CPO futures trading seen rangebound

Crude palm oil (CPO) futures prices on the Malaysia Derivatives Exchange will likely to be in rangebound trade next week, despite rising concerns over tight supply, dealers said.

A dealer said the dry season may continue to curb some production.

HWANGDBS Vickers Research Sdn Bhd, in its research note said however, the low inventory level would likely be reversed next month.

"We expect the stock/usage ratio to reverse itself next month as yields continue to recover, despite seasonally drier weather starting May," said the research house.

It said exports continued to grow in March, rising 7.7 per cent on a month-on-month basis, to 1.394 million metric tonnes.

This, coupled with higher domestic consumption, reduced inventory from 1.789 million metric tonnes to 1.655 million metric tonnes, the lowest in six months.

Correspondingly, the stock/usage ratio was 9.1 per cent at end March, it noted.

However, this rising production as well as expectation that soybean oil prices will continue to decline, is likely to drag prices down.

"Recent palm oil price movements confirm our view that lower soybean oil prices will continue to drag down palm oil prices," it explained.

Soybean and palm oil prices always move in tandem as both commodities compete for similar export destinations.

For next week, the support level would be at RM2,500 per tonne and immediate resistance at between RM2,550 to RM2,560 per tonne.

CPO prices were mostly lower on trading days during the week but ended firmer on Friday.

On a Friday-to-Friday basis, May 2010 declined RM13 to RM2,540, June 2010 lost RM66 to RM2,528 and July 2010 eased RM12 to RM2,518.

However, total turnover dropped to 58,345 lots from 82,169 lots last Friday while open interests declined to 71,486 contracts from 77,683 contracts last week.

On the physical market, April South declined RM15 to RM2,560 per tonne. --Bernama

India Rapeseed Crop May Fall 15% on Drought, Heat, Martell Says

India’s rapeseed harvest, the world’s third-biggest, may fall 15 percent because of dryness followed by excessive heat, said agricultural meteorologist Gail Martell, head of Martell Crop Projections.

“A 15 percent reduction from last year seems possible with poor yields and reduced planted area,” Whitefish Bay, Wisconsin-based Martell said in an online report yesterday. “Rapeseed was ravaged by winter drought and heat stress in the top producing state, Rajasthan.”

Only China and Canada grow more rapeseed than India, according to data from the U.S. Department of Agriculture. The oilseed is used to produce vegetable oil, animal feed and biodiesel.

The USDA last week cut its outlook for Indian rapeseed production in 2009-10 to 6.4 million metric tons, compared with 6.6 million tons forecast a month earlier and the prior year’s harvest of 6.7 million tons.

Increase production of oilseeds, states told

The central government has asked the states to increase the production of oilseeds as the requirement of the crop in the country is continuously increasing.

'The domestic production of oilseeds, despite various efforts, is unable to keep pace with the demand,' said a letter sent by the agriculture ministry to the state governments last month asking them to forward the annual action plan for 2010-2011 under the integrated scheme of oilseeds, pulses, oil palm and maize (ISOPOM).

'Therefore, there is an urgent need to bring additional area under oilseeds besides measures to enhance per unit area production of these crops,' said the letter.

Oilseeds stand next only to food grains in agricultural production. Bulk of the oilseed and vegetable oil production in the country is derived from the nine annual oilseed crops - groundnut, soybean, rapeseed and mustard, sunflower, sesamum, safflower, niger, castor and linseed.

However, this time pulses was excluded from the ISOPOM as the central government converged the pulses programme under National Food Security Mission from April 1.

'This has been done to avoid duplication as pulses is the major component in the National Food Security Mission, launched from 2007-08 Rabi season,' said a ministry official.

MARKET TALK: India Soybean Futures Likely Down; High Stocks

Apr 15 2010 8:48Am

0316 GMT [Dow Jones] India April NCDEX soybean futures likely to open down on high oilseed, vegoil stocks; as of April 1, total edible oil stocks at ports 700,000-800,000 tons, while stocks in pipeline 500,000-600,000 tons. India holding more than 5 million tons of soybean, 7 million tons of rapeseed, 6 million tons of cottonseed, 2 million tons of groundnut for crushing. "Global markets (CBOT, BMD) are steady, hence local weak factors will rule the session today," says Indore-based trader; expects soybean in INR2,010-INR2,055/100 kg, soyoil in INR446-INR452/10 kg band; soybean last closed down 0.3% at INR2,041.50, soyoil 0.4% lower at INR449.75

Mustard oil output drops, as mills find seed prices too high

Futures speculation blamed for poor arrivals at mandis; may lead to less sowing next season.

A steep rise in the price of mustard seed, due to “heavy speculation” in the futures market, has led to oilseed crushing units reducing their operating capacity from an average of 50 per cent last year to 40 per cent. Squeezed between higher mustard seed prices and lower oil prices, the mills are currently abstaining from active procurement of the raw material and its processing.

The Central Organisation for Oil Industry and Trade, the apex trade body, estimated the country’s mustard seed output at 6.4 million tonnes (mt) in 2009-10 (October-September) as against 6.7 mt a year earlier. Leading traders, however, estimate output at 6-6.2 mt this year.

It is farmers and aggregators, says the industry, who have been unwilling to offload their stocks to mills in anticipation of higher future prices. For related reasons, arrivals in state mandis have been poor, though the peak season is currently on. Trade sources say total daily arrivals are 300,000-350,000 bags (a bag has 85 kg) in state mandis, as against 6,00,000 bags a day at the same time last year. Rajasthan, the largest mustard seed producer, is witnessing arrivals of about 2,50,000 bags a day as against 3,50,000 bags at the same time last year.

The result has been a surge in seed prices and an alteration in the economics of crushing. At an average 40 per cent of oil content in seed, about 2.5 tonnes of mustard seed is required to produce a tonne of oil. Therefore, at a price of Rs 28-29 per kg of seed, the cost of mustard oil production is around Rs 73 a kg. With a variable conversion cost of Rs 2-2.5 per kg, the final cost of production rises to over Rs 75 a kg, against the current price of mustard ‘kachi ghani’ of Rs 55-58 per kg (at stockists).

According to Deviprasad Khandelia, managing director, Khandelia Oil and General Mills, “Mills are waiting for prices of mustard seed to decline to at least Rs 450-460 per 20 kg to make crushing viable.”

The price for mustard seed delivery in July rose sharply on the National Commodity and Derivatives Exchange on Tuesday to Rs 528.65 per 20 kg, as compared to Rs 526.15 per 20 kg on Monday. The commodity was quoted at Rs 497.95 per 20 kg a month earlier.

There has also been a problem of labour shortage in harvesting the crop for growers, says the industry. Standing crop cannot be left for long in the field. All this is likely to translate into lower sowing in the next season, said a senior official with K S Oils, the largest mustard seed crusher in the country.

Rabi oilseeds production increases 2.3%

Our Bureau

Chennai, March 17

Oilseeds production during rabi may have increased 2.3 per cent but the overall production for the oil year ending October is likely to be 9.2 per cent lower, according to estimates made by the Central Organisation for Oil Industry and Trade (COOIT).

According to the estimate made public at the 31 {+s} {+t} All-India Rabi Seminar of Oilseeds, Oil Trade and Industry, rabi oilseed production is likely to be 94.6 lakh ones (lt) against 92.3 lt last year.

Rapeseed/mustard will be the major contributor with its output estimated at 63.2 lt against 62 lt a year ago. Groundnut production is also seen higher than last year at 18.3 lt (17 lt), sesame seed is seen up at 3.3 lt (2.8 lt) while that of linseed is 1.6 lt (1.3 lt).

The production of sunflower may be lower at 6.7 lt (7.5 lt) and that of safflower at 1.5 lt (1.7 lt).

The rise in production comes despite a fall in the coverage of oilseed. According to COOIT, the area under oilseeds this rabi has been 94.07 lakh hectares (lh) against 98.31 lh a year ago.

The area under rabi groundnut increased to 10.17 lh (9.52 lh) but that of rapeseed/mustard dropped to 65.07 lh (66.87 lh). Overall oilseeds production this season (November 2009-October 2010) is now projected at 329.2 lt against 338.4 lt a year ago. The Solvent Extractors Association, in a statement, said rapeseed/mustard production was likely to increase despite lower acreage as the weather condition was favourable.

Going by the production estimate, the vegetable oil availability from the oilseeds, including cottonseed and copra, would be 78.8 lt against 82.1 lt last year.

COOIT also revised the estimates of the kharif crop by pruning the production of toria to 1 lt from 1.5 lt and that of cottonseed to 91.5 lt from 94.6 lt. Castorseed output, however, has been raised to 9.3 lt from 8.5 lt.

Mustard Seed up on stern supply

AHMEDABAD (Commodity Online): Mustard Seed rise on account of restricted supply in the market. Mustard oil prices up by Rs 50 per 100 kilogram in Delhi on Tuesday on limited supply in the market.

Fresh demand from local traders in the wake of reports of higher prices in producing centres also aided the firm trend.

RM Seed May futures Contract opened at Rs.499.10, made a high of 504.50 and a low at 497.50 during the trading session. The volume recorded for the day is 84440 and the Open Interest for the day is 115370.

“Technically, RM Seed is expected to move down in long run on fresh arrival, but it can go up on short covering in short run. The 14 days RSI is at 51.42,” said Sudarshan Goel, Commodity Analyst with Commodity Online.

Currently, 300,000-350,000 bags (1 bag = 85 kg) of mustard seed arrived daily across the country. Arrivals in Rajasthan, the largest mustard producing state in India, were at 200,000-250,000 bags.

“Fundamentally, “fresh arrival of Mustard Seed may lead to fall in prices, however arrival is thin but Once it (arrivals) starts increasing, prices will come under pressure. So one can make short position for long term,” said Goel.

Oilmeals & Non-edible Oil Prices

Oilmeals Prices (fas/fob pmt in bulk)
Soymeal - US$ 373-375 pmt Kandla/Bedi port
Rapeseed Meal - US$ 252-255 pmt Kandla port
Peanut Meal - US$ 370-372 pmt Bedi port
Rice Bran Meal - US$ 175-177 pmt Kakinada port

Castor Meal - US$ 77-78 pmt Kandla port

Wholesale & futures Prices in Indian market

Cottonseed Oilcake (spot prices) : US$ 228-230 per ton
Futures (per ton): US$ 224.5 - April ; US$ 227.5 - May ; US$ 230 - June

Castor Oil (wholesale price)
Comm - US$ 1400-1410 Ex-Kandla
FSG - US$ 1425-1430 Ex-Kandla

Mentha oil - US$ 1644 per 100kg (spot market rate)
Futures Contracts (per 100kg) : April - US$ 1485 ; May - US$ 1499 ; June - US$ 1501

डॉलर की गिरावट से खाद्य तेलों का आयात बढ़ने की संभावना

रुपये के मुकाबले डॉलर की कमजोरी से देश में खाद्य तेलों का आयात बढ़ने की संभावना है। शुक्रवार को रुपये के मुकाबले डॉलर घटकर 44।28 के स्तर पर आ गया। भारतीय बंदरगाहों पर चालू महीने के पहले सप्ताह में ही 42,310 टन खाद्य तेलों का आयात हो चुका है। हालांकि आयातित खाद्य तेलों के दाम पिछले दो महीने में बढ़े हैं लेकिन घरेलू बाजार में मांग के मुकाबले उपलब्धता ज्यादा होने से कीमतें घटी हैं। उधर अर्जेटीना और ब्राजील में सोयाबीन की पैदावार में भारी बढ़ोतरी का अनुमान है। ऐसे में घरेलू बाजार में आगामी दिनों में खाद्य तेलों की कीमतों में मंदे की ही उम्मीद है।एनएनएस के रिसर्च एनालिस्ट टी. के. सिंह ने बताया कि रुपये के मुकाबले डॉलर कमजोर होने से खाद्य तेलों के आयात में बढ़त होगी। इससे घरेलू बाजार में तिलहनों की कीमत पर दबाव पड़ेगा। बंदरगाहों पर इस समय करीब 10 से 10.5 लाख टन खाद्य तेलों का स्टॉक है जबकि करीब छह-सात लाख टन के ताजा सौदे हो चुके हैं। इसका शिपमेंट चालू महीने में पहुंचने की संभावना है। साल्वेंट एक्सट्रेक्टर्स एसोसिएशन के मुताबिक फरवरी में आयात 8 फीसदी घटकर 671,293 टन रह गया था लेकिन डॉलर कमजोर पड़ने से आयातकों को अच्छे पड़ते लग रहे हैं। इसीलिए आगामी महीनों में आयात ज्यादा होने का अनुमान है। आयातित खाद्य तेलों की कीमतों में पिछले दो महीने में तेजी आई है लेकिन इस दौरान घरेलू बाजार में दाम घटे हैं। 29 जनवरी को बंदरगाह पर आरबीडी पामोलीन का भाव 785 डॉलर प्रति टन था जो बढ़कर 835 डॉलर प्रति टन हो गया। इसी तरह से क्रूड पाम तेल का भाव भी 760 डॉलर से बढ़कर 805 डॉलर प्रति टन हो गया। अमेरिकी कृषि विभाग (यूएसडीए) की रिपोर्ट के अनुसार अर्जेटीना में सोयाबीन का उत्पादन बढ़कर 530 लाख टन होने का अनुमान है तथा वहां पर अभी तक 27 फीसदी फसल की कटाई हो चुकी है। इसी तरह से ब्राजील में भी सोयाबीन का उत्पादन पिछले साल के 570 लाख टन से बढ़कर 670 लाख टन होने की संभावना है। ब्राजील में भी अभी तक 50 फीसदी फसल की कटाई हो चुकी है। दिल्ली वैजिटेबल ऑयल ट्रेडर्स एसोसिएशन के सचिव हेमंत गुप्ता ने बताया कि मांग के मुकाबले बाजार में खाद्य तेलों की उपलब्धता ज्यादा है इसीलिए मांग कमजोर बनी हुई है। इंदौर में सोयाबीन रिफाइंड तेल का भाव 13 मार्च को 436 रुपये प्रति दस किलो था जो घटकर 430 रुपये प्रति दस किलो रह गया। इस दौरान जयपुर में सरसों तेल का भाव 456 रुपये से घटकर 454 रुपये, बिनौला तेल का भाव मुंबई में 441 रुपये से घटकर 424 रुपये और कांडला बदरगाह पर क्रूड पाम तेल का भाव 372 रुपये से घटकर 362 रुपये तथा आरबीडी पामोलीन का भाव 395 रुपये से घटकर 386 रुपये प्रति दस किलो रह गया।

India March Vegoil Imports Down 1.3% On Higher Stocks

MUMBAI (Dow Jones)--India's vegetable oil imports during March fell 1.3% from a year earlier to 632,868 metric tons due to higher imports in the past few months and large stocks at ports, the Solvent Extractors' Association of India said Tuesday.

While imports slowed in the past month, overall imports increased during the first five months of the marketing year that began Nov. 1 as cheaper imports led to lower domestic crushing.

Total vegetable oil imports during November-February rose about 4.3% to 3.75 million tons, the trade body said in a statement.

A strong Indian rupee against the dollar, coupled with zero import duty on crude vegetable oils and marginal duty on refined vegetable oils, also raised imports during peak crushing season, it added. In India, the peak oilseed crushing season is October-February.

Edible oil stocks at ports also piled up due to the higher imports. As of April 1, total edible oil stocks at ports were at 700,000-800,000 tons, while stocks in the pipeline were at 500,000-600,000 tons, the trade body said.

Higher imports also left uncrushed domestic oilseeds at a record high, which stood at more than 18 million tons.

As of April 1, total soybean stocks are estimated at 4.5 million tons, rapeseed stocks at 6 million tons, groundnut stocks at 2 million tons and cottonseed stocks at 6 million tons.

Imports of edible oils may remain low in coming months if the processing of local oilseeds picks up, the trade body said.

Edible oil imports in March totaled 612,293 tons, marginally up from 609,553 tons a year earlier, it

Mustard prices may ease from April on fresh arrival

Mustard seed prices were likely to ease in April as arrivals were expected to increase then, but would continue to stay firm for now due to lower-than-normal arrivals and good demand in physical markets, said traders and industry officials.

The price of mustard seed in the key Jaipur market in Rajasthan is about Rs 2,550 per 100 kg currently, and was expected to rise to Rs 2,600 by March-end, they said.

“Prices of mustard seed have been rising since the last few days mainly as arrivals are not up to the mark. Once it (arrivals) starts increasing, prices will come under pressure,” said Jyoti Kanda Aggarwal, general secretary of Mustard Oil Producers Association. As soon as the arrival pressure builds up, mustard prices could fall by Rs 100 per 100 kg from the current levels, said Anil Chattar, trader at Jaipur-based Madhur Trading Agency.

Vijay Solvex Managing Director Vijay Data said the medium-term bearish outlook was being mirrored by mustard seed futures on the National Commodity and Derivatives Exchanges, which was showing a mild backwardation, a scenario where far-month contract trades at a discount to current month.

“I feel that more than the fundamentals, speculative activity in futures market has pushed up mustard prices. Arrivals are lower this year but at the same time the crop size is good, and carryover stocks are high,” said Deviprasad Khandelia, managing director, Khandelia Oil and General Mills.

The Central Organisation for Oil Industry and Trade (COOIT) has estimated India’s mustard seed output in 2009-10 (October-September) at 6.4 million tonnes, as against 6.7 million tonnes a year ago. Although the figure is lower on year, it is substantially higher than earlier industry estimate of 5.9 million tonnes. However, some traders say production might not be as high as COOIT’s estimate and will be around 6-6.2 million tonnes.

“Mustard crop is likely to be about 5 per cent lower than COOIT estimate and even yield is not expected to touch last year’s level,” Aggarwal said.

Lower arrivals

Arrivals of mustard seed are lower this year due to delay in harvesting and holding back of stocks by farmers.

Currently, 300,000-350,000 bags (1 bag = 85 kg) of mustard seed arrived daily across the country, sharply down from about 600,000 bags at this time of year, said traders and industry officials.

Arrivals in Rajasthan, the largest mustard producing state in India, were at 200,000-250,000 bags, down from over 300,000 bags a year ago, Chattar said.

“This year harvesting was delayed by 15 days as February was cold in most mustard growing regions. Moreover, farmers have seen higher prices, so they are holding back their stocks. Hence, arrivals have been lower,” Aggarwal said.

Paras Jain, a Jaipur-based trader said mustard harvesting had been delayed as wheat harvesting was underway.

“Arrivals were lower also because of festivals like Holi and Navratri in March, during which trading activity in spot markets is subdued,” Khandelia said.

The other factor that has affected the pace of arrivals is labour shortage in most growing areas.

“Usually, we can see 600,000-650,000 bags of mustard seed arriving in the last week of March. But, this year we will be able to see this quantum of arrivals in the first or second week of April,” Khandelia said.

In Haryana, mustard seed is arriving in small quantities, but supply will be higher in the coming days, in turn undermining prices, he said.

“I am expecting arrivals pressure to rise in April and continue in May as farmers bring more stocks after Akshaya Tritiya on May 16,” Data said.

Normally, wedding season started with Akshaya Tritiya and farmers raised money around this time of year by selling produce, Data said.

Demand scenario

Buying interest in mustard seed from stockists and millers was good, as demand for mustard oil and mustard seed meal was firm, said traders and industry officials.

“Demand for mustard oil cake is good in domestic markets. We are also getting fair amount of export enquiries. This is supporting prices,” Chattar said.

India’s mustard seed meal exports in January-February were around 120,000 tonnes as against 55,000 tonnes during the same period a year ago.

However, crushers were not buying mustard seed in large quantities due to poor margins, which would weigh on prices in the long run, Jain said.

“Farmers are not selling their produce at lower levels. So, crushers are buying seeds at higher rates but realization from sale of mustard oil and meal is not good. Hence, their margins are hit. I think, just like soybean, crushing in mustard might be lower this year and we will end up with high carryover stock,” Data said.

The main factor that would determine prices of mustard seed in the future was the rate at which the farmer was willing to sell his produce, said industry officials.