Chana 

Agri Commodities—Fundamentals
November 17, 2014
Chana

Highlights:
High volatility noted for Agri
commodities ahead of the
weekend Holidays as most
commodities traded bothways

Guar failed to recover as high
arrivals amidst weak demand
kept market sentiments down

Spices, Oil complex recovered
moderately after the recent fall
as demand picked up and
arrivals fell in mandis; weakness in International markets
however kept uptrend limited
for Oil complex.
Inside this issue:



Reports of lower sowing for Chana
and good demand from millers and
Govt agencies had kept supporting
the market sentiments. Raising the
MSP from Rs 3100/Q to Rs 3175/Q
added support to the prices in
recent days.
Fall in Canada crop production had
been reported earlier. Continuous
fall in rates over last few months
has reportedly adversely affected
the sowing.
uptrend even as prices are considered to be on the lower side. However lower sowing reports are
keeping prices up as of now.



Expectations of improved crop
sowing in states of MP, UP and
Rajasthan could prevent strong
According to Ministry of Agriculture,
rabi pulses 2014-15 coverage till
Nov.7 is down by 22.2% to 23.98
lakh ha. compared with 30.86 lakh
ha. during the corresponding period
of last year. Chana, main rabi
pulses area is down by 32% to
16.15 lakh ha. compared with 23.78
lakh ha. during the corresponding
period of last year
As per 1st Advanced crop estimates
for 2014-15 by Govt of India, India is
likely to produce Kharif Foodgrains
of 120.27 million tonnes, which is
down by 8.97 million tonnes from
the record 129.24 million tonnes
achieved in Kharif 2013-14.
NCDEX Cha na Dec cont ract
Close
3199
S1
3170
S2
3144
R1
3220
R2
3248
Decline in area under Tur and
Moong has also affected production
of Kharif Pulses which is estimated
at 5.20 million tonnes as against
their production of 6.02 million
tonnes during Kharif 2013-14. Tur
production estimated at 2.74 million
tonnes and Urad at 1.15 million
tonnes.
Mentha Oil
Chana
1
Mentha Oil
1
Jeera
2
Turmeric
2
Guar
2
Ref Soy Oil
3
Soybean
3
RMSeed
3



Mentha continued to trade sideways
last week as rates found some
strong support at these lower levels.
Expectations of a pick up in demand
in coming weeks supported falling
rates to some extent. But higher
stocks and lack of strong demand
as of now prevented any strong
uptrend in price movement also.
Prices continued to faced strong
Resistance at near the 700 levels.
However reports of current prices
being on the lower side along with
expected pick up in export and
winter season domestic demand in
coming weeks could ensure prices
find some strong support here.
Higher production and higher stock
levels have been keeping market
sentiments weak for quite sometime.
Domestic pharmaceutical Industries
demand are likely to rise in coming
weeks.



Banning of Gutka in some states
continues having negative impact on
Mentha Oil demand.
Latest reports from Spice Board
indicate that for the period AprilDecember last year, exports for Mint
value-added products like Oil,
Menthol and its crystals rose 94% in
volumes at 17,850 tonnes and 39%
in value at Rs 2202 Cr w.r.t. same
period the previous year.
Research Team
Ajitesh Mullick
+91120 6795530
[email protected]
AVP-Retail Research
Mahesh Choudhary
+91120 6795529
[email protected]
Sr Manager—Retail Research
E-mail ID: [email protected]
Disclaimer: http://www.religareonline.com/research/Disclaimer/Disclaimer_rcl.html
MCX Me nt ha Oil No v cont ract
Production this year expected higher
at more than 60000 tonnes vs
~50000 tonnes last year
Close
689
S1
683
S2
674
R1
696
R2
706
REL/RCL/CRD/TM/06/01

No strong movement was noted for
Chana in absence of clear trend in
mandis as prices stabilized at these
levels after the recent fall in rates.
Bearish news in International markets affected the market sentiments
adversely. According to USDA, the
expected pulses production in USA
is up by 8% to 2,232,630 metric
tonne during 2014 from last year.
This could keep the import cost of
Pulses under check and resulted in
short term Bearishness for the
commodity rate.
Agri Commodities—Fundamentals
Jeera


NCDEX Jeera Dec cont ract
Close
12215
S1
12135
S2
12020
R1
12360
R2
12480

Low arrivals, falling stocks, higher
temperatures in growing areas and
improved Export demand (aided by
a firm Dollar vs Re) kept trend firm
for Jeera last week before profit
booking set in at the higher levels.
A cool temperature would be needed for next few weeks for the crop
to grow satisfactorily. The temperatures are a bit on the higher side as
of now in Gujarat — as per market
sources. This is creating apprehensions of likelihood fall in productivity



The sowing progress in coming
weeks would be important and
determine the near term trend for
the commodity. An expected pick
up in sowing area could prevent too
strong recovery for the commodity.
Rains earlier this year in Gujarat
and Rajasthan have improved
moisture content of the soil and this
can have a beneficial impact on the
sowing of new crop that has started.
However a cool climate would be
needed for better crop productivity.
Effect of Dollar vs Re would be
important in medium term when
exports pick up. But till that happens some more dips not ruled out


Jeera production in India is expected to rise to 6.5-7 million bags
of 55 kg each in 2014, from 4.5-5
million bags a year earlier, due to
an expanded area under cultivation
and favourable weather conditions.
As per Spices Board of India statistics, India exported 96,500 tonne of
cumin seed or Jeera during AprilDecember 2013, up from 50,944
tonne exported in similar period,
previous year.
Good quality arrivals have ensured
Jeera rates are fetching premium
w.r.t. International markets. Low
stocks in global trade and political
unrest in Turkey and Syria have
pushed export demand to India.
India will remain the primary exporter for this commodity as of now.
Turmeric

Profit booking set in at the higher
levels for Turmeric after the recent
rise as arrivals increased in mandis.
Lower production possibilities and
improved Export demand have kept
sentiments firm for last few days.
But demand reportedly got affected
at these higher levels as traders
wait for some more dips.
to rise in coming weeks, it can
support prices to some extent.


NCDEX T urmeric Dec contract
Close
6306
S1
6228
S2
6168
R1
6376
R2
6432


With harvesting still some months
later, any demand has to be met
from the current stock and this
factor has been supporting the
falling rates to some extent.
Lower rains in AP and TN have
already adversely affected sowing
for the new crop there.

As per reports from Spice Board of
India, the estimated exports of
Turmeric during April-December
2013 was pegged at 58000 MT, up
by 17% same period previous year.
In value terms, it was up by 45% at
Rs 463.8 Cr.
The demand is expected to pick up
in coming days—lending some
support to the prices. Traders
anticipate prices are at very low
levels and further downtrend may
be limited. Last year production was
low due to crop damage reports
from AP and TN but stock levels
from earlier years are high.
However, with demand from North
India and Export demand expected
Guargum

NCDEX G uarg um Dec cont ract
Close
13820
S1
13640
S2
13400
R1
14100
R2
14280

Prices broke the psychological 5000
mark for Guarseed and 14000 got
Gum as there was no let up in falling
rates with increasing stocks amidst
arrivals of the new crop keeping
sentiments weak. Traders anticipate
that with prices having fallen a lot,
stockists would be unwilling to sell at
such lower levels. But till exports pick
up strongly, any strong recovery in
the markets is unlikely as of now.
Higher arrivals of the new and old
crop in mandis had kept sentiments
down. Exports demand too has
reportedly slackened over last few
days. Guar gum Stock rose more
than by 3 times at NCDEX godowns
to 3397 tons by 31st October 2014.



Guargum millers are reportedly
processing seeds for exports to China
and Latin American countries. Pick up
in exports in coming weeks could
support prices
As per First estimates advance
estimates of Area, Production and
Yield of Guar Seed by Rajasthan
Government: Area: 3212965 Hectares, Production: 13.39 Lakh MT and
productivity: 417 Kg. /Hectare.
As per reports from APEDA, in the
year 2013-14, India exported more
than 6 lakh MT Guargum vs nearly 4
lakh MT in the previous year due to a
significant fall in rates. However this
also ensured a fall in Export realization which fell by 45% in Re terms.
Agri Commodities—Fundamentals
Ref Soy Oil


NCDEX So y Oil Dec cont ract
Close
586.9
S1
584
S2
581.4
R1
592
R2
595.5

Lack of strong demand in domestic
markets along with weakness in
International markets kept trend
weak for Ref Soy oil as some more
fall in rates expected in the near
term. Prices continued to find strong
psychological Resistance at the
600 level.
India imported 11.62 million tonnes
of edible oil during Sep-Oct 2013/14
compared to 10.68 million tonnes
during the same period previous
season, stated the Solvent Extractors' Association(SEA).
were slightly lower at 7.29 Mn T
against 8.29 Mn T last season.
Sunflower oil imports were recorded
at 1.51 Mn T against 0.97 Mn T in
2012/13.


India’s 2013/14 soyoil imports stood
at 1.95 Mn T against 1.09 Mn T in
2012/14 season. Palm oil purchases
Reports on apprehensions of India
considering raising import taxes on
crude and refined vegetable oils to
protect local farmers and the refining industry kept trend firm in Indian
markets


In order to improve realizations for
farmers and to bring in transparency
in soybean selling, the Madhya
Pradesh government has introduced
sample-based auction for the
commodity.
The pilot project will be implemented
at Ujjain, one of the biggest mandis
(wholesale agricultural markets) in
Madhya Pradesh, and once the new
system is found to be successful, it
will be extended to 10 other mandis.
The sample-based auction will not
only save post-harvest losses, but
also encourage farmers to produce
fair average quality commodities that
ensure better return on their yield.
Madhya Pradesh has been the
biggest producer of soybean.
Soybean

NCDEX So ybea n Dec cont ract
Close
3302
S1
3264
S2
3228
R1
3334
R2
3368


Soybean traded with high volatility
last week as the initial uptrend was
not sustainable with fall in international markets pressurizing the Indian
market sentiments also. Improved
International production forecasts are
keeping sentiments weak there.
Traders expect downtrend to be
limited however as demand is expected to improve in coming weeks.
3,958 million bushels, up 31 million on
higher yields. The soybean yield is
projected at a record 47.5 bushels per
acre, up 0.4 bushels mainly on gains
for Iowa and South Dakota. Soybean
supplies for 2014/15 are projected 1
percent above the October forecast.

U.S. oilseed production for 2014/15 is
projected at 117.2 million tons, up 0.9
million from last month on increased
soybean, peanut, and cottonseed
production.
Soybean production is forecast at

U.S. soybean exports for 2014/15 are
raised 20 million bushels to 1,720
million reflecting the record pace of
export sales through late October.
Soybean crush is raised 10 million
bushels to 1,780 million mostly due to
increased soybean meal exports.
es in the 2013/14 balance sheet.
Soybean ending stocks are projected
at 450 million bushels, unchanged
from the previous forecast.


Domestic soybean meal consumption
is reduced slightly in line with chang-
New crop arrivals continue in MP but
are stated to be lower in Maharashtra.
This is keeping sentiments firm
Global oilseed production for 2014/15
is projected at a record 528.9 million
tons, up 0.5 million from last month.
Higher soybean and rapeseed production are only partly offset by a lower
sunflowerseed forecast. Global soybean production is projected at a
record 312.1 million tons reflecting the
increase for the United States.
RMSeed

NCDEX RMSeed Dec contract
Close
3873
S1
3856
S2
3838
R1
3916
R2
3956


A firm trend was noted for RMSeed
last week even as a fall in other Oil
complex prevented any strong
recovery for the commodity rates.
Reports of lower sowing area,
lower stocks in warehouses and
high demand from stockists are
likely to keep supporting the prices
in the near term.
Global rapeseed production is
raised to 70.7 million tons on a
record EU harvest. Gains for EU
are partly offset by a reduction for
Australia where dry conditions in
the southeast have reduced yield
prospects.
Global sunflowerseed production is
reduced 0.4 million tons to 39.8
million on lower forecasts for
to good rains in Oct and fields being
unused, early sowing was possible
there. UP area coverage in Rabi
2014-15 till 30th Oct was 4.91 lakh
ha while it was nil in 2013-14 during
this period. As fields this year were
unused in kharif season, so farmers
had sown Mustard early in UP.
Russia and Kazakhstan


As per Ministry of Agriculture,
Rajasthan area coverage in Rabi
season 2014-15 till 30thOct 2014
was 9.07 lakh ha vs 11.88 lakh ha
in 2013-14. The fall in area was
due to high temperature in Oct and
lack of rains. Farmer are reportedly
shifting to
Barley and Wheat.
Crops also faced germination
problem due to the high Temperature.
Haryana area coverage in Rabi
2014-15 till 30thOct was reportedly
nil while it was 2 lakh ha in 2013-14
during this time. The reason is
again the high temperature during
Oct. MP area coverage in Rabi
2014-15 till 30th Oct. was 3.80 lakh
ha while it was nil in 2013-14. Due

Mustard area coverage in All over
India is 18.64 lakh Ha during Rabi
2014-15 and 14.08 lakh ha in 201314, area coverage during Rabi 2014
-15 is higher by 4.56 lakh ha compared to corresponding period of
Rabi 2013-14