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Agricultural commodities daily review: India and other countries (March 10, 2010)

Contributed by Nirmal Bang

By Nirmal Bang

SPICES COMPLEX

MARKET ROUNDUP
- Spices complex witnessed some selling pressure particularly in Mentha oil, Pepper and Turmeric in yesterday trading session. Cardamom rose by more than 1% supported by increase in the export demand.

IN FOCUS
- Pepper is continuously increasing for last 3 days as Export demand for Pepper is likely to remain robust despite of fresh arrivals in the physical market.
- 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.
- Jeera huge difference between spot and futures has resulted into the selloff in future as despite of rise in futures prices spot prices didn't move up sharply fundamentals for the commodity still remain bullish.
- Turmeric has climbed almost 12% since last fifteen days due to weak arrivals in Errode and some some other spot markets. After a huge rally in the prices, we expect some selloff in the commodity.
- Mentha oil too is expected to increase on the back of increasing export demand as well as domestic demand for the commodity.

FUNDAMENTAL OUTLOOK
- Pepper and Jeera can witness profit booking today; Selling is recommended. Turmeric may trade up today; buying is recommended. Menthe oil is expected to trade up supported by increase in the international and domestic demand.

GUAR, PULSES AND GRAINS COMPLEX

MARKET ROUNDUP
- Wheat extended its losses for third trading session on hope of record output and increasing arrivals in the physical markets. Chana too traded low as rising arrivals in the physical market depressed sentiments. Guar traded sideways to up on short covering yesterday.

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.
- In order to combat inflation, the government has scrapped import duty on rice, wheat, pulses, edible oils and sugar, and allowed the import of raw sugar at zero duty under open general licence. It has allocated two million tonne wheat and one million tonne rice to states for distribution to retail consumers.
- The grain market is expected to remain flat as a surplus of wheat in the northern hemisphere, and good seasons in Europe put a dampener on prices. A report from the United States Departmentof Agriculture due out later this week is expected to confirm the grim news. It's expected huge crops in South America, India and Russia will stop the market going up.
- 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
- We expect prices of wheat to trade tad lower today. Chana looks strong today; selling at this level should be avoided. Guar may extend its upward rally today.

OIL AND OIL SEEDS COMPLEX

MARKET ROUNDUP
- Oilseed complex traded subdued on yesterday followed by prices in the international market. Soybean and Cottonseed oil fell by all most 2% on profit booking.

IN FOCUS
- China, the world's top soybean buyer, imported 2.95 million tonnes of the oilseed in February, down 28 percent from January as many crushers had shut down production during the holidays, official figures showed on Wednesday. But imports during the first two months rose 11.7 percent from year-ago levels to 7.03 million tonnes, figures from the General Administration of Customs showed. China imported 370,000 tonnes of vegetable oils, mainly palmoil and soyoil, in February. Total imports in the first two months rose 18 percent on the year to 910,000 tonnes, according to Customs. U.S. farmers will grow the second-largest corn and soybean crops on record this year -- 13.134 billion bushels of corn and 3.213 billion bushels of soybeans, just below the records set in 2009, said a University of Missouri think tank on Tuesday.
- Soybean: Harvesting of record large South American soy crop, firm dollar, lower crude oil and technical weakness weigh on soybean futures. Drier weather in northern Brazil boosting soy harvest pace and some heavy rainfall in Argentina's La Pampa and southwest Buenos Aires regions leading to some flooding. Brazil soy crop view rises to record 67.57 million tonnes - gov't. U.S. soybean export premiums at FOB Gulf unchanged late on Monday amid seasonally slow demand and CIF barge steady.
- Soy oil: Pressure from lower soy, with lower crude oil and firm dollar adding pressure. Palm ends off 2-month high on near-term outlook. Oil World expects moderate rise in palm oil prices.
- Indonesian plantations firm PT Bakrie Sumatera Plantations Tbk expects its palm oil sales volume to grow 32 percent this year as acquisitions start contributing to sales. "Our target is to increase sales to 370,000 tonnes this year from 280,000 tonnes last year," Ambono Janurianto, Bakrie Sumatera's president, said in an interview.
- Brazil's 2009/10 soy crop forecast rose to a record 67.57 million tonnes from the 66.73 million tonnes projected in February due to favorable weather in the grain belt, crop supply agency Conab said Tuesday. Brazil harvested 57.17 million tonnes of soybeans in the previous season. The current grain harvest is entering its peak.

FUNDAMENTAL OUTLOOK
- Oilseed complex looks strong today. Soy bean in particular looks strong; buying at dips is recommended. Selling should be avoided in palm oil.