Rubber
Rubber prices have climbed steadily this week in India with prices initially moving up to Rs 103. Thereafter, taking cues from domestic and international futures, spot ruer prices rose to Rs 106.50 on covering purchases although there were no fresh enquiries from tyre sector by weekend. Rubber in physical markets looks set to reach Rs 110 in near term.

At National Multi Commodity Exchange of India,RSS 4 September futures to Rs 109.21 (107.57), October to Rs 110.50 (108.35), November to Rs 111.25 (109.09) and December to Rs 111.98 (109.99). Cool weather is expected to help India produce more rubber from September and help attain the production targets set for this year. Production is estimated to advance 0.3 percent to 867,000 metric tons in the 12 months to March 31, after falling 13 percent to 209,825 tons in April to July because of dry weather. Therefore, rubber prices which have maintained high levels this year and rose 42% may see some cooling of in the medium term.

At TOCOM rubber futures advanced to a two-week high on Friday as rising crude oil prices and equities raised hopes of economic recovery and increased prospects for automobile sector. February delivery rubber rose to 212.4 yen a kilogram ($2,265 a metric ton) before settling at 210 yen. Analysts pointed out that Rubber Futures may test the recent high of 214 yen once again. Meanwhile, Indian rubber futures and spot markets are in for some gain in the coming weeks as major manufacturers are expected to enter the market following the closing gap between domestic and international prices. September futures at NMCE is likely to trade very close to Rs 110 levels.

Soybean
Soybean (NCDEX Sep contract) futures opened the week at Rs 2343 a quintal and moved in a narrow range of 2282 -2364 levels amidst weak sentiments during the last week on account higher sowing acreage of soybean and revival of monsoon rains. Mr. Ashok Sethia, President, Solvent Extractors Association (SEA), requested Mr. Sharad Pawar, Hon,ble Minister of Agriculture for exemption of edible oils, Oilcacks and Oilmeals from VAT and APMC Cess to reduce the cost edible oils and feeds. At present, there is 4% VAT on oilseeds, edible oil, oilcakes and oilmeals which is a heavy burden on the oilseeds sector and ultimately translates into higher prices of edible oils, oilcake, oilmeals and feeds for animal & poultry and lesser realisation to the farmers for their produce. As per Agriculture Ministry of India till Aug 20, 2009 area covered under domestic kharif oilseeds area has been covered 154.11 lakh hectares against 168.26 lakh ha during corresponding period a year ago, as on August 20, 2009. However, area under soybean is reported slightly higher at 94.49 lakh hectares against 94.13 lakh hectares in the corresponding period last year. The US Census Bureau released its Soybean Crush Report on Thursday, which is a higher than expected estimate for July at 129.4 million bushels, although this was down substantially from 140.1 million bushels in June. In the coming week, prices are expected to move range bound with strong support at 2265/2235 and resistance is seen at 2355/2400 levels.

Chana
Chana Futures tumbled at NCDEX last week following imposition of stock limits in major pulses producing states in the country and concerns about largest chana producer Madhya Pradesh planning to impose stock restrictions.
News of better rains in pulses growing areas also added to the weak sentiment. Chana, a winter-sown pulse is cheaper than kharif pulses such as tur, urad and moong.

In the Delhi spot market, the price rose by 31 rupees to 2,300 rupees after trading at 2275 levels a few days ago. Major pulses producers like Rajasthan, Maharashtra, Andhra Pradesh and Gujarat have imposed stock limits and Madhya Pradesh is expected to follow soon. Indian Meteorological Department on Friday forecast rains in Maharashtra and Karnataka in next three days leading to bearish sentiment.

On Friday, the September futures traded weak till afternoon but gained 0.75% at Rs 2,283 while October Futures gained 1.21% to 2,418 on increased demand in spot markets. The September futures was trading at 2329 in the beginning of the week.

Chana futures may trade steady to weak in the coming days as imposition of stock limits for traders in Madhya Pradesh will lead to more supplies entering the market.

Pepper
Pepper spot prices after witnessing firm movement declined tracking Pepper futures. Demand from the overseas has declined marginally as the buyers are following a wait and watch stance. Indian prices of pepper in the international market are quoting at competitive levels at around $3,150/tonne whereas Brazil, Vietnam and Indonesia are being quoted at $2,900/tonne $3,250/tonne and $3,150 /tonne. Thus, buyers may place fresh orders once the prices stabilize. Vietnam has lower stocks of pepper left at around 20-30 thousand whereas India has stocks of around 10-15 thousand tonnes. However, exports of Pepper during April to July 2009 declined to 6,750 tonnes as compared to 9,430 tonnes in the same period previous year.

Pepper futures after touching a high of Rs.16,140/qtl declined by 11.1% and made a low of Rs.14,360/qtl on account of profit booking. Prices in the short to medium term (September to October) may find support due to lower stocks of pepper and in anticipation that the buyers may place fresh orders ahead of winter and festive season. In the long term (November onwards) pepper prices may be determined by the pepper international prices of major origins and pepper crop in 2010 in two major growing nations ie. in India and Vietnam. Technically, pepper prices have strong support at 14,200/qtl and thereafter at Rs.13,890/qtl and resistance may be seen initially at Rs.15,300/qtl and thereafter at 15,900/qtl.

Wheat
Wheat Futures ended steady on Friday as government is expected to offload procured grains in the open market and lower rice output led to September Futures contract at NCDEX to gain 0.85% at Rs 1,167 per 100 kg. In the beginning of the week, the contract was trading at Rs 1,163 levels.With government announcing that imports are likely for food grains that witness shortfall has capped further gains. Government reportedly is planning to release 3 million tonnes of wheat in the open market which will stabilize prices. India has procured 25.13 million tonnes of wheat in 2009/10 marketing year that began in April, up from 22.6 million tonnes in the previous year.Prices of the grain have been moving up in the last few days on hopes of higher demand driven by a drop in rice sowing due to deficient monsoon rains. India’s rice output is expected to drop 15-20% in 2009/10. Wheat prices are likely to remain stable in the coming days.

Meanwhile US Wheat Futures continue to remain bearish on ample world supplies and lacklustre demand. Deliveries on Monday are expected to be heavy at around 2000-5000 contracts at CBOT.U.S. Commodity funds sold an estimated 2,000 contracts at the CBOT in the weekend. CBOT December wheat closed down 7 3/4 cents at $4.95 1/4 a bushel, on Friday. (With inputs from Angel Commodities, Mumbai)

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