ISSUE DEC. 2019

MARKET ALL-TIME HIGH:MARKET ALL-TIME HIGH:OVER-PERFORMED OUT-PERFORMED?OR

ScopeKaliedo

EDITORIAL

Global equities have outperformed despite the volatility among the macro

numbers during the recent past. Except United States, major countries have

remained worried about their GDP growth outlook. The Brexit and US China

trade related uncertainties remained major worried factors. However ultra-

dovish policies from central bankers helped the emerging markets in terms of

investment flow. Indian equity benchmark again pierce 12000 mark while

Sensex is trading at record high,first time after May 2019. Market approached

all-time high, despite the falling GDP growth numbers, higher inflation,

sluggish consumer demand and weakness from manufacturing acuities.

Higher than expected Q2FY20 bottom line due corporate tax cut and forward

looking approach of market are two major reasons behind the stellar

ISSUE DEC. 2019

INDEX

EQUITY INSIGHT:

BULLION OUTLOOK:

AGRI OUTLOOK:

Nifty Hits 12000 mark: Over-performed or Out-performed?

Highlights of Recent Macro Data....................................................................................................................... 2

Q2FY20 Earnings.................................................................................................................................................. 3

Top Recommendations........................................................................................................................................4

With Focus on Global Macro Events................................................................................................................5-6

Currency Outlook: USDINR..................................................................................................................................7

With Focus on Weather Impact............................................................................................................................8

Soybean Outlook..............................................................................................................................................9-10

HIMANJAL BRAHMBHATT

performance. The financial sector has outperformed versus peers during the rally and pushed the

benchmarks at record high.

On commodity front, the bullion remained volatile on back of mixed news from global markets while base

metals noted recovery from lower levels as the sentiments improved post Britain elections and ongoing

trade talk between US and China. Crude prices gained momentum on back of the ultra-dovish policies

from central bankers and favorable outcome from OPEC members. As part of the deal, members agreed

to cut production of crude by additional 5 lakh barrel per day. Listing premium from world's biggest IPO

added further boost to the Crude prices. On Agri front, Oil and Oil seed complex remained on limelight as

jumped at record levels. Due to the higher prices of Oil complex, the commodities like Soybean and

Mustard seen remained on the focus and prices recovered sharply during the recent past. During the year

Crude palm oil jumped by almost 40 percent on back of lower production from sourcing nations.

During the upcoming month, now financial market likely to face a range bound on back of long holidays

from European and US counterpart. The stock and sector specific momentum likely to be seen before the

announcement of Union Budget 2020. So advisable to go for accumulation approach with recommended

picks as part of balanced investing approach.

Director - Financial Services

NIFTY HITS 12000 MARK: OVER-PERFORMED OR OUT-PERFORMED?

Indian equity indices challenged existing all time

high again during the first week of November.

Sensex also pierced important level of 40k and

made historical life time high at 40,749 on 8th

November. Sensex has overtaken existing high

June 04th high of 40,312. Nifty index pierced the

12,000-mark for the first time since June 03, 2019.

A series of measures taken from the Finance

Minister including corporate tax cut and removal

of additional surcharges, Better-than-expected Q2

results, RBI rate cuts, Ultra Dovish policies from

major central bankers and easing trade war

tensions have boosted overall investor

sentiments.

However, during recent past we had seen

weakness across the Indian macro picture. The

downgrade of outlook from Moody’s, soft auto

sales, lackluster consumer demand, falling GDP

growth numbers, higher input cost, rising fiscal

burden and contraction in manufacturing and

service sector activities are worried factors for

near term. The biggest question on the mind of

investors about out-performance or over-

performance in Indian equity indices.

Major macros announced during recent past

showing clear sign of slowdown and indicates

gloomy picture on future till the effect of recent

measures. The numbers of Industrial Production

and Core Infra output seen at worst levels since

FY2011. The Inflation pressure also started rising

trend as last month retail inflation came at 3.99

percent when index hits fresh high. The current

month retain inflation accelerated by 4.62

percent, highest in last 16 months.

The past GDP cam at 5.0 percent while Inflation is

almost at the GDP growth levels, indicates

negative sign for the outlook of economy. The

global factor will play an important role during the

upcoming quarters as series of factors expected

to have an impact on economy including Brexit, US

Sino trade uncertainties, Crude Prices and

currency momentum.

IIP (Index of Industrial Production):

The country’s factory output slumped to its lowest

level in nearly eight years, dragged down by sharp

contraction in capital goods, manufacturing,

mining and electricity sectors, and heaping fresh

pressure on authorities to reverse the

slowdown.The index of industrial production

contracted 4.3 percent in September, the second

successive month of decline after the fall of 1.4

percent during August.

Between April and September, the sector grew an

annual 1.3 percent compared to 5.3 percent YoY.

Within the Index, the capital goods sector saw a

contraction of 20.7 percent, compared with

shrinkage of 21 percent in August. The mining

sector contracted by 8.5 percent, compared with

growth of 0.1 percent in August. The

manufacturing sector contracted 3.9 percent in

September, compared with a contraction of 1.2

percent in the previous month. The electricity

sector, too, saw a continued contraction in

September, shrinking 2.6percent, compared with

a contraction of 0.9percent in August. In terms of

industries, seventeen out of 23 industry groups in

the manufacturing sector have shown negative

growth during the month of September 2019 as

compared to the corresponding month of the

previous year.

ISSUE DEC. 20191

2ISSUE DEC. 2019

Manufacturing and Service PMI:

Manufacturing activity in the country continued to

weaken in October, with factory orders and

production rising at the weakest rates in two

years. The cooling of manufacturing sector

conditions in India continued in October, with

both factory orders and production rising at the

weakest rates for two years. The PMI data for

October showed a continuation of manufacturing

sector weakness in India, "with sales growth

softening to the slowest in two years.

India’s service sector activity declined for the

second straight month in October, the first back-

to-back reduction since the second quarter of

2017-18, dragging business confidence to its

lowest level in almost three years. In the service

sector, anecdotal evidence highlighted subdued

demand conditions, competitive pressures and a

fragile economic situation. PMI fell to 49.2 in

October from 48.7 in September. In PMI parlance,

the reading below 50 denotes contraction.

GDP growth data:

The weaker-than-expected economic data

emerging from India points to a deepening

slowdown in Asia’s third-largest economy, where

private consumption, investments and exports

have all taken a hit. Global rating agencies like

World Bank, IMF, S&P and Moody’s cut the GDP

growth forecast of India for FY20 and FY21.

Domestic agencies also joined the economic

growth downgrades for India.

SBI report said the demand slowdown in the

economy is still significant and would take longer

time to recover. SBI slashed the nation's FY20

growth forecast to 5 percent from 6.1 percent.

Nomura massively cut its GDP forecast to a low 4.9

percent for the year from 5.7 percent earlier.

Fiscal Position:

To protect the industries and economy,

government have taken various steps, however

expected to have significant impact on fiscal

prudence of the nation. The GST collection of the

nation remained below 1 lk crore mark during

recent past, indicates the higher possibility of

revenue deficit. Recent slowdown and demand for

stimulus could raise the associated fiscal costs,

should the government need to support some

institutions and increase the risk that growth

remains too low to prevent a rise in the debt

burden.

Agencies like Fitch and Moody’s raised their fiscal

deficit concerns during the latest review of

economy. Fitch raised India's fiscal deficit forecast

to 3.6 percent of the GDP for this fiscal year, from

3.4 percent previously.

In October 2019, India's wholesale inflation

dropped to a 40-month low at 0.16 per cent. The

same month, the retail inflation rose to 4.6 per

cent, the highest in 16 months. The divergence

between the both indices widen on back of

differential among the weightage of articles. The

wholesale price index is measured by changes

happening in three broad sectors - primary

articles, fuel and power and manufactured

products. The CPI product categorization is

sharper and is bracketed under food and

beverages, pan, tobacco and intoxicants, clothing

Inflation:

Most Nifty 50 companies either met or surpassed

estimates in the July-September earnings season

after two straight quarters of muted performance.

Operating income of nearly half of the Nifty 50

companies seen improvement. Out of Nifty 50

companies 39 companies either beat or hit

estimates while 11 companies trailed market

estimates. Auto, Financials, Banks and selective

technology sector stocks seen outperformed on

earnings during Q2FY20, however Energy sector

stocks seen underperformed. Hero Motocorp,

M&M, Bajaj Auto, Maruti and Tata Motors beats

market estimates and all five constituents were

from Auto sector. On otherside Grasim, Dr Reddy,

Tata Steel, TCS and Yes Bank trailed market

estimates during the Q2FY20.

October breached the Reserve Bank of India's

medium-term target of 4percent for the first time

since July 2018 due to higher food prices.

Consumer Food price inflation, which amounts to

half of the inflation basket, increased to 7.89

percent compared to 5.1percent in the previous

month. Core inflation which excludes energy and

food items slowed to 94-month low of 3.47

percent in comparison to 4percent a month ago

reflecting the slowdown in the economy.

Meanwhile, pulses inflation shot up to

11.72percent from 8.4percent MoM and vegetable

inflation jumped to 26percent from 11.4percent

MoM.

The macro announcement in near past is a clear

red alarm for the economy, however the equity

indices seen at record high. The major reasons for

the out performance are: the forward looking

approach of market and the positive impact of

corporate tax cut on the Q2FY20 earnings.

Ongoing forward announcement of Q2 GDP

numbers, RBI interest rate decision and

Government reform process are major domestic

factor to consider. On global front the

developments related to US-Sino trade deal, US

macro announcement , Ch inese macro

announcement, Federal Reserve Monetary policy

and Britain elections expected to drive market

sentiments.

Q2 Earnings Heat Map

Nifty50 Companies

Q2FY2020 EARNINGS: TOPLINE

MUTED, MARGINS SEEN

IMPROVEMENT

more than two years. The Nifty companies have

beat estimates on their operating income and

excludes one-offs, including the impact of

corporate tax rate cuts. Net profit grew in double

digits, helped by a cut in corporate tax rate and

buoyed by the financial sector.

3

and footwear, housing, fuel and light and a

miscellaneous category.

Most Nifty 50 companies either met or beat

estimates through the second-quarter earnings

season—the best operational performance in

On broader picture,

except Banking and

NBFCs out of sample of

1697 companies failed to

impress the street. The

general trend indicates

the muted topline growth

seen while operational

environment remained

encourag ing dur ing

Q2FY20. Given sluggish

economic indicators

ISSUE DEC. 2019

dramatic revenue recovery is unlikely in the

remainder of the fiscal though operating margins

may improve due to cost cutting and streamlining

of operations.Net profit based on a common

sample of 1,697 companies that have declared

results for each of the 13 quarters to September

2019 — increased by 22.5 per cent, while revenue

fell 0.2 per cent. Excluding banks and financial

services institutions, the growth in net profit

moderated to 11.3 percent while revenues fell by

3.0 percent. For the consumer sector, the

September quarter remained challenging due to

demand slowdown, especially in rural areas on the

back of liquidity crunch, floods, etc. Bottom-line

performance of companies seen better on back of

one-offs, tax write back, lower corporate tax and

cost cut from corporates. Private lenders shown

better performance despite the slower credit cycle

during the quarter. Asset quality from private

lenders seen improvement, however PSU Banks

not able to impress on earnings, except SBIN and

Indian Bank.

Major Hits and Misses during Q2FY20:

Reliance Industries reported 18.3 per cent year-

on-year rise in consolidated net profit at Rs 11,262

crore. Reliance Industries maintained tag of most

profitable Indian company in private sector as

recorded profit of more than 11k crore during the

quarter. Indian telecom companies posted record

loss in the history of Indian corporates on back of

provisions for AGR (Adjusted Gross Revenue)

ruling. Vodafone-Idea hits loss of Rs 50,922 crore

at the net level versus loss of Rs 4,974 crore in the

year-ago quarter while the loss in the June quarter

was Rs 4,874 crore. Idea posted highest quarterly

loss from any Indian company. Airtel has posted

loss of Rs 23,045 crore, the third-biggest loss from

any Indian company. Combined quarterly losses

stands at Rs 74000 crore during Q2FY20.

Q2FY20: Top Portfolio

Recommendations

Earning season Q2FY20 remained supportive for

the market sentiments as major companies have

clear beat on operational margin and net profit.

On back of strong operational efficiency via cost

control and corporate tax cut, listed companies

able to surpass market estimates on bottom line.

However top line remained muted as major

corporates came with tepid growth on back of

economic worries, slowdown in realty and auto

segment, liquidity related concerns and lack of

willingness from Buyers.

Thanks to Finance Minister for corporate tax cut as

companies able to maintain EPS (Earning Per

Share) during Q2FY20. After analysis of major

Indian listed peers, we have prepared portfolio of

stocks. With consideration of future prospects and

current earnings, we recommend Accumulate

mentioned stocks on every dips.

4ISSUE DEC. 2019

COMMODITY OUTLOOK: BULLION

Gold has outperformed on YoY bases on back of

global economic uncertainty and fears over a

trade war have supported the precious metal –

traditionally viewed as a safe haven investment by

the investor community. However some profit

booking seen on back of The gold price continued

to rally, reaching new multi-year highs in

September, Spot gold made $1557 per Ounce and

MCX gold touched 39885 rs per 10 grams. The

International gold price rose by more than 5%

during Q3 and MCX gold 7.90%.

The factors spurred safe heaven prices

The uncertainty over US-China trade talks:

China and the United States have agreed in the

past two weeks to cancel tariffs in different

phases, the Chinese commerce ministry said on

Thursday without giving a timeline. Later on

Friday, President Trump says he has not agreed to

scrap tariffs on Chinese goods, though Beijing

would like him to do so. No clarity on scrap tariffs,

market go through bumpy ride ahead.

Global economic growth: The global economic

growth forecast was revised down to 3.0% for 2019

and to 3.1% for 2020, compared to the previous

forecast of 3.1% and 3.2%, respectively. Ongoing

slowdown in the US and the Euro-zone, lower-

than-expected growth in India in first 6 months in

2019, rising sovereign debt issues in Argentina,

and the continuation of the US-China trade

dispute, among other factors. US economic

growth was revised down to 2.3% for 2019 and

1.9% for 2020. The forecast for Euro-zone growth

in 2019 remains at 1.2%, while 2020 was revised

down to 1.1%.

The yield on the 10-year U.S. Treasury note has

traded below the yield on the 2-year note

September, marking an inversion of the yield

curve. Inversions can stir recession fears, which

would also boost gold's haven appeal.

Rate cut by Central Banks: The US central bank's

FOMC lowered its benchmark funds rate by 25

basis points to a range of 1.5% to 1.75%. It was the

third cut this year as part of what Fed Chairman

Jerome Powell had characterized as a “mid cycle

adjustment” in a maturing economic expansion.

Meanwhile, ECB President had announced that it

will restart its quantitative easing measures and

has cut its bank deposit rate to an all-time low of -

0.5% in a bid to stimulate the flagging eurozone

economy.ECB will resume buying up eurozone

government bonds at a rate of €20 billion as from

November.

5 ISSUE DEC. 2019

Escalating risks: Heightened trade and

geopolitical tensions, including Brexit-related

risks, could further disrupt economic activity, and

derail an already fragile recovery in emerging

market economies and the euro area. On an

annual basis, UK GDP only rose by 1.0% in July-

September compared with Q3 2018. That's the

lowest annual growth rate since the first quarter of

2010. The UK economy expanded by 0.3% in the

third quarter of the year. India's GDP data also

continuously deteriorated till now.

Highlights of World Gold Council (Q3):

Gold-based mutual funds (ETFs) bought 258.2 tons

of gold in the third quarter, raising the amount of

gold in their portfolio to a record 2,855.3 tons.

Central banks continue to play a critical role in the

rise in demand for gold, according to WGC data.

The third quarter of this year saw a 156.2-ton

increase in the central banks' gold reserves. A total

of 547.5 tons of gold has been purchased since the

beginning of the year. Turkey was the largest gold

purchaser in the world with 71.4 tons in the third

quarter. Russia increased its total gold reserves by

34.9 tons to 2,241.9 tons till Q3.

Gold supply rose by 4% to 1,222.3 tons in the third

quarter compared to the same period last year.

This was due to a 10% increase in recycling. Gold

production in mines declined to 877.8 tons in the

third quarter from 883.3 tons in the same period

last year. The amount of gold recycled has reached

963.1 tons since the beginning of the year.

Jewellery demand was down 16% to 460.9t in Q3.

Weak consumer sentiment due to continued

geopolitical and economic uncertainty, coupled

with substantially higher gold prices, dented

jewellery purchases in all major markets.

India imported 26 tonnes of gold in September,

down from 81.71 tonnes a year ago. India's gold

imports plunged 68% year on year in September

to their lowest in more than three years as record

domestic gold prices curbed retail buying.

Highlights of World Gold Council (Q3):

Macroeconomic backdrop wi l l become

increasingly favorable for investment in gold in the

coming months. This includes an end to sustained

US dollar strength, further rate cuts by the Fed (

Fed is already cut three times rate cut), more

accommodative monetary policies from other

major central banks(Eur, China, India), and the

continued rise of negative-yielding debt. Further,

in spite of growing risk aversion this year, equities

have remained near all-time highs (India, Japan,

US) and, seemingly, most investors are still not

betting on a sustained correction. However,

investor's sentiment will eventually change in

favor of defensive assets, including gold, if unlikely

equity market correct.

Support: 37,100/36,750

Resistance: 38,280/38,600

Technically, MCX December future prices have

corrected sharply after it made a high of 39,885

rs/10 grams in September. Price almost slipped

5% from high but on YTD it gained 18% and from

low to high it climbed 27.50%. In last week, it came

out from triangle pattern and also closed below

trend line on weekly basis. We assume prices to

take support 100 days EMA on daily chart at 36,922

and 38.2% Fibonacci retracement of its rally from

low of 31,232 till high of 39885, which is placed at

36,580 levels. For medium to long term, we

recommend buy on dip, make long position

between 36,650-36,700 levels for target of 38,680

with stop loss of 36,000.

6ISSUE DEC. 2019

CURRENCY OUTLOOK: USDINR

In 2019, INR traveled in six phases. In this it saw

bear, bull and sideway all in one year. Journey

starts with appreciation due to sharp correction in

International crude oil prices, in 3rd phase most ot

the Pundits expect that NDA government again

came in power and pre budget sentiments

support for appreciation. In budget, Finance

Minister Sitharaman announced higher surcharge

on FPIs, who have sold Indian stocks (net) worth

over $3 billion within two months and Indian

equity markets were down about 10% from their

June highs. Due to this our rupee sharply

depreciated and Chinese Yuan also depreciated

due to escalation of trade war and cancel the

meet. On 23rd August FM announced the abolition

of tax surcharge on foreign portfolio investors

(FPIs) as well as domestic investors. Before this,

our currency lost almost 5.50% against the USD.

In between RBI continued rate cut to support the

growth as inflation are in control. In last meet, the

central bank revised its growth forecast for the

current financial sharply, from 6.9% projected in

the August policy, to 6.1%. Growth forecast for the

first quarter of the next financial year was also

trimmed to 7.2% from 7.4%. Meanwhile,

The Indian rupee's recovery in September was

partly driven by concessions made by both US and

China on trade, but gains were capped by a less

dovish Fed, start of policy easing by the ECB,

Trump impeachment risks, and increase in oil

prices on geopolitical risks in the Middle East. In

between our government continued to introduce

more stimulus measures in September as clear

signs of an economic slowdown, including

corporate tax cuts, a new tax refund programme,

and a funding window for affordable housing. It all

covered in phase 5. Meanwhile, India's gross

domestic product (GDP) grew 5 percent in April-

June 2019 v/s 8 percent in the same quarter of

2018-19 and Gross value added grew 4.9 percent

in April-June 2019 v/s 7.7 percent in the same

period last year and 5.7 percent in January-March

this year.

The World Bank, on 13 October, had cut India's

GDP growth for 2019-20 to 6% in its South Asia

Economic Focus report. Followed by the IMF, it

also cut its estimate for India's growth this year to

6.1% from 7% projected in July on 15 October,

calling on the country to use monetary policy and

broad-based structural reforms to address cyclical

weakness and strengthen confidence. Last week,

Moody's changed its outlook for India from 'stable'

to 'negative'. Though, it has retained its 'Baa2'

rating for the country's foreign and local currency.

Strategy: Buy at 71.16 TGT 72.45 SL 70.40

Support: 71.16/70.50 Resistance: 71.94/72.50

7

All the above scenarios are indicating that short-

term depreciation is not ruled out as US-China

trade war threatens global growth, political

instability in Maharashtra, Brexit issue, Crude Oil

prices, fall in GDP and Manufacturing data and

traders should maintain a negative bias, we would

advise traders to go for long.

ISSUE DEC. 2019

AGRI COMMODITIES OUTLOOK

The Weather Disturbances form in the Indian Seas

which subsequently become Cyclones. These

disturbances can come up at any point of time, but

since cyclones are mostly in Pre and Post Monsoon

seasons, other times, they just manage to remain

as smaller systems.

The conversion rate from disturbance to a

Cyclone is 80 percent in the Pre and Post

Monsoon season. Which is April and May as well as

October-December.

Meanwhile, for 2019, there was a formation of 9

disturbances, out of which, seven ended up

becoming Cyclones, making the year with the

highest conversion rate.

This year, there has been some exception with

Arabian Sea seeing two storms namely Vayu and

Hikaa in the Monsoon season. Meanwhile, two

more storms came up in the Post Monsoon season

namely Kyarr and Maha. Bay of Bengal saw Pabuk

at the beginning of the year, Fani in the Pre

Monsoon season, and Bulbul in the Post Monsoon

season.

Kharif Crops outlook with focus of weather disruption

In Arabian Sea most of storms weaken Out of the

four that formed in the Arabian Sea this year, three

did not even make a landfall. Only Hikka made a

landfall: It was only Hikaa which made a landfall as

a Severe Cyclonic Storms. Other three storms

failed to make a landfall, Vayu weakened off

Gujarat Coast as a Depression, Kyarr, which was a

Super Cyclone dissipated close to the coast of

Somalia, Maha also weakened before it could hit

the Gujarat Coast. The frequency of storms has

been high this time, but majority did not hit the

coast. Bay of Bengal had three storms, Pabuk

which came from Thailand in January, entering

Andaman Sea did not make landfall. The recent

Bay Cyclone Bulbul was also strong enough and

only weakened from a Very Severe Cyclone to a

Severe Cyclone at the time of landfall.

The maximum crop damage was reported from

Western Madhya Pradesh, which received 61 per

cent surplus rains. While 40 to 50 per cent of

soybean crop has been hit in Madhya Pradesh,

which is the biggest producer of the oilseed, 30 to

40 per cent of groundnut and up to 30 per cent of

cotton crops have been affected in Gujarat.

Sugarcane, cotton, rice, soybean, tur dal,

groundnut were among the worst hit. The sowing

was delayed in the State to mid-July. Heavy rains

after sowing hindered germination. The rains in

early August adversely affected the crop at the

early vegetative state. Excess rains in the period

between September 7 and 13 caused severe

damage to the crops by inducing flower shedding

and impacting seed setting.

As many as six States – Madhya Pradesh,

Maharashtra, Gujarat, Rajasthan, Karnataka and

Bihar – suffered severe floods, while eight others,

including Assam, Andhra Pradesh, Kerala, Odisha

and Punjab, experienced moderate floods during

this southwest monsoon season, which witnessed

development of two cyclones, one deep

depression, one depression and 10 low pressure

areas.

Saurashtra and Kutch regions in Gujarat received a

surplus of 66 per cent, the highest since 2010. The

districts most severely hit are Bharuch, Chhota

Udaipur, Narmada, Botad, Dwarka, Jamnagar,

8ISSUE DEC. 2019

Junagadh, Kutch, Morbi, and Surendranagar.

Widespread damage to the groundnut and cotton

crops has been reported from most of these

districts.

Excess rains in late September when the

groundnut crop was mature and ready to be

harvested have infused fungal infection in the

crop which has adversely impacted both the yield

and the quality. The excess rains have caused

inundation in the fields and harvesting has been

delayed by 15-20 days.

Simultaneously, excess rains have induced flower

shedding in the late sown cotton crop and

damaged the quality of the opened ball. Yield has

been adversely impacted and the quality also

suffered. Around 30-40 per cent of the groundnut

crop and 20-30 per cent of the cotton crop have

been completely damaged.

On Maharashtra Unseasonal rain in O c t o b e r a n d N o v e m b e r h a s ruined kharif crops on over 54 lakh hectare of the 140 lakh hectare under c u l t i v a t i o n .

Agriculture minister of Maharashtra one-third of the total area under cultivation or crops on over 54 lakh hectare have been affected by the unseasonal rainfall. Cotton and soybean crops on 17 lakh hectare each have taken the biggest hit. Other crops lost include jowar, bajra, maize, vegetable and fruits. The otherwise drought-prone Aurangabad division is the worst-hit, with over 60% or 22 lakh hectare of the cultivated area damaged.

There was delay in arrival of rains this year, which affected sowing in many areas, and now, farmers are facing huge losses due to unseasonal rain.

COMMODITY OUTLOOK: SOYBEANPositive trends are featured in Soybean complex

during last two months amid mixed sentiments in

the market. Expectation of lower production due

to unseasonal rain and slow arrivals in mandi keep

price supportive. Stockiest are building

inventories because of lower output projections.

Already unseasonal rains impacted soybean crop

in Madhya Pradesh badly and India's 2019-20

soybean output is feared to fall 17.7% at 90 lakh

tons, said SOPA.

As per recent updates of SOPA, India may harvest

17.7% lower Soybean crop to 89.9 lakh tonnes in

2019 against 109.3 lakh tonnes in 2018 on account

of heavy rainfall at maturity period of time. The

major growing Soybean states like Gujarat,

Karnataka, Madhya Pradesh may harvest lower

Soya crop by 30% to 0.86 lakh tonnes, 7.1% to 2.69

lakh tonnes,31.1% to 40.10 lakh tonnes

respectively against last year record. However,

Farmer may get 5.7% higher Soybean to 36.29 lakh

tonnes in Maharashtra in the current season. The

association has projected India's soybean output

in 2019-20 at 89.84 lakh ton, along with a carryover

stock of 1.70 lakh tons and imports of 3 lakh tons.

Hence, total availability of soybean in 2019-20 is

pegged at 94.54 lakh tons, of which 12 lakh tons

would be retained for sowing by farmers and

82.54 lakh tons for crushing, direct use and

exports. SOPA said.

India's export of soymeal during 2019-20 (Oct-Sep)

is likely to fall sharply to 10 lakh tons from 21.79

lakh tons in the year ago period, according to data

released by the SOPA. The fall in exports during

October could be because the government has

stopped giving Merchandise Export Incentive

Scheme (MEIS) benefits on overseas sale of

soymeal with effect from August 1. SOPA has

raised this matter with the Commerce and

Industry Minister Piyush Goyal stating that

suspension of MEIS benefits would hit exports and

affect the industry.

9 ISSUE DEC. 2019

On international front CBOT Soybean future prices

traded higher side recover from recent low as

China offered to exempt some U.S. shipments

from import tariffs. China offered 10 million

tonnes of tariff-free quota to major Chinese and

international soybean crushers to import

soybeans from the United States.

Soybean harvesting Now Supplies are remained

higher side due to good pace of harvesting of

Soybean crops. Farmers in MP have harvested

almost 80% of Soybean crop of this season and

stockiest are very active at the current level. While,

in Rajasthan, 30 to 40% harvesting has been

completed so far. In Maharashtra, harvesting pace

is slow due to election activities and late sowing

varieties of soybean crop. However, NAFED

procurement process of Soybean and lower crop

estimates of this season may support Soybean

prices from any major fall. NCDEX future prices of

Soybean traded higher side due to buyers'

interests in the market. CBOT prices increased as

China offered to exempt some U.S. shipments

from import tariffs.

Soybean Indore plant prices Positive trend as

expectation of fall in production late in arrivals in

major mandi and steady demand from millers

keep supportive for Price. After heavy supplies in

the market and. Prices may decline later on in

expectation of heavy new crop supplies in coming

week. Prices are likely to trade in the range of 3750

to 4000 in next Months. The market sentiments

SOYABEAN Technical Outlook:

Soybean Near month future trend positive price

rose rich at4100 from last few session as

speculators are moderate bullish on future

market as supportive fundamental over fall in

production as unfavorable weather at time of

maturing and harvesting crops. Over all soybeans

future price may trade in upper range of 3750 to

4100 if it crosses above 4100 next resistance at

4250. On down side below 3750 level next support

at 3660.

10ISSUE DEC. 2019

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are now depending on the surplus bean stocks to

be carried over to the next marketing year, Kharif

harvesting pace, millers demand & weather

condition and Kharif crop size estimates. Over all

outlooks moderate positive.

ECONOMIC CALENDER

th16 December (Monday)07.30: CN Industrial Production (YoY) (Nov)

07.30: CN Chinese Industrial Production YTD

(YoY) (Nov)

20.15: US Manufacturing PMI (Dec)

th17 December (Tuesday)15.00: US Employment Change 3M/3M

(MoM) (Oct)

19.00: US Building Permits (Nov)

19.00: US Housing Starts (Nov)

20.30: US JOLTs Job Openings (Oct)

th18 December (Wednesday)05.20: JP Trade Balance

15.30: EU CPI (YoY) (Nov)

21.00: US Crude Oil Inventory Report

th19 December (Thursday)08.30: JP BoJ Interest Rate Decision

15.00: UK Retail Sales (MoM) (Nov)

17.00: IN RBI MPC Meeting Minutes 17.30:

UK BoE Interest Rate Decision (D)

19.00: US Philadelphia Fed Mfg Index

20.30: US Existing Home Sales (Nov)

th20 December (Friday)07.00: CN PBoC Loan Prime Rate 19.00: US

GDP (QoQ) (Q3)

19.00: US Personal Spending (MoM)

(Nov)

20.30: US Michigan Consumer Sentiment

(Dec)

rd23 December (Monday)10.00: JP All Industrial Activities

20.30: US New Home Sales (MoM) (Nov)

20.30: US New Home Sales (Nov)

th24 December (Tuesday)19.00: US Core Durable Goods Orders (MoM)

(Nov)

19.00: US Durable Goods Orders (MoM)

(Nov)

th25 December (Wednesday)Christmas Day Holiday

US, UK, India

th 26 December (Thursday)06.30: UK UK - Boxing Day

19.00: US Unemployment Claims

21.00: US Natural Gas Storage

21.30: US Crude Oil Inventory Report

th 27 December (Friday)05.20: JP Industrial Production (MoM) (Nov)

14.30: EU ECB Economic Bulletin

20.30: US Revised UoM Consumer Sentiment

th 30 December (Monday)19.00: US Goods Trade Balance

20.30: US Pending Home Sales

st 31 December (Tuesday)06.30: CN Manufacturing PMI

06.30: CN Non-Manufacturing PMI

19.30: US HPI m/m

20.30: US CB Consumer Confidence (Dec)

st 01 January (Wednesday)

New Year's Holiday

Japan, China, UK

nd 02 January (Thursday)07.15: CNY Caixin Manufacturing PMI (Dec)

14.30: EU Manufacturing PMI (Dec) 15.00: UK Manufacturing PMI (Dec)

18.45: US ADP Non-Farm Employment Change

20.15: US Manufacturing PMI (Dec)

rd 03 January (Friday)00.30: US FOMC Meeting Minutes 19.00: US

Average Hourly Earnings m/m

19.00: US Non-Farm Employment Change

19.00: US Unemployment Rate

19.00: US ISM Manufacturing PMI

th06 January (Monday)14.25: EU German Final Services PMI

20.30: US ISM Non-Manufacturing PMI

th07 January (Tuesday)19.00: US Trade Balance

19.00: US Factory Orders m/m

th08 January (Wednesday)12.30: EU German Factory Orders m/m

18.45: GBP Halifax House Price Index m/m

21.00: US Crude Oil Inventory Report

th09 January (Thursday)12.30: EU German Trade Balance

18.00: EU ECB Monetary Policy Meeting

Accounts

21.00: US Natural Gas Storage

th10 January (Friday)20.30: US Prelim UoM Consumer Sentiment

Ravi Diyora - Head of Research | Somil Gandhi - Asst. Manager | Ronak Bhavsar- Asst. Manager

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