A number of agri contracts hit the upper circuit on the National Commodity & Derivatives Exchange (NCDEX) on Tuesday, amid concern over a possible hit in kharif sowing due to deficient monsoon rainfall.
Kapas (raw or seed cotton) contracts for delivery in February and April rose four per cent to trade at Rs 1,016 and Rs 1,020 per 20 kg. Soybean contracts followed, with the commodity for delivery in October and November jumped to trade at Rs 3,270 and Rs 3,182 a quintal. Coriander for June delivery rose to settle at Rs 3,678 a quintal.
Chana, jeera and mustard seed also rose for near-month delivery by 2.2 per cent, 2.7 per cent and 2.8 per cent, respectively, to trade at Rs 4,160 a quintal, Rs 13,400 a quintal and Rs 3,816 a quintal.
The monsoon rainfall has been 36 per cent and 50 per cent below average in the first and second week of the current season, posing a threat for kharif sowing. Timely advent of the monsoon is imperative, as a majority earn their livelihood from agriculture and are largely dependent on these rains for farming, in the absence of other irrigation facilities. A delay in rain would result in loss of moisture in the soil, leading to lower yields and delay in planting of kharif crops.
A report by SMC forecasts kapas futures for delivery in April 2013 to trade range-bound at Rs 965-990 due to slow mill buying in the domestic market. The fact that is supporting the counter is the decreasing sowing progress. Government data showed cotton sowing was completed as on June 15 in Maharashtra in around 131,100 hectares against 270,200 hectares last year in the same period.
The report further estimates soybean futures for delivery in July to trade higher, testing Rs 3,510-levels. With demand from plant operators improving, deliveries ruled higher at Rs 3,470-3,510 a quintal. Soymeal quoted at Rs 30,200 a quintal on improved export demand. In the domestic market, it ruled at Rs 28,500-29,000. In mandis across Madhya Pradesh, soyabean ruled at Rs 3,330-3,420 a quintal.
Malaysian palm oil futures closed higher yesterday, after Greece's pro-bailout parties won closely-watched elections over the weekend, preventing the Euro zone debt crisis from escalating and reviving risk appetite.
“Turmeric prices are expected to trade upwards on account of rise in demand from stockists and lower output expectations. Prospects of a rise in daily arrivals may limit any sharp gains ,” said an analyst with YES Bank. Turmeric arrivals were steady at 3,000-4,000 bags (a bag is 75 kg) at Nizamabad but declined to 4,000-6,000 bags at Sangli. At Erode, arrivals were steady at 7,000 bags early last week, increasing to 11,000 bags on Friday. Spot rates were steady and quoted at Rs 32-35 per kg across major trading centres.
Going forward, turmeric futures (July) are expected to trade within a narrow range, facing resistance near Rs 3,940 a quintal levels. There were announcements for procurement of turmeric at Rs 4,000 a quintal, but none has been made so far; growers expect far more. The upside moves in cardamom futures might remain restricted, owing to weakness in spot markets as arrival of quality materials dropped sharply at auctions held in Kerala and Tamil Nadu.
Meanwhile, pepper futures for delivery in July are expected to trade with a bearish bias and remain below Rs 40,500 levels, as stockists who do not have processing facilities are liquidating because of the rains. Arrivals from the primary markets on Tuesday were 12 tonnes and the entire quantity was traded at Rs 379-383 a kg.
