Cotton

Kapas NCDEX April
The trend has turned down. Exit all earlier long positions at market price and on rise to Rs. 519.70 – Rs. 521.30 as the opportunity arises. Re-enter long only on rise and close above Rs. 525.

29/03 08:42 Kapas khali NCDEX May

29/03 09:18 ICE cotton slips on weak commodities

28/03 17:19 Cotton lint steady in west India

28/03 16:20 Cotton lint tad up in north India

Market outlook: Edible oils
Mumbai - Market outlook for edible oils is as follows:- International scenario: CBOT Exchange - Soya oil futures Soya oil futures have opened weak and moved down, finally settled at lower end of the day.

29/03 08:41 Mustard Seed NCDEX May

29/03 08:40 Castor Seed NCDEX April

29/03 08:39 Soya bean NCDEX April

29/03 08:10 Ref Soya Oil NCDEX April

Cotton futures dip on US weakness
Mumbai - Tracking sharp overnight losses in the US cotton amid general commodities weakness, cotton futures on both the domestic exchanges went into negative area amid renewed selling by traders and...

29/03 08:34 Kapas NCDEX April

29/03 08:42 Kapas khali NCDEX May

29/03 09:18 ICE cotton slips on weak commodities

US, Australia want India to tango on Doha

Washington, March 29: The US and Australia have said they would work together to try to bring the Doha round to a successful close, but it would take many others countries, including India, doing their part.

"Takes more than two to tango," Australian Prime Minister Kevin Rudd said at a news conference with President George W Bush here on Friday. The Doha round of world trade talks, now in its seventh year, was a major topic of their conversation.

"Takes a lot of people to tango when it comes to the Doha Round - combination of ourselves and the Cairns Group (of agricultural exporters led by Australia), the United States, the Europeans, Brazil, India, others," he said.

The US and the European Union both face demands to make deep cuts in their agricultural subsidies and tariffs, but want major developing countries such as India and Brazil to open their markets in exchange.

Negotiators have been working in Geneva toward a possible ministerial-level meeting in April or May, where it is hoped a long-awaited breakthrough would occur.

"My own view is that if ever the global economy needs a psychological injection of some confidence in the arm, it's now, and that can be delivered by a positive outcome on Doha," Rudd said.

"But what we have agreed, again, as strong, long-term supporters of free trade around the world, as one of the best drivers of global economic growth, is to work very closely together in the months ahead to try and get a good, positive outcome for Doha-good for our economy, good for the American economy, good for the global economy."

On his part, Bush said the US is ready to make significant agricultural concessions to reach a new world trade deal if other countries open their markets to more US exports.

"We're willing to make serious concessions on the agricultural front, but we expect other nations to open up their markets on manufacturing as well as services." Bush said. "I said it's possible to achieve a Doha round. He (Rudd), too, believes we should work to achieve a Doha round."

Bush said they had also talked about the need to work collaboratively to achieve an international agreement in which the US is at the table, along with developing nations like China and India.

"In order for there to be an effective, international agreement, China and India must be participants," he said.

"Here's an interesting moment for all of us to recognize that we can become less dependent, in our case, on foreign oil, and at the same time be good stewards of the environment," Bush said.

The President said he and Rudd had talked about the need to help developing nations improve their environment. "And one way that we can do so is to commit ourselves to tariff-free trade and technologies that promote low carbon energy.

"This is something we're spending a lot of money on in the United States, and we'll continue to do so because I happen to believe technologies will enable us to be good stewards of the environment and change our energy habits, which we need to do here in the United States," he said.

On Tibet, both Bush and Rudd repeated their call to China to exercise restraint and engage the Dalai Lama or his representatives in a informal set of discussions about future possibilities regarding internal arrangements within Tibet.

However, the Australian leader was more vocal about human rights abuses in China.

"It's absolutely clear that there are human rights abuses in Tibet. That's clear-cut. We need to be up-front and absolutely straight about what's going on. We shouldn't shilly-shally about it," he said.

Cotton futures close mixed
Mumbai - Tracking sharp overnight losses in the US cotton amid general commodities weakness, cotton futures closed mixed following renewed selling by traders during last session if the week on both exchanges.

29/03 10:21 Cotton futures dip on US weakness

29/03 09:18 ICE cotton slips on weak commodities

29/03 08:42 Kapas khali NCDEX May

29/03 08:34 Kapas NCDEX April

Sales slow on The Seam (21:27 GMT 28th Mar, 2008)
Cotton futures down on New York close (19:24 GMT 28th Mar, 2008)
Cotton futures move sharply lower (16:31 GMT 28th Mar, 2008)
Mostly clear conditions rule across US cotton belt (13:52 GMT 28th Mar, 2008)
New York futures about unchanged (13:05 GMT 28th Mar, 2008)
Cotcorp quotes (9:47 GMT 28th Mar, 2008)
Indian arrivals (9:20 GMT 28th Mar, 2008)
ZCE moves lower (8:37 GMT 28th Mar, 2008)
Some provincial output data in China (8:35 GMT 28th Mar, 2008)
CNCE moves lower (3:43 GMT 28th Mar, 2008)
Unsold cotton under China’s ADB loan (3:10 GMT 28th Mar, 2008)

March 28, 2008

By: O.A. Cleveland, Ph.D.

The daily 100 point trading range days are now common place for cotton futures. Additionally, 200 point plus range days are no longer unusual, to say nothing of limit up and/or limit down activity in the same day. That said, market volatility has seemingly cooled a bit, but will remain, from time to time, quite volatile. The nearby May contract has settled in the range of 72 cents, but is vulnerable to a slip to the 67-68 cent range. However, I am of the opinion that the 70-72 cent level will hold the bottom for both the May and the July.

Cotton fundamentals continue to be bearish for the old crop contract months and bullish for the new crops months. The current weak spot basis offers reflect the very bearish short term conditions of excessive U.S. and world ending stocks. The bearishness is further entrenched as certificated stocks, both certificated and those awaiting review, are in excess of 900,000 bales with prospects of climbing to 1.25 million.

Yet, fundamentals for the 2008-09 crop are bullish as world ending stocks could fall as much as 8.0 million bales and U.S. ending stocks could fall to between 3.5 and 4.0 million bales, down for an expected 9.8 to 10.0 million bales in the U.S. as of August 1, 2008.

It is the bridge between old crop prices and new crop prices that the market is attempting to locate. That is, how does the market get from the current 72 cents, basis May to the near 85, cents, basis December, a 13 cent difference. While the old crop is fundamentally very bearish and the new crop is bullish (notice the distinction between “very bearish” and “bullish”), there are bullish factors in the old crop market and some “potentially bearish factors facing the new crop December contract.

The weekly call sales report indicates that May and July call sales (mill price fixations or buying of futures) were 27,496 and call purchases (merchant fixations for growers or selling of futures) for the same two month period 3,819. Thus, required old crop buying far exceeds required old crop selling.

Spot market transactions have increased but growers continue to face a very weak basis. While the weak basis arrived with the highly volatile price activity during the first three weeks of March, it was the resulting liquidity crisis created in the cotton merchandising sector that led to the expanding basis. Additionally, the basis has been, and will continue to be weak due to the increasing level of carryover in the U.S. The new crop basis should narrow before such strength returns to the old crop contracts.

The sharp price correction of the past two weeks injected new life in the export market. However, do not expect anything more that “average” weekly sales unless the May slips to very near 70 cents. Weekly net export sales for the week ending March 20 totaled 451,800 RB, with Upland sales at 408.700 RB and Pima sales at 43,100 RB. The primary of buyers of Upland were China (191,200); Turkey and Indonesia. The primary buyers of Pima were China (31,300); India and Japan. Export shipments continue as the drag with respect to projecting higher annual exports as only 218,400 RB were shipped. Upland shipments were 198,500 RB and Pima shipments were 19,900 RB. The primary destinations for Upland were China (48,500); Turkey and Indonesia. The primary destinations for Pima were China (9,300); India and Indonesia.

Monday morning will bring us the USDA March Planting Intentions Report. Look for grower intentions to be near the National Cotton Council’s January estimate of 9.5 million acres. Intentions of 9.4 to 9.5 million acres will be slightly bearish while intentions of 9.3 million acres or less will be bullish.

Growers should remain tuned to their local basis level. Old crop basis will be slow to improve, thus, market with price advances, not declines.

NYBOT Cotton #2
Month
Click for chart Session Pr.Day Options
Open High Low Last Time Sett Chg Vol Sett OpInt
Cash - - - 73.81 * Feb 25, 09:53 - - - - - n/a
May 08 72.70 73.35 71.28 71.68 Mar 28, 17:15 71.68 -1.22 8461 72.90 112215 Call Put
Jul 08 76.02 76.52 74.51 75.11 Mar 28, 17:15 75.11 -1.08 4233 76.19 55921 Call Put
Oct 08 79.80 79.80 78.80 79.10 Mar 28, 17:15 79.10 -1.14 41 80.24 2326 Call Put
Dec 08 82.79 83.39 81.07 81.67 Mar 28, 17:15 81.67 -1.32 2933 82.99 88206 Call Put
Mar 09 85.34 85.34 83.50 84.20 Mar 28, 17:15 84.20 -1.30 119 85.50 7316 Call Put
May 09 - 84.95 84.95 84.95 Mar 28, 17:15 84.95 -1.40 3 86.35 553 Call Put
Jul 09 86.67 86.67 85.75 85.75 Mar 28, 17:15 85.75 -1.20 2 86.95 847 Call Put
Oct 09 - 86.15 86.15 86.15 Mar 28, 17:15 86.15 -1.20 - 87.35 69 Call Put
Dec 09 86.35 86.48 86.35 86.47 Mar 28, 17:15 86.47 -1.52 7 87.99 2753 Call Put
Mar 10 - 88.07 88.07 88.07 Mar 28, 17:15 88.07 -1.62 - 89.69 50 Call Put
May 10 - 88.57 88.57 88.57 Mar 28, 17:15 88.57 -1.62 - 90.19 - Call Put
Jul 10 - 89.07 89.07 89.07 Mar 28, 17:15 89.07 -1.62 - 90.69 1331 Call Put
Oct 10 - 89.57 89.57 89.57 Mar 28, 17:15 89.57 -1.62 - 91.19 7 Call Put
Dec 10 - 90.87 90.87 90.87 Mar 28, 17:15 90.87 -1.62 - 92.49 34 Call Put

Cane farmers may taste sweet victory in support price
31 Mar, 2008, 0440 hrs IST.................................

NEW DELHI: The government is understood to be considering revising upwards the statutory minimum price (SMP) for sugarcane from what was announced earlier this month, by including a profit margin for farmers reeling under the impact of a glut and a sharp drop in sugar prices.

The Cabinet Committee on Economic Affairs’ (CCEA) decision to fix the SMP at Rs 81.18 per quintal for the 2008-09 season was based on last year’s recommendations of the Commission for Agricultural Costs and Prices (CACP), the nodal body for suggesting crop support prices to the government. The CACP is yet to come out with its suggestions for this year.

Sources said for the first time in the history of sugarcane price support, the government may be gearing up to include a profit margin over the bare floor price. The CACP has yet to finalise this but indications are that the support price could now be above Rs 100 a quintal. The support price is applicable for a basic recovery of 9% subject to a premium of Rs 0.90 for every 0.1 percentage point increase in the recovery above that level.

Sources said the price is being calculated with new criteria, including a profit margin in the cost of production formula, land rental at prevailing market price, a 10% managerial cost, risk factors, transportation charges from field to factory etc. Even in sugarcane-rich Maharashtra, food minister Sharad Pawar’s home state, the support price being paid by cooperative mills to cane farmers is below production costs. The recovery rate in Maharashtra, though, is higher than in Uttar Pradesh.

The CACP held a meeting with all stakeholders, including farmers’ groups, mill owners and state governments, here on March 19. State governments told the Centre at the meeting that land under sugarcane had gone to other more remunerative crops on account of the disputes over support price between producers and mills. They also expressed apprehension that the entire sugar economy could be impacted adversely if the support price was not raised urgently.


The commission is expected to hold a conclusive meeting soon before submitting its recommendations to the agriculture ministry. Once approved, this would be the first official acknowledgement that farmers need more than survival-level remuneration for staying in business. “Even sugarcane farmers have to put children through school, pay hospital bills, spend on festival and personal occasions, keep up with information technology etc,” said Anil Singh of Kisan Jagriti Manch.

The massive output last season had dictated the low SMP and input prices have gone up manifold since then. Support prices for wheat (over 40% hike to Rs 1,000-odd/quintal) and rice have gone up significantly over the last three years in consonance with the marked increase in input prices. The global sugar situation has also changed.

In the legal battle between cane growers and sugar mills in various courts, the farmers are pushing hard for a profit margin in support price. Ironically, just three years ago, sugarcane farmers in Uttar Pradesh found themselves being paid many times over the prevailing SAP for their cane, thanks to low production and intense competition between private.

But since then, farmers have had to deal with the flip side of pure market economics and want a reasonable long-term support price formula. Sugarcane glut in the ensuing two years has meant plummeting support, plunging sugar prices, a government dragging its feet over ethanol-blended petrol and sullen sugar mill owners, paving the way for legal battles over support prices for cane.

Industries have since been pressuring the Centre for a lower SMP and contested the state’s right to politicise SAP or state-declared support prices such as that of Uttar Pradesh. In sugar glut years, even as other avenues of returns such as co-generation and ethanol production fail to take off sufficiently, paying out a high support price affects the profit margins of mills as it did recently even in the case of giants including Bajaj Hindusthan and Balrampur Chini.

On their part, farmers’ groups such as the manch (their experts pegged reasonable support at over Rs 140/quintal) have demanded from the CACP that to make sugarcane farming sustainable and to ensure farmers’ survival, a profit margin should follow Dr M S Swaminathan’s recommendations, ie cost of agricultural production plus 50% and that profits of cane by-products such as ethanol, molasses, bagasse, pressmud, power generation etc be shared with farmers on a 50:50 proportion by mills.

However, a government source asserted: “ There is a big variance between the sugarcane production price arrived at different quarters. The formula arrived at has to be fair to mills and to farmers to ensure a synergy in the sugar economy and for that, we have preferred the statistics of the directorate of economics and statistics, faulty though it may be.”

If there is one thing all the stakeholders are united on, it is that the unfairly high weight for sugar in the wholesale price index should be rectified immediately by the government. The bitter side of that was tasted in 2007 when the government banned exports to check inflation.

Further fall in refined palmolein
29 Mar, 2008, 1645 hrs....................

MUMBAI: Refined palmolein declined further on the oils and oilseeds market here today due to lack of buying enquiries coupled with lower Malaysian advices.

Castorseeds and its oil both moved down lack of enquiries from shippers and soap manufacturers. Castorseeds futures also declined in the absence of export enquiries.

In the edible section, refined palmolein fell by Rs 8 to Rs 560 from Rs 568 previously while groundnut oil ruled steady at Rs 725.

Turning to the industrial section, castorseeds bold fell by Rs 10 to Rs 2,740 from Rs 2,750 previously and castoroil commercial also eased by Rs 2 to Rs 578 from Rs 580 while linseed oil continued to rule steady at Rs 620.

In the futures section, castorseeds June contract opened lower at Rs 2,663 and dropped further to Rs 2,645 before closing at Rs 2,671 from the yesterday's closing level of Rs 2,684, showing a loss of Rs 13.