Commodities Daily Report

Monday| September 24, 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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Disclaimer: The information and opinions contained in the document have been compiled from sources believed to be reliable. The company does not warrant its accuracy, completeness and correctness. The document is not, and should not be construed as an offer to sell or solicitation to buy any commodities. This document may not be reproduced, distributed or published, in whole or in part, by any recipient hereof for any purpose without prior permission from Angel Commodities Broking (P) Ltd. Your feedback is appreciated on commodities@angelbroking.com

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Commodities Daily Report

Monday| September 24, 2012

Agricultural Commodities
News in brief
Monsoon continues to be active in eastern parts
Monsoon continued to be active over northeast India and parts of peninsula even as it readied to exit west and northwest India. A northsouth trough of lower pressure linking eastern hills of the Himalayas and the Bay of Bengal was responsible for the active monsoon conditions in that region. A weather warning valid for the next two days said that heavy to very heavy rainfall may lash Assam, Meghalaya, Arunachal Pradesh and Andaman and Nicobar Islands. Elsewhere, flows feeding into latest Pacific typhoon named Jelawat have dropped rain of varying amounts over peninsular India during the past couple of days. It had also caused the formation of a weather-friendly circulation off the Maharashtra-Karnataka coasts. Meanwhile, the weather would be mainly dry over northwest and central and adjoining east India during this period. Already, a dry-air setting anti-cyclonic circulation sits over south Rajasthan and adjoining Gujarat. Satellite imagery and observations clearly indicated reduction in the moisture over parts of northwest India, the IMD update said. Conditions have thus become favourable for the withdrawal of monsoon from Jammu and Kashmir, Punjab, Haryana, Rajasthan, Saurashtra and Kutch. (Source: Business Line)

Market Highlights (% change)

Last Prev. day

as on Sept 21, 2012

WoW MoM YoY

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

18753 5691 54.26 91.87 1768

2.20 2.46 0.67 -0.12 -0.07

4.06 4.71 -1.72 -5.30 2.14

4.85 4.98 -1.88 -4.98 7.79

11.99 13.10 12.29 6.93 -2.09

Source: Reuters

Red Chilli Area Down by 16.5% in Major Growing Regions

During the current year, till 19-09-2012 the area under chilli, in major producing area of Andhra Pradesh is 97,872 hectare compared to 117,308 hectare last year. Farmers were expected around 30% crop shortage due to current season lower prices and erratic monsoon. In some regions farmers have already shifted to cotton and other cash crops. The upcoming crop outlook will be clear by end of November.
(Source: Agriwatch)

Cardamom takes a tumble as fundamentals turn weak

Cardamom prices have fallen by over 50 per cent within a months time due to lower demand and strong supplies. Now the market looks forward to festive demand during Diwali to stage a recovery. Cardamom prices touched a one-and-half year high of Rs 1,500 per kg in the first week of August, when demand from domestic and Gulf markets was high on account of Ramzan. Demand started falling after Ramzan. Besides, farmers had anticipated this years crop to be less due to deficient rainfall in the early part of monsoon, said Hareesh V, senior analyst at Geojit Comtrade. However, prices started falling by September when monsoon recovered, with the cardamom-growing areas of Kerala now reporting sufficient rains. Meanwhile, export demand was also hit by reports from Guatemala about a bumper crop this year, keeping global prices in check. Pest attacks and floods had affected the Guatemala crop last year. Domestic demand for cardamom was further dampened following the ban on production and sale of gutka and pan-masala by more than 10 states, including Maharashtra, Kerala and Delhi. About 2,000 tonnes of cardamom were consumed annually by pan-masala and gutka makers. (Source: Financial Chronicles)

Grain, oilseeds market rally could lead to rise in meat prices

The currently rally in grain and oilseed prices could affect supply chains, especially the animal protein industry, resulting in rising meat prices. Right now, food inflation is weather-driven in exporting nations, mainly resulting from the US facing its worst drought since 1936 and water shortages in Russia and South America, according to Rabobank. With prices of agricultural commodities skyrocketing, it could result in agflation globally. As a result, food prices are likely to hit record highs next year. The surge could well continue into the third quarter of next year. This would see feed-intensive crops coming under pressure resulting in repercussions for the animal protein and dairy industries, Rabobank said in a report. Luke Chandler, Global Head of Agri Commodity Markets Research at Rabobank, said that this would lead to consumers, especially those in the lower strata, to switch over from animal protein to grains such as rice and wheat. Grain shortage will be sustained since herds take a longer time to rebuild and also since the animal protein and dairy industries have long production cycles. This will result in pressure on food prices. Since food makes up only a smaller portion of spending in emerging countries, the current period of agflation would not lead to unrest as was seen in 2008, Chandler said.
(Source: Business Line)

Coriander in correction mode

Over the past mo-nth, prices of coria-nder have corrected sharply from Rs 5,095 a quintal to Rs 4,005, a fall of about 20 per cent, due to low demand from do-mestic as well as overseas buyers. Total production in Rajasthan is estimated to be around 65 lakh bags this year, up from 45 lakh bags last year. In Madhya Pradesh, the total output is projected to be more or less 40 lakh bags, up 10 lakh bags from that of previous year. According to Vedika Narvekar, senior research analyst for agrocommodities at Angel Broking, Coriander futures may see some consolidation in the prices in the coming weeks. Traders are expe-cted to adopt a wait and watch policy and may track the sowing progress of rabi crops. An increase in sowing of more remunerative crops such as mustard seeds in Raja-sthan and chana or wheat in MP may affect the sowing of dhaniya this season. Also, export demand may emerge ahead of the festive season as well as winter. Considering the above-mentioned factors, no major downside is expected from the current levels. However, considering sufficient stocks with the stockists, any sharp upward movement may also be capped. (Source: Business Line)

States opposed to FDI in retail set for private players in farm sector
They have said no to FDI in multi-brand retail but states such as Bihar, Madhya Pradesh, Chhattisgarh, Kerala, Odisha, Uttar Pradesh and West Bengal may soon open up their farm sector to private investments both in agriculture as well as in supply chain. The move is aimed at strengthening the government-procurement system and open an effective back-door window to global retailers, experts said. According sources in the consultancy business, the Nitish Kumar-led Bihar government has already signed up Ernst & Young to help attract private investment in agriculture and supply chain. Odisha, Madhya Pradesh, and Chhattisgarh will follow soon. In Mamta Banerjee's West Bengal, the procurement of Atlanta variety potatoes by PepsiCo has jumped nearly 200% since 2009-10 to over 60,000 tonne, while the agri-land under contract farming has increased three-fold to 6,200 acre. The agriculture department of Kerala government, the only Congress-ruled state to have opposed FDI in retail, wants to encourage contract farming and private investment in the farm sector by strengthening the legal structure. (Source: Financial Express)

Wheat firms for 2nd session on possible Russia export curb

Russia barred grain exports in August 2010 after a severe drought that led to a wheat crop of just 41.5 million tonnes. Chicago prices nearly doubled in the two months leading up to the ban that summer. This year's Russian wheat crop is forecast to be even lower at around 38 million tonnes following another widespread drought. (Source: Reuters)

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Commodities Daily Report

Monday| September 24, 2012

Agricultural Commodities
Chana
Chana futures declined sharply on Saturday and hit a lower limit of 4%, while spot declined marginally by 0.5%. Reports of good sowing prospects of Rabi pulses amid good soil moisture coupled with expected higher imports supported the weak market sentiments. As per the NCDEX circular dated 20 September, existing Special Margin of 20% (in cash) on the Long side shall be reduced to 10% (in cash) on all the running contracts and yet to be launched contracts in Chana with effect from Monday, September 24, 2012. Prices declined last week on improved rains and reports of expected higher output in Australia, the largest supplier of chickpeas to India. In Australia, chana production rose by 70.5 percent to 8.27 lakh tonnes from 4.85 lakh tonnes in previous year. Ongoing recovery in monsoon and above average rains in the past few days is showing better prospects for Rabi pulses sowing in the coming days. Monsoon has recovered across India, especially in Rajasthan, one of the major chana growing states, and may prove beneficial for the chana sowing. However, the overall fundamentals still remain supportive for the prices on account of supply tightness amid festive season demand. 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.
th

Market Highlights
Unit Rs/qtl Rs/qtl Last 4586 4393 Prev day -0.59 -3.39

as on Sept 22, 2012 % change WoW MoM 0.50 -3.20 -3.13 -5.53 YoY 43.88 48.16

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 99.81 Lakh hectare area has been planted under Kharif pulses as on 21th September, 2012 compared to 108.28 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 24, 2012 Resistance 4445-4510

4280-4325

Outlook
Chana futures are expected to open down initially on possible higher imports and improved sowing prospects, but might recover in the later sessions on account of reduction of special margin on the long side of all Chana future contracts. Also demand may emerge at lower levels ahead of upcoming festive season. However sharp upside may be capped 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.

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Commodities Daily Report

Monday| September 24, 2012

Agricultural Commodities
Sugar
Sugar futures closed marginally up by 0.28% but Spot closed 1.96% down on reports of rise in inventories and good output prospects due to favorable weather, for the 2012-13 season. Sugar inventory on Oct. 1, when the new 2012/13 season begins, is estimated at 6 million tonnes, up from 5.5 million tonnes in the previous year. (Source: Reuters) The Cabinet Committee on Economic Affairs (CCEA) is likely to consider on Friday a proposal to raise price of sugar sold through ration shops - if approved it would be the first hike in about a decade. There are reports that Maharashtra will start crushing for the 2012/13 season from Nov. 1, instead of Oct. 1 supported the prices. 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. 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. ICE raw sugar and life white sugar futures traded on a positive note on Thursday, due to short coverings and settled 0.91% and 1.32% higher.

Market Highlights
Unit Sugar Spot- NCDEX (Kolkata) Sugar M- NCDEX Sept '12 Futures Rs/qtl Last 3823

as on Sept 22, 2012 % Change Prev. day WoW -1.96 0.77 MoM 5.30 YoY 25.74

Rs/qtl

3580

0.34

0.99

2.17

30.42

Source: Reuters

International Prices
Unit Sugar No 5- LiffeOct'12 Futures Sugar No 11-ICE Oct '12 Futures $/tonne $/tonne Last 560.9 430.67

as on Sept 21, 2012 % Change Prev day WoW 0.70 0.88 -2.57 -3.25 MoM 2.37 -2.02 YoY -11.53 #N/A

Source: Reuters

Domestic Production and Exports

The area under sugarcane is estimated at 52.88 lakh ha for 2012-13 crop season, up from 50.99 lakh ha on same period a year ago. Despite of higher acreage, the producers body has estimated next years output lower at 24 mn tn, down by 2mn 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 6 mn tn stocks for the new season beginning October 01, 2012 compared to 5.5 mn tn year ago. India may export 2.5-3 mn tn sugar in 2012-13. With the opening stocks of 6 mn tn, domestic Sugar supplies are estimated at 30mn tn against the domestic consumption of around 22.523 mln tn for 2012-13. Thus, no curbs on exports are seen as of now.

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 24, 2012 Support 3545-3560 Resistance 3605-3625

Outlook
Sugar prices may trade sideways in the intraday with downward bias owing to reports of improved output and better yield due to supportive weather conditions. Prices may find support at lower levels on account of improving demand ahead of the festive season. However, sufficient stocks may pressurize prices. A delay in crushing in Maharashtra by a month may also support prices. However, sufficient supplies and improved rains may cap a sharp upside.

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Commodities Daily Report

Monday| September 24, 2012

Agricultural Commodities
Oilseeds Soybean:
Soybean futures declined further amid start to harvesting in India as well US. The spot also closed sharply down by 5.28%. CBOT Futures closed marginally up ahead of short coverings on Friday. An up gradation of US crop condition Good to Excellent to 33% from 32%, however, are in favor of bears. According to the report, 10% of soybeans have already been harvest as against 4% last week. CBOT Soybean settled 0.18% higher on Friday. U.S. Department of Agriculture monthly report pegged the soybean harvest at 2.634 billion bushels, down from last month's 2.692 billion and below the analysts' average estimate of 2.657 billion. Ending stocks next summer were projected to be the lowest in nine years at 115 million, unchanged from Augusts estimate. 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. In the domestic markets, as on 20 September, 2012, Oilseeds have been sown in 174.39 lakh hectares so far, compared with 178.16 lakh ha same period last year. Soybean area is higher at 106.9 lakh ha. In 2011-12 season, soybean was sown under 107 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)
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Market Highlights
% Change Unit Soybean Spot- NCDEX (Indore) Soybean- NCDEX Oct '12 Futures Ref Soy oil SpotNCDEX(Indore) Ref Soyoil- NCDEX Sept '12 Futures Rs/qtl Rs/qtl Rs/10 kgs Rs/10 kgs Last 3997 3455 776.4 711.4 Prev day -1.41 -0.09 -0.75 -1.02

as on Sept 22, 2012

WoW -10.98 -7.55 -2.71 -10.99

MoM -12.27 -13.63 -2.18 -10.86

YoY 87.39 61.15 23.72 14.15

Source: Reuters

as on Sept 21, 2012 International Prices Soybean- CBOTNov'12 Futures Soybean Oil - CBOTOct '12 Futures Unit USc/ Bushel USc/lbs Last 1621.75 54.45 Prev day 0.18 -0.32 WoW -6.98 -3.56 MoM -2.08 2.83
Source: Reuters

YoY 17.57 -4.97

Crude Palm Oil

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

as on Sept 22, 2012 Last 2593 480.2 Prev day -3.07 -1.80 WoW -7.19 -9.87 MoM -9.34 -14.27
Source: Reuters

YoY -23.74 2.78

MYR/Tonne Rs/10 kg

Refined Soy Oil: NCDEX Soy Oil traded lower tracking the oilseeds
complex. Although, exports are high the overall stocks of Malaysian palm oil are higher on the back of seasonally higher yield. Exports of Malaysian palm oil products for Sept. 1-20 rose 14.6 percent to 928,110 tonnes from 809,814 tonnes shipped during Aug. 1-20, according to cargo surveyor Intertek Testing Services. Palm oil exports from Indonesia increased by 20 percent to 1.5 mt in July compared to the previous month. Palm oil output is expected to be 23-25 mt, and around 18 mt 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).

RM Seed
Unit RM Seed SpotNCDEX (Jaipur) RM Seed- NCDEX Sept '12 Futures Rs/100 kgs Rs/100 kgs Last 4150 4082 Prev day 2.47 -0.22

as on Sept 22, 2012 WoW -1.19 -3.54 MoM -4.60 -7.83

Source: Reuters

YoY 43.47 44.85

Technical Chart Soybean

NCDEX Oct contract

Rape/mustard Seed: Mustard futures closed marginally down

while the spot gained by 2.47% on reports of good sowing prospects of the Rabi seed ahead of favorable monsoon. As per NCDEX circular, existing Special Margin of 15% (in cash) on the Long side shall be reduced to 5% (in cash) on all the running contracts and yet to be launched contracts in Rapeseed Mustard Seed with effect from Monday, September 24, 2012. Mustard output was lower in 2011-12. 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 Oct Futures Unit Rs./qtl Rs./qtl Rs./qtl Rs./qtl

valid for Sept 24, 2012 Support 700-706 3360-3395 4000-4030 467-472 Resistance 715-718 3480-3515 4100-4125 481-484

Outlook
Edible oil complex may open lower taking cues from the international markets. Expectations of improved yield of domestic soybean may also keep the downside intact.

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Commodities Daily Report

Monday| September 24, 2012

Agricultural Commodities
Black Pepper
Pepper Futures traded on a positive note last week due to a supply crunch in the domestic markets. However, prices corrected towards the end of the week on account of profit booking. Farmers are not selling their stocks at lower levels and expect better prices. Traders are buying pepper directly from the farmers. Lower demand for Indian pepper in the international markets has capped sharp gains. The Spot as well as the Futures settled 1.23% and 1.6% higher w-o-w. 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 $8,4758,700/tonne(C&F) while Indonesia Austa is quoted at $6,750/tonne (FOB). Vietnam was offering 550GL at $6,900/tonne. 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
Unit Pepper SpotNCDEX (Kochi) Pepper- NCDEX Sept '12 Futures Rs/qtl Rs/qtl Last 42100 43290 % Change Prev day 0.12 -0.82

as on Sept 21, 2012 WoW 1.23 1.60 MoM 2.46 2.96 YoY 16.94 18.31

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 24, 2012 Support 42850-43100 Resistance 43600-43900

Production and Arrivals

The arrivals in the spot market were reported at 120 tonnes while offtakes were 120 tonnes on Saturday. 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 in the intraday. Low stocks in the domestic markets may support prices. Festive demand is also expect to emerge at lower levels. However, lower demand at higher levels in the domestic as well as international markets may cap sharp gains.

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Commodities Daily Report

Monday| September 24, 2012

Agricultural Commodities
Jeera
Jeera Futures traded on a negative note last week due to good rains in Gujarat and expectations of better sowing prospects ahead of the rabi sowing. However, the spot was comparatively stable as farmers are not selling their stocks at lower levels. According to markets sources about 75% exports target has already been achieved due to a supply crunch in the global markets. Around 10 lakh bags of Jeera are reported across India. 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 as well as the Futures settled 0.98% and 3.03% lower w-o-w. Production in Syria and Turkey is being reported around 17,000 tonnes and around 4,000-5,000 tonnes, lesser than expectations. Jeera prices of Indian origin are being offered in the international market at $2,750-2,775 tn (c&f) while Syria and Turkey are not offering. 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 14603 13620 Prev day -1.15 0.74

as on Sept 22, 2012 % Change WoW -0.98 -3.03 MoM -6.34 -7.75 YoY -3.38 -5.61

Source: Reuters

Technical Chart Jeera

NCDEX Oct contract

Production, Arrivals and Exports

Unjha markets witnessed arrivals of 3,500 bags, while off-takes stood at 3,500 bags on Saturday. 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%.

Source: Telequote

Outlook
Jeera prices are expected to trade sideways. Prices may find support at lower levels on expectations of higher export figures. However, 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.

Market Highlights
Prev day 0.00 0.18

as on Sept 22, 2012 % Change

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

Last 5964 5664

WoW 5.34 -6.04

MoM 6.38 -9.03

YoY -1.68 4.62

Turmeric
Turmeric October Futures traded on a negative note last week as there are sufficient stocks with the stockists. However, the spot traded on a bullish note as farmers are not selling stocks at lower levels, demanding higher floor price of Rs.9000/tn. Lower sowing figures have also supported prices at lower levels. Rainfall in Nizamabad is 16% lower than the normal as on 19/9/2012. Turmeric has been sown in 0.55 lakh hectares in A.P as on 19/9/2012. Sowing is also reported 30-35% lower during the sowing period. The Spot settled 5.34% higher while the Futures (October) settled 4.19% lower w-o-w. 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 1,500 bags and 3,000 bags respectively on Friday. 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 24, 2012 Support 13320-13480 5520-5600 Resistance 13780-13920 5720-5780

Outlook
Turmeric prices are expected to trade sideways taking cues from lower sowing figures and lower arrivals. Demand for higher floor prices may also support prices. Traders expect fresh export orders in the coming days. However, good stocks may pressurize prices at higher levels. In the medium term (September) prices may take cues from the sowing figures.

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Commodities Daily Report

Monday| September 24, 2012

Agricultural Commodities
Kapas
NCDEX Kapas futures again extended heavy losses and closed down by 2.64% and MCX declined by 1.29%. Prices have seen a major downfall in the past couple of weeks as the concerns over the crop output has been thinned as favorable monsoon has reduced the fears of crop damage in the successive states. Also prices have taken cues of the weak global Cotton market. Monsoon deficiency has further narrowed to 6% below LPA which is raising hopes of better output. Good rains in Gujarat, the top producer of Cotton has provided some relief to the standing cotton crop. ICE cotton Futures also extended losses and settled sharply down by 2.36% as reports of good crop prospects ahead of harvesting is putting downside pressure on the prices. Cotton harvesting has commenced in US, in all 6% is harvested as compared to 4% a week ago, versus 8% same period a year ago. Cotton crop condition is 43% in Good/Excellent state as compared to 41% a week ago, and 27% same period a year ago.

Market Highlights
Unit Rs/20 kgs Rs/Bale Last 899.5 16060

as on Sept 22, 2012 % Change Prev. day WoW -3.02 -10.85 -1.29 -5.19 MoM -18.23 -5.19 YoY -

NCDEX Kapas Futures MCX Cotton Futures

Source: Reuters

International Prices
ICE Cotton Cot look A Index Unit Usc/Lbs Last 72 81.35

as on Sept 21, 2012 % Change Prev day WoW -2.36 -3.39 0.00 0.00 MoM -5.82 0.00 YoY -26.85 -29.20

Source: Reuters

Domestic Production and Consumption

As on 14 September, 2012, Cotton is being planted on 114 lakh hectares; lower by 5.6lakh hectares compared to the last years 119.6 lakh hectares. However, the acreage so far is at par with its normal area of 111.8 lakh hectares. 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. In its September monthly demand supply report on Wednesday, the Agriculture Department (USDA) raised its estimate for the global cotton surplus by next July to a record of 76.5 million 480-pound bales, nearly a two-million bale increase from last month's estimate.
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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. USDA estimated US Cotton planting for the season 2012-13 at 12.64 mln acres as compared to 14.74 mln acres last season (2011-12). Ending stocks were at 4.8 mln bales (480 pounds/bales) with Production of 17 mln bales and exports of 12.1 mln bales were pegged for the season 2012-13. China's 2012 cotton output is estimated at 6.97 million tonnes, down 4.2 percent from last year. China's cotton imports in August rose 48 percent on the year to 305,600 tonnes. Total imports in the first eight months of the year were 3.77 million tonnes, up 123 percent from the same period last year, according to the report by the China National Cotton Reserves Corp.

Source: Telequote

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

valid for Sept 24, 2012 Support 872-885 868-880 15840-15950 Resistance 908-920 900-912 16150-16220

Outlook
Cotton prices are expected to trade lower owing to good yield prospects. Also arrivals from northern regions are expected to commence in the coming days which would pressurize the prices. Moreover, reports of china not considering any imports for stockpiling, as the countrys domestic new cotton crop is expected to hit the market soon will support might put pressure on the global and domestic cotton prices.

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