The year 2018 was a mixed bag for agriculture commodities. On one hand, pulses breached multi-year lows, while crops, spices, sugar, and cotton saw multi-year highs. Commodities are always vulnerable to external factors, such as global production, monsoon, irrigation, electricity pricing etc. In the second leg of 2018, the government’s efforts to save interest of the farmers have been at the center stage. In view of the election year of 2019, it can safely be assumed that these interests will continue to be at the center stage again for commodity market in 2019.
1. Soyabean – At the moment, it is trading at 52 weeks high and is highly likely to hold the momentum. China may also open its doors for imports from India and it will give a further push to prices. CMP 3600 Target price 4000.
2. Guargum – An increased demand and a deficit in supply side are the twin factors which have compelled us to be highly bullish on this commodity. Exporters like Supergums and Rajasthan Gums are buying heavily and some of them are even paying a premium on the produce. All this is happening while a reduced production and hence the prices are expected to shoot upwards.CMP 8200. Target 12000.
3. Jeera – India looks to hold its dominance in the spices segment. Jeera(Cumin) is one of the largest exported commodity(by volume) from the nation but increased production may be a restraint on the prices. We expect this commodity to stay rangebound, trading between 14000 to 22000.
4. Castorseed – November 2018 brought this commodity to the forefront after its prices jumped by 40% in 7-8 weeks. The driving factors have been low acreage in sowing and reduced production, driving prices upwards. Since then the momentum had been held and it has made us bullish on this commodity – CMP 5200, Target 6500
5. Chana – The sentiments on this commodity are not very strong as pulses are seeing some dark days. Reduced bets by traders on the back of easing demand in the physical market against adequate stocks position, mainly led to fall in chana prices. We expect it to be range-bound, with trading in the range of 3800-5000, CMP 4300.
6. RM Seed – The commodity has been declining, since the last October and has not been able to sustain any levels. We hold a firm bearish view on this commodity and expect it to slide further as the market sentiments are negative. CMP 3900 target 3400.
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