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Price Outlook for NCDEX Traded Agricultural Commodities till November End

Abhijeet Banerjee
Abhijeet Banerjee
castor
Castor Seeds

The guar complex basket was down during the greater part of the week, which ended recently. Approaching November series expiry had attracted short sellers to give deliveries against their holdings, because of which pressure was seen in the derivatives. The primary direction was bullish in the oil complex mainly because of strength in global markets and steady demand in the retail markets. The oil complex basket has been trending upwards since the beginning of the week.  Mentha oil was range bound throughout the week amid subdued trading interest.

Castor seed lost the bullish momentum as spot demand weakened against rising prices. Increase in the All India arrivals kept sentiments weak in domestic markets of cotton and pushed Kapas, Cotton and Cotton cake futures lower. Turmeric was seen trading with a sideways trend during the recently ended week. Similar trends may be observed this week considering the existing trade atmosphere. Buyers are waiting for further clarity over this year’s crop size. Dhaniya and Jeera posted respectable gains over previous week but weekend profit taking eased the trend to some extent. Lower sowing acreage reports supported these counters.

Weekly Price Trend of The Spot Market

For the week November 15 to 19, soybean markets of Indore had appreciated by Rs 400-500 rupees on a quintal. At present, the offers at Kota and Indore are averaging between 6100-6200 Rs/qtl. Speaking about edible oils, Soybean refined oil was up Rs10-12 on10 Kgs, with prices at Kandla and Indore hovering between Rs.1235 and 1250 per 10 Kgs respectively. Jeera prices at Unjha had gained by approximately 700 Rs/qtl while prices were up Rs 200/qtl at Jodhpur mandi. Turmeric at Nizamabad was up Rs 100/qtl week on week with offers averaging at Rs7200/qtl towards the later part of the week. Dhaniya was up Rs.200/qtl at Gondal and Rs.300/qtl at Jaipur.

Traded offers of Dhaniya are currently heard between Rs.8000-8400/qtl. Kapas on the other hand fell by Rs.50/qtl in mandis of Kadi and Rajkot and traded offers have gone to Rs.1600/20 kgs. Cotton cake prices fell by Rs.50-100 on a quintal in mandis of Akola and Kadi. Traded offers are presently heard between Rs.2450-2550/qtl in these mandis.

Guar gum was down Rs.700/qtl week on week while Guar seed prices had depreciated by Rs.250-300 on a quintal. In Jodhpur and Bikaner mandis, guar seed is presently traded around Rs.6250-6275/qtl and Guar gum near Rs.11600-11800/qtl.

Price outlook of the derivatives market till Nov End: 

The broader fundamentals are bullish for Guar and Guar gum, therefore we expect the futures prices to attempt for a moderate recovery during the remaining part of November. In the coming sessions, the trade situation in global markets of edible oils like soya oil and palm oil shall govern the price trend of these edible oils in the domestic markets. Stockists are regularly purchasing soybean as prices have started rising. However, in case the new season arrivals improve then there will be a reversal in the futures market. The poultry units are keen over importing soymeal as these products are now available at lower offers then the domestic soymeal. If these deals are materialized then it will also push the futures lower. At prevailing offers, the sellers of Mentha oil are not willing to dispose of their stocks. This will keep the downward movement in check in the present term.

The arrivals of castor are lower these days and prices have turned cheaper now, therefore attractive for fresh purchases by the stockists. This will help futures in bouncing back from current levels soon. Market talks indicated that the sowing area of Jeera and Dhania may fall by 25-35 percent roughly. Buying intentions are stable in these counters while planting area is adversely affected this year. Therefore the upward trend may continue in Jeera and Dhaniya in coming days. Speaking about Kapas and Cotton, as the new season arrival pressure may persist this week also, we will not observe any sharp recovery for the remaining days of the month, unless exports/domestic demand picks up.

What Does The Charts Convey

Soybean December Contract (Friday’s Closing Price 6066): The short term view is positive. Prices will face resistance in moving upwards, as long as fail to sustain above 6400 on a closing basis. Under this situation, the fall can be towards 5750-5800.

Soy Oil December Contract (Friday’s Closing Price 1234.9): The short term view is positive. The December contract will continue trading with the upward bias, as long as it sustains above 1220. Immediate resistance is near 1240, and if it closes above then look forward to levels of 1255-1260. A close below 1220 will push the contract towards 1200-1205.

Jeera December Contract (Friday’s Closing Price 16530): The short term view is positive and the broader view has turned positive lately. The December contract will continue trading with the upward bias, as long as it closes above 16000. Immediate resistance is near 17200-17400. Since the contract is overbought, there will be a downward correction towards 15500-15600 if it closes below 16000.

Dhaniya December Contract (Friday’s Closing Price 8610): The upside momentum had eased on Friday. Nevertheless, the December contract will trade with an upward bias for the remaining part of this month, unless it fails to sustain below 8420-8440. The contract shall face strong resistance between 9000-9200. In case prices hold above 9000 then expect levels of 9800-9900.  

Turmeric December Contract (Friday’s Closing Price 7262): The price trend of December turmeric was sideways throughout the week. We expect a similar behavior till November end. The contract is expected to trade between 6800-7800 as of now.

Guar seed December Contract (Friday’s Closing Price 6285): The derivative is under influence of the sellers presently. The price direction was downwards throughout the week and we may see prices moving lower towards 5900-6000 in coming days. But the broader view remains upwards therefore if the December contract manages to sustain above this level, then a moderate upside retracement can be expected towards 6800-6900

Guar gum December Contract (Friday’s Closing Price 11827): Guar gum had trended lower throughout the week and the December contract is down nearly 3.5 percent week on week. The broader view remains wards therefore if the December contract manages to sustain above 11000-11200 on a closing basis, then a moderate upside retracement can be expected towards 12400-12500.   

Cotton Cake (Cocud) December Contract (Friday’s Closing Price 2485): December cocud had ended the week on a soft note with prices down nearly 2 percent over last week. We may see prices moving lower towards 2400-2420 in coming days. This is a strong support region, so if the December contract is able to close above 2400 for a day or two, then an upside pull towards 2575-2585 can be expected.  

Castor seed December Contract (Friday’s Closing Price 6362): December castor had lost the momentum lately and was down roughly 2.5 percent week on week. The short term as well as the long term outlook is positive. As long as the December contract closes above 6050-6100, chances for an upside move towards 6650 shall remain high. 

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