NCDEX May Soybean edged lower on Thursday mainly on technical selling by the market participants. As per USDA report, India’s total oilseed production in Marketing Year (MY) 2018/19 (Oct-Sep) is forecast to rise 10% to 38.8 mt on 38.4 million hectares, assuming normal monsoon season.
The production forecast for soybean is pegged at 115 lakh tonnes (lt) compared to 90-95 lt last year. There is still concern about demand from the feed industry and normal monsoon prediction by IMD which encourage stockists to sell old crops. Govt. is taking up the issue with China to remove restrictions on Indian soymeal.
CBOT Jul Soybean closed unchanged on Thursday on concerns about decreased export demand from China as well as rising expectations for a bumper crop in Brazil. USDA export sales report indicated 416,259 MT in old crop soybean export sales up 12.1% from last week but down 43.2% from a year ago. Exports during the week of 4/26 totaled 691,239 MT, 55% larger than last week. Pressure came from reports that Chinese buyers are switching to South America for its soybean requirement while U.S. soybean export sales to China have come to a halt. Brazilian soybean production is expected hit 117 million tonnes (mt) for 17/18 according to estimates from INTL FCStone, up 1.1 mt from their April projection.
RMseed (Mustard seed)
Mustard May futures edged higher on Thursday supported by lower level buying from the market participants. However, prices are still trading at 7 month low on concern over sufficient stocks with the traders and oil mills.
The USDA’s latest GAIN report forecast that mustard production may be around 70 lakh tonnes in 2018/19 season due to normal rains. In 2017-18 (Oct-Sep) mustard output in India is seen at 64 lt, down 9% because of lower acreage.
As per SEA data, the export of rape oilmeals during March 2018 is provisionally reported at 23,499 tons compared to 52,071 tons in Feb 2018, i.e. down by 55%. However, exports have been 162% higher at 5.62 lt for the FY 2017/18 compared to previous year’s export volume of 2.14 lt.
Refine Soy Oil
Refined Soy Oil Futures closed lower for the 5 th consecutive session on Thursday due to steady physical demand from the stockists on reports of higher stocks of edible oil in the country.
The government has kept crude soyoil tariff value unchanged at $824 per tn for first fortnight of May. Moreover, higher import duty and increase in tariff value during the current calendar year is making imports expensive. As per the data from SEA, soyoil imports during the March dropped 49.9% to 115,102 tons compared to 229,853 tons in the same period a year ago.
There are reports of 3% higher vegetable oil imports on year at 11.5 lakh tonnes (lt) in March. Stocks of edible oil in ports and pipeline are estimated at 2.11 mt as on Apr 1 compared to 1.91 mt a year ago while lower than 2.197 mt in Feb, data showed.
Crude Palm oil
MCX CPO falls close to 1.3% on Thursday tracking weak trend in Malaysian Palm oil futures. Moreover, cut in base import prices and steady domestic demand also weigh on prices. The base import price of crude palm oil was slashed to $671 per tn from $684 per tn. However, it is still supported by weaker rupees and good steady physical demand.
CPO has been trading all-time high in April due to jump in oilseed prices in the country following news on removing export restrictions on edible oils from the country. As per SEA latest report, India's crude Palm oil (CPO) imports in March increased by 30.33% compared to same period a year ago despite the govt. imposed higher duty. However, Shipment of RBD palmolein dropped 25.56% to 163,222 tons compared to 219,270 tons last year.
Malaysian palm oil futures slid to their lowest in over a year in on Thursday, on concern over weakening export demand. Malaysian palm oil product exports fell 5.7% for the full month of April compared with March, said AmSpec Agri Malaysia.
Malaysia's palm oil production for April is expected to rise in line with seasonal trend. It last rose 17.2% on-month to 1.57 mt in March, its highest March production since 2000. Malaysia, the world's second largest palm producer and exporter, would resume export duties on crude palm oil after four months of tax exemptions and set its crude palm oil export tax at 5% for May.
Chana
Chana May futures continue its uptrend and close higher on Thursday on anticipation of good physical demand at lower prices. Chana may still get support on reports that government restricted import of yellow peas, an substitute added in the Chana flour till June end. Center is trying to support farmers by buying at MSP. Madhya Pradesh and Chhattisgarh government announce bonus for Chana procurement over an above this MSP prices. Government is trying to support prices by removing export restrictions and procuring at MSP. MP govt announces to procure about 21 lt of Chana at MSP of 4,400 /quintal and exclude it from Bhavantar scheme. Earlier, govt has announced of a 7% duty credit incentive on export of desi chana.
Spices (Jeera & Turmeric)
NCDEX Jeera futures ended lower on Thursday on profit booking concern over export demand at higher levels. Jeera prices have surged about 9.5% in last one month due to lower arrivals and pick up demand. As per Agmarknet data, arrivals of jeera in the country were lower by 5.8% at 28,874 tonnes during April compared to 30,664 tonnes last year for the same period. As per government data, Jeera exports during first 11 months of FY 2017/18 (Apr-Feb) is 124,394 tonnes, up 13.6% compared to last year exports volume for the same period. India's jeera exports in February were up by 30% on year to 9,512 tonnes compared to 7,325 tonnes last year.
NCDEX Turmeric futures slipped about 2% on Thursday on profit booking at higher levels. Prices have touched 4 months high tracking improved demand in physical market due to reports of lower stocks. Turmeric prices have surged about 8% in April after it closed almost flat in March. Currently, turmeric stocks in the country is around 20 lakh bags (1 bag =70kg) compared to 35 lakh bags last year same time. However, the prices are still suppressed this season on concern about export demand in coming weeks. Supplies from the new season turmeric have been same during April at 1.25 lt compared last year, as per Agmarknet data. The export of turmeric is down by 11.8% to 98,487 tonnes for the first 11 month of FY 2017/18 (Apr-Feb) compared to last years’ exports.
Investment & trading in securities market is always subjected to market risks, past performance is not a guarantee of future performance.CapitalStars Investment Adviser: SEBI Registration Number: INA000001647
