Commodities Daily Report

Tuesday| September 11, 2012

Agricultural Commodities

Content
News & Market Highlights Chana Sugar Oilseed Complex Spices Complex Kapas/Cotton

Research Team
Vedika Narvekar - Sr. Research Analyst vedika.narveker@angelbroking.com (022) 2921 2000 Extn. 6130 Anuj Choudhary - Research Associate anuj.choudhary@angelbroking.com (022) 2921 2000 Extn. 6132

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Commodities Daily Report

Tuesday| September 11, 2012

Agricultural Commodities
News in brief
Monsoon revival will aid rabi crops
The current revival of monsoon should save the rabi crop from drought though the kharif harvest is beyond repair, according to Indranil Sengupta, India economist at Bank of America MerrillLynch (BofAML). In a report released on Monday, he said that Indus waters - a proxy for moisture conditions in north Indian wheat fields - have now increased to 94 per cent of normal conditions from 55 per cent in mid-July. BofAML is retaining FY13 5.6 per cent growth forecast despite better rains. The upside risk of 50 basis points to our 0.5 per cent agricultural growth projection, on account of revival of rains, is effectively neutralised by a 50bp downside risk to our 4.7 per cent industrial growth forecast, with the RBI delaying monetary easing and by extension, lending rate cuts, Sengupta said in the report. Thus BofAML expects rural demand to continue to slow in second half of 2012. On its part, it estimates that farm income will slow to 7.4 per cent in 2012 from 12.4 per cent in 2011. (Source: Business Line)

Market Highlights (% change)

Last Prev. day

as on Sept 10, 2012

WoW MoM YoY

Sensex Nifty INR/$ Nymex Crude Oil - $/bbl Comex Gold - $/oz

17767 5363 55.44 96.54 1729

0.47 0.40 0.14 0.12 -0.54

2.20 2.09 -0.31 1.30 2.11

0.94 0.50 0.68 3.06 7.39

4.11 4.66 20.10 8.06 -4.71

Source: Reuters

Export enquiries add flavour to cardamom

The cardamom market was by and large steady last week at auctions held in Kerala and Tamil Nadu on nearly matching demand and supply. In fact, good export enquiries and purchases to the tune of about 25 tonnes last week was attributed to the market remaining steady. The domestic demand has not picked up yet and hence, it showed signs of sluggishness, market sources told Business Line.Festival demand is likely to take off soon and that is expected to bring some buoyancy in the market, they said. Currently, arrivals are moderate with about 65 per cent material from the current picking and the balance from the old stock. Officially, the new cardamom season has begun from August 1. Thus, total arrivals during the current season from August 1 to September 9 was at 1,884 tonnes and that in the corresponding period previous season stood at 2,235 tonnes. Sales were 1,791 tonnes and 2,182 tonnes respectively. The growing areas are receiving showers for about a week now, growers said. It would have some positive impact on the crop. But the overall performance may not be encouraging because of the protracted dry spell this year. (Source: Business Line)

Central parts may manage to wipe out rain deficit soon

Most parts of the countrys entire northern half are expected to continue to receive showers over the next seven days. North-West India (except part of extreme west Rajasthan), Central India and east and North-East India would come under rainfall of varying strength during this period. This would also see central India managing to wipe out the entire deficit (assessed as just two per cent as of Monday), the first Met subdivision to achieve the feat this season. Southern peninsula is marching close behind at five per cent, but global model predictions do not see a major rainfall event unfolding here during this period. North-West India has a deficit of 12 per cent, even after flooding rain over many parts of Rajasthan. This is after the entire Bihar-Uttar Pradesh-Haryana-Punjab-Himachal Pradesh falling in deficit after rains got confined to Rajasthan and across the international border during the past week. East and North-East India has the largest deficit of 16 per cent as on date, but model predictions suggest some gains during the fortnight ending September 26.
(Source: Business Line)

More incentives likely for millers

The Government is working towards further incentivising the hybrid rice programme in India in a bid to spread this technology across the farming and millers communities. Currently, the government is offering farmers incentives to buy hybrid seeds, which are more than double the cost of traditional varieties. China could achieve food security with the adoption of hybrid science, with more than 50 per cent of its rice cultivation area under the hybrid programme. Sustainability of Chinese hybrid species in countries like India is poor, he said, adding that You cannot bring in Chinese hybrids here. These have to be built on local varieties. Echoing similar sentiment, Datta said: Unlike China, India can never have a single rice variety, as taste for rice is distinct in different States. So, we should develop hybrid varieties based on the background of our traditional varieties. (Source: Business Line)

Sugar body forecasts 8% drop in 2012-13 output

The Indian Sugar Mills Association (ISMA) has forecast an eight per cent drop in sugar output at 24 million tonnes (mt) for 2012-13 over the previous year. The downward revision is due to lower output in Maharashtra and Karnataka where dry spells have hit cane crop. However, the industry body maintained that there would be enough sugar to meet the domestic requirement throughout next season. The opening sugar balance for the 2012-13 season, starting October 2012, would be around 6 mt, ISMA said. This is considering domestic consumption of 22 mt and exports of 3.5 mt for the 2011-12 season, where production stood at 26 mt. In its first advance estimate on Monday, ISMA attributed the drop in output to poor crop conditions in Maharashtra and Karnataka, which account for 45 per cent of countrys sugar output. In June, in a preliminary estimate, it had pegged the output at 25 mt.. (Source: Business Line)

Area under hybrid rice may go up to 5 million hectares

India is targeting a hybrid rice cultivation of five million hectares in the next five years. Currently, India has about two million hectares under hybrid rice cultivation, out of the total of 44 million hectares under rice cultivation. S. Ayyappan, Director-General of Indian Council of Agriculture Research, said that the institutes frontline demonstration and its farmers' first programme were expected to popularise this technology in the coming years. (Source: Business Line)

Storage crunch eases as grain stock dips to 71 mt

The storage crunch faced by the Food Corporation of India (FCI) and state government-owned agencies have eased considerably during the last few months due to distribution of grain under the Targeted Public Distribution System (TPDS) and offloading of some of the excess stocks through open market sale. After reaching a peak of 82 million tonne (mt) in June, the grain stocks with the FCI and state warehousing corporations have declined to 71 mt at the beginning of this month. Despite the distribution of grain under the TPDS and open market sale, the current reserve, mostly consisting of wheat and rice, is 238% more than the buffer stock and strategic reserve norms.

Malaysia's August palm oil stocks up 5.8 pct

Malaysia's August palm oil stocks rose 5.8 percent to 2,115,214 tonnes from a revised 1,999,066 tonnes in July, industry regulator Malaysian Palm Oil Board said on Monday. Augusts rise exceeded market expectations that stocks in the world's No.2 palm oil producer likely rose 4.5 percent to 2.09 million tonnes. However, Malaysias august palm oil output down 1.7 pct from July. Malaysias august palm oil exports up 10.1 pct from July. (Source: Agriwatch)

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Commodities Daily Report

Tuesday| September 11, 2012

Agricultural Commodities
Chana
Chana futures settled 1.69% lower owing to improved rains in the Chana producing regions, making the soil favorable for Rabi sowing. The spot prices also settled lower by 2.02% on Monday. India's monsoon rains were 31 percent above average in the week to Sept. 5. Monsoon has recovered across India that may prove beneficial for the chana sowing, the overall fundamentals still remain supportive for the prices on account of supply tightness amid festive season demand. The Cabinet Committee on Economic Affairs approved the Minimum Support Prices (MSP) for Arhar (Tur) and Moong for 2012-13 season. The MSP for Arhar has been fixed at Rs.3850 per quintal and of Moong at Rs.4400 per quintal marking an increase of Rs.650 per quintal and Rs.900 per quintal respectively. Government released fourth advance estimates wherein it revised upward Chana output at 7.58 mn tn from 7.4 mn tonnes estimated in the third advance estimates and 8.22 mn tn in 2010-11.

Market Highlights
Unit Rs/qtl Rs/qtl Last 4741 4705 Prev day -2.02 -1.69

as on Sept 10, 2012 % change WoW MoM -1.68 -3.25 0.71 -2.39 YoY 50.50 50.61

Chana Spot - NCDEX (Delhi) Chana- NCDEX Sept '12 Futures

Source: Reuters

Technical Chart - Chana

NCDEX Oct contract

Sowing progress and demand supply fundamentals

According to the Ministry of Agriculture 98.2 Lakh hectare area has been planted under Kharif pulses as on 7th September, 2012 compared to 104.4 lakh hectare (ha) same period last year. Rajasthan Agriculture Department states that, planted area under Kharif Pulses is down at 19.42 lakh hectares ha compared to 25.55 lakh ha same st period last year. (Dated 31 August, 2012). Sowing which was down by more than 55% has gained momentum after improvement in rainfall in the last one week and is now down by 24%. According to the Fourth advance estimates, Pulses output is pegged at 17.21 mn tn in 2011-12 compared with 18.24 mn tn produced in the year 2010-11. While Chana output in 2011-12 is estimated at 7.58 million tones, Tur is estimated at 2.65 million tones, Urad is estimated at 1.83 million tones, Moong is estimated at 1.71 million tones. As per the latest release, Ministry of Commerce & Industry revealed that 20.23 lakh tones of peas, 2.03 lakh tons of Chana, 4.32 lakh tons of Urad & Moong, 1.12 lakh tons of Masoor and 4.26 lakh tons of Tur has been imported by India during April11-March 12. Assocham estimates, 21 mn tn of pulses demand in 2012-13 and is likely to reach at 21.42 mn tn in 2013-14 and 21.91 MT in 2014-15. (Source: Agriwatch) India's consumption of pulses is on the rise, while the growth in output in not consistent amid vagaries of weather, which may lead to increase in imports this year. However, rupee weakness may turn import costlier.

Source: Telequote

Technical Outlook
Contract Chana Oct Futures Unit Rs./qtl Support

valid for Sept 10, 2012 Resistance 4875-4915

4748-4800

Outlook
Chana futures are expected to remain sideways as improved rains may cap the upside. However, festive demand couple with tight supplies may restrict the downside in the prices. In the medium term to long term, the trend remains positive as supplies may not be sufficient to meet the rising demand of the commodity. Also lower sowing of kharif pulses may support chana prices.

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Commodities Daily Report

Tuesday| September 11, 2012

Agricultural Commodities
Sugar
Sugar futures settled marginally higher by 0.58% on Monday as the industry body revised down its estimates on sugar output. Indian Sugar Mills Association (ISMA) has forecast sugar production for 2012-13 season at 24 mn tn. This is about 8 per cent lower than 26 mt produced in 2011-12 season and from its initial forecast of 25 mn tn for 2012-13 season. India's monsoon rains were 31 percent above average in the week to Sept. 5, the second straight week of heavier than normal rains, reducing the threat of a prolonged drought in the south Asian country. The Indian government has provided an additional 10 days to sugar mills to sell around 200,000 tonnes of unsold non-levy sugar stocks of August. In the international markets Liffe Sugar as well as ICE sugar settled 0.38% and 0.26% higher on Monday due to covering of short positions at lower levels. Steady harvesting in the centre-south of Brazil, the world's main growing region, has weighed on sugar prices with more supplies expected from northern hemisphere harvests in coming months.

Market Highlights
Unit Sugar Spot- NCDEX (Kolkata) Sugar M- NCDEX Sept '12 Futures Rs/qtl Last 3689

as on Sept 10, 2012 % Change Prev. day WoW -0.30 -0.23 MoM -0.97 YoY 22.96

Rs/qtl

3469

0.58

-1.11

-1.98

26.93

Source: Reuters

International Prices
Unit Sugar No 5- LiffeOct'12 Futures Sugar No 11-ICE Oct '12 Futures $/tonne $/tonne Last 558.4 431.78

as on Sept 7, 2012 % Change Prev day WoW 0.38 0.26 0.18 0.47 MoM -5.23 -7.87 YoY -25.25 #N/A

Domestic Production and Exports

The area under sugarcane is estimated at 52.88 lakh ha for 2012-13 crop season, up from 50.63 lakh ha on same period a year ago. Despite of higher acreage, the producers body has estimated next years output lower at 25mn tn, down by 1mn tn compared to the current year. Sugar production in India the worlds second-biggest producer touched 26 million tonne since October 1, 2011. Industry body ISMA has estimated 7 mn tn stocks for the new season beginning October 01, 2012 compared to 5.5 mn tn year ago. India may exports 2.5-3 mn tn sugar in 2012-13. India will likely produce 25 million tonne of sugar in 2012-13 factoring in dry spells in biggest producer Maharashtra as well as Karnataka. With the opening stocks of 7 mn tn, domestic Sugar supplies are estimated at 32mn tn against the domestic consumption of around 22.523 mln tn for 2012-13. Thus, no curbs on exports are seen as of now.

Source: Reuters

Technical Chart - Sugar

NCDEX Oct contract

Global Sugar Updates

Brazilian cane mills produced 3 mn tn of sugar in the first half of August thanks to dry weather. Unica in its latest report stated said that total sugar output since the start of the crushing season is still down 12 percent from the same period a year ago. Brazil exported 2.06 mn tn raw sugar in August 2012, down from 2.08 mn tn exported in July. The International Sugar Organization said on Friday it expected a global sugar surplus of 5.86 million tonnes in the season running from October 2012 to September 2013, up from the prior season's surplus of 5.19 million tonnes. The wider surplus reflects expectations for a record global crop of 177.39 million tonnes, raw value, up 2.25 percent from the prior season as production in top grower Brazil rises. The ISO said the stocks/consumption ratio could rise to around 40 percent in 2012/13, from 37.6 percent in 2011/12. (Source: Reuters)

Source: Telequote

Technical Outlook
Contract Sugar Oct NCDEX Futures Unit Rs./qtl

valid for Sept 10, 2012 Support 3510-3532 Resistance 3582-3600

Outlook
Sugar prices may remain sideways as improved rains have offset the firm market sentiments led by higher festive season demand. In the medium term, although sufficient supplies may keep the upside capped, sharp downside will also be restricted on the back of emergence of fresh demand at lower levels amid series of festivals ahead.

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Commodities Daily Report

Tuesday| September 11, 2012

Agricultural Commodities
Oilseeds Soybean: After a sharp downside in the prices last week, soybean
futures bounced back on account of short coverings. Further higher exports of CPO also led to profit taking by the market participants. CBOT Soybean corrected yesterday after upgraded the Good-toExcellent condition of Soybean from 30% last week to 32% in its weekly crop progress report. The area harvested was also reported higher at 4% against 1% in the same period a year ago. CBOT Soybean settled 1.1% lower on Monday. In the domestic markets, as on 7 September, 2012, Oilseeds have been sown in 170 lakh hectares so far, compared with 175 lakh ha same period last year. Soybean area is higher at 106.9 lakh ha. In 2011-12 season, soybean was sown under 102.9 lakh hectares area and recorded 12.28 million tonne output, down from 12.73 mn tn in 2010-11 season. Soy meal exports fell to 10,005 tn in August, from 165,610 tn a year ago. (Source: Solvent Extractors' Association of India). Soybean exports from Brazil declined from 4.13 mn tn in July to 2.4 mn tn in the month of August. (Source: Reuters) Brazils grain Association expects the number 2 producers of soybean to produce record 81.3 mn tn in 2012-13. Planting in Brazil would commence from Sept. 15 & exports may soar to 37.5 mn tn, beating the 33.8-mn tn record in 2010/11 crop. USDA released its monthly crop report on 10 August wherein its cut U.S. 2012/13 soybean production forecast to 2.692 billion bushels, from 3.05 billion in July.
th th

Market Highlights
% Change Unit Soybean Spot- NCDEX (Indore) Soybean- NCDEX Oct '12 Futures Ref Soy oil SpotNCDEX(Indore) Ref Soyoil- NCDEX Aug '12 Futures Rs/qtl Rs/qtl Rs/10 kgs Rs/10 kgs Last 4476 3804 801 793.3 Prev day -0.44 1.44 -0.29 0.20

as on Sept 10, 2012

WoW -1.56 -5.35 1.03 -1.29

MoM 0.09 -16.07 3.16 1.69

YoY 116.97 80.18 26.51 31.93

Source: Reuters

as on Sept 7, 2012 International Prices Soybean- CBOTSept'12 Futures Soybean Oil - CBOTSept '12 Futures Unit USc/ Bushel USc/lbs Last 1713 55.96 Prev day -1.10 -0.20 WoW -3.23 -1.11 MoM 1.83 8.18
Source: Reuters

YoY 24.18 -2.34

Crude Palm Oil

% Change Unit
CPO-Bursa Malaysia Sept '12 Contract CPO-MCX- Aug '12 Futures

as on Sept 10, 2012

Last 2824 542.5

Prev day 0.53 0.78

WoW -4.63 -3.56

MoM -2.22 -1.51

YoY -16.94 15.57

MYR/Tonne Rs/10 kg

Refined Soy Oil: NCDEX Soy Oil and MCX CPO settled higher by
0.69% and 0.2% after release of higher export figures by Malaysia. Exports of Malaysian palm oil products for September 1-10 jumped 30 percent to 460,939 tonnes from 354,614 tonnes shipped during August 1-10 Malaysia's August palm oil stocks likely climbed to their highest in nine months as still-high production offset a strong rise in exports. Stocks in the world's second largest palm oil producer most probably climbed 4.5 percent to 2.09 million tonnes. Palm oil exports from Indonesia increased by 20 percent to 1.5 million tonnes in July compared to the previous month. Palm oil output is expected to be 23-25 million tonnes, and around 18 million tonnes is likely to be exported. India imported 112,611 tn of refined palm oil in July, down 9.28 percent from June. Total vegetable oil imports in July were 870,328 tn, up from 783,315 tn in the previous month (Source: Sea of India).

Source: Reuters

RM Seed
Unit RM Seed SpotNCDEX (Jaipur) RM Seed- NCDEX Sept '12 Futures Rs/100 kgs Rs/100 kgs Last 4300 4065 Prev day 1.71 -0.47

as on Sept 8, 2012 WoW -0.92 -7.45 MoM -0.13 -6.38

Source: Reuters

YoY 51.08 48.63

Technical Chart Soybean

NCDEX Oct contract

Rape/mustard Seed: Mustard seed futures settled 7.35% lower

w-o-w on account of improved rains that have raised hopes of better sowing next year. However, spot prices settled 1.7% higher on account of lower supplies of this oilseed. Mustard output was lower in 2011-12 season. However, on the back of higher returns and improved rains, next years output is expected to be better. Rainfall deficit in Rajasthan has come down sharply due to rainfall in last 4-5 days. It will ensure higher area under rapeseed as its prices are trading near record high level. Sowing of rapeseed starts from October and north-western Rajasthan is the top producing area in the country.

Source: Telequote

Technical Outlook
Contract Soy Oil Oct NCDEX Futures Soybean NCDEX Oct Futures RM Seed NCDEX Oct Futures CPO MCX Sept Futures Unit Rs./qtl Rs./qtl Rs./qtl Rs./qtl

valid for Sept 10, 2012 Support 768-774 3650-3710 4050-4090 529-534 Resistance 782-788 3783-3820 4180-4210 541-546

Outlook
Soybean may remain under downside pressure on expectations of good harvest in the domestic markets. However, edible oil is expected to trade on a positive note amid rissing exports.

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Commodities Daily Report

Tuesday| September 11, 2012

Agricultural Commodities
Black Pepper
Pepper prices traded on a negative note yesterday due to lack of demand from the upcountry markets. Lower demand for Indian pepper in the international markets due to huge price parity also pressurized prices. Low stocks in the domestic markets have supported prices at lower levels. The Spot as well as the Futures settled 0.81% and 0.73% lower on Monday. th According to the circular released on June 13 2012 the existing Special margin of 10% (cash) on the long side stands withdrawn on all running contracts and yet to be launched contracts in Pepper from beginning of day Friday June 15, 2012. Pepper prices in the international market are being quoted at $8,100/tonne(C&F) while Indonesia Austa is quoted at $67506800/tonne (FOB). Vietnam was offering Austa at $7,250/tonne. Brazil was offering its pepper at $6,250/tonne for B-Asta grade. As per circular dt. 29/06/2012 issued by NCDEX, Hassan will be available as an additional delivery centre for all the yet to be launched contracts. (not applicable to the currently available contracts-till Dec 2012 expiry).

Market Highlights
% Change Unit Pepper SpotNCDEX (Kochi) Pepper- NCDEX Sept '12 Futures Rs/qtl Rs/qtl Last 41068 41755 Prev day -0.81 -0.73

as on Sept 10, 2012 WoW 0.60 1.38 MoM -3.97 -6.39 YoY 19.37 18.86

Source: Reuters

Technical Chart Black Pepper

NCDEX Oct contract

Exports
According to Spices Board of India, exports of pepper in April 2012 fell by 47% and stood at 1,200 tonnes as compared to 2,266 tonnes in April 2011. India imported 1,848 tonnes of pepper till March 2012 and has become the third country to import such large quantity after UAE and Singapore. (Source: Agriwatch) According to Vietnam Ministry of Agriculture and Rural Development (MARD) exports of black pepper in 2012 are forecasted at around 1,25,000 tonnes. Exports of Pepper from Vietnam during January till June 2012 is estimated around 73000 mt 73,000 mt, higher by 4.3% in volume and 31.7% in value compared to corresponding year last year. Exports of Pepper from Brazil during January till May 2012 are estimated around 13369 mt. (Source: Peppertradeboard). Pepper imports by U.S. the largest consumer of the spice declined 14.8% in the first 2 months of the year (2012) to 8810 tn as compared to 10344 tn in the same period previous year. Imports of Pepper in the month of February declined by 16.8% to 3999 tn as compared to 4811 tn in the month of January 2012. Exports from Indonesia posted significant decrease of 42% as compared to previous year. Exports stood at 36,500 tonnes as compared to 62,599 tonnes in the last year. During May 2012 Brazil exported 1,705 tonnes of pepper as against 1600 tn in May 2011.

Source: Telequote

Technical Outlook
Contract Black Pepper NCDEX Oct Futures Unit Rs/qtl

valid for Sept 10, 2012 Support 42350-42710 Resistance 43550-43960

Production and Arrivals

The arrivals in the spot market were reported at 6 tonnes while offtakes were 4 tonnes on Saturay. Global Pepper production in 2012 is expected to increase 7.2% to 3.20 lakh tonnes as compared to 2.98 lakh tonnes in 2011 with sharp rise of 24% in Indonesian pepper output and in Vietnam by 10%. According to latest report pepper output in Vietnam is estimated to be 1.35 lakh tonne as compared to 1.10 lakh tonne estimated early in the beginning of year (2012). Domestic consumption of Pepper in the world is expected to grow by 3.03% to 1.25 lakh tonnes while exports are likely to grow by 1.48% to 2.46 lakh tonnes in 2012. (Source: Pepper trade board) On the other hand production of pepper in India in 2011-12 is expected to decline further by 5% to 43 thousand tonnes as compared to 48 thousand tonnes in the last year. Production is lowest in a decade.

Outlook
Pepper prices are expected to trade sideways to upwards today due to improving demand. Lack of supplies may support prices at lower levels. However, prices may correct due to lower demand at higher levels in the domestic as well as international markets.

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Commodities Daily Report

Tuesday| September 11, 2012

Agricultural Commodities
Jeera
Jeera Futures bounced back yesterday after correcting sharply over the last six sessions. Arrivals in the spot markets are low as farmers are not selling at lower prices. Around 10 lakh bags are reported across India. The spot remained low due to good rains. Supply concerns from Syria and Turkey still exists. Expectations are that export orders may still be diverted to India from the international markets due to lack of supplies from Syria on back of the ongoing civil war. The Spot settled 0.22% lower while the Futures settled 1.06% higher on Monday. Production in Syria and Turkey is being reported around 17,000 tonnes and around 4,000-5,000 tonnes, lesser than expectations. Jeera prices in the international market of Indian origin are being offered at $28,000-2,850 tn (c&f) while Syria and Turkey are not offering their produce. Carryover stocks of Jeera in the domestic market is expected to be around 7-8 lakh bags as compared to 4-5 lakh bags in the last year.

Market Highlights
Unit Jeera SpotNCDEX(Unjha) Jeera- NCDEX Sept '12 Futures Rs/qtl Rs/qtl Last 14872 13823 Prev day -0.22 1.06

as on Sept 10, 2012 % Change WoW -3.74 -3.66 MoM -7.88 -11.52 YoY -2.64 -5.03

Source: Reuters

Technical Chart Jeera

NCDEX Oct contract

Production, Arrivals and Exports

Unjha markets witnessed arrivals of 3,000 bags, while off-takes stood at 3,000 bags on Monday. Production of Jeera in 2011-12 is expected to be around 40 lakh bags as compared to 29 lakh bags in 2010-11 (each bag weighs 55 kgs). (Source: spot market traders). According to Spices Board of India, exports of Jeera in April 2012 stood at 2,500 tonnes as compared to 2,369 tonnes in April 2011, an increase of 6%.

Outlook
Jeera prices are expected to trade sideways. Prices may find support at lower levels due to expectation of revival in export demand as well low stocks. Good rains in Gujarat may cap any sharp gains. In the medium term(September-October 2012) prices are likely to witness a bounce back as there are limited stocks with Syria and Turkey and crop there is 30% short as compared to last year.

Source: Telequote

Market Highlights
Prev day -2.19 -1.15

as on Sept 10, 2012 % Change

Unit Turmeric SpotNCDEX (N'zmbad) Turmeric- NCDEX Sept '12 Futures Rs/qtl Rs/qtl

Last 5460 6030

WoW -0.67 1.01

MoM 0.06 5.98

YoY 2.16 29.40

Turmeric
Turmeric corrected yesterday for the third consecutive day after the regulator disallowed creating of any fresh positions in the September contract. Sufficient stocks with the traders have also pressurized prices. The farmers were not selling their stocks demanding higher floor price. Rainfall in Nizamabad is 27% lower than the normal as on 5/9/2012. Turmeric has been sown in 0.54 lakh hectares in A.P as on th 5 September 2012. Sowing is also reported 30-35% lower during the sowing period. The Spot settled 1.22% higher while the Futures settled 0.73% lower on Wednesday. No fresh positions will be allowed in respect of Turmeric September 20, 2012 expiry contract from September 08, 2012 till the expiry of the contract. Only squaring up of existing positions will be allowed.

Technical Chart Turmeric

NCDEX Oct contract

Production, Arrivals and Exports

Arrivals in Erode and Nizamabad mandi stood at 5,000 bags and 1,500 bags respectively on Monday. Turmeric production for the year 2011-12 is projected at historical high of 90 lakh bags (1 bag= 70 kgs) compared to 69 lakh bags in 201011. Erode is expected to produce 55 lakh bags of turmeric a rise of 29% as compared to previous year. According to Spices Board of India, exports of Turmeric in April 2012 increased by 1% at 7,300 tn as compared to 7,230 tn in April 2011.

Source: Telequote

Technical Outlook
Unit Jeera NCDEX Oct Futures Turmeric NCDEX Oct Futures Rs/qtl Rs/qtl

valid for Sept 10, 2012 Support 13500-13680 5520-5590 Resistance 14060-14260 5730-5800

Outlook
Turmeric prices are expected to continue to trade downwards taking cues from lower sowing figures and lower arrivals. The regulators decision to disallow creating of fresh positions in September contract has also created a fear in the minds of the traders. However, traders also expect fresh export orders in the coming days. Also, lower arrivals may support prices at lower levels. In the medium term (September) prices may take cues from the sowing figures.

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Commodities Daily Report

Tuesday| September 11, 2012

Agricultural Commodities
Kapas
In intraday NCDEX Kapas closed 1.55% up and MCX cotton futures closed 0.34% up owing to short coverings by market participants Cotton prices declined sharply in the last few weeks as cotton advisory board in its latest meeting has made and upward revision in the end stocks estimates. Further improved rains in August and higher imports of cheaper global cotton also supported the weak market sentiments. According to the latest report by IMD, India received 12% below normal rains during June 01- August 31. The month of August witnessed 99.7% th rainfall as on 29 August. However, reports of good rains in the past few days in Gujarat, the top producer of Cotton has provided some relief. ICE cotton Futures settled 0.98% lower on Monday as the US weekly crop report showed an upward revision in the cotton crop condition as compared to same period last year.

Market Highlights
Unit Rs/20 kgs Rs/Bale Last 1017 17560

as on Sept 8, 2012 % Change Prev. day WoW 1.55 -2.02 0.34 0.23 MoM -11.07 -1.57 YoY -

NCDEX Kapas Futures MCX Cotton Futures

Source: Reuters

International Prices
ICE Cotton Cotlook A Index Unit Usc/Lbs Last 74.98 81.35

as on Sept 7, 2012 % Change Prev day WoW -0.98 -0.07 0.00 0.00 MoM -0.69 0.00 YoY -32.79 #N/A

Domestic Production and Consumption

In India Cotton harvesting commences by mid September from the North Indian irrigated states like Punjab, Haryana and Rajasthan. While, in rain fed areas its starts in October. st As on 31 August, 2012, Cotton is being planted on 112.83 lakh hectares; lower by 4.3% compared to the last years 118.37 lakh hectares. However, the acreage so far is at par with its normal area of 111.8 lakh hectares. Area covered under cotton in Gujarat is 23.42 Lh ha as compared to 29.56 Lh ha last year, in Maharashtra 41.27 Lh ha compared to 40.95 Lh ha and in Andhra Pradesh 21.17 lh ha compared to 17.75 Lh ha same th period last year as on August 30 2012. (Source: business Line) According to the latest updates by Cotton Advisory Board (CAB), Cotton production for 2011-12 seasons is revised upward to 357 lakh bales compared with 347 lakh bales estimated earlier. Also, on account of cheaper cotton available in the global markets, imports have more than double from 5 lakh bales to 12 lakh bales. On the demand front, exports increased to around 127 lakh bales from the earlier estimates of 115 lakh bales taking total cotton consumption to around 382 lakh bales. Thus, the ending stocks figure for 2011-12 season, that would end in September, has been revised upward to 28 lakh bales from the previous estimates of 25 lakh bales. However, 28 lakh bales is the lowest since 2004-05 caused by robust exports.

Source: Reuters

Technical Chart - Kapas

NCDEX April contract

Source: Telequote

Technical Chart - Cotton

MCX Oct contract

Global Cotton Updates

Global cotton prices are mainly influenced by China, US and India. China is the largest producer, consumer, and importer of Cotton, While India is the second largest producer, consumer and exporter of Cotton. US is third largest producer and a largest exporter of Cotton in the world. The global cotton market surplus will total more than 3 million tonnes in 2012-13 (August- July) from growing output and falling demand in China, the world's largest textile market China's 2012 cotton output is estimated at 6.97 million tonnes, down 4.2 percent from last year. China has issued fresh import quota to textile mills to procure cotton from international markets, which are 40 percent cheaper than domestic stock. This is additional to 1 million tonne issued in May this year.

Source: Telequote

Outlook
In intraday cotton futures may recover on reports that China may buy cotton due to fresh start in stock piling for the second year. Also, imports of China increased by 48% on year. Moreover if Prices in international market fall further, imports might be cheaper which would lead to higher ending stocks resulting in downside pressure in short term. Also reports of negligible damage done by the tropical storm Isaac in US in the cotton growing belts might put further pressure on the prices.

Technical Outlook
Contract Kapas NCDEX April Kapas MCX April Cotton MCX October Unit Rs/20 kgs Rs/20 kgs Rs/bale

valid for Sept 10, 2012 Support 973-989 975-991 17200-17380 Resistance 1012-1022 1013-1022 17600-17710

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