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2. agriculture and forestry
3. crops and seed

Agri Commodities—Fundamentals
December 29, 2014
Chana

Highlights:

Jeera, Turmeric continued
hitting upper circuits on good
demand amidst falling stocks
and expectations of lower crop


Chana, Guar recover strongly
as demand continued rising on
the domestic front for Chana
and on the export front for
Guar

Hike in Edible Oil import duty
keeps Oil complex firm.
Inside this issue:

Bearish news in International markets affected the market sentiments
adversely. As per USDA, expected
pulses production in USA is up by
8% to 2,232,630 metric tonne during
2014 from last year.
Reports from Canada indicate
chickpea production there expected
to fall to 0.14 million MT in 201415—down from 0.18 million MT in
2013-14due to lower yield. Reports
from Australia indicate a 22.5% fall
in Pulses production and more than
30% fall in Chick Peas production in
2014-15 vs that in 2013-14.



In Indian markets, reports of lower
sowing due to prevailing low rates,
good demand from millers and Govt
agencies and a rise in MSP from Rs
3100/Q to Rs 3175/Q had supported
prices.
Latest report from AP Agri Dept
indicate Rabi Pulses sowing down
8.7% from 5.98 lakh ha as on
19.12.2013 to 5.46 lakh ha as on
19.12.2014. Rajasthan Agri Dept for
Rabi Pulses indicates sowing
indicates area at 15.36 lakh ha as
on 19.12.2014, vs 15.28 lakh ha as
on 19.12.2013. MP Agri Dept
indicates Rabi Pulses sowing at
35.81 lakh ha as on 19.12.2014 vs
42.44 lakh ha previous year—down
by 15.6%.
As per Ministry of Agriculture, rabi
pulses 2014-15 coverage till Dec 26
is down to 124.16 lakh Ha as compared with last year’s area coverage
of 134.72 lakh hectare during the
corresponding week. The area
planted under chana is also down to
77.81 Lakh ha against 90.66 lakh ha
in same corresponding week during
last year.
NCDEX Cha na Jan co ntract
Close
3478
S1
3444
S2
3424
R1
3516
R2
3560
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.
Mentha Oil
Chana
1
Mentha Oil
1
Jeera
2
Turmeric
2
Guar
2
Ref Soy Oil
3
Soybean
3
RMSeed
3


Moderate firm trend persisted for
Mentha Oil as it traded with high
volatility. Prices found some strong
support at the lower levels as
closure of International markets for
Christmas and New Year adversely
affected the export demand that had
picked up recently. However, domestic demand from pharmaceutical
Industries in Indian markets may
support the falling rates in coming
days. High stocks are keeping
uptrend limited. Exports expected to
pick up in Jan 2nd week as International markets open.
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 sentiments weak for 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. Production this
year expected higher at more than
60000 tonnes vs ~50000 tonnes last
year
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
ajitesh.mullick@religare.com
AVP-Retail Research
Mahesh Choudhary
+91120 6795529
Mahesh.choudhary@religare.com
Sr Manager—Retail Research
E-mail ID: agri.research@religare.com
Disclaimer: http://www.religareonline.com/research/Disclaimer/Disclaimer_rcl.html
MCX Me nt ha Oil Ja n cont ract
Close
723
S1
712
S2
704
R1
732
R2
738
REL/RCL/CRD/TM/06/01

Trend remained strong for Chana as
Festive season demand rose in the
mandis. Reports of lower sowing
further supported the prices. Further
uptrend likely in coming days as
market sentiments remain firm. Fall
in Rabi sowing area for Rabi Pulses
too is having a Bullish impact on the
prices. Lower production prospects
in International markets would make
import costlier.
Agri Commodities—Fundamentals
Jeera

NCDEX Jeera Jan co ntract
Close
15080
S1
14965
S2
14740
R1
15220
R2
15320


Till 17.11.2014, 60,900 ha have
sown as compared to 74100 ha last
year. The sowing area during the
current year likely to go down in
Gujarat and Rajasthan growing
regions due to lower price as
compared to the Coriander. Area
may shift to Coriander and Fenugreek seed. Total Jeera area is
likely to go down by 25 -30% during
the current period as per trader
estimates.
Jeera rates shot up strongly as
improved Export demand amidst
reports of a fall in production supported the prices. International
markets closed for the Christmas
and New Year Holidays. But exports are likely to pick up as markets open after 1st week of January. Lower production expected this
time but improved climate in growing states are reportedly good for
the standing crop.
Short term trend continues to be
determined by these 2 factors even
as a fall in sowing area could impart
long term Bullishness to the prices.

As per latest Govt reports, in Gujarat, normal area for Jeera crop is
approximately 388,000 hectares.


The latest report from Spice Board
of India indicates a pickup in exports during April-Sept 2014 period
at 87500 tonnes (up from 70243 in
April-Sept 2013) – a rise of 25% in
Quantity and 2% in value (due to
fall in rates during that time). The
targeted Export for 2014-15 period
is 1,00,000 tonnes.
With Indian produce being of superior quality, they fetch a premium w.r.t.
International
market
producing
countries. Adverse reports from
International producers would be
beneficial for the Indian markets in
the long term.
The exports have already shot up
40% during the 1st half of the quarter.
It is expected to remain high in
coming months too – which could
create a Bullish sentiment in the long
term for the commodity. Finally a fall
in area as reported amidst adverse
weather conditions in growing areas
could help keep market sentiments
firm in the medium term.
Turmeric


NCDEX T urmeric Ap r cont ract
Close
8932
S1
8844
S2
8768
R1
9040
R2
9188

Bullish trend persisted for Turmeric
as falling stocks amidst rise in
Festive season domestic and export
demand and lower production
reports kept trend positive. Demand
is expected to pick up further in
coming weeks. Falling stocks too
are likely to support the prices.
A fall in sowing area in Tamil Nadu
and Karnataka due to the cyclone in
October amidst delayed Monsoon
could affect the production adversely—as per market sources. Even as
area in Andhra Pradesh goes up,
overall production is expected to
come down—lending medium term
support to the prices.
from the current stock and this
factor has been supporting the
falling rates to some extent.

However, with demand from North
low due to crop damage reports from
AP and TN but stock levels from
earlier years are high.

India and Export demand expected
to rise in coming weeks, it can
support prices to some extent.


As per reports from Spice Board of
India, the estimated exports of
Turmeric during April-September
2014 was pegged at 43000 MT, up
by 10% same period previous year in
quantity and 15% in value terms,
same period in 2013.
Lower rains in AP and TN have
already adversely affected sowing
for the new crop there.
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
With harvesting yet to pick up
strongly, any demand has to be met
Guargum

NCDEX G uarg um Ja n co ntract
Close
12850
S1
12640
S2
12500
R1
13120
R2
13280

With prices finding very strong
support at these lower levels, reports
of pick up in exports supported the
rates for Guar. Firmness in Crude Oil
rates further supported the market
sentiments. Exports are expected to
pick up again as International markets open in January. High stocks,
weakness in Crude oil price resulting
in low export demand, poor quality
arrivals had kept pressurizing prices.
However with rates having fallen a
lot, exports are likely to pickup in
coming weeks. With farmers unwilling to hold onto the poor quality
stocks, this has resulted further in
prices coming down with increased
arrivals.
Exports
demand
has
reportedly
slackened over last few weeks due
to a fall in Crude Oil prices. Any pick
up in rates for Crude Oil in coming
days could be an additional supporting factors for the exports to rise.


As per trader estimates however,
production this year is expected 43%
lower at 12.5 MMT due to erratic
rains. Total arrival is around 1.25
lakh
bags,0.4-0.5
lakh
bags
down from previous year. This could
support prices in medium term when
exports pick up.
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 Ja n co ntract
Close
635.3
S1
628
S2
624
R1
642.4
R2
648

Trend remained firm for Ref Soy Oil
as Import Duty on Crude Edible Oil
hiked from 2.5% to 7.5% and on
Refined Edible Oil to 15% from
10%.Trend likely to remain firm as
domestic demand also remained
strong.

Fall in International markets had so
far kept pressure on the market
sentiments while domestic markets
traded firm. Rates however continue
to find strong psychological Resistance at the 600 level.

Total U.S. oilseed production for
2014/15 is projected at 117.0 million
tons, down slightly due to a small
reduction in cottonseed.

Soybean exports are increased 40
million bushels to 1,760 million
reflecting the record export pace in
recent weeks and prospects for
additional sales and shipments
ahead of the South American
harvest.

India’s 2013/14 soyoil imports stood
at 1.95 Mn T against 1.09 Mn T in
2012/13 season. Palm oil purchases
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.
With crush unchanged, soybean
ending stocks for 2014/15 are
projected at 410 million bushels,
down 40 million from last month but
still the highest since 2006/07.
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).
Soybean


NCDEX So ybea n Jan co ntract
Close
3402
S1
3368
S2
3340
R1
3438
R2
3480
Hike in import duty on Edible Oil had a
Bullish impact on the Oil complex
sector even as International markets
remained closed. Indian markets
remained firm however as good
demand continued.
USDA raised its forecast for global
production, and expects inventories to
reach an all-time high. Bigger global
grain and oilseed supplies have
pushed world food costs to a 4-year
low. Soybean futures are heading for
second straight annual losses, the
longest slides since 1999. The market
analysts are of the opinion that even
with record demand, the leftover
supply of soybeans before next year’s
harvest will be record large.
Brazil’s government forecast agency
Conab raised its outlook for the
domestic crop to a record 9.58 crore
tons. That’s bigger than the USDA
estimate for 9.4 crore tons.



Expectation of fall in soymeal export
from April 14 to March 15. Soymeal
export likely to fall by 29 % to 20 lakh
ton. Last year export 28 lakh ton Low
export may pressurize the sentiments.
Global oilseed production for 2014/15
is projected at a record 530.7 million
tons, up 1.8 million tons from last
month. Foreign oilseed production
accounts for most of the change on
increases for soybeans, rapeseed,
and sunflowerseed.
based on the latest survey results from
Statistics Canada.


Global soybean production is projected at a record 312.8 million tons with
gains this month for Canada, Ukraine,
and Paraguay. Global rapeseed
production is projected at a record
71.9 million tons, up 1.2 million mainly
on increased production for Canada,
which is estimated at 15.6 million tons
Global oilseed trade for 2014/15 is
projected at 135.3 million tons, up 0.8
million from last month. Soybean
exports account for most of the
change with higher projections for the
United States, Paraguay, Ukraine, and
Canada only partly offset by reductions for Argentina and Brazil.
Global oilseed ending stocks are
projected at 104.1 million tons, up 1.1
million from last month and 23.5
million above year-earlier levels.
Increased rapeseed stocks in Canada
and higher soybean stocks in Brazil
and Argentina are only partly offset
with lower soybean stocks in the
United States.
RMSeed

NCDEX RMSeed Jan cont ract
Close
4327
S1
4274
S2
4244
R1
4368
R2
4416

An overall firmness in Oil complex
along with good demand for Mustard Oil kept trend Bullish for
RMSeed also. Reports of crop
damage from parts of Rajasthan
from recent rains also kept prices
firm. Demand rose further for
Mustard Oil amidst falling stocks
ahead of the Festival season. Cool
weather in growing states keep
production prospects good though
reports of damage to crop in some
areas in Rajasthan from the recent
rains supported the market sentiments.
A fall in other Oil complex and
bearishness in International markets prevented strong upside
movement though. Demand for
Mustard Oil remained strong in the
domestic markets and could prevent prices from falling a lot in
coming weeks.


European Union rapeseed output
rose to 22.5 million tons this year
from 20.9 million tons,data from the
28-nation bloc show. 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 Russia and Kazakhstan
As per Ministry of Agriculture,
Rajasthan area coverage in Rabi
season 2014-15 till 17th Nov was
24.24 lakh ha vs 25.16 lakh ha in
2013-14. The government has set
a target of 29 lakh for this year. 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 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.
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