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Sentiment bullish on agri prices for next 3 months; here are short-term targets for 10 commodities

The futures market rightly shot up for most counters on apprehensions of lower productivity and crop damage.

August 29, 2020 / 05:32 PM IST

Ajitesh Mullick

As per reports from the IMD, as on August 28, 2020, the monsoon rains in South and Central India have been a massive 22 percent and 18 percent above normal, respectively.

Meanwhile, in North-West India, a huge deficiency of 11 percent was reported. Floods in many parts of India and low rains in the remaining parts – both ensured damage to the sown kharif crops. It also needs to be noted that our country as a whole, is now heading towards excess rains with 9 percent above normal already. Till a few weeks back, it was just at the normal mark.

The early 'warning' signals came from SOPA, which mentioned 10-12 percent crop damage reports from Madhya Pradesh for Soybean. MP, Maharashtra and even the Southern states, being the major producer of many kharif crops, this brings apprehensions of losses to more other crops being grown in these regions. The crucial states in North-West (led by Rajasthan) kept showing a huge deficient rain. That too is likely to adversely affect the sown crops there.

The futures market rightly shot up for most counters on apprehensions of lower productivity and crop damage. Apart from that is the Festive season demand that is hotting up the prices further. Exports that had remained on the lower side due to coronavirus during the 1st half of the year, too, are expected to rise rapidly till the winters – aided further by a firm Dollar versus Rupee and rising crude oil prices.

Close

We give the revised estimates for our targets for the Agri counters till mid-September. Previous buy targets have all been met/exceeded.

Chana September: Rs 5,400 per quintal

Guarseed September: Rs 4,600 per quintal

Guargum September: Rs 7,000 per quintal

Jeera September: Rs 15,120 per quintal

Turmeric September: Rs 6,800 per quintal

Dhaniya September: Rs 7,400 per quintal

Soybean September: Rs 4,400 per quintal

Mustard seed September: Rs 5,600 per quintal

Refined Soybean Oil September: Rs 920 per 10 kg

CPO September: Rs 790 per 10 kg

Please note that with prices having risen a lot, some intermittent profit booking is always possible. Any rains in North-West India too may have short term bearish impact on prices. But these effects will be temporary only. We have been maintaining a bullish trend for last 3 months. We maintain a bullish trend for the next 3 months also.

The author is VP - Retail Research at Religare Broking Ltd.

Disclaimer: The views and investment tips expressed by investment expert on Moneycontrol.com are his own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Ajitesh Mullick is the VP Retail Research at Religare Broking.
first published: Aug 29, 2020 11:23 am

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