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June WrapUp

posted Jun 27, 2010, 12:16 AM by Unknown user   [ updated Jun 27, 2010, 1:12 AM ]
Bihar Maize is getting huge demand from Malaysia & Vietnam mainly due to the significant price advantage and fast shipment times. However the port infrastructure not upto the mark, is causing some bottleneck. But this has led good support to the prices of Bihar maize which now look to become more firm. Also the demand from Bangladesh is expected to strengthen once their local crop utilization is finished in a few more days. Bullish tendencies will prevail. 

Soybean continues its way downward. For the first seven months of the 2009-10 oil year, which runs from October to September, soymeal exports stood at 1.6 million tons, down 41% compared to the corresponding period previous year. Soybean prices are expected to trade lower on ahead of rain monsoon and better carry over stock this year as compared to last year and lower demand from solvent extractors. According to SOPA spokesperson and coordinator, Rajesh Agarwal, at present, markets are witnessing higher soybean supply. Avg daily arrivals of soybean were at 6,000 bags in Indore mandi and 70,000 bags in Madhya Pradesh (bag=100 kg). If this continues, the country could export around 8-10 lakh tons from June to September, he said.  Higher supply of soybean would bring down the prices that would enable domestic processing units to produce more soymeal, he said. This will make the Indian meals’ prices competitive like those of Brazil and Argentina, he added. Hence the momentum looks towards more bearishness. 

Rapeseed on the other hand, is waiting for fresh market queues. All India Mustard seed arrivals have declined in the past few days due to intense heat wave prevailing in north India mainly UP and Rajasthan which are among the most important states which produce RMseed. Lackluster trading activities are seen in physical market. It is true that market is trying to find the direction as is clear from the price movement which is hovering in a very narrow range. It is to be understood that until and unless we do not see any improvement in Soybean prices, it will be very hard for RMseed that it alone will continue to witness northward movement. Hence as soybean heads downward, rapeseed will also be expected to show bearish trends. 

Turmeric production in the major turmeric growing areas is expected to improve due to timely rainfall. Further, farmers have earned good profits from the previous crop sown. This will pressurize prices in the short term. Demand from the overseas and domestic buyers have reduced due to expectation that production will improve in the coming season. However, farmers and stockists are hoarding the stocks of turmeric in anticipation of further rise in the prices. This will provide support to the prices in the short term. Thus, prices in the near month may not fall sharply. Prices in the in the short term (till June) will depend on the demand from the overseas buyers and advancement of rains to the interior parts of India. In the medium to long term (July onwards) prices are likely to take cues from the stocks of turmeric with the stockists and progress of sowing of Turmeric. No clear bias can be confirmed at present.

For Cumin, firm trend was noted in Unjha mandi as a significant rise in demand was noted. There are expectations of exports rising further in coming weeks that can support the rates along with falling arrivals. There are reports that traders are not willing to sell at these low levels and are expecting some recovery in rates in coming days. Latest report from Spice Board of India indicates a rise in Spice exports in April-Feb period from 433,360 tonnes last year to 437,241 tonnes this year. Exports of Jeera fell from 49,500 tonnes to 42,500 tonnes. Overall neutral to bullishness is indicated.