Sugar
Sugar market was steady ahead of the government announcement regarding release of 44 lakh tonnes of sugar to be offloaded by mills as a free sale quote for the October-December quarter. The festive demand helped to firm the market which was balanced with sufficient stock available. The total availability has risen to 52 lakh tonnes. Union Agriculture Minister has ruled out any duty-free imports of raw sugar despite the lower expected production in 2008-09. The Minister said that opening stocks in the new sugar season is estimated to be about 11 MMt, while production was likely to be 22 MMt. This year, sugar sowing acreage has declined by 17% at 4.42 mln ha and production is also expected to be down by nearly 20% at 20-22 MMt. Traders expect volatility in sugar prices and with a weak bias.
Soybean
NCDEX November Soybean futures moved lower during the past week on account of weak sentiments of global market, harvesting pressure & higher production estimates of soybean. According to Soybean Processors Association of India (SOPA) estimates of soybean output is reported to 108.176 lakh tonnes, it is up by 14.19% as compared to 94.73 lakh tonnes last year. National productivity of soybean is estimated to be 1124 kg/ha for 2008 against 1070 kg/ha in 2007. The USDA pegged US soybean stock as on Sep 1st at 205 million bushels, which is much higher than recent USDA forecast of 140 million bushels. US soybean stock estimate surged only because the USDA revised their 2007 crop production forecast to 2.676 billion bushels, which was 91 million bushel above the previous estimate. Sharp fall in crude helped to drive the market lower on bio-diesel concern. Lower demand of soy meal from poultry Industry also provided support to bears in the market. November Soybean prices are expected to move down in coming week on above mentioned fundamentals with strong support of 1685/1630 and resistance 1890/1950.
Rubber
Rubber seems to be on a declining mode as it finished at Rs 106 per kg for RSS 4 on Saturday. In the beginning of the week itself rubber prices nosedived from Rs 121 to Rs 112. Domestic market sentiments reflected the movements in global rubber futures. Transactions have fallen with no quantity sellers. The domestic market is awaiting cues from TOCOM which reopens after the weekend holidays on Monday. Fresh arrivals have fallen since the market already surrendered a major part of its gains in the past few months.
Guar Seed
Guar futures remained weak during the initial days of the last week due to fresh arrivals of early sown Guar crop. However, as per our expectations, Guar futures bounced back from its strong support at around 1650 levels towards the end of the week. Rising demand at lower levels coupled with weakening rupee supported the prices on Friday. In the short term, increasing demand at lower levels amidst rising supplies with the fresh arrivals of early sown Guar crop may keep Guar prices in a narrow range of Rs. 1650-1750 per qtl. With the second spell of rains coming in at the right time in the growing areas, the crop could be on target to meet the initial estimate of 1.10 crore bags output. However, it will take another week or so before we can make the exact estimate of the crop. November contract is likely to trade higher in coming week with strong support of 1645/1620 and resistance 1780/1855 levels.
Black pepper Domestic black pepper market was dampened due to holiday mood prevalent in Kochi market. The main feature of the week was the emerging overseas buyer demand and supply shortage in terminal makets. Sellers have withdrawn from upcountry markets even as there was good enquiry from European and US buyers. Indian parity has declined and were offered at $3,100 per tonnes f.o.b. Globally all origins firm up. Vietnamese ASTA was being quoted at $3,300 per tonne. Pepper prices may get a life due to tight supply position and strong international demand. Pepper may trade firm and expect downside movements along the way.
(With analytical inputs from Angel Commodities, Mumbai)
