Commodities Daily Report

Monday| October 8, 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

Monday| October 8, 2012

Agricultural Commodities
News in brief
Rain forecast for peninsula, eastern parts
Western flanks of the peninsula continued to receive rains as the causative circulation persisted over coastal areas of Maharashtra. An India Meteorological Department (IMD) update said on Sunday evening that many places over Konkan, Goa and Madhya Maharashtra received overnight rain. Winds from a north-east direction are expected to push the circulation over Maharashtra further back west into the Arabian Sea. This would help the north-easterly flows to establish their presence over land except the extreme-most south of the peninsula by the weekend. From here, the setting of the North-East monsoon should be a matter of time, according to weather experts. Meanwhile, conditions have become favourable for further withdrawal of South-West monsoon from Uttar Pradesh, some more parts of Madhya Pradesh and Bihar.
(Source: Business Line)

Market Highlights (% change)

Last Prev. day

as on Oct 5, 2012
WoW MoM YoY

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

18938 5747 51.9 89.88 1778.6

-0.63 -0.70 0.31 -2.00 -0.86

1.93 1.72 -1.93 -2.14 0.06

8.94 9.39 -6.54 -2.51 0.42

15.10 16.26 5.19 12.80 8.43

Source: Reuters

Kelkar recommendation on food price gets mixed reviews

The Vijay Kelkar committees recommendation to link foodgrain prices sold through ration shops with the minimum support price (MSP) has stirred a debate. The Centre has shown little interest in the key suggestions of the panel, which recommends aligning food grains central issue price (CIP) with MSP. Chief Economist at CARE Ratings Madan Sabnavis said, The whole idea of having CIP is to protect the poor. Its objectives are different from those of MSP. Linking both would mean capping subsidies. That would be impractical. When the Centre in 200102 froze CIP of wheat and rice for the below poverty line (BPL) families at Rs 4.15 a kg and Rs 5.65 a kg, respectively, MSP for wheat was Rs 6.10 a kg and for rice Rs 5.30 a kg. The ratio between CIP and MSP was 1:1 for rice and 3:5 for wheat during that period. The ratio in 2011-12 stood at 1:2 for rice and 3:10 for wheat. Thus, as the purchase price went up because of rising MSP, the sale price remained constant. The idea is to keep the ratios same, so that the food subsidy bill does not inflate, added Gulati. In Budget 2012-13, the food subsidy swelled to Rs 75,000 crore from around Rs 9,200 crore in 1999-2000 a staggering rise of over 700 per cent in a decade. Primary reasons have been heavy procurement of grain at high prices and increased distribution at cheap rates. (Source: Business Standard)

Govt must ensure proper pricing for farm produce

A leading farm educationist has said that the Government should draw up a robust pricing policy for agriculture produce. Dr B. T. Pujari, Dean (Agriculture), University of Agriculture Sciences, Raichur, said crop holidays is a dangerous trend and the Government should ensure proper pricing policy for farm produce. He said stabilisation of the market is a crucial factor for sustainable agriculture. Dr Pujari said to ensure food security to the ever-growing population, it has become imperative for the Government to tread cautiously on its EXIM policy as far as agriculture commodities are concerned. He said the export and import policies of the agriculture commodities should be under the Agriculture Ministry, and the import and export of agriculture commodities should be based on supply and demand. Lauding the intervention of the NCDEX in the market in Gulbarga in the past two years, Dr Pujari said the entry of NCDEX in the market has helped stabilise the prices of red gram . G. Chandrasekhar of The Hindu Business Line in his presentation stressed the importance of achieving at least 4 per cent growth in the agriculture sector to achieve 9 per cent GDP growth during the 12th Plan period. The business in the agriculture futures market has witnessed a record growth from Rs 5.71 lakh crore in 2004 to Rs 119.48 lakh crore in 2010-11.
(Source: Business Line)

No worry on food subsidy front: Thomas

Even as the Centre and the Reserve Bank of India say a cut in the subsidy bill is important in reducing inflation and the fiscal deficit, K V Thomas, minister of food, and consumer affairs and public distribution, has said currently, subsidies in the food sector present no worries. Speaking to reporters here on Saturday, Thomas said, Being consumer affairs minister, my view is food should be made available to the poor at a subsidised rate. These are issues we are discussing. We have not taken any decision regarding subsidy on food itemsCurrently, our food subsidy bill alone stands at Rs 88,000 crore. This is huge. And, I need about 55 million tonnes (mt) of foodgrain. On this issue, we have not retracted. At present, (there is) nothing to be worried about in the food sector. (Source: Business Standard)

Rangarajan Panel moots sugar industry decontrol;

The Rangarajan committee, set up to examine issues related to sugar decontrol, has recommended complete decontrol of the sugar industry. In its report, the committee has asked the government to remove levy sugar obligation (sugar for ration shops) and to do away with the regulated release mechanism besides freeing up the commodity's export and import. At present, the government decides mill-wise quantity to be released every quarter into the open market. The committee has recommended the abolition of state advised price (SAP) - the selling price of cane as fixed by state governments - and the introduction of a profitsharing mechanism to arrive at a uniform pricing for cane farmers. It has suggested a dynamic twostage payment. Mills would have to pay farmers the fair and remunerative price fixed by the central government at the onset of every crop season. Thereafter, farmers would be paid 75% of prices that mills realise for selling sugar and its byproducts to be calculated every quarter. This will link farmers' remuneration to market prices. The report also advocates freedom for farmers to sell cane to any mill irrespective of distance. (Source: The Economic Times)

Argentina sees corn area holding steady this season

Farmers in Argentina, the world's No. 2 corn supplier, are expected to plant roughly the same amount of land with corn this season as they did during the drought-hit 2011/12 crop year, the government said on Friday. In its weekly crop progress report, the Agriculture Ministry revealed its first estimate for 2012/13 corn area. It put it at 4.97 million hectares, a touch lower than the 5.00 million hectares planted last season. President Cristina Fernandez said last month that corn production was set to hit a record high of 24.5 million tonnes in the 2012/13 season. The Agriculture Ministry has not released an official forecast, however. The government's weekly report said farmers had planted 24 percent of estimated corn area by Thursday, edging out last season's pace by 1 percentage point. Argentine corn output is forecast by the U.S. Department of Agriculture to rise to 28 million tonnes in 2012/13 from 21 million tonnes in the prior season. (Source: Reuters)

Russia doubles forecast of grain sales from stock - RTRS

Russia, one of the world's key wheat exporters, has doubled its forecast of this year's sales from government intervention stocks to almost 1 million tonnes of grain, Deputy Agriculture Minister Ilya Shestakov told reporters on Friday. The country is likely to sell up to 100,000 tonnes of grain per week from Oct. 23 till the end of the year to stem rising domestic prices, Shestakov was quoted as saying by the Interfax news agency. (Source: Reuters)

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Commodities Daily Report

Monday| October 8, 2012

Agricultural Commodities
Chana
Chana futures settled almost flat and spot settled 0.82% lower on ongoing reports of higher sowing of Rabi pulses this season. However festive demand along with tight supplies restricted any major fall in the prices. CACP has recommended a hike in minimum support price (MSP) of gram by Rs.200 to Rs.3000 a quintal and Masoor by Rs.100 to Rs.2900 a quintal for upcoming 212-13 Rabi season to boost the production of pulses. As per the statement of Finance Minister P. Chidambaram, India has raised the subsidy on imported pulses to Rs. 20/kg from the earlier Rs. 10/kg, this move is expected to increase pulses imports. According to the first advance estimates, kharif pulses output is estimated lower by 14.6% at 5.26 million tonnes compared with 6.16 mn tn last year. Kharif pulses harvesting would commence from next month. As per the NCDEX circular dated 1 October, Special Margin of 10% (in cash) on the Long Side on all the running contracts and yet to be launched contracts in Chana have been withdrawn with effect from beginning of day Thursday, October 04, 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.
Source: Telequote
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Market Highlights
Unit Rs/qtl Rs/qtl Last 4400 4519 Prev day -0.82 -0.09

as on Oct 6, 2012 % change WoW MoM 0.00 -7.19 2.94 -3.95 YoY 27.93 29.97

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

Source: Reuters

Technical Chart - Chana

NCDEX Nov contract

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.

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

valid for Oct 8, 2012 Resistance 4365-4400

4245-4275

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. 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)

Outlook
Chana futures are expected to trade sideways with upward bias today ahead of festive demand and tight supplies. However, reports of higher sowing of Rabi pulses this season might pressurize the prices in the medium term. Also, higher imports from Australia may cap the sharp upside in the prices.

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Commodities Daily Report

Monday| October 8, 2012

Agricultural Commodities
Sugar
Sugar November futures closed marginally higher on account of short coverings. The Government has decided to make available a quantity of 40 lakh tons of non-levy quota, for the months of October and November 2012. Indian mills have signed deals to buy up to 450,000 tonnes of Brazilian raw sugar for delivery from October to December as a gap between domestic and overseas prices widens, making room for the first imports in more than two years, five dealers told Reuters. Millers based in western and southern India and global trading firms bought sugar at around $500/ton a CIF basis, as the price in the domestic market has jumped more than 23% to $680/ tn in the past three months. ICE raw sugar and life white sugar futures traded marginally lower and settled 0.12% and 0.28% lower on Friday.

Market Highlights
Unit Sugar Spot- NCDEX (Kolkata) Sugar M- NCDEX Oct '12 Futures Rs/qtl Last 3800

as on Oct 6, 2012 % Change Prev. day WoW 0.00 -0.78 MoM 3.01 YoY 22.58

Rs/qtl

3353

0.69

-5.23

-3.34

21.53

Source: Reuters

International Prices
Unit Sugar No 5- LiffeOct'12 Futures Sugar No 11-ICE Oct '12 Futures $/tonne $/tonne Last 597.3 478.67

as on Oct 5, 2012 % Change Prev day WoW -0.12 -0.28 2.61 1.94 MoM 8.17 13.31 YoY -12.17 #N/A

Domestic Production and Exports

The area under sugarcane is estimated at 52.88 lakh ha for 2012-13 crop season, up from 50.99 lakh ha on same period a year ago. According to the first advance estimates by agriculture ministry, Sugarcane output is pegged at 335.3 mn tn, down by 6.2% compared to 357.6 mn tn last year. Despite of higher acreage, the producers body has estimated next years sugar 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.

Source: Reuters

Technical Chart - Sugar

NCDEX Nov 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. The International Sugar Organization said 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 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 Oct 8, 2012 Support 3290-3310 Resistance 3342-3360

Outlook
Sugar prices may trade sideways as festive demand might support the prices while higher Quota for the month of October and November may cap sharp gains.

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Commodities Daily Report

Monday| October 8, 2012

Agricultural Commodities
Oilseeds
Soybean: Soybean spot as well as the Futures traded on a bearish
note last week due to the ongoing harvest of the Soybean crop. However, the Futures recovered from lower levels towards the end of the week tracking positive international markets. The Spot as well as the Futures settled 5.67% and 1.06% lower respectively w-o-w. As per NCDEX, Special Margin of 20% (in cash) on the Long Side on Soya bean October 2012 expiry contract will be withdrawn with effect from beginning of day Monday, October 08, 2012. CBOT Futures recovered and settled higher by 1.29% on reports that China is buying Soybean from U.S. US soybeans are 41 pct harvested v/s 22 pct week ago and 19 pct to nd 5-year average as on 2 October 2012. In Brazil planting has started 10 days earlier amid good rains. If rains continue in the coming weeks as forecast, Brazil could churn out 81 million tonnes of oilseed and replace the drought-stricken US as the world's top soybean producer, according to the USDA. Brazils grain Association expects the number 2 producers of soybean to produce record 81.3 mn tn in 2012-13. In the domestic markets, as on 20 September, 2012, Oilseeds have been sown in 174.39 lakh ha so far, compared with 178.16 lakh ha same period last year. Soybean area is higher at 106.9 lakh ha. According to first advance estimates, Soybean output is pegged at at 126.2 lk tn for 2012-13. However, drop in area under groundnut, sunflower & castor seed may lead to lower output of these oilseeds in 2012-13 which is estimated 9.6% lower at 187.8 lakh tn.
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Market Highlights
Unit Soybean Spot- NCDEX (Indore) Soybean- NCDEX Oct '12 Futures Ref Soy oil SpotNCDEX(Indore) Ref Soy oil- NCDEX Oct'12 Futures Rs/qtl Rs/qtl Rs/10 kgs Rs/10 kgs Last 3092 3139 656.3 639.6 Prev day 2.15 2.08 0.66 1.05

as on Oct 6, 2012 % Change WoW -5.67 -1.06 -8.84 -5.34 MoM -30.92 -17.36 -18.07 -19.46
Source: Reuters

YoY 38.65 39.48 2.43 1.51

as on Oct 5, 2012 International Prices Soybean- CBOTNov'12 Futures Soybean Oil - CBOTOct '12 Futures Unit USc/ Bushel USc/lbs Last 1551.5 50.76 Prev day 0.00 -0.47 WoW -3.09 -2.72 MoM -11.24 -11.51 YoY 12.47 -11.41

Source: Reuters

Crude Palm Oil

as on Oct 6, 2012 % Change Prev day WoW 2.70 0.36 -7.11 -7.26

Unit
CPO-Bursa Malaysia Oct '12 Contract CPO-MCX- Oct '12 Futures

Last 2248 412.5

MoM -23.54 -23.96

YoY -33.88 -13.90

MYR/Tonne Rs/10 kg

Refined Soy Oil: Ref soy oil settled 1.05% higher on Saturday
ahead of festive demand and positive international markets. 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. 1-25 rose 8 percent to 1,170,720 tonnes from 1,084,343 tonnes shipped during Aug. 1-25. Indias edible oil imports should rise 5.4 percent to a record 10.31 million tonnes in 2012/13, with the entire increase met by palm oil. 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 Oct '12 Futures Rs/100 kgs Rs/100 kgs Last 3975 3900 Prev day -0.63 1.38

as on Oct 6, 2012 WoW -4.22 1.19 MoM -7.56 -4.18

Source: Reuters

YoY 33.73 26.13

Technical Chart Soybean

NCDEX Nov contract

Rape/mustard Seed: Mustard futures traded on a positive note

last week due to low stocks in the domestic markets and settled 1.19% higher w-o-w. 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. Sowing of rapeseed starts from October and northwestern Rajasthan is the top producing area in the country. 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. Outlook Edible oil complex is expected to trade sideways with a upper bias as taking cues from the international market. Also withdrawal of special margin in October soybean contract might provide support to the prices. However upside might be capped due to rise in soy output.

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 Oct 8, 2012 Support 617-621 3065-3095 3860-3900 405-408 Resistance 630-634 3205-3260 3975-4025 416-420

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Commodities Daily Report

Monday| October 8, 2012

Agricultural Commodities
Black Pepper
Pepper futures traded on a mixed note last week. Low supplies in the domestic markets as well as festive demand supported the prices. Farmers are also unwilling to sell their stocks at lower levels. However, reports that FMC has asked NCDEX to find out if there were any erratic trades in Pepper has pressurized prices. Traders are buying pepper directly from the farmers. Exports demand for Indian pepper in the international markets is said to be low due to huge price parity. The Spot settled 0.54% higher while the November Futures settled marginally lower by 0.09% 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 $8,600/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 Oct '12 Futures Rs/qtl Rs/qtl Last 42316 43005 % Change Prev day 0.40 -0.43

as on Oct 6, 2012 WoW 0.54 -0.81 MoM 3.04 2.99 YoY 22.17 24.62

Source: Reuters

Technical Chart Black Pepper

NCDEX Nov 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 Oct 8, 2012 Support 42600-42910 Resistance 43400-43760

Production and Arrivals

The arrivals in the spot market were reported at 15 tonnes while offtakes were 17 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 is expected to trade sideways today. Low supplies in the domestic markets as well as festive season demand are expected to support prices. However, reports that FMC has asked NCDEX to find out any irregularities in pepper trade may cap sharp upside.

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Commodities Daily Report

Monday| October 8, 2012

Agricultural Commodities
Jeera
Jeera prices traded on a positive note last week on account of low arrivals in the domestic markets. Farmers are unwilling to sell at lower prices. Expectations of better export figures have also supported the prices at lower levels. However, reports of higher carryover stocks as compared to last year restricted sharp gains. Good rains in Gujarat, thereby expectations of better sowing prospects ahead of the rabi sowing have also pressurized the prices in the spot market. The spot settled lower by 0.03% while the Futures settled 2.13% higher w-o-w. 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. 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 $2,600 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 Oct'12 Futures Rs/qtl Rs/qtl Last 14496 13998 Prev day -0.28 0.83

as on Oct 6, 2012 % Change WoW -0.03 2.83 MoM -2.52 1.27 YoY -3.11 -3.33

Source: Reuters

Technical Chart Jeera

NCDEX Nov contract

Production, Arrivals and Exports

Unjha markets witnessed arrivals of 4,000 bags, while off-takes stood at 7,000 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

Market Highlights
Prev day 0.00 2.04

as on Oct 6, 2012 % Change

Outlook
Jeera futures are expected to trade on a positive note today. Prices may find support at lower levels on expectations of higher export figures. However, good rains in Gujarat and higher carryover stocks 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.

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

Last 5289 5498

WoW -4.06 -2.48

MoM -3.14 -8.82

YoY -6.03 7.89

Turmeric
Turmeric Futures traded on a negative note last week after reports that FMC asked NCDEX to find out if there are any erratic trades in Turmeric kept the prices under check. Higher stocks with the stockists also pressurized the prices. However, a reduction in the special cash margin on the long side supported the prices at lower levels. Turmeric has been sown in 0.57 lakh hectares in A.P as on 03/10/2012. Sowing is also reported 30-35% lower during the sowing period. The Spot as well as the Futures settled 4.06% and 2.48% lower w-o-w. Special Cash Margin of 40% on the Long side shall be reduced to 20% (cash) on all the running contracts and yet to be launched contracts in Turmeric w.e.f. beginning of day Wednesday, September 26, 2012.

Technical Chart Turmeric

NCDEX Nov contract

Production, Arrivals and Exports

Arrivals in Erode and Nizamabad mandi stood at 4,000 bags and 1,000 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 Oct 8, 2012 Support 13800-14000 5470-5516 Resistance 14350-14570 5620-5660

Outlook
Turmeric prices are expected to trade on a negative note today on reports that FMC has asked NCDEX to find out any erratic trades in turmeric. However, a reduction in the special cash margin, lower sowing figures and lower arrivals may support prices.

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Commodities Daily Report

Monday| October 8, 2012

Agricultural Commodities
Kapas
NCDEX Kapas prices settled almost flat as traders adopted wait and watch policy. ICE cotton Futures closed lower by 0.85% on account of pick up in global harvesting in key countries. Cotton harvesting has commenced in US, in all 14% is harvested as compared to 10% a week ago, versus 15% same period a year ago. Cotton crop condition is 42% in Good/Excellent state as compared to 43% a week ago, and 29% same period a year ago.

Market Highlights
Unit Rs/20 kgs Rs/Bale Last 913.5 15890

as on Oct 6, 2012 % Change Prev. day WoW 0.27 2.24 0.51 -0.50 MoM -10.13 -0.50 YoY #N/A -17.20

NCDEX Kapas Futures MCX Cotton Futures

Source: Reuters

Domestic Production and Consumption

As on 21 September, 2012, Cotton is being planted on 114 lakh hectares, down, as 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 First Advance Estimates, Cotton production for 2011-12 seasons is revised upward to 334 lakh bales compared with 352 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.
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International Prices
ICE Cotton Cot look A Index Unit Usc/Lbs Last 69.8 81.35

as on Oct 5, 2012 % Change Prev day WoW -0.85 0.13 0.00 0.00 MoM -6.80 0.00 YoY -32.46 -29.20

Source: Reuters

Technical Chart - Kapas

NCDEX April contract

Global Cotton Updates

Global cotton prices are mainly influenced by China, US and India. 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 17.65 mln bales and exports of 12.1 mln bales were pegged for the season 2012-13. 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. China's 2012 cotton output is estimated at 6.97 million tns, down 4.2 percent from last year. China's cotton imports in August rose 48 percent on the year to 305,600 tns. Total imports in the first eight months of the year were 3.77 million tns, up 123% from the same period last year, according to the report by the China National Cotton Reserves Corp.

Source: Telequote

Technical Chart - Cotton

MCX Oct contract

Outlook
Kapas futures in intraday is expected to trade sideways as ongoing harvesting in the key states coupled with new cotton crop arrivals from the northern states might pressurize the prices. However, prices in spot market are nearing its MSP, which would restrict any major fall. Also Farm Minister has lowered the output estimates of cotton for the 2012-13 season, that will provide support to the prices in the short term. In the international front, cotton harvesting has begun globally which might cap a sharp upside in medium term.

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 Oct 8, 2012 Support 888-902 885-900 15650-15770 Resistance 928-937 925-935 16020-16120

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