WEEKLY AGRI REPORT-14 July To 19 July 2014

Chana, or chickpea, futures ended higher helped by bargain-buying, though ample supplies and weak demand kept the upside limited. Lower level buying coupled with below normal rains and lower kharif pulses sowing till date supported prices. However, fears that the government may impose further stock limits to curb rising prices coupled with expectations of revival of the monsoon in the coming days kept prices under check. According to the Ministry of Agriculture, sowing of kharif pulses as on 4th July stand at 750,000 ha against 2,184,000 ha. Sowing of Tur, Urad and Moong stand at 188,000 ha 103,000 ha and 254,000 ha respectively. CCEA increased the MSP of tur and urad by Rs.50 to Rs. 4,350 each, while the MSP of moong was increased by Rs.100 to Rs.4, 600/qtl. Fears of tightening of stock limits, revival of monsoon and expectations of improvement in sowing of kharif pulses may cap the upside and pressurize prices at higher levels.  

Turmeric futures fell in starting of this week on profit-taking and as the monsoon revived in key producing southern states. Turmeric August futures traded in a mixed note on expectations of revival of monsoon coupled with weak demand in the physical markets on the back of poor quality crop arrivals and huge carryover stocks However, concern over drop in acreage for the current year will limit the major fall in turmeric prices. 
Indian oilseeds and soy oil futures extended losses , following weaker overseas markets and on sluggish exports demand for Indian soy meal. Soy meal exports from India fell sharply to 2,637 MT in June from 8.226 MT in May vs. 213,564 MT in June 2013. India's oil meal exports in 
June 2014 were 193K MT vs. 161K MT in previous month and 360K MT in June 2013India imported 1.02 million MT of veg oils in May vs. 819K MT in April and 892K MT in May 2013. India imported 654K MT of Palm oil, 174K MT of Soy oil and 178K MT of Sun oil in May 2014. U.S. soybean futures dropped to their lowest since early February as near-perfect crop weather across the U.S. Midwest buoyed hopes of record production. Bearishness continues in the CBOT soybean market and prices fell consecutively for the tenth session. Prices fell on expectations of a record high acreage and the favorable weather conditions which is supporting the soybean growth. 

USDA World Agricultural Supply and Demand Estimates, As on 11th July 2014: 
OILSEEDS: U.S. oilseed production for 2014/15 is projected at 113.1 million tons, up 5.0 million tons with higher soybean production accounting for most of the change. Soybean production is projected at a record 3,800 million bushels, up 165 million due to increased  harvested area. Harvested area, forecast at 84.1 million acres in the June 30 Acreage report, is 3.6 million above the June forecast. The soybean yield is projected at 45.2 bushels per acre, unchanged from last month. Soybean supplies are 180 million bushels above last month’s forecast due to higher beginning stocks and production. Soybean crush is projected at 1,755 million bushels, up 40 million reflecting increased domestic soybean meal disappearance in line with adjustments for 2013/14 and higher U.S. soybean meal exports that offset lower projected exports for India. Soybean exports for 2014/15 are raised 50 million bushels to 1,675 million reflecting record U.S. supplies and lower prices. U.S. soybean ending stocks are projected at 415 million bushels, up 90 million. If realized, projected stocks would be the highest since 2006/07.

Prices for soybeans and products for 2014/15 are all reduced. The U.S. season-average soybean price is projected at $9.50 to $11.50 per bushel, down 25 cents on both ends of the range. Soybean meal prices are projected at $350 to $390 per short ton, down 5 dollars on both  ends. The soybean oil price range is projected at 36 to 40 cents per pound, down 1 cent on both ends. 

Global oilseed production for 2014/15 is projected at a record 521.9 million tons, up 5.8 million from last month with soybeans and rapeseed accounting for most of the change. Global soybean production is projected at 304.8 million tons, up 4.8 million mostly due to higher production in the United States. Higher soybean production is also projected for Russia and Ukraine, both reflecting higher harvested area. Lower soybean production for India resulting from reduced harvested area partly offsets these gains. Harvested area is reduced based on planting delays resulting from the slow development of the monsoon in the main soybean producing states. Rapeseed production is raised for Canada based on higher planted area reported by Statistics Canada. Rapeseed production is also raised for Australia on higher area  and yield. Global oilseed ending stocks for 2014/15 are projected at 99.7 million tons, up 3.6 million mostly reflecting a sharp increase in U.S. soybean stocks. U.S. soybean crush for 2013/14 is raised 25 million bushels to 1,725 million on both increased soybean meal exports and domestic soybean meal use. Soybean exports for 2013/14 are projected at 1,620 million bushels, up 20 million reflecting record shipments through early July. Seed use is raised and residual is reduced based on indications from the June 30 Acreage and Grain Stocks reports, respectively. Soybean ending stocks for 2013/14 are projected at 140 million bushels, up 15 million.

Jeera Aug futures traded higher on Demand from the domestic as well as overseas buyers coupled with declining arrival pressure support prices. However, record output along with huge carryover pressurized prices at higher levels and settled 0.3% lower. Area under Jeera in Gujarat was reported at 455,000 ha as against 335,200 ha last year while about 390,000 ha were sown in Rajasthan. Geo-political tensions in Syria and Turkey have led to a supply crunch in the global markets raising supply concerns from the two major exporting countries. Export orders are 
diverted to India. Production is also expected to fall in Syria and Turkey due to crop failure. Exports of Jeera between Apr-Dec 2013 stood at 96,500 tn, up 89% as against 50,944 tn between Apr-Dec 2012. According to IBIS India’s Jeera exports have crossed 1, 00,000 tonnes till Feb’14. Production of Jeera in 2013-14 is expected around 45-50 lakh bags (55 kgs each), higher than 40-45 lakh bags last year. Domestic as well as overseas demand coupled with declining arrivals may support prices. However, comfortable supplies may cap the upside movement. 

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