Commodities Daily Report
Monday| May 16, 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
`
Monday| May 16, 2016
Agricultural Commodities
News in brief
Monsoon to be delayed by six days, says Met department
The India Meteorological Department (IMD) said on Sunday that the
onset of southwest monsoon over the Kerala coast this year could be
delayed by six days and that the rains would arrive around June 7. The
forecast is with a model error of plus-minus four days. The normal onset
date of the south-west monsoon is June 1, which marks the start of its
four-month journey over the Indian sub-continent. Although the onset of
monsoon is forecast to be delayed, its overall impact on the progress and
performance is difficult to predict as of now. IMD is sticking to its
forecast of “above normal” rains in 2016. IMD’s forecast of monsoon
onset issued from 2005 to 2015 has proved to be correct in all years
(with the error margin of plus or minus four days), except in 2015. Delay
in monsoon onset is not an unusual phenomenon, said IMD Director
General Laxman Singh Rathore. He, however, added there would be
some relief to south Indian states from the intense heat as there could
be some rainfall in the coming days. (Source: BS)
ISO, in its latest quarterly report, raised its 2015/16 global sugar deficit
forecast to 6.65 million tonnes, from its previous forecast made in
February for a deficit of 5.0 million tonnes. (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)
India Soybeans: 2016/17 Production Expected to Rebound from Last
Year
USDA forecasts India soybean production for 2016/17 at 11.70 million
tons, up 58 percent from last year. The increase is based on the
assumption of normal yields. Yield is forecast at 0.97 tons per hectare, up
nearly 50 percent from last year and up 5.0 percent from the 5-year
average. Harvested area is forecast at 12.0 million hectares, up 5.3
percent from last year. Poor growing conditions in 2015/16 resulted in
historic low yields in the soybean producing areas. The summer monsoon
ended a month earlier than normal for the majority of the soybean area
and rainfall throughout the growing season was characterized as uneven
and sporadic. Madhya Pradesh, the largest producer, experienced
excessive rainfall and pest issues throughout the growing season which
resulted in significant crop losses. However, dry weather in Maharashtra
and Rajasthan caused crop losses in these districts. (Source: USDA)
Govt projects shortfall in edible oil at 15.5 mt
The projected shortfall of edible oil in the country in oil year 2015-16 is
15.5 million tonnes (mt), Parliament was informed today. The oil seeds
production in the country during 2015-16 oil year (November-October) is
estimated at 26.3 mt while the estimated edible oil production in the
same period is 9.5 mt, Food Minister Ram Vilas Paswan said in a written
reply in the Lok Sabha. "To meet demand in the country, the import of
edible oils has been allowed under open general licence (OGL), and
import duty on edible oils is reviewed from time to time," Paswan added.
Export of edible oil has been banned since March 2008 with some
exceptions. (Source: PTI)
Palm oil producers predict El Nino to hit 2016 output
Southeast Asia's palm oil output is likely to drop in 2016 due to dry
conditions from the El Nino weather pattern, while the cotton market
will trade in a narrow range, Singapore-based trader Olam International
said on Friday. Indonesia, the world's top palm oil producer, is likely to
see output fall by about 2 million tonnes, while production in Malaysia,
the No. 2 supplier, will decline by 1.2 million tonnes, Chief Executive
Officer Sunny Verghese said at a news conference. Indonesia produced
35.5 million tonnes of the edible oil in 2015, with Malaysia producing
19.96 million tonnes. "I think all the impact from El Nino has already
been crystallised. So that is not now going to be a surprise," he said. The
weather phenomenon typically brings dry weather to swathes of Asia.
Malaysian palm oil futures jumped to a two-year high at the end of
March, but the market has given up some of those gains following a
decline in China's commodity markets. (Source: Reuters)
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)
ISO sees 3.8 million tonnes sugar deficit in 2016/17
The International Sugar Organization (ISO) forecast on Friday a 2016/17
global sugar deficit of about 3.8 million tonnes on rising consumption and
reduced output prospects in number 2 producer India. The London-based
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Commodities Daily Report
Monday| May 16, 2016
`
Agricultural Commodities
Chana
Chana futures gain in Friday due to expectation of tight supplies in
coming months. The trend is still positive on anticipation of limited
supplies amid lower production and expensive imports. Chana futures for
Jun delivery closed 1.49% down 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.
Market Highlights
As on May 13, 2016
% change
Unit
₹/qtl
₹/qtl
Chana Spot - NCDEX
Chana- NCDEX Jun’16
Last
5816
5792
Prev day
0.18
1.49
WoW
3.21
3.24
MoM
11.43
9.99
YoY
26.44
22.81
Source: Reuters
Spread Matrix
Closing
5816
5696
5792
5863
Spot
20-May-16
20-Jun-16
20-Jul-16
20-May-16
-120
0
-
20-Jun-16
-24
96
0
-
Technical Chart - Chana
20-Jul-16
47
167
71
0
NCDEX May contract
Outlook
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 16, 2016
Contract
Unit
Support
Resistance
Chana NCDEX Jun’16
₹/qtl
5615-5700
5850-5910
Sugar
Sugar Futures on NCDEX traded on negative note continue its sideways
movement. Lower production estimates in current season and stock
limits for traders keep pressure on sugar prices. Sugar Jul futures closed
0.28% down to settle at Rs. 3,535 per quintal. In current sugar year (OctSep) 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 tumble on Friday as market corrected down
from prior sessions high. 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 13, 2016
Unit
₹/qtl
₹/qtl
$/tonne
Usc/lbs
% Change
YoY
40.29
47.16
Last
3605
3534
Prev. day
-0.13
-0.03
WoW
-0.01
-0.25
MoM
0.13
-3.34
478.1
-1.24
4.30
9.53
24.73
16.74
-1.41
6.35
10.13
23.27
Source: Reuters
Sugar Spread Matrix
Spot
20-May-16
20-Jul-16
20-Oct-16
Closing
2975
3342
3534
3636
Technical Chart – Sugar M
20-May-16
367
0
-
20-Jul-16
559
192
0
-
20-Oct-16
661
294
102
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 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
www.angelcommodities.com
Commodities Daily Report
Monday| May 16, 2016
`
Agricultural Commodities
Technical Outlook
Valid for May 16, 2016
Contract
Sugar NCDEX Jul’16
Unit
₹/qtl
Support
3390-3515
Market Highlights
As on May 13, 2016
Resistance
3550-3575
Soybean
Soybean futures closed lower the prices tries to consolidate in current
price levels as pre-season rains have arrived in largest soybean
producing state of MP. Soybean Jun’16 contract closed 1.24% down to
settle at Rs. 4,987 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 fell on Friday on profit-taking following this
week's surge in the most-active contract to a 21-month high.
Moreover, slow export demand too weighs on price. 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. 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
Unit
₹/qtl
Last
4089
% Change
Prev
day
WoW
-0.54
0.22
MoM
-2.57
YoY
2.00
₹/qtl
3987
-1.24
-1.65
-5.99
-5.17
Soybean-CBOT Jul’16
USc/Bsh
1065.0
-0.65
2.92
10.45
10.13
RM Seed Spot- NCDEX
₹/qtl
Usc/lbs
4473
-0.74
-0.02
0.73
10.38
4425
0.36
-0.87
-2.79
7.66
Soybean- NCDEX Jun’16
RM Seed- NCDEX Jun’16
Source: Reuters
Soybean Spread Matrix
Spot
20-May-16
20-Jun-16
20-Jul-16
Closing
4089
3848
3987
4046
20-May-16
-241
0
-
20-Jun-16
-102
139
0
-
20-Jul-16
-43
198
59
0
Mustard Seed Spread Matrix
Spot
Closing
4473
20-May-16
-145.1
20-Jun-16
21.9
20-Jul-16
71.9
20-May-16
4328
0
167
217
20-Jun-16
4495
-
0
50
20-Jul-16
4545
-
-
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 Friday as market participants’
buys at lower prices sue to good demand from stockists amid lower
arrivals. NCDEX Jun’16 futures closed 0.36% higher at Rs. 4,425 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 as physical demand is
lower at higher prices. The oilseed prices have been weighing down by
good monsoon predictions.
Technical Levels
Source: Telequote
Valid for May 16, 2016
Contract
Unit
Support
Resistance
Soybean NCDEX Jun’16
RM Seed NCDEX Jun’16
₹/qtl
₹/qtl
3940-3965
4330-4380
4010-4030
4450-4480
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Commodities Daily Report
Monday| May 16, 2016
`
Agricultural
Refined
Soy Oil Commodities
Refined soy oil futures recovered a little after two days of negative
trading. However, steady physical demand from stockists amid
increase retail demand ahead of festival season. Ref Soy oil Jun’16
expiry closed 0.01 % higher to settle at Rs. 655.5/ 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 13, 2016
% Change
Ref Soy oil- NCDEX
May’16
Soybean Oil- CBOTJul’16
CPO-Bursa Malaysia Jul’16
Unit
₹/10 kg
Last
655.5
Prev day
0.01
WoW
0.00
MoM
-1.19
YoY
7.6
USc/lb
32.50
-0.21
-1.69
-3.39
-0.9
MYR/Tn
2587
-2.30
-1.56
-2.12
17.3
₹/10 kg
540.3
0.11
-0.94
-0.60
23.5
Outlook
CPO- MCX – May’16
Soy oil futures may trade sideways on sufficient stocks of soyoil
coupled with improved domestic demand in the country due to
higher imports during the last one year.
Refined Soy Oil SpreadMatrix
Crude Palm Oil
CPO Apr Futures closed higher on Friday as prices bounce back a
little due to chart based trading. CPO May’16 expiry closed higher by
0.04% to settle at Rs. 547.3 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.
Source: Reuters
20-May-16
20-Jun-16
20-Jul-16
Closing
638.45
655.5
658.95
20-May-16
0
-
20-Jun-16
17.05
0
-
20-Jul-16
20.5
3.5
0.0
CPO Spread Matrix
Closing
31-May-16
30-Jun-16
31-Jul-16
31-May-16
547.3
0
-7.1
-11.9
30-Jun-16
540.2
-
0
-4.8
31-Jul-16
535.4
-
-
0
Technical Chart –Ref Soy Oil
NCDEX Jun’16 contract
Malaysian palm oil fell on Friday hit by the effects of a sell-off on
China's commodities market. Expectation of improved demand and
forecasts of lower stockpiles may keep prices supported.
Global output may be smaller than previously expected and fall to
61.25 million metric tons this year, the first decline in over 20 years,
industry researcher Oil World said in a May 3 report.
Malaysian data showed a 4.5% decline in local stockpiles in April as
output growth was less than expected. 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. Exports of Malaysian
palm oil products for May 1 to May 10 rose 21.9 % to 391,222
tonnes from the same period a month ago, cargo surveyor Intertek
Testing Services said on Tuesday.
Technical Chart –Crude Palm Oil
MCX May’16 contract
The Muslim holy celebration of Ramadan, which starts in early June
this year, is a month-long event of fasting and feasting that spurs
higher palm oil demand for cooking.
Outlook
We expect CPO prices to trade sideways to lower on higher imports
and steady demand. There is expectation of more correction in
coming days. There are sufficient stocks due to record imports in
country.
Source: Telequote
Technical Outlook
Valid for May 16, 2016
Contract
Unit
Support
Resistance
Ref Soy Oil NCDEX Jun’16
CPO MCX May’16
₹/qtl
₹/qtl
644-650
535-540
659-662
550-555
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Commodities Daily Report
Monday| May 16, 2016
`
Agricultural Commodities
Spices
Market Highlights
Jeera
Jeera futures closed down on profit booking at higher levels on Friday
However, good demand from stockists on quality arrivals capped
further loss. The Jun Jeera contract traded on NCDEX closed 0.68%
lower to close at Rs 16,750 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 13, 2016
Unit
Jeera Spot- NCDEX
Jeera- NCDEX Jun’15
Turmeric Spot- NCDEX
Turmeric- NCDEX Jun’16
₹/qt
₹/qt
l
₹/qt
l
₹/qt
Closing
17077
16550
16750
16920
Prev
day
0.20
16750
8713
8120
-0.68
0.00
-1.00
-1.87
0.00
1.12
l
l
Jeera Spread Matrix
Spot
20-May-16
20-Jun-16
20-Jul-16
Last
17077
% Change
WoW
MoM
-0.14
5.96
3.72
0.25
-3.91
YoY
-3.08
-7.72
9.71
4.91
Source: Reuters
20-May-16
-527
0
-
20-Jun-16
-327
200
0
-
20-Jul-16
-157
370
170
0
Turmeric Spread Matrix
Closing
20-May-16
20-Jun-16
20-Jul-16
Spot
8713
-207
-593
-591
20-May-16
20-Jun-16
20-Jul-16
8506
8120
8122
0
-
-386
0
-
-384
2
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 on Friday but gain more than 1% on
weekly basis. Market participants 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 1 % down to settle at Rs
8,120 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.
Source: Telequote
Outlook
We expect turmeric prices to trade sideways to down for today on
expectation of some more correction. However, 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 16, 2016
Jeera NCDEX May’16
Unit
₹/qtl
Support
16570-16660
Resistance
16840-16930
Turmeric NCDEX May’16
₹/qtl
8000-8060
8190-8270
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Commodities Daily Report
Monday| May 16, 2016
`
Agricultural Commodities
Kapas
Cotton complex traded on negative note on Friday due to steady demand
and higher supplies due to lower exports. NCDEX Kapas for Apr’17
closed lower by 0.29 % while MCX Jun’16 cotton closed 0.06% 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 13, 2016
NCDEX Kapas Apr ‘17
MCX Cotton Jun’16
ICE Cotton Jul ‘16
Unit
₹20 kgs
₹/Bale
USc/Lbs
Last
871.5
17280
60.62
Cotton ZCE
Yuan/t
12080
% Change
Prev. day WoW
-0.29
-2.41
-0.06
-2.15
-0.18
-1.96
-1.91
0.42
MoM YoY
-3.70
-5.17
0.41
5.63
1.00
-6.77
6.43
-6.68
Source: Reuters
Cotton Spread Matrix
31-May-16
30-Jun-16
31-Jul-16
Closing
31-May-16
30-Jun-16
31-Jul-16
17080
17280
17490
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 slipped on Friday pressured by a downturn in
commodities markets amid a stronger dollar. Moreover, Speculators
slashed their net long positions in cotton by 6,090 lots to 24,306 lots in
the week ended May 10, U.S. Commodity Futures Trading Commission
data showed on Friday. Strengthening U.S. currency is not helping with
trade volume. 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.
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.
Technical Chart - Cotton
MCX Jun’16 contract
Source: Telequote
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.
Outlook
We expect cotton prices may trade sideways to down on higher supplies
in the domestic market as export demand is dwindling coupled with
forecast of good monsoon for next season. Demand from traders and
textile sector are dwindling due to sufficient stocks.
Technical Outlook
Valid for May 16, 2016
Contract
Unit
Support
Resistance
Kapas NCDEX April ’17
₹/20 kgs
858-865
878-885
Cotton MCX Jun’16
₹/bale
16980-17030
17140-17200
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