The Hindu Business Line : Futures market bullish on cotton, soya, urad

Riding on floods
Potato prices up 4.7 per cent to Rs 578 per quintal for September contract on MCX.
Turmeric witnesses marginal fall on NCDEX.
Renewed activity in urad on NCDEX.

Kolkata , Aug. 14

After a weeklong sudden activity influenced by widespread supply concerns due to floods across the agri-commodity basket, the futures market is expected to move on fundamentals in the short and medium term.

While a clear picture on crop loss is yet to emerge, market sources are bullish on tubular crops (such as turmeric and potato) and cotton, urad, groundnut and sugarcane due to floods.

Turnaround

Potato registered an unexpected turnaround last week, due to fears of crop failure in Maharashtra, with MCX (Multi Commodity Exchange of India Ltd) September contract registering 4.7 per cent rise to Rs 578 a quintal.

Turmeric, on the other hand, registered a marginal fall on NCDEX (National Commodity & Derivatives Exchange Ltd) last week, presumably due to contradictory reports on crop loss from traders at Sangli and Nijamababad — the two major centres — in Maharashtra.

Mr Vivek Bajaj of Mars Comtrade, however, expects a major upward movement in turmeric during the current week.

Rains in the main cultivation areas of Maharashtra, Madhya Pradesh and Andhra Pradesh have made commodity fund managers bullish on urad. The commodity witnessed renewed activity during last week registering over four per cent rise in prices on NCDEX.

Though it is expected that rainfall had affected soyabean crop in Maharashtra, in Madhya Pradesh it did not have any impact. Market sources expect upward movement in soyabean this week.

Commenting on the overall impact of floods, Kotak CSL Research said, "We are yet to get a clear picture of the damage due to floods. In case the root area of the crop is not affected, the yield will increase resulting in a significant downward correction in a number of commodities."

Despite showing impressive movements during last week riding on flood sentiment, market sources does not expect chilli to appreciate further this week.

Pepper, jeera

Beyond the flood sentiments, Kotak CSL holds contradictory views on pepper and jeera. While pepper is expected go up to Rs 1,500 levels, jeera is believed to have factored the supply concerns sufficiently and is due for a correction.

Jeera closed at Rs 8,093 on Saturday up by Rs 286 from the closing price on Monday. The intra-day movement was Rs 235 on Saturday.

Volatility back in wheat

After a brief slumber, wheat is back on the list of chart busters. The August contract on NCDEX ended on Saturday at Rs 891 per quintal.

According to Kotak CSL, the movement is attributed to international bullish trend in prices.