Epic Research Daily Agri Commodity Report Of 08 NOVEMBER 2017

Commodity News

Turmeric futures edged lower on NCDEX as speculators offloaded their bets, tracking a weak trend at the physical markets due to muted demand.Further, increased supplies from major growing regions also influenced turmeric futures.The contract for November delivery was trading at Rs7114.00, down by 1.98% or Rs 144.00 from its previous closing of Rs7258.00. The open interest of the contract stood at 2600 lots. The contract for December delivery was trading at Rs 7050.00, down by 2.35% or Rs170.00 from its previous closing of Rs 7220.00. The open interest of the contract stood at 5970 lots on NCDEX.

Jeera futures edged lower on NCDEX as speculators offloaded their positions amid lower domestic and exports demand in the spot market.Besides, good supplies from major producing belts also weighed on jeera futures. The contract for November delivery was trading at Rs 18655.00, down by 0.29% or Rs 55.00 from its previous closing of Rs 18710.00. The open interest of the contract stood at 3261 lots. The contract for December delivery was trading at Rs 18965.00, down by 0.37% or Rs 70.00 from its previous closing of Rs 19035.00. The open interest of the contract stood at 10440 lots on NCDEX.

Soybean futures traded higher on NCDEX as speculators enlarged positions on anticipation of good demand for the domestic oilseeds as government is going to hike import duty on edible oil and oilseeds. There are reports that government is expected to reimburse farmers of Madhya Pradesh if soybean is sold below MSP. However, new season arrivals and higher stocks from last year capped some gains. The contract for November delivery was trading at Rs 2819.00, up by 1.22% or Rs 34.00 from its previous closing of Rs 2785.00. The open interest of the contract stood at 40490 lots.

Economic News

Even as the Darjeeling unrest affected the second flush this year, the higher volume of CTC and rise in production of other orthodox tea varieties are likely to narrow the total export loss to only 4-6 per cent in 2017-18, said a senior official of tea exporter MK Jokai. "The 104-day strike resulted in complete shutdown of plantations in Darjeeling, affecting the plucking of the secondflush, considered the most premium in the country. However, the loss of 80 per cent of the second flush was about 6 million kgs or Rs 350-400 crore of premium orthodox tea," MK Jokai Vice President Parimal Shah told here. Therefore, the total loss in India's tea exports would be around Rs 250-300 crore, mainly compensated by higher volume of CTC and Assam orthodox teas, he said. In FY17, India exported Rs 4,750 crore worth of tea, including CTC and orthodox, from Darjeeling and Assam, he said. However, these teas are significantly lower in value than the Darjeeling orthodox, he added.

The recent Rs. 10/quintal increase in the Uttar Pradesh (UP) Government's state advised price (SAP) for sugarcane for the season sugar year, SY2017-18 is likely to result in an increase in the cost of production by around Rs. 800 - 1,000/MT of sugar. While this may result in some moderation in operating margins going forward, given ICRA's expectations of a likelihood of healthy sugar realisations, sugar recovery rates and an increase in the cane crushing volumes, it expects another good year in terms of profits for most UP-based sugar mills. Sabyasachi Majumdar, Senior VP, ICRA, "We expect sugar prices to remain at remunerative levels in the near term, given the tight domestic stock position. Further, UP-based sugar mills are likely to continue to derive the benefit from the improved sugar recovery rates and higher crushing volumes, arising out of cane development activities undertaken in the past.Thus efficient and forward integrated sugar mills are likely to benefit from higher by-product production and thus sales in SY2017-18.

Trading Recommendations

BUY CORIANDER OCT ABOVE 5030 TARGET 5060 5100 5150 SL BELOW 4980
BUY TURMERIC OCT ABOVE 7070 TARGET 7100 7140 7190 SL ABOVE 7020
SELL GUARGUM5 OCT BELOW 7950 TARGET 7920 7880 7830 SL 8000

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This release was published on openPR.