Farm goods futures dip with rain

The futures prices of all agri-commodities like pulses, jeera, chilli, soyabean and soya oil have been on a decline, with the outlook on monsoon improving substantially.

These commodities have been clocking good volumes on the exchanges till recently. "The general outlook for all the agri-commodity prices is bearish with improved monsoons, signalling better crops," said Kishore Narne, head, research, Anand Rathi Commodities.

According to Sunil Ramrakhiani, head, commodities, IL&FS Investmart Commodity Brokers, although acreage in pulses like tur and urad are not reported to be very high, there is not much of crop damage in the areas covering pulses.

"This has changed the sentiment and triggered a fall in the prices of pulses," he said. Chana (gram) futures, too, are expected to be range-bound for the time being.

Trade sources pointed out that the shelf-life of chana was short and there might be a correction in the spot market in the coming days with flood waters receding in Madhya Pradesh, pulling the futures down.

The September chana futures have already seen prices falling from Rs 1919 on August 1 to Rs 1867. No significant change is expected, until the festival demand picks up in October.

There is good availability of chilli in the market, with low exports prospect because 2,50,000 tonnes of a Chinese surplus coming into the market and good production in other states. All these factors have led to the bearishness.

Refined soya oil prices are also declining due to reports of satisfactory rains in the 90 per cent of area in Madhya Pradesh being covered by sowing.

According to Soyabean Processors' Association (SOPA), sowing is accomplished in roughly 40-42 lakh hectares of land. The September contract of soya oil on the National Commodities and Derivatives Exchange of India (NCDEX) has seen a decline in prices from Rs 380.30 per 10 kg to Rs 372.05 in the last 10 days.

The lack of physical demand for jeera is attributed to the steep correction in the prices over the last 10 days. In addition, there is ample stock coming in from other regions, including Vietnam.

The price of September futures on the NCDEX fell from Rs 7,380.50 per quintal on August 1 to Rs 7,128.00 yesterday. The prices are expected to remain subdued.