oilseeds daily 23012015

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March 2012 Oil Oilseeds Daily

ORPRIVATECIRCULATIONONLY January23,2015

mestic edible oil complex closed traded lower as

wer international market and high domestic

ppliesweighonprices

bleoilcorrectedthemostwhileMustardseedsaw

leastcorrection

ng liquidation in edible oil and Soybean was

nessed while Mustard seed saw short

umulation

zil soy crop is expected to reach a record 94.2

liontonsfor2014/15,up3percentfromprevious

ecast of 91.4 million tons Celeres. Last season,

zilharvested86.3milliontonnesofsoybeans.The

w crop whichhas begun earlyharvesting will pick

speed in the coming months and peak in March

dApril.

e Brazilian soybean crop deteriorated from

trimental

weather

in

the

three

weeks

to

Jan

20,

wever, soybean standing crop conditions have

provedinArgentina

World has released its latest report on global

ble oil industry. In its report it estimated India

ybeancrushingat6873 lakhtonnes inthecurrent

son as against 201213 record level of 92 lakh

nes.

stard seed traders continued to apt for cautious

proach,

as

stockiest

were

unwilling

to

sell

theirksatcurrent level.Ontheotherhand,competing

rkets showing signs of weakness, provided little

pportforthecommodity.

eRSOCPOspreadinlasttradingsessionwasatRs

7 compared to 218. The spread has been on a

ngtrendandhaspassedtheprevioushigh.

HIGHLIGHTS

RSO CPOSpotSpread

0

50

100

150

200

250

300

350

10Nov10 10May1 1 1 0Nov1 1 1 0May1 2 1 0Nov12 10May1 3 1 0Nov13 10May14 10Nov14

RSOCPOSpotSpread

Contract Open High Low Close %Chg Vol(MT) OI

Feb15 3395 3416 3346 3359 1.00% 65140 76750 10

Apr15 3414 3431 3352 3373 1.20% 32390 38690 2

Jun15 3433 3452 3360 3388 1.37% 9900 11880 4

Feb15 637 637.8 624.1 625 1.87% 54175 69145 3

Apr15 613 613.85 598.6 600.05 2.14% 21410 59265 2

Jun15 588 588 579.4 583.55 0.85% 9950 53015 5

Apr15 3447 3480 3414 3431 0.41% 35720 38920 2

May

15 3477 3514 3451 3464

0.46% 3150 5660

2

Jun15 3524 3544 3500 3520 0.06% 640 1820

Jan15 445.7 445.7 436.1 438.4 1.64% 667 1082 2

Feb15 452 452 443 444.5 1.64% 2196 3330 2

Mar15 457 457 447.5 448.7 1.79% 602 1825

Note

:

MCX

&

ACE

OI

in

Lots

Contract Open High Low Close Change %chg

CBOTSOYBEAN USCents/Bushel

Mar15 984.25 992.5 975 976.8 6.75 0.69%

May15 990 998.5 981.25 983.0 6.5 0.66%

CBOTSOYMEALUS$/shortton

Mar

15 330.8 335.8 327.7 330.1

0.4

0.12%

May15 323.4 327.3 320.7 322.6 0.1 0.03%

CBOTSOYBEANOILUSCents/Pound

Sep16 32.39 32.58 31.9 31.97 0.44 1.36%

Oct16 32.57 32.74 32.08 32.16 0.42 1.29%

WCECANOLACanadian$/ton

Mar16 469.1 469.1 469.1 469.1 5 1.08%

May16 458 463.4 457.6 462.2 3.4 0.74%

BURSAMALAYSIAPALMMYR/ton

Apr15 2278 2282 2242 2246 27 1.16

INTERNATIONAL

EDIBLEOILCOMPLEX

NCDEX REFINEDSOYOILRs./10kg

MCX CRUDEPALMOILRs./10kg

NCDEX MUSTARDSEEDRs./Qtl

NCDEX SOYBEANSRs./Qtl

22Jan15FUTURESPRICEMOVEMENT


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Centre Spot Change

SOYBEANSRs./Qtl

Indore 3359 23

Kota 3270 19

Nagpur 3350 0

REFINEDSOYOILRs./10kg

Indore 656 7

Mumbai 641 4

Nagpur 661 12

SOYMEALRs./ton

Indore 28700 0

MUSTARDSEED

Rs./Qtl

Alwar 4125 0

Jaipur 4038 8

Source:

NCDEX

&

ACE

Soyoil$/ton 876 972 901

Rs./10kg 540 555

PalmOil$/ton 667 912 690

Rs./10kg 411 425

Source:SEA,KCSL

Note:

Domestic

price:

Soy

oil

Ex

IndorePalmOilExKandla

570

440

Oil

(Crude)C&F Rate-

Mumbai

Imp Base

Tariff

Domestic

Price

Landed

Price

GrossCrush(Rs.) 4890

Oilshare 75.51%

Mealshare 24.49%

SoybeanComplex

GrossCrush(Rs.) 370.0

Oilshare 30.9%

Mealshare 69.1%

Source:

SEA,

KCSL

Rape/MustardComplex

CRUSHMARGIN&OILMEALSH

Currency Type Close %

USD/INR Spot 61.59 0

COMMODITY CONTRACT SUPPORT RESISTANCEINTRA

TREN

SOYBEAN February 3300 3420 Bear

RSO February 618 630 Bear

MUSTARDSEED April 3400 3480 Bull

CPO February 440 450 Bear

MARKETANALYSIS

Centers

Demat InProcess Demat InProcess

TOTAL 10329 0 0 0

TOTAL 9577 0 0 0

SOYBEAN

ACE

MUSTARDSEED

NCDEX

WAREHOUSESTOCKS inMT(Ason21January2014)

beanDomesticsoybeanfuturesareexpectedto

eweak tracking sell off on CBOT.U.S. soybean

resfellThursdayon expectationsof largeSouth

erican soy harvests that should boost global

ntories,coupledwith strength in theU.S.dollar.

agoBoard of Trade soybeanfuturesdeclined in

ytradesandaretrading lowerby0.1%.InIndian

ket, Soy complex witnessed weak tone in prices

hedomesticspotmarketamid lowdemandand

warrivals.

nedSoybeanOil RSOfutureduringthesession

xpectedtotradeweak.Indiarefinedsoyoilprices

ted lower inspotmarketsacrossthecountrydue

owdemand.Thecommodityisalsosufferingfrom

dybuildingupofsupplypressure.Soyoilfutures

pped pressured by technical selling and lower

bean. CBOT Soy oil is trading lower by 0.3% in

ytrades.

de Palm Oil MCX CPOfutures are expected to

e loweras selloffacross theglobalmarketwill

ghonCPO.Malaysianpalmoilfuturesdroppedto

r lowest level inthreeweeksonThursdayas the

git ticked up and crude oil prices continued to

guish, but tight supplies of palm after flooding

vided some support. BMD palm oil prices are

inglowerby0.8%inearlytrades.

eseed Mustardseedpricesareexpectedtotrade

for the new crop contract. Mustard seed and

ellerprices

have

turned

softer

on

the

domestic

t markets due to slower demand. Soft tone in

peting markets has also dented the prospect.

anwhile, rains in northern region of the country,

ed restrict price fall. Markets continue to eye

pgrowthprogresswhichwilldeterminethefuture

lability of the commodity. Focuswill also be on

tard oil demand in the wake of changing

ther.NCDEXAprilcontractisgettingsupportnear

4103400while resistance is seennearRs.3470

0.

OUTLOOK


3/7



nalysis:Pricesofsunfloweroilandsunflowerseedhavesofteneda littleoverthe lasttwomonthsunderpressure from

lummetingcrude

oil

price

and

ageneral

oilseed

glut.

However,

the

decline

for

sun

oil

has

been

modest

compared

to

o

egetableoils.Thisispartlyduetoexpectationsoflowerglobalsuppliesthisyear,andstrongdemandfromplaceslikeIndia.

ncreasingstockpilesofvegetableoils in IndiaandChinacouldmeandemand from thesedestinationsstarts todropoff,

hereisalsothequestionofhowlongvegetableoilpricescanwithstandthedownwardpressurefromcrudeoil,withwhicht

reusuallycloselyaligned.

UPPLY:BlackSea: InUkraine,thesizeofthenewsunflowercrop isstilluncertain,witharea forecastsranging from4.5

ectaresto5.5mlnha.TheUSDAforecastthecountryssunseedproductiontodropby14%comparedwith2013/14to10

onnes,whilesunfloweroiloutputwaspeggedtodropby4%to4.26mlntonnes.Exportsofsunfloweroilarealsopeggedto

y4%to3.7mlntonnes.Ukrainessunoilexportsduringthefirstfourmonthsoftheseason(JulythroughOctober2014)ros

early40%comparedwiththepreviousyearto1.3mlntonnes.

U:TheEUistheonlymajorproducerforwhichtheUSDAforecastariseinsunflowerseedproductionthisseason,upby2%

.04mlntonnes.Asaresult,importsbytheblocarepeggedtofallby22%forsunseedand18%forsunoil.

rgentina: The USDA forecast a 19% rise in sunflower seed output for Argentina in 2014/15 to 2.5 mln tonnes, with su

roductionalsoexpectedtoriseby12%to1.06mlntonnes.However,mostofthatincreasewillbeabsorbedbyhigherdome

onsumption,withseedexportsprojectedtoremain levelwith2013/14butoilexportsareforecasttogrowby7%to375,

onnes.HarvestingofthenewcropstartedearlierthismonthinthenorthernregionsofChacoandSantaFe,butduetorai

armerswereonlyabletogetaround5%ofthecropoffthefieldsbyJanuary8,AldebaranCommoditiessaidinareport.The

otmuchseedleftoftheoldcrop,andproducersaretryingtosellanyremainingstocksbeforethenewcroparrives,withpr

tablefornow,itadded.

EMAND: India: Sunflower oil imports by India continued to run at a strong pace during the last two months of 2014, w

94,032tonnesbookedinNovemberand151,626tonnesinDecember.Thiswas52%morethanduringthesametwomont

earearlier,accordingtotheSolventExtractorsAssociationofIndia.Pricesforsunfloweroilfellby2%inDecembertoUSD

ertonne(CIFIndianport),narrowingthedifferentialbetweensunoilandsoybeanoiltoUSD37pertonne.Soybeanoil,w

astraditionallybeenmoreexpensivethansunfloweroil,hasbeentradingatadiscounttosunoilsinceOctoberduetostr

emandandtightsuppliesforsunoil.Localsourcessaidthatsunoilretailpriceshaverisenbyaround8%sincethebeginnin

hecurrentoilyearonNovember1,whichcouldleadconsumerstoswitchtothenowcheapersoyoilandrestrictimportso

hecomingmonths.Stockpilesofcookingoilshadgrownto38days localdemand,comparedwithnormal levelsofaround

ays.Importsshouldslowdownbecauseofthesestockpiles.

hina:InNovember,Chinaimported1,253tonnesofsunflowerseedfromKazakhstan,athreemonthhigh.However,import

unflower

oil

only

came

to

4,419

tonnes,

a

fraction

of

the

amounts

seen

earlier

last

year

in

the

summer.

For

the

yeaovember2014,sunoilimportsroseby20%yearonyeartoaround430,000tonnes.

U:AlthoughEUsunseedproductionisforecasttobemarginallyhigherin2014/15,thebloccouldstillsee increaseddem

orsunoilimportsduetoanexpectedslumpinglobaloliveoilproduction.Traditionalcookingoilconsumersmightbeforce

witchtosunoilasoliveoilproductionisforecasttowitnessadropof27%thisseasonduetobadweatherandpestdamag

heworldsmainproducers,SpainandItaly.

RICEOUTLOOK: Competition among vegetable oils is likely to remain tough in the near term due to large global oils

upplies, especially soy. Furthermore, vegetable oil prices are almost certain to follow crude oil down eventually, at leas

omeextent.However,ontheupside,tightersuppliesofsunflowerseedandsunoilthisseason,alongwith itspopularity

ooking

oil,

should

give

it

a

competitive

edge

and

ensure

that

prices

remain

relatively

stable

for

near

future.


4/7



ORWARDCURVE

570

580

590

600

610

620

630

640

650

660

670

680

690

700

Spot Feb15 Apr15 Jun15

Monday Tuesday Wednesday Thursday

e forward curve has shifted from flat contango to steep

ckwardation in last session. The basis has corrected in last

ssion and is at Rs 31 compared to 26.10. The spread for

nuaryFebruaryclosedatRs24.95comparedto23.70.

ORWARDCURVE

300

350

400

450

500

550

600

650

Spot Feb15 Apr15 Jun15


eForwardcurvehas movedon the left.The spread January

bruaryclosedatRs14comparedto21.is59comparedto92

astweek.FEDstockof17000MTpluswillkeeptheJancontract

der pressure. We expect the spread to widen till Rs 90. We

wrecommendtobookprofit.

Spread 20Feb 20Apr 19Jun

Spot 31.00 55.95 72.45

Feb15 24.95 41.45

Apr15 16.50

TURESMARKETANALYSIS SOYBEAN SPREAD(FEBAPR)

OYBEAN

FINEDSOYOIL

arehousestocks:MustardseedwarehousestocksatNCDEXis9577MTcomparedto11137MTwith0MTinprocess.Theb

inedtoRs607comparedtoRs585inprevioussession.

Spread 20Feb 20Apr 19Jun

Spot 0 14 29

20Feb 14 29

20Apr 15

Soyoil:FebruaryApril

20

10

0

10

20

30

40

50

1N ov 8Nov 15Nov22N ov29N ov 6D ec 13Dec 20Dec 27D ec 3Jan 10Jan 17Jan 24Jan 31J a

2015 2014 2013 2012 2011

Soybean:FebruaryApril

150

100

50

0

50

100

150

200


5/7



ORWARDCURVE

200

350

500

650

800

950

100

Spot Apr15 May15 Jun15


Spread 20Apr 20May 19Jun 20Jul

Spot 607 574 518 475

20Apr 33 89 132

20May 56 99

19Jun 43

TURESMARKETANALYSIS(Continued.)

USTARDSEED

OT:

MUSTARD

Seed

SOYBEAN

The forward curve on Thursday has moved on the left. The

spread for AprilMay closed at Rs 33 compared to 35. 46

compared to 556 in previous session. We recommend selling

an and buying April at the spread of Rs 790810. We expect

hespreadtonarrowtillRs575550withatrailingstoplossof

800

500

200

900

600

300

0

300

600

900

200

500MustardSoybeanSpotSpread

pot spread of Mustard seed and Soybean continued its

ptrend in lastweek.ThespreadmadeanewhighofRs1000

nd corrected. In last trading session the spread closed at Rs

79comparedto648.stradingatRs585comparedtoRs432

previoussession.

Mustardspread:AprilMay

100

80

60

40

20

0

10Nov 30Nov 20Dec 09Jan 29Jan 18Feb 10Mar 30Mar 19

2011 2012 2013 2014 201


6/7



Soybean

Soyoil

Mustardseed

SpotFebisshowingacarryof0%inprevious

sessioncomparedto24%.

SoybeanFebAprisshowingacarryof16%.

Soy oil JanFeb is at a carry of 42%. We

expected this carry to widen buy it has

narrowed. keeping the price structure in

backwardation.

Mustard seed SepOct was at carry of 118%.

We

recommend

buying

Sep

and

selling

Oct

withatargetof105%of fullcarry.Currently

thecarry isat16%.Werecommendtobook

profits.

20Apr 607 154 0%

20May 574 206 0%

19Jun 518 259 0%

20Jul 475 313 0%

20May 33 46 71%

19Jun 89 93 96%20Jul 132 141 94%

19Jun 56 47 120%

20Jul 99 95 104%

20Jul 43 49 88%

BaseContract Contract Spread FullCarry %

of

Full

Carry

Spot

APR

MAY

JUN

20Fe b 31 7 0%

20Apr 55.95 23 0%

19Jun 72.45 38 0%

20Aug 73.3 54 0%

20Apr 24.95 15 0%

19

Jun

41.45 30 0%

20Aug 42.3 45 0%

19Jun 16.5 14 0%

20Aug 17.35 29 0%

20Aug 0.85 15 0%

Contract Spread FullCarry %ofFull

Carr

Spot

Ja n

Fe b

Apr

Base

Contract

20Feb 0 44 0%

20Apr 14 132 11%

19Jun 29 223 13%

20Aug 50 316 16%

#N/A #N/A #N/A #N/A

#N/A #N/A #N/A #N/A

20Apr 14 89 16%

19Jun 29 179 16%

20Aug 50 272 18%

19Jun 15 91 17%

20Aug 36 184 20%

20Aug 21 94 22%

Spread FullCarry %ofFull

Carry

Spot

FEB

APR

JUN

BaseContract Contract


7/7


aimer

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sepossessionthisdocumentmaycomearerequiredtoobservetheserestrictions.

materialisforthepersonalinformationoftheauthorizedrecipientandwearenotsolicitinganyactionbaseduponit.Thisreportisnottobeconstruedasanofferto

tation of an offer to buy any commodity or commodity derivative to any person in anyjurisdiction where such an offer or solicitation would be illegal. It is for the

mation of clients of Kotak Commodity Services Limited. It doesnt constitute a personal recommendation or take into account the particular investment objectives,

tions,orneedsofindividualclients.

havereviewedthereport,and inso faras it includescurrentorhistorical information, it isbelievedtobereliablethough itsaccuracyorcompletenesscannotbegua

herKotakCommodityServicesLimited,noranypersonconnectedwithit,acceptsanyliabilityarisingfromtheuseofthisdocument.Therecipientsofthismaterialshou

owninvestigationsandtaketheirownprofessionaladvice.

and value of the commodity referred to in this material may go up or down. Past performance is not a guide for future performance. Certain transactions includ

vingcommodity

derivatives

involve

substantial

risk

and

are

not

suitable

for

all

investors.

Reports

based

on

technical

analysis

centers

on

studying

charts

of

acommodi

ementandtradingvolumeasopposedtofocusingonacommoditysfundamentalsandassuchmaynotmatchwithareportonacommodity'sfundamentals.

donothaveany informationotherthaninformationavailabletogeneralpublic.Thereport isbasedon informationfromsourceslikerespective industryassociations,

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theinformationdiscussedinthismaterial,theremayberegulatory,compliance,orotherreasonsthatpreventusfromdoingso.Prospectiveinvestorsandothersarec

anyforwardlookingstatementsarenotpredictionsandmaybesubjecttochangewithoutnotice.Ourproprietarytradingmaymaketradingdecisionsthatareinconsis

ecommendationsexpressedherein.

ndouraffiliates,officers,directors,andemployeesworldwidemay:(a)fromtimetotime,havelongorshortpositionsin,andbuyorsellthecommoditiesmentionedher

ngagedinanyothertransactioninvolvingsuchcommoditiesandearnbrokerageorothercompensationoractasamarketmakerinthecommodity/(ies)discussedherei

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analystforthisreportcertifiesthatalloftheviewsexpressed inthisreportaccuratelyreflecthisorherpersonalviewsaboutthesubjectcommodityandnopartofh

pensationwas,isorwillbe,directlyorindirectlyrelatedtospecificrecommendationsorviewsexpressedinthisreport.

artofthismaterialmaybeduplicatedinanyformand/orredistributedwithoutKotakCommodityServicesLimitedspriorwrittenconsent.

stered

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Commodity

Services

Ltd.,

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house,

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4696 Customer care: 180010266776 www kotakcommodities com

FaiyazHudaniAsst.VicePresident Oilseeds, Grains &Cotton [email protected]

SudhaAcharya Sr.ResearchAnalyst Sugar,Chana&Spices [email protected]

MadhaviMehta Sr.ResearchAnalyst Bullion &Energy [email protected]

PriyankaJhaveri Sr.ResearchAnalyst BaseMetals [email protected]

DharmeshBhatiaDeputyVicePresident [email protected]

TapanPatel Sr.ResearchAnalyst [email protected]

ShabbirKayyumiResearchAnalyst [email protected]

FundamentalTeam

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oilseeds daily 23012015

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