by about 12 percent than 318.45 lakh bales arrived till the same period
last year. The country had exported 6.7 million bales (of 150 kg each) in
the 2014-15 marketing year (October-September). Major export
destinations include Bangladesh, Pakistan and Vietnam.
Market Highlights
As on May 16, 2016
NCDEX Kapas Apr ‘17
MCX Cotton Jun’16
ICE Cotton Jul ‘16
Unit
₹20 kgs
₹/Bale
USc/Lbs
Last
883
17440
60.99
Cotton ZCE
Yuan/t
12040
% Change
Prev. day WoW
1.32
0.57
0.93
-0.11
0.61
-0.55
-0.33
1.13
MoM YoY
-2.86
-3.92
0.11
6.82
-1.99
-7.27
3.17
-6.45
Source: Reuters
Cotton Spread Matrix
31-May-16
30-Jun-16
31-Jul-16
Closing
31-May-16
30-Jun-16
31-Jul-16
17240
17440
17650
0
-
200
0
-
410
210
0
Technical Chart - Kapas
NCDEX Apr 2017 contract
As per Indian Cotton Federation (ICF), cotton supply in the current
season is around 415 lakh bales after estimating opening stock of 52 lakh
bales and the imports of 11 lakh bales. Total cotton
consumption/demand for the season estimated to be around 380 lakh
bales this season.
Global Cotton Updates
Cotton futures rose on Monday as market participants’ increase their
position due to chart based trading at lower prices. In its monthly World
Agriculture Supply and Demand Estimate report, USDA raised its outlook
for US inventories of cotton to be carried into the 2016/17 crop year but
forecast world stocks to decline next year. Speculators cut net long
position to 24,306 from 30,397 in the latest week as prices sank ahead of
the U.S. Department of Agriculture's monthly crop report.
Technical Chart - Cotton
MCX Jun’16 contract
Chinese officials may auction up to 2mt of cotton from its reserves,
between the start of May and the end of August, when the domestic
harvest begin.
As per latest ICAC press release, world cotton production expected to
increase slightly by 4% from 22 mt in 2015/16 to 23 mt in 2016/17.
Cotton production in the US may decline by 21% to 2.8 mt in 2015/16.
Cotton consumption is projected to remain at 23.7 mt in 2016/17.
Source: Telequote
Outlook
We expect cotton prices may trade higher today as there are reports on
lower supplies of good quality stock for mills. CCI is active in selling
cotton as supplies dwindling in the physical markets. There are
expectations of revival in on export demand.
Technical Outlook
Valid for May 17, 2016
Contract
Unit
Support
Resistance
Kapas NCDEX April ’17
₹/20 kgs
868-875
888-894
Cotton MCX Jun’16
₹/bale
16990-17130
17340-17440
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