Commodities Daily Report
Thursday| May 19, 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)
Angel Commodities Broking Pvt. Ltd.
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Commodities Daily Report
`
Thursday| May 19, 2016
Agricultural Commodities
News in brief
Monsoon reaches Andamans amidst cyclone alert in Bay
The South-West monsoon has entered the Andaman region in the
extreme south-east of Bay of Bengal, which is the first port of call for the
seasonal rain system. It should normally take 10-12 days for it to make its
subsequent onset over Kerala around June 1, but this is being delayed
until June 7 with a model of error of plus or minus four days. The India
Met Department declared the onset of the rainy season on Wednesday
over entire South Andaman Sea, Nicobar Islands, and parts of South-East
Bay of Bengal and North Andaman Sea. This happened as a depression in
the South-West Bay of Bengal intensified into a deep depression. It is
expected to further intensify as a cyclonic storm in the next 24 hours. On
Wednesday afternoon, the deep depression was located 170 km to the
south-southeast of Nellore in Andhra Pradesh. It would move northnortheastwards along and off the North Andhra Pradesh and Odisha
coasts when it would further intensify into a cyclone. (Source: HBL)
India to renew sugar imports, says analyst, upping world deficit outlook
Green Pool backed growing ideas for the world sugar production deficit
next season, with caution over Asian prospects more than offsetting the
improved outlook for volumes for top-ranked Brazil. The Australia-based
consultancy lifted to 6.5m tonnes, from an estimate in March of 4.95m
tonnes, its forecast for the shortfall in world sugar output behind
demand in 2016-17. The revision followed Monday's upgrade by Platts
Kingsman to 7.67m tonnes, from 6.38m tonnes, in its estimate for the
global sugar output deficit next season. Green Pool's move came despite
what it acknowledged as a "strong start" to the cane crushing season in
Brazil's Centre South region, responsible for some 90% of sugar output in
the top producing country. Data from cane industry group Unica this
week showed that Centre South mills crushed 36.1m tonnes of cane in
the second half of last month, a record volume for the period, helped by
dry weather and the timely opening by mills for the new season, which
began at the start of April. Sugar output, at 1.81m tonnes, was up 71%
year on year. (Source: AgriMoney)
Malaysia raises June crude palm oil export duty to 5.5 pct
Malaysia, the world's second-largest palm oil producer after Indonesia,
will raise its crude palm oil export tax to 5.5 percent in June from 5
percent in May, a circular on the Malaysian Palm Oil Board website
showed on Tuesday. The Southeast Asian nation calculated a reference
price of 2,625.18 ringgit ($654) per tonne for June. A price above 2,250
ringgit incurs a tax, which starts from 4.5 percent and can reach a
maximum of 8.5 percent. Malaysia last raised its tax on crude palm oil
exports to 5 percent in March for April supply, ending a duty free policy
held since May 2015. (Source: Reuters )
Acreage under cotton in Punjab, Haryana below target
Despite pushing farmers for timely sowing of crop to prevent pest attack,
acreage under cotton in Punjab and Haryana remained far less than the
targeted area. Punjab has so far seen cotton sowing at 2.08 lakh
hectares as against the target of 5 lakh hectares. The neighbouring state
Haryana has seen 65 per cent sowing so far against the target of 6.20
lakh hectares. Having witnessed massive damage by pest whitefly attack
last year, agriculture departments of both states had asked cotton
growers this season to complete sowing by May 15 which is considered
ideal period as plantation after May 15, the crop become prone to pest
attack (Source: PTI)
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)
Turmeric reverses higher from key base
Turmeric futures contract traded on the National Commodity and
Derivatives Exchange (NCDEX) has surged 5 per cent last week to ₹8,506
a quintal, forming a bullish engulfing candlestick pattern in the week
chart. This bullish momentum continued on Tuesday as the contract price
rose more than 1 per cent to record an intra-day high at ₹8,648 levels as
participants built-up long positions, backed by pick up in the demand at
the spot market. But, the contract has subsequently started to witness
marginal selling pressure and experiencing a volatile movement. It
currently trades at ₹8,530 per quintal. This gives good opportunity for
traders with short and medium-term perspective to go long in the
contract. (Source: HBL)
Cardamom market to remain firm
The cardamom market is likely to remain firm on lower imports and
robust demand. Domestic arrivals are nil and traders are holding to the
stocks in anticipation of rally. Harvest of the new crop is expected only by
August and export demand from West Asia is likely to support the
market, traders said. India is the second-largest producer of the spice in
the world, after Guatemala, and the biggest consumer. The market is
likely to remain firm because harvesting came to a halt by March in most
plantations, PC Punnoose of Cardamom Processing Marketing Company
(CPMC), Kumily, told FE. “The cardamom region did not receive any rains
from January and the drought-like conditions spread concern on the
health of the plantations. For the first time in the recent past, harvesting
had to be halted because of nil summer showers,” he added. (Source: FE)
Brazil sugar mills crush record cane in late April
Brazil's center-south sugar mills crushed 36.07 million tonnes of cane in
the second half of April, a record amount for the period, as dry weather
last month favored a strong start to the 2016/17 season. Cane industry
group Unica said on Monday that center-south sugar output reached
1.81 million tonnes in late April versus 1.43 million tonnes early in the
month. Sugar production in the fortnight was 71 percent higher than in
the year-ago period. Ethanol production late in April reached 1.49 billion
liters versus 1.28 billion liters earlier in the month. Ethanol output was 30
percent higher than last year in the two-week period. (Source: Reuters )
No hang-ups for Brazilian soybean exports –Braun
Brazil’s soybean export season is off to a stellar start, and there are
no signs of a slowdown anytime soon. Brazil, the world’s No. 1 soybean
exporter, tallied record monthly volume in April, totaling 10.1
million tonnes. That figure was up 20 percent from March and more
than 50 percent from one year ago. Brazil has had good luck with its
soybean harvest in recent years, padding the availability for export. But
the increased appetite from the world’s leading soybean importer,
China, has been particularly influential in the soybean export boom.
(Source: Reuters )
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Commodities Daily Report
Thursday| May 19, 2016
`
Agricultural Commodities
Chana
Chana futures continue to gain further yesterday on reports of lower
production and expectation of tight supplies in coming months coupled.
Moreover, expensive imports mostly from Australia too keeping prices
high. Chana futures for Jun delivery closed 0.23% higher to settle at Rs
5,977 per quintal. In the third advance estimates (May 2016), chana
nd
production is revised downwards to 7.5 mt from 8 mt forecasted in 2
estimate (Feb 2016).
India has imported 9.93 lt of Chana until February in the current financial
year (Apr 2015-Feb 2016). In Feb 2016, country imported over 79,000 lt
of chana higher than 38,000 tones imports last year in Feb. 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 18, 2016
% change
Unit
₹/qtl
₹/qtl
Chana Spot - NCDEX
Chana- NCDEX Jun’16
Last
6200
5977
Prev day
0.00
0.23
WoW
6.46
4.26
MoM
16.98
10.30
YoY
33.33
27.75
Source: Reuters
Spread Matrix
Closing
6200
5994
5977
6035
Spot
20-May-16
20-Jun-16
20-Jul-16
20-May-16
-206
0
-
20-Jun-16
-223
-17
0
-
Technical Chart - Chana
20-Jul-16
-165
41
58
0
NCDEX May contract
Outlook
We expect chana prices to trade higher on anticipation of lower stock
and higher demand from millers in the domestic market. Moreover,
higher demand and lower supplies may keep the prices higher.
Technical Levels
Valid for May 19, 2016
Contract
Unit
Support
Resistance
Chana NCDEX Jun’16
₹/qtl
5910-5950
6040-6080
Source: Telequote
Sugar
Sugar Futures gain on Wednesday mainly due to good physical demand
on reports of lower production estimated in current season. Sugar Jul
futures closed 1.60% higher to settle at Rs. 3,614 per quintal. In current
th
sugar year (Oct-Sep) until 30 April 2016 sugar mills have produced
246.03 lt of sugar, down 11% as compared to 276.04 lt produced in 201415 SS till at the same corresponding period. However, stock limits for
traders may keep pressure on sugar prices in the spot market.
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 closed lower on Wednesday, extending a retreat from
last week's 18-month high as a stronger dollar prompted broad-based
losses in commodity markets. Moreover, there were some bearish
signals comes as the ISO forecast a narrowing global deficit in 2016/17,
with production expected to increase in Europe, Brazil and Thailand.
Brazil's center-south sugar mills crushed 36.07 mt of cane in the second
half of April. 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.
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 18, 2016
Unit
₹/qtl
₹/qtl
$/tonne
Usc/lbs
% Change
YoY
41.70
43.42
Last
3614
3614
Prev. day
0.47
1.60
WoW
-0.11
1.95
MoM
-1.14
2.09
476.8
-0.65
-0.63
4.06
30.06
16.81
-0.06
0.24
6.46
30.72
Source: Reuters
Sugar Spread Matrix
Spot
20-May-16
20-Jul-16
20-Oct-16
Closing
2975
3389
3614
3700
Technical Chart – Sugar M
20-May-16
414
0
-
20-Jul-16
639
225
0
-
20-Oct-16
725
311
86
0
NCDEX Jul’16 contract
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
Thursday| May 19, 2016
`
Agricultural Commodities
Technical Outlook
Valid for May 19, 2016
Contract
Sugar NCDEX Jul’16
Unit
₹/qtl
Support
3530-3575
Market Highlights
As on May 18, 2016
Resistance
3550-3670
Soybean
Soybean futures continue its downtrend due to lower crushing
demand coupled with reports of good monsoon, which may enhance
production in next season. Soybean Jun’16 contract closed 1.23%
lower to settle at Rs. 3,939 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 on Wednesday pressured by a higher U.S.
dollar and reduced fund buying in the market. Moreover, prices were
weigh down by 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
Unit
₹/qtl
Last
4076
MoM
-4.90
YoY
1.75
₹/qtl
3939
-1.23
-2.40
-9.43
-5.16
Soybean-CBOT Jul’16
USc/Bsh
1075.3
-0.46
-0.28
4.65
13.63
RM Seed Spot- NCDEX
₹/qtl
Usc/lbs
4514
-0.45
-0.44
-1.87
10.70
4422
0.07
-0.72
-4.08
2.63
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
4076
3826
3939
3995
20-May-16
-250
0
-
20-Jun-16
-137
113
0
-
20-Jul-16
-81
169
56
0
Mustard Seed Spread Matrix
Spot
Closing
4514
20-May-16
-140.8
20-Jun-16
-23.8
20-Jul-16
43.2
20-May-16
4373
0
117
184
20-Jun-16
4490
-
0
67
20-Jul-16
4557
-
-
0
Technical Chart –Soybean
Outlook
% Change
Prev
day
WoW
-0.80
-1.00
NCDEX Jun’16 contract
We expect Soybean prices to trade sideways to down on anticipation
of low retail and stockists 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 little higher as the prices moving on a
range in the absence of any significant demand. The June delivery
contract ended 0.07% lower at Rs. 4,422 per quintal. Market
participants’ are active at lower prices due to steady demand from
stockists as arrivals may dwindle in coming weeks. 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 price look to consolidate
on expectation of any physical demand revival. The oilseed prices have
been weighing down by good monsoon predictions.
Technical Levels
Source: Telequote
Valid for May 19, 2016
Contract
Unit
Support
Resistance
Soybean NCDEX Jun’16
RM Seed NCDEX Jun’16
₹/qtl
₹/qtl
3875-3910
4370-4400
3990-4040
4440-4455
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Commodities Daily Report
Thursday| May 19, 2016
`
Agricultural
Refined
Soy Oil Commodities
Refined soy oil futures closed down yesterday as market participants
off-load their buying positions anticipating supply glut in physical
market on report of higher imports on vegetable oil. Ref Soy oil
Jun’16 expiry closed 1.39 % lower to settle at Rs. 643.8/ 10 kg. There
is a steady physical demand from stockists amid increase retail
demand ahead of festival season.
As per SEA data, lower landed cost of refined oils against crude veg
oils pushed up refined oil imports by 168 % to 13.23 lt during Nov
2015 to Apr2016 period as against 4.92 lt in the same period
previous year. Moreover, Import of soyoil during Apr increased by
over 86 % to 3.5 lt in April from 1.87 lt in the year-ago period.
Market Highlights
As on May 18, 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
643.8
Prev day
-1.39
WoW
-3.09
MoM
-5.70
YoY
6.2
USc/lb
32.45
-1.01
-2.73
-5.94
0.8
MYR/Tn
2561
-1.50
-4.37
-6.36
18.2
₹/10 kg
534.5
-2.45
-4.02
-6.59
19.4
Outlook
Source: Reuters
Soy oil futures may trade sideways to 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 recovered yesterday taking clues from International
markets. However, reports of higher imports and steady demand
capped further increase. CPO May’16 expiry closed higher by 0.24%
to settle at Rs. 547.9 per 10 kg.
According to latest data released by SEA, import of RBD palmolein
have risen sharply to 13.23 lt 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
632.7
643.8
651.05
20-May-16
0
-
20-Jun-16
11.1
0
-
20-Jul-16
18.3
7.3
0.0
CPO Spread Matrix
Closing
31-May-16
30-Jun-16
31-Jul-16
31-May-16
534.5
0
-6
-10.3
30-Jun-16
528.5
-
0
-4.3
31-Jul-16
524.2
-
-
0
Technical Chart –Ref Soy Oil
NCDEX Jun’16 contract
Malaysian palm oil reversed gains yesterday to hit a two-week low
on Wednesday due to speculation over higher output and technical
selling.
In the export front, Malaysian palm oil shipments rose 14-16
percent in the first half of May compared with the same period a
month ago. Malaysia raised its export tax on crude palm oil to 5.5
percent for June, a government circular showed on Tuesday. The
world's second largest palm oil producer set the export tax at 5
percent for April and May.
Technical Chart –Crude Palm Oil
MCX May’16 contract
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.
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 down 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.
Source: Telequote
Technical Outlook
Valid for May 19, 2016
Contract
Unit
Support
Resistance
Ref Soy Oil NCDEX Jun’16
CPO MCX May’16
₹/qtl
₹/qtl
637-640
526-532
649-655
542-550
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Commodities Daily Report
Thursday| May 19, 2016
`
Agricultural Commodities
Spices
Market Highlights
Jeera
Jeera futures recover yesterday as market participants buy at lower
levels. The Jun Jeera contract traded on NCDEX closed 0.16% higher to
close at Rs 16,620per quintal.
Market players are expecting some more export enquiries at lower
prices on reports of higher arrivals and good quality jeera 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 18, 2016
Unit
Jeera Spot- NCDEX
Jeera- NCDEX Jun’15
Turmeric Spot- NCDEX
Turmeric- NCDEX Jun’16
₹/qt
₹/qt
l
₹/qt
l
₹/qt
Closing
16864
16505
16620
16775
Prev
day
0.16
16620
8713
8170
1.59
0.00
0.27
-0.92
0.00
-0.27
l
l
Jeera Spread Matrix
Spot
20-May-16
20-Jun-16
20-Jul-16
Last
16864
% Change
WoW
MoM
-0.75
1.81
-0.51
0.06
-3.34
YoY
-7.34
-11.74
9.62
5.82
Source: Reuters
20-May-16
-359
0
-
20-Jun-16
-244
115
0
-
20-Jul-16
-89
270
155
0
Turmeric Spread Matrix
Closing
20-May-16
20-Jun-16
20-Jul-16
Spot
8713
-169
-543
-487
20-May-16
20-Jun-16
20-Jul-16
8544
8170
8226
0
-
-374
0
-
-318
56
0
Technical Chart – Jeera
NCDEX Jun’16 contract
Technical Chart – Turmeric
NCDEX Jun’16 contract
Outlook
We expect Jeera futures to trade sideways to higher on revival of
physical demand prior to onset of monsoon. Jeera prices may look to
consolidate, as there is a tendency of lower demand at higher prices.
Market players are expecting good export demand on reports of good
quality jeera production this year.
Turmeric
Turmeric futures closed higher yesterday as arrivals have dip at south
Indian markets including Erode. The price trend is looking mostly
sideways as market participants anticipating good sowing in next
season on forecast of good rains. The Jun delivery contract on NCDEX
closed 0.27% high to settle at Rs 8,170 per quintal.
Turmeric arrivals have been higher in Feb and March compared to last
year but the arrivals have slowed in April 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 higher as supplies have been
limited and demand may rise. Turmeric supplies are slowing down, as
farmers are not ready to sell at lower prices. Good demand from
traders and stockists may keep the prices supportive.
Technical Outlook
Valid for May 19, 2016
Jeera NCDEX May’16
Unit
₹/qtl
Support
16200-16430
Resistance
16800-16940
Turmeric NCDEX May’16
₹/qtl
8100-8140
8210-8240
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Commodities Daily Report
Thursday| May 19, 2016
`
Agricultural Commodities
Kapas
Cotton complex corrected yesterday after two days of consecutive
uptrend. However, there is good demand from domestic mills as CCI is
actively auctioning cotton bales from its reserves. NCDEX Kapas for
Apr’17 closed lower by 0.50% while MCX Jun’16 cotton closed 0.28%
lower. There is an expectation of good demand for cotton in the absence
of quality cotton in the domestic market.
Market Highlights
As on May 18, 2016
NCDEX Kapas Apr ‘17
MCX Cotton Jun’16
ICE Cotton Jul ‘16
Unit
₹20 kgs
₹/Bale
USc/Lbs
Last
888.5
17540
62.05
Cotton ZCE
Yuan/t
12490
% Change
Prev. day WoW
-0.50
2.07
-0.28
1.39
-0.24
2.39
2.00
3.14
MoM YoY
-2.52
-2.35
-0.45
10.03
-3.06
-3.57
0.08
-2.61
Source: Reuters
Domestic update
The sowing in Punjab and Haryana has affected this season as farmers
has sown lesser crop due to whitefly attack last season. Agriculture
departments of both states asked cotton growers to complete sowing by
May 15 to escape pest attack. Punjab has so far seen cotton sowing at
2.08 lh as against the target of 5 lh similarly Haryana has seen only 65%
sowing so far against the target of 6.20 lh.
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
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.
Cotton Spread Matrix
31-May-16
30-Jun-16
31-Jul-16
Closing
31-May-16
30-Jun-16
31-Jul-16
17340
17540
17730
0
-
200
0
-
390
190
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
Technical Chart - Cotton
MCX Jun’16 contract
Cotton futures fell on Wednesday due to stronger dollar. However, China
cotton futures on the Zhengzhou Commodity Exchange closed up 2
percent at 12,490 yuan per tonne.
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.
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 sideways to higher on reports of
lesser sowing area in Punjab and Haryana. Moreover, reports on lower
supplies of good quality stock for mills and CCI selling cotton bales as
supplies dwindling in the physical markets. There are expectations of
revival in on export demand.
Technical Outlook
Valid for May 19, 2016
Contract
Unit
Support
Resistance
Kapas NCDEX April ’17
₹/20 kgs
880-885
894-900
Cotton MCX Jun’16
₹/bale
17200-17280
17430-17520
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