Sugar traded almost flat at the major cash markets across the country on poor demand and negligible trading activity. Road blocks in north India during the pilgrim season in Haridwar are restricting supplies to the market. Sugar producers are incurring heavy losses in October 2006–September 2007 sugar season, as against the 20% margins in sugar sales earned during the previous year. Co-generation and distilleries are emerging as the growth drivers for sugar producers across the country, offsetting the negative trend in revenues from their core sugar production activity. The higher sugarcane acreage in the current kharif sowing and higher production estimates for the next season are likely to keep the prices subdued through the next season till 2009. Shifting focus to raw sugar exports and mandating ethanol doping in commercial auto-fuels are recommended to bail out the ailing sugar sector.
A long dark candle with some buying at lower levels is formed in the charts, with prices once again falling below the EMAs. Stochastic has emerged from oversold region, which is a positive indication. RSI however has turned lower in the neutral zone. MACD is rising slowly in the negative region. Sugar is likely to trade weak in the next trading session, following a firm opening with possibility of a late rebound.
Revival of monsoon and increased acreage points towards higher cane production.
Bihar maize traded flat at Rs.826/qtl in Delhi mandis on some demand from Haryana poultry units amidst steady arrivals of around 4 motors from Bihar. Hybrid maize arrivals increased to 5 motors from U.P. mandis and quoted at Rs.810/ qtl. Maize traded marginally up at Rs.705/qtl in Naugachia mandi of Bihar on lower arrivals of around 80 bags. According to trade sources around 5% of the stock has been damaged in the state due to prevailing flood situation. Demand from Kolkata is supporting the prices. The export demand from Bangladesh remained subdued. Pune mandis witnessed weak tone on good arrivals during the day. Area under kharif maize has increased to 6.68 million hectares so far as on 03.08.07 as against 6.15 million hectares during last year. Southern India is likely to contribute significantly higher during Kharif 2007.
A long bodied dark candlestick has formed on the charts, showing strong selling pressure in the market. Prices have fallen well below the EMAs and MACD continues to slump in negative zone, indicating medium-term weakness may continue. Stochastic and RSI have fallen further into oversold region. Some support is possible at the 740 levels, which marked the previous low, but a fall below it could lead to more selling. Maize futures are likely to trade bearish after a steady to weak opening.
While South India features normal to better rains, Monsoon is reviving in Central and North India.
Guar seed and guar gum prices in Jodhpur market improved during the Tuesday’s trade on some demand from millers against lower arrival, while the prices of guar seed remained unchanged on subdued trading activity. Demand for the by-product of guar seed (Churi and Korma) featured in the market and consequently demand from processors also emerged. Sources reported that the Jaisalmer district in Rajasthan received overnight heavy rains on 6th August and sowing of the commodity has started there from the very next morning. There are also reports of drizzles in some other parts of Rajasthan like (Nokha, Bikaner, Sriganganagar, Hanumangarh etc.). Also IMD predicted for rains over the South Rajasthan from 8th August onwards. Thus, considering the above factors prices are expected remain weak. Total arrivals at the most of the major markets in Rajasthan further declined marginally and stood at around 2000-2100 bags.
The long hollow candlestick shows firmness in the market. MACD and EMA remain bearish for medium-term. Stochastic shows some signs of recovery in the oversold zone. So bounce back from these levels cannot be ruled out. RSI turned up in the neutral region. Market is expected to trade range bound with firm bias.
As per IMD’s prediction Rain/thundershowers are likely over South and East Rajasthan in North Western India.