Farmers again on the mercy of Rain God in India

Farmers of many states like Rajasthan, Madhya Pradesh and Maharashtra have yet not come out from the trauma of crop loss due to unseasonal rains during first fortnight of March. However, the states/central government have announced different relief (financial assistance) packages for the farmers.

And again Rain God seems to have annoyed from the farmers. As per the IMD, the rains/hail storm/squall are likely to occur at many places in the next one to two days.

The Rabi crop harvesting is underway in most parts of the north India. Major contribution to the food crops comes from the states like Punjab, Haryana, Uttar Pradesh, Rajasthan and Madhya Pradesh.

Have a close eye on the RABI SEASON CROPS like WHEAT, GRAM (Chana), BARLEY, MUSTARD SEED (RMSEED), CUMIN (JEERA), Coriander (Dhaniya)  in India market.   

It is to be seen that impact of this rain on the crops and accordingly the market direction would  be decided. 

It seems that Next week movement would  be volatile with a positive bias in the above mentioned commodities.



Source: IMD, 29 March 2015

Source: IMD, 29 March 2015

Source: IMD, 29 March 2015

Soy oil trades down in Indian Market

11.00 PM IST
Soy oil Update

Soy oil trades down by more than 1% in Indian futures market due to subdued demand in the physical market. Weakness is also seen in the international market as soy oil prices at CBOT also trades down by 2%.

Yesterday when NCDEX Soy oil April Contract was trading at 588.50 level, we posted that market may fall from current levels.

Today till now market has made a low of 579.45. Thus we have seen a fall of Rs. 9. Currently market trades at 580 level.

Again if market close below 584-585 level, then next week also we may witness further fall... may be near 560 level.

NCDEX Soy Oil April Contract

Soy oil likely to correct from current levels in Indian Futures Market

After trading in a range bound to positive territory for the last 4-5 days, it appears that market is getting enough resistance on current levels in soy oil futures market in India.

we may go wrong in our view, but as we mentioned in our earlier posts that 591 is the major resistance for short term. And till now market was not able to close above this level in NCDEX Soy oil April Contract.

And today if market close near 584-585 level, then there are quite fair chances that market may start coming down again towards the levels below 560.

At the same time if market is able to close above 591 level then movement towards 600 may be seen in short term.

However likelihood of correction is very high.

Sugar Market Plunges due to Excess Supply in India

There has been a sharp correction of around 17 % in the sugar futures prices in India since the start of the sugar marketing season (sugar marketing season starts from October and ends in September).

The Futures prices of NCDEX Sugar May Contract have dropped from Rs. 2860/quintal during October 2014 to Rs. 2370/quintal till date.

In fact, Traders were having fair idea about the production rise and situation of ample supply world over. They utilized every rise in making selling opportunities.

The market seems still in the grip of the bears in the light of the facts and figures which were released by the Indian Sugar Mills Association (ISMA) recently.

The important points of the Press Release are given below.

·        The sugar mills in the country have produced 221.8 lac tons of sugar during the current season up to 15^th March, 2015.  This is 28 lac tons higher than the production up to the corresponding period in the last season of 193.8 lac tons.

·        As on 15^th March, 2015, 476 sugar mills were still under operation, which were 409 mills last year at the same time

·        The Government has revised its sugar production estimates to 265 lac tons, as compared to the earlier estimate of 250 lac tons.  They had previously estimated a surplus of 14 lac tons and, therefore, allowed incentives to export this 14 lac tons as raw sugar. 

·        However, the global sugar prices fell at the same time mainly due to the massive depreciation of Brazilian currency in comparison to the US dollar, making sugar exports from Brazil even cheaper.  The fall in global sugar prices, therefore, have restricted raw sugar exports from India.

·        With higher estimations of the sugar production by the Government by 15 lac tons and lower expected raw sugar exports, the industry has requested for creation of 20 lac tons of buffer stocks.  It will help the industry with some cash flows to carry the extra sugar and will check distress sales by some sugar mills.  This 20 lac tons can then be used by the Government next season for its PDS requirements.

Source: ISMA, Press Release, 17 March 2015.

NCDEX SugarM May Contract

Market Follows what We predicted in Soy oil in Indian

Please recollect our earlier post on 12 March 2015.
http://prasoonmathur.blogspot.in/2015/03/short-term-marginal-recovery-then-again.html

We said that after making a marginal recovery, Soy oil market is likely to fall again.

Market did the same. From 12th  to 16th March soy oil April contract rose from the level of 574 to the level of 588.30 then again it started falling from 17th March.

Today right now market trades at 571.80 at 10.37 AM IST.

We still stand with our earlier forecast that correction will continue in medium term.

The Technical levels are given below as was described in the post of 12 March.

NCDEX Soy Oil April Contract as on 18 March 2015

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12 March 2015

Short term marginal Recovery then again Fall expected in Indian Soy oil Market

http://prasoonmathur.blogspot.in/2015/03/short-term-marginal-recovery-then-again.html

12 March 2015:
Short Term Recovery then
During last 10 days Indian soy oil market has fallen by nearly 4%. (from 600 to 575 level) till date.

Let us review the market movement for next couple of days.
Two things seem still clear --------
1.  MEDIUM term Outlook is still BEARISH.
2.  SHORT term MARGINAL RECOVERY might be seen


Right Now Soy oil April Contract trades at 576.50 at 12.33 IST.

Technical levels are given below for MEDIUM and SHORT term.

India: NCDEX Soy oil April Contract

Medium Term Technical Levels

S1: 548    S2: 530                   R1: 600           R2: 619

Short Term Technical Levels

       S1: 555    S2: 550                   R1: 590           R2: 600

Fundamentals have yet not changed. Physical market demand is still not picking up and traders are in wait and watch mode.

Some technical bounce back may be seen in the market. Higher levels may result in to fresh selling by the hedgers and speculators.

---------------------------------------------------------------------------------------------------------------------------

Rains and hailstorm Damage Crops in Many parts of the India

Recent rains in various parts of the country for the past couple of days have badly affected the crop production.

Various print and electronic Media reports of India have shown pictures and visuals  of crop damage due to hailstorm and waterlogging in fields.

Farmers of the states like Rajasthan, Madhya Pradesh and Maharashtra are among the worst sufferers.

In Rajasthan some people died while many injured due to this unseasonal rains and weather disturbance.

Rabi crops like Mustard seed, wheat, Barley, Gram, Masoor, Jeera (Cumin), Potato and Onion have seen maximum loss.

Please note that Madhya Pradesh is one of the major producers of Wheat and Gram (chickpea) while Rajasthan stands first in Mustard production. Other crops like Onion and Cumin are also among major crops of Rajasthan.

In Maharashtra crops like Onion and horticulture crops like pomegranate and grape have seen losses.

In many cases the quality issues will be raised in time to come.

The final assessment of production loss is yet to be made by the government agencies. The farmers say that more than 50% of the crops are lost either in terms of production or quality.

The market will surely adjust itself once some clear picture emerges. But one thing is sure that ample amount of damage is there to some of the crops.

In near future in March or in Early April if again weather turns unfavorable then it will be really hard to save the remaining crops because in the north Indian states like Haryana, Punjab, UP and Bihar harvesting of crop would be in full swing and any unseasonal rain during that period may put farmers in great trouble.

Strong US dollar Index and Weather Concerns Support Indian Agricultural Market

Indian edible oil market witnessed some recovery on Friday mainly due to short covering by the sellers.

Strong US dollar against Indian currency also added support to the edible oils i.e soy oil and crude palm oil as Indian is the net importer of these oils.

Weather concerns also encouraged bulls as there is forecast of widespread rains in many parts of the country for the next 3-4 days which may result in to some loss to the standing crop and delay in harvesting process of the crops like Mustard seed, Chana wheat.

Yesterday we posted in our blog that some recovery might be seen in the market.

On next week too, if intensity of rains remain high then market may witness some more gains in the above mentioned commodities.

Next week may witness increased volatility in the agricultural commodities market.

Bad Weather Supports Indian Agricultural Market Sentiments

Forecast for widespread rains in many parts of the country supports the agricultural commodities market sentiments.

Please note that the crops like Mustard seed, and Gram are ready for harvesting.
In Fact in many parts harvesting is underway.

Rains may delay process of harvesting. There is possibility of hailstorm in some patches, it may also damage the crop to some extent.

Below is the weather warning issued by the IMD on 13 March 2015.

Thus, it appears that some upside movement in Wheat, Gram (Chana), Mustard seed, edible oils and soybean may be seen in near future.

Short term marginal Recovery then again Fall expected in Indian Soy oil Market

During last 10 days Indian soy oil market has fallen by nearly 4%. (from 600 to 575 level) till date.

Let us review the market movement for next couple of days.
Two things seem still clear --------
1.  MEDIUM term Outlook is still BEARISH.
2.  SHORT term MARGINAL RECOVERY might be seen


Right Now Soy oil April Contract trades at 576.50 at 12.33 IST.

Technical levels are given below for MEDIUM and SHORT term.

India: NCDEX Soy oil April Contract

Medium Term Technical Levels

S1: 548    S2: 530                   R1: 600           R2: 619

Short Term Technical Levels

       S1: 555    S2: 550                   R1: 590           R2: 600

Fundamentals have yet not changed. Physical market demand is still not picking up and traders are in wait and watch mode.

Some technical bounce back may be seen in the market. Higher levels may result in to fresh selling by the hedgers and speculators.


NCDEX Soy oil April Contract: 
Medium Term Chart View

Short Term Chart View

Free Fall Continues in Soy oil, Palm Oil and Soybean in Indian Market

On Tuesday morning, Indian vegetable oil complex trades with a negative note due to poor buying interest in the physical markets.

What we mentioned in the earlier posts that market seems heading towards a significant fall in near future seems true.

Confidence is lacking among the buyers while sellers are quite active in the market.

CPO and soybean also looks very weak.

We repeat the technical levels that might be seen in the Indian soyoil futures market in near future.

Current level is 576.

India: NCDEX Soy oil April Contract

S1: 548    S2: 530                   R1: 602           R2: 620 

NCDEX SoybeanApril Contract

Downtrend intensify in Oilseeds and Edible Oils Markets in India

Today is the first trading day of the current week starting 9 March and Indian oilseeds and edible oil (Soy oil and Crude Palm Oil) trades down both in physical as well as futures market.

On last friday on 6 March in my previous post, I predicted that edible oil market in India may witness steep fall in near future.

Today market has given early signs of it. Soy oil and Palm oil tried to go up but due to lack of physical market support, the market has started coming down.

In the physical market, the soy oil price are down by Rs. 5.60/10 kg in the Indore market which is the benchmark market for soy oil and soybean.

In Indian futures Market, the soybean, mustard seed, cpo and soy oil all are down in the range of .20 to .88% from previous close.

Discouraging oilmeal export data, poor domestic edible oil demand, weak international market sentiments do not allow Indian market to move up.

It seems that more weakness will be seen in near future.

More update will be given in the night near market close. (IST)

Indian Soy oil Market seems heading towards steep fall

It appears that Indian soy oil market is likely to fall significantly from current levels as physical market demand is not improving amidst weak global cues.

Poor soymeal export data of India also discouraged the soy industry in India. Earlier, no announcement on the import duty increase on edible oils in the Union Budget disappointed the industry.

Buyers are waiting for more correction to take place in the market then they can start fresh buying.

Indian soy oil importers seems continuously hedging their positions in the futures market. At the same time buyers restrains themselves for big buying.

Technical Chart pattern also suggest a fresh fall in the soy oil market in near future.

The following technical levels seems valid in the next week starting 9-14 March 2015.

Current Trading Price of Soy oil April Contract at NCDEX is 580.55

India: NCDEX Soy oil April Contract

S1: 548    S2: 530                   R1: 602           R2: 620

Indian Oilmeal Exports Drop Sharply by 43%

For the consecutive third month the oilmeals exports by India has fallen sharply due to slack demand by the Importers.

As per the Press Release by the Solvent Extractors’ Association of India, dated 5 Feb 2015: 

• The Oilmeal export during April.’14 to Feb.,15 is reported at 2,229,993 tons compared to 3,933,664 tons i.e. down by 43%.  [Table 1]

• In Feb., 2015, export of oilmeals is reported at 181,996 tons compared to 307,260 tons in Feb., 2014 i.e. down by 41%.

• Export of soybean meal has greatly reduced in last 11 months. The Association cites the main reason of this drop is the disparity for soybean meal in international market.

• However, the share of rapeseed meal has increased from 820,885 to 1,002,491 tons, while that of ricebran extractions export is more than doubled in last 11 months.

The Press release further mentions that there has been sharp drop in the Average FOB prices of Oilmeals.

The average FOB soybean meal price sharply dropped from US $ 560 in Sept’14 to US$458 in Feb’15.

The Major Importers of Indian Oilmeals are South Korea, Iran and Thailand.

Be Ready for Sharp Movement in Soy oil in Indian Market in near future

With no change in the duty structure in the Union Budget  on edible oils, market will now start following fresh demand and supply fundamentals in Indian market.

International crude oil prices have also shown some improvement in short term.

In India, the central and northern parts which are the major oilseeds producing states, have received widespread rains which may delay the Rabi oilseeds crop arrivals a little bit delay particularly the Mustard seed crop.

With the start of summer season, demand is likely to pick up gradually.

Please note that for the past 7-8 days soy oil market moves in range of 10-12 rupees with no clear direction.

Right now Soy oil April Contract at NCDEX trades at   593.75.

As discussed earlier, there are signs of some improvement in the physical market demand. But there is still some skepticism over long term outlook in the light of amply world edible oil supplies.

This is the very reason why speculators are a little bit quite and waiting for some clear trend to emerge to make their fresh bet.

The chart pattern suggest that in the next couple of days some clarity must come in the market about the medium term.

The downside seems limited from current levels.

On Daily Chart of Soy oil April Contract at NCDEX following technical levels seems valid for next couple of days.

Support = 585  Resistance 1 = 596  Resistance 2 =604.
A closing above 597 will lead the market towards 604.

A Good and Big news for Indian Commodities Market

Budget 2015: Proposal to merge FMC with SEBI

The Indian government proposed in the Union Budget 2015 the merger of Commodities Futures Market regulator i.e. Forward Markets Commission (FMC) with Stock Market Regulator i.e. Securities and Exchange Board of India (SEBI) with the aim to further strengthen commodities market, allow more access to the domestic and foreign institutional players.

This is a welcome step of the Government as it will provide more powers to the regulators.

However it is to be seen that how and when all these this will take place and finally in what shape it emerge.

But one thing is sure, that more transparency and consistency will be there in commodities market transaction and duplication of many items like KYC may be avoided.

Further, new products like Options, Indices, weather derivatives and many more may be introduced after the merger.

The most important point is how soon this merger takes place.