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Agricultural commodities daily review: India and other countries (March 08, 2010)

Contributed by Nirmal Bang

By Nirmal Bang

SPICES COMPLEX

MARKET ROUNDUP
- Spices were the out performer in entire commodities on Saturday. Turmeric hit the circuit and ended 4% up supported by low carryover stocks and strong demand. Cardamom settled almost 2% up tracking the prices of physical market. Pepper, Jeera and Mentha oil too traded up on fresh buying.

IN FOCUS
- India's pepper output in 2010 is expected to be around last year's levels, but prices are unlikely to fall sharply in coming months due to low carry-over stocks. Indian pepper exports in January stood at 1,500 tonnes, down 28.57 percent on year, the Spices Board said.
- Turmeric exports in January 2010 stood at 3,250 tonnes, down 22.61 percent from a year ago, according to data from the Spices Board.
- Indian pepper exports in January stood at 1,500 tonnes, down 28.57 percent on year, the Spices Board said. India's pepper output in 2010 is expected around last year's levels, but prices are unlikely to fall sharply in coming months due to low carry-over stocks.
- Prices are weak due to increasing arrivals. Daily inflow at the Unjha spot market has increased to 20,000 bags with the season entering into the peak period. Jeera exports in January 2010 dropped by 46.66 percent to 2,000 tonnes on year, the Spices Board said.

FUNDAMENTAL OUTLOOK
- We expect spices to trade up today. Turmeric and Mentha oil in particular look strong; buying at dips is recommended today. Jeera is likely to edge lower today, as higher arrivals and weak exports are seen weighing on prices.

GUAR, PULSES AND GRAINS COMPLEX

MARKET ROUNDUP
- Wheat traded tad higher on Saturday on the hope that Government will allow the exports of wheat. Chana traded over 1% up on short covering. Guar complex settled too traded flat.

IN FOCUS
- Chana arrivals are 5000-6000 bags at Delhi's Lawrence Road Mandi. The Spot price is expected to open at Rs.2150-2160/quintal, Rs.15/ quintal higher than the prices on previous day's trading session.
- Canadian farmers will produce 9 percent less wheat this year as big global supplies and lower prices cause the world's top exporter of spring wheat and durum to look to other crops. Canada will harvest a crop of 24 million tonnes of all wheat in 2010 compared with 26.515 million tonnes last year, the Canadian Wheat Board said.
- The government is planning to export the foodgrain and some varieties of rice - first time in six years - to clear its bulging inventories. The move could further cool prices in the global markets, where wheat is already down 70% from the year-ago peak. India is the world's second largest producer of wheat. Major global grain trading companies operational in India, like AWB, Glencore, Adani along with a host of private wheat traders, are expected to benefit from the move.
- The United States Department of Agriculture (USDA) is forecasting the US agricultural trade exports to increase by $3.5 billion year-overyear (YOY) to $100 billion in FY 2010. In addition, US farm income is forecast to jump by 12 per cent to $63 billion in 2010,

FUNDAMENTAL OUTLOOK
- Chana fundamentally looks strong today; buying at every dip is recommended. Wheat may trade in thin range today. Guar complex is expected to trade sideways to down.

OIL AND OIL SEEDS COMPLEX

MARKET ROUNDUP
- Oilseed complex witnessed a profit booking and ended sideways to down on Saturday. Soybean and Soy oil ended down trailing the international prices. Cottonseed oil cake too traded down on the back of weak spot market.

IN FOCUS
- The world's two most traded vegetable oils, palm and soy, are in a bull phase 45-month price cycle and may go higher on tight supplies and growing demand.
- Palm oil may go as low as 2,300 ringgit but might not reach that level if Malaysian output gets worse in late 2010 and early next year due to El Nino driven hot weather earlier on, she said. Top palm oil supplier Indonesia could make up the output shortfall as more oil palms mature and mitigate the impact of El Nino.
- Argentina's preference to tax soyoil exports more than its biofuel variant could also hold South American soyoil exports below their potential.
- Markets will also get price direction this week from the U.S. Agriculture Department's March supply-demand report, which will update estimates of ending stocks for corn, soybeans and wheat in the current 2009/10 marketing year. Traders were expecting the USDA to trim its estimate of soybean ending stocks to 194 million bushels from February's forecast of 210 million. Corn stocks were seen mostly flat at 1.720 billion versus 1.719 billion estimated in February.
- Cash palm oil products should start widening their discount to soyoil as Malaysian palm oil futures have not fully taken into account prospects of higher supplies.

FUNDAMENTAL OUTLOOK
- Outlook for Oilseed complex remains strong today. Buying at dips is recommended particularly in Soy oil and Palm oil taking cues from international markets.