Agri Outlook: Jeera may trade up low inventories .

Market review
Spice complex on the National Commodity and Derivatives Exchange came under pressure due to profit sales after Saturday's gains

Fundamental factors
Pepper
Pepper fell amid subdued demand as most buyers stayed Cautious. Pepper prices, after gaining 35% from a low of 16,100 rupees per 100 kg on Jun 17 to reach a high of 21,719 rupees on Jul 22, are witnessing corrections. The pepper output in Karnataka, grown principally in coffee estates, is estimated to be an improvement over last year, when it was estimated at little over 15,000 tonnes.

Arrivals in the Kochi spot market improved to 20 mt. India Apr-Jun pepper export 4,650 mt, down 5% on year on year basis. The spot pepper unchanged at Rs 203 per kg for the Garbled Pepper in the Kochi market.

Jeera
Jeera futures declined sharply on Monday as speculators created fresh short positions. However the low inventory levels and low cost of India jeera compared with other producing countries may keep prices firm in the coming sessions. According to market sources the inventory level for jeera was around 1.4 mln bags (1 bag = 55 kg), down from the 1.7 mln bags in same time last year. India Apr-Jun jeera export 10,750 mt, down 20% compared to the same period last year. In spot market Unja, jeera prices were traded lower at Rs.14625 from Rs.14670 from the previous days.

Turmeric
Turmeric contracts also lost Saturday's gains with traders opting to book profits. Although the prices declined, overall tight supply may help the prices to recover in the coming days Demand from exporters may increase ahead of the Ramadan festival in September India’s Apr-May turmeric export 10,350 mt, up by 8% from same period last year. Arrivals in the Erode mandi surged to 6,000 bags from 4,500 bags. India Apr-Jun turmeric export 14,600 tn, down 11% from same period previous year.

According to market sources, heavy rains in some of the growing areas hampering supply in the spot markets may also help the prices firm up.

SOY COMPLEX
Market review
Edible oil complex fell sharply after sharp rise over last few weeks. The soy bean August contract fell more than 3 percent, recording biggest daily fall since launch of contract and ended at Rs2012 levels. Soy oil August contract also fell sharply to Rs475.6 on huge long liquidation.

Outlook
Area under kharif edible oil seeds estimated at 129.49 lakh hectares till third week of July against 123.88 lakh hectares in last year. Area under soy bean is estimated at 80.28 lakh hectares, down from 81.53 lakh hectares during the same period last year. However, rainfall across soy bean growing areas is expected to benefit the already sown crop and has eased concerns of fall in output.

CBOT soy bean futures fell sharply yesterday below 1000 cents and currently trading at 995 cents. For the day ahead, soy bean and soy oil futures are expected to remain weak on continued long liquidation.

Others
Market review
Chana
Chana futures fell sharply on huge liquidation supported by weakness in most of the agriculture commodities. The active contract August fell nearly 3 percent and closed at Rs2317 levels. Spot prices at Delhi remained steady at Rs2350 per quintal.

Guar seed
Guar seed futures fell more than 3 percent on huge selling pressure followed by heavy rains in western parts of the Rajasthan. The active contract August NCDEX lost over Rs75 and closed at Rs2377 levels.

Outlook
Chana
Prices of most of the pulses have declined in recent days followed by better rains across growing states and higher kharif acreage estimates. As per agriculture department estimates, area under kharif pulses stood at 57.22 lakh hectares against 50.45 lakh hectares in last year.

Market is also cautious ahead of parliament session, where government is expected to table food security bill in the parliament. Better rains during kharif season are favorable for sowing of chana in rabi season. Spot prices of chana are quoting weak at Rs2320 per quintal at Delhi. For the day ahead, chana futures are expected to extend correction, however, bargain buying can be seen at lower levels.

Guar seed
Most parts of the guar seed growing states have received rains in last couple of days, which is very beneficial for the delayed sowing activities. Sowing takes place till end of July in western parts of Rajasthan, where guar seed is major crop. Howver, overall decline in area may limit major decline in prices in long term. As per market sources, guar seed output is expected to increase to 50 lakh bags, but still lower than normal output. For the day ahead, guar seed futures are expected to remain under pressure due to continued selling pressure following rains in northwest region.

Source : commodityonline.com