Commodities Daily Report

Monday| November 12, 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 Analyst anuj.choudhary@angelbroking.com (022) 2921 2000 Extn. 6132

Vaishali Sheth - Research Associate vaishalij.sheth@angelbroking.com (022) 2921 2000 Extn. 6133
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Commodities Daily Report

Monday| November 12, 2012

Agricultural Commodities
News in brief
Farm costs panel moots 10% import duty on pulses
The Commission for Agriculture Costs and Prices (CACP) has suggested 10 per cent import duty on pulses to encourage domestic production. It has also recommended opening up of pulses exports to create a neutral trade policy. Currently, there is no duty on import of pulses, while exports of many pulses are banned. Terming the restrictive exports and duty-free imports as pro-consumer, CACP in its latest report, Price Policy for Rabi Crops, said such a policy was not in the interest of producers. CACP says that imposing 10 per cent duty on imports would enhance domestic output by bringing more irrigated areas under pulses. Indirectly, such a move would result in saving on fertiliser subsidy as pulses are nitrogen fixing and help in stabilising production. Further, the levy of import duty would help contain the rising import bill on pulses. India imported pulses worth Rs 8,767 crore or $1.8 billion in 2011-12, an increase of 16.4 per cent over the previous year. The country has been importing 2-3 million tonnes every year for the past few years. The country has prohibited export of pulses till March 2013, but the ban does not apply to kabuli chana or chickpea, whose exports were freed back in March 2007. (Source: Business Line)

Market Highlights (% change)

Last Prev. day

as on Nov 9, 2012
WoW MoM YoY

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

18684 5686 54.37 85.09 1725

-0.86 -0.91 0.30 0.77 0.71

-0.38 -0.20 1.31 -2.30 0.66

-0.58 -0.32 3.46 -4.75 -2.71

6.34 7.50 10.95 -9.73 -1.70

Source: Reuters

Wheat exports may exceed 5.5 mt

Wheat exports are likely to exceed 5.5 million tonnes (mt) this financial year. This would make India the seventh-largest exporter of the commodity. In 2011-12, it was the sixteenth-largest wheat exporter. In the first half of the current financial year, wheat exports stood at 2.43 mt, with average realisation of $270 a tonne, or about Rs 14 a kg, according to a senior official at Agricultural & Processed Food Products Export Development Authority (APEDA). As on October 1, wheat stocks with state-run agencies stood at 43.15 mt. The US Department of Agriculture (USDA) has estimated global wheat production this financial year to decline about five per cent to 665.33 mt, compared with 694.69 mt in 2011-12, owing to poor weather. Lower production globally has increased the demand for wheat. Therefore, despite the poor quality of wheat produced in India, wheat exports from the country are estimated to rise. (Source: Business Standard)

Slowdown in pulses import; yellow peas dominate basket

A decline in pulses production for two years in a row should normally have caused a spurt in Indias pulses import volume; but contrary to general expectation, physical arrival of imported pulses has been rather slow since the beginning of the new fiscal in April. Enquiries with several traders across the country confirm the slowdown in physical arrivals. There is general consensus that in the first six months of the new fiscal that is from April to September this year, imports were an estimated 12 lakh tonnes. It is the outside limit and could be slightly lower, asserted an executive of a large trading house. Import volumes this year compare poorly with arrivals of 14.7 lakh tonnes (lt) in April-September 2011 and 13.0 lt during the same period in 2010. What is worrisome is the composition of the import basket. Well diversified imports including pigeon pea (tur/arhar), lentil (masur) and beans have now largely given way to yellow peas. A significant part of the imported material so far has been yellow pea, the lowest priced pulse available in the world market today. According to government statistics, out of the 33 lt pulses imported in fiscal 2011-12, yellow peas accounted for 20 lt or 60 per cent. (Source: Business Line)

Govt to release extra wheat, rice to tame prices in festival season

To quell rising prices of wheat and rice during the ongoing festival season, the government has cleared sale of an additional 6.5 million tonnes (mt) of wheat in the open markets to bulk consumers and 1 mt of both wheat and rice to retail buyers. In total, the government has till now allocated more than 10 mt of wheat and some quantities of rice in the open market during this financial year. In June, it had allocated 3 mt of wheat for only bulk consumers. The government has been accused of hoarding unsual quantities of wheat and rice in its stocks causing an artificial shortage in the retail markets leading to spurt in prices. A senior official said the step will also help in easing the bulging grain stocks as procurement of rice picks up. The stocks of wheat in the central pool stood at 40.58 mt at the end of October 2012 against a requirement of around 21 mt. (Source: Business Standard)

Turmeric growers fix floor price of Rs 10,000 a quintal

Turmeric prices may rise in the coming weeks, as farmers across the major turmeric producing States of Andhra Pradesh, Tamil Nadu, Maharashtra and Karnataka are coming together to fix their own minimum selling price. Andhra Pradesh turmeric farmers have joined their counterparts in the other three producing States to fix a minimum selling price of Rs 10,000 a quintal, even as market prices crashed to about Rs 5,000-6,000. Recently farmers in Tamil Nadu fixed their minimum price of Rs 9,000, followed by Maharashtra and Karnataka where the price fixed was Rs 10,000 due to additional transportation costs. In the absence of a minimum support price from the government, the farmers, under the umbrella body of Turmeric Farmers Association of India, have taken this step to fix their respective prices in the four States.
(Source: Business Line)

NCDEX under FMC scanner for inferior quality pepper deposits

A senior FMC official is currently on inspection of two warehouses in Kochi where bulk of alleged inferior quality pepper deposits took place. Barely four months after guars discontinuation from trading due to excessive manipulation, the National Commodity & Derivatives Exchange (NCDEX) has come under the regulators scanner once again. This time, however, for deposits of inferior quality pepper in the NCDEX registered warehouses for its targeted delivery to physical traders. According to trade sources, NCDEX-linked warehousing company National Collateral Management Services (NCMSL) and JICS Logistics have accepted deposits of 2,500-3,000 tonnes of inferior quality pepper, not meeting with quality standards specified in the NCDEX contracts. The quantity was deposited by various traders through NCDEX physical participants including Kishor Spices, Harita Spices, Anusha Trading, VB traders, DS Sons and Globe Commodities Pvt Ltd. When a number of traders complained to the NCDEX last week, the exchange collected samples of pepper from recently deposited stocks and sent to the nearby recognised laboratory for testing. On receiving complaints, the exchange had blacklisted accepted deposits from the aforementioned physical participants for two-three days but, resumed later. (Source: Business Standard)

Bay under watch for fresh low-pressure area

The India Meteorological Department (IMD) has put South Bay of Bengal under watch for a fresh low-pressure area. The low is expected to materialise over central parts of South Bay around Wednesday, the IMD said. The storm is forecast to develop later in the week and is shown lying anchored off north Tamil Nadu and adjoining south Andhra Pradesh coast by the weekend up to which forecasts were available from these agencies. (Source: Business Line)

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Commodities Daily Report

Monday| November 12, 2012

Agricultural Commodities
Chana
Chana futures recovered and settled higher by 0.87% on account of short coverings. Except for Wheat, minimum support price of all other Rabi crops has been increased by CCEA for 2012-13 season. MSP of Chana/Gram is raised by Rs 200 per qtl for 2012-13 season to Rs 3000. Higher returns and favorable soil condition will definitely boost acreage in the coming season. Although overall pulses sowing is lagging by 20% to 37.23 lakh ha till 9 Nov, Chana sowing is up Maharashtra and AP.
th

Market Highlights
Unit Rs/qtl Rs/qtl Last 4496 4624 Prev day -1.72 0.87

as on Nov 10, 2012 % change WoW MoM 0.68 -6.32 2.62 -6.26 YoY 42.18 47.73

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

Source: Reuters

Technical Chart - Chana

In Maharashtra, Chana sowing is completed on 4.6 lakh hectares as on 9 November, which is 37.5% of the targeted 12.32 lakh ha, and up by 66% compared to last year. In AP Chana sowing is up by 41% to 3.81 lakh ha. (State Farm Departments) As per the NCDEX circular dated 9 November, the pre expiry margin on Chana November 2012 contract has been increased from the existing 3% to 7% for last 5 trading days increased on a daily basis on both buy and sell sides. In Rajasthan, the third largest Chana producing states, sowing is lagging behind by almost 55% and stands at 5.45 lakh hectares as on th 9 November, 2012. The Commission for Agriculture Costs and Prices (CACP) has suggested 10 per cent import duty on pulses to encourage domestic production. in the first six months of the new fiscal that is from April to September this year, imports were an estimated 12 lakh tonnes.
th th

NCDEX Dec contract

Source: Telequote

Sowing progress and demand supply fundamentals

Improved rains towards the end of monsoon season coupled with hike in MSP have raised prospects of Chana sowing in the 2012-13 season. Also, farm ministry has targeted 7.9 mn tn chana output for 2012-13 season, higher compared to 7.58 mn tn in 2011-12. According to the Ministry of Agriculture 99.81 Lakh hectare area has been planted under Kharif pulses in 2012-13 compared to 108.28 lakh hectare (ha) in the previous year. According to the first advance estimates of 2012-13 season, 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. 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)

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

valid for Nov 12, 2012 Resistance 4375-4415

4230-4285

Outlook
Chana futures may recover in the early part due to short coverings but prices might trade on a negative note later on expectations of easing supplies. In the short to medium term we expect prices to stay under downside pressure as supply pressure may ease amid shipments from Australia and Canada. Going forward, prices may also take cues from sowing progress of Rabi pulses.

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Commodities Daily Report

Monday| November 12, 2012

Agricultural Commodities
Sugar
Sugar prices settled marginally higher by 0.21% on Saturday due to bargain buying. Decision over cane pricing in Maharashtra and UP has delayed crushing this season too. Despite festival season, prices are under check this season as government has released higher quota of 40 lakh tonnes for October and November, compared to 34.6 lakh tonnes during 2011. Liffe white sugar as well as ICE raw sugar closed higher on Friday by 0.68% and 1.17% on account of long liquidation. Higher output and lower imports expectations for the 2012-13 season from China coupled with higher sugar surplus forecast for fourth straight year has led to a sharp decline in international sugar prices during the past few weeks.

Market Highlights
Unit Sugar Spot- NCDEX (Kolkata) Sugar M- NCDEX Nov '12 Futures Rs/qtl Last 3686

as on Nov 10, 2012 % Change Prev. day WoW -1.05 -1.17 MoM -2.06 YoY 10.03

Rs/qtl

3390

0.21

-0.29

-2.16

12.62

Source: Reuters

International Prices
Unit Sugar No 5- LiffeDec'12 Futures Sugar No 11-ICE Mar '13 Futures $/tonne $/tonne Last 529.5 423.56

as on Nov 9, 2012 % Change Prev day WoW 0.68 1.17 -1.51 -1.40 MoM -10.32 -10.35 YoY -19.68 -22.99

Domestic Production and Exports

Although some of the mills have started operations in Maharashtra, but still crushing has not gained momentum as farmers are seeking higher cane prices. In UP too crushing normally starts in the first week of November, but this year also crushing is delayed due to disputes over cane pricing. 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 Dec contract

Source: Telequote

Global Sugar Updates

Sugar output in Brazil jumped 57% during the first fortnight of October. th And thus output is now lower just by 3.7% as of 16 October at 26.7 mn tn. Unica expects the main center-south cane to yield 32.7 mn tn sugar output in 2012-13, down 1.2 % from the 33.1 mn tn forecast in April. Brazil exported 3.998 million tons of sugar, raw value, in October up from 2687 million tons in September. Brazil has exported only 15.59 million tons of sugar this year till October which was 17.17 million tons, raw value, last year same period. 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)

Technical Outlook
Contract Sugar Dec NCDEX Futures Unit Rs./qtl Support

valid for Nov 12, 2012 Resistance 3330-3345

3280-3295

Outlook
Sugar prices may trade sideways as supplies are sufficient to meet the festive season demand which might put pressure on the prices. However, delayed crushing may support prices at lower levels and thus sharp fall may be restricted.

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Commodities Daily Report

Monday| November 12, 2012

Agricultural Commodities
Oilseeds
Soybean: Soybean futures declined further and settled 1.53%
lower% on account of weak international markets ahead of USDA November monthly crop report which estimated an increase in its production forecast for soybean. Soy meal exports during October are down 49,840 tn in October, the seventh consecutive month of fall in the current fiscal year, from 223,594 tn a year ago. This is because, most export commitments were done for forward trade like Nov-Dec amid uncertainty over supplies in October. Soybean arrivals at MP declined to 2.75 lakh bags on Friday, while in Maharashtra and Rajasthan it stood at 1 lakh bag and 60000 bag respectively. Solvent plants are aggressive buyers in the coming days to keep up with their commitments for DOC exports. According to first advance estimates, Soybean output is pegged at 126.2 lk tn for 2012-13.

Market Highlights
Unit Soybean Spot- NCDEX (Indore) Soybean- NCDEX Nov '12 Futures Ref Soy oil SpotNCDEX(Indore) Ref Soy oil- NCDEX Nov '12 Futures Rs/qtl Rs/qtl Rs/10 kgs Rs/10 kgs Last 3273 3228 690.1 669.6

as on Nov 10, 2012 % Change Prev day -2.18 -1.53 -0.80 -1.90 WoW -0.33 -1.45 -1.17 0.59 MoM 4.10 3.28 3.36 0.76 YoY 46.77 44.92 9.24 6.49

Source: Reuters

as on Nov 9, 2012 International Prices Soybean- CBOTNov'12 Futures Soybean Oil - CBOTDec'12 Futures Unit USc/ Bushel USc/lbs Last 1452 47.77 Prev day -3.15 -2.05 WoW -4.91 -3.02 MoM -4.68 -4.78
Source: Reuters

International Markets
CBOT Soybean declined 3.15% on Friday after the release of USDA November monthly crop report which forecasted more than expected rise in US soybean output. Soybean prices have fallen 18% from their nominal record closing high of $17.71 a bushel on Sept. 4 According to the USDA November monthly report, The U.S. Department of Agriculture on Friday raised its estimate for soybean production by 4% from its forecast last month, saying that rainfall late in the growing season softened the impact of the U.S. drought. Despite the USDA report, supplies of the oilseed in the U.S. are unusually tight by historical standards and China-led export demand remains strong. Area and production in Argentina for MY 2012-13 are maintained at 19.7 million hectares and 55 million tonnes, respectively. th Brazil's government on 8 Nov 2012 edged up its forecast for a record 2012/13 soybean crop to between 80.1 and 83 million tonnes, despite concerns after dry October weather and planting delays

YoY 23.50 -6.31

Crude Palm Oil

as on Nov 10, 2012 % Change Prev day WoW -0.35 -1.01 -5.11 -1.73

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

Last 2249 421.1

MoM -1.27 0.98

YoY -26.62 -16.89

MYR/Tonne Rs/10 kg

Source: Reuters

RM Seed
Unit RM Seed SpotNCDEX (Jaipur) RM Seed- NCDEX Nov '12 Futures Rs/100 kgs Rs/100 kgs Last 4275 4159 Prev day 0.47 -0.79

as on Nov 10, 2012 WoW 0.59 1.69 MoM 4.65 -0.43

Source: Reuters

YoY 39.59 34.55

Refined Soy Oil: Ref soy oil settled lower taking cues from the
edible oil market. MCX CPO also settled lower by 1.01% on account of supply glut. Also, reduction in Indonesias export tax led to a correction on the BMD. According to latest data from SEA, total vegetable oil imports in September were 993,912 tn, up from 897,018 tn in the previous month. As per MPOBs latest report, Malaysia's September palm oil stocks rose 17 percent to record high 2.48 million tons compared to previous month.

Technical Chart Soybean

NCDEX Dec contract

Rape/mustard Seed: Rm seed futures settled lower by 0.79% as

rise in rabi sowing of mustard weighed on the prices. Rabi oilseeds th sowing as on 10 November was reported at 43.21 lakh ha as compared to 35.18 lakh ha in the same period last year. MSP for Mustard seed is increased by 20% from Rs 2500/Quintal to Rs 3000/Quintal for 2012-13 Season.

Outlook
Edible oil complex might trade sideways with downward bias taking cues from the USDA monthly report. However, good demand for soy meal might provide support to the prices at lower levels.
Source: Telequote

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

valid for Nov 12, 2012 Support 638-646 3190-3228 4132-4165 411-416.50 Resistance 660-667 3288-3320 4244-4270 424.50-428

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Commodities Daily Report

Monday| November 12, 2012

Agricultural Commodities
Black Pepper
Pepper futures on a negative note last week on reports of better output in the domestic as well as the international markets this season. Farmers are also trying to liquidate their stocks ahead of the commencement of arrivals of the fresh crop. Exports demand for Indian pepper in the international markets remains weak due to huge price parity. However, prices found support at lower levels due to festive as well as winter buying. The Spot as well as the December Futures settled 1.82% and 3.39% lower w-o-w. Pepper prices in the international market are being quoted at $8,350/tn(C&F) while Vietnam was offering Austa at $7,000/tn, Brazil Austa at $6,700/tn, and Indonesia Austa at $6,500/tn (FOB).

Market Highlights
Unit Pepper SpotNCDEX (Kochi) Pepper- NCDEX Nov '12 Futures Rs/qtl Rs/qtl Last 41175 41740 % Change Prev day -0.54 -0.52

as on Nov 10, 2012 WoW -1.82 -2.10 MoM -2.50 -2.75 YoY 17.87 17.69

Source: Reuters

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 September 2012 is estimated around 80,433 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.

Technical Chart Black Pepper

NCDEX Dec contract

Source: Telequote

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

valid for Nov 12, 2012 Support 40380-40690 Resistance 41150-41325

Production and Arrivals

The arrivals in the spot market were reported at 9 tonnes while offtakes were 12 tonnes on Saturday. As per IPC, Global pepper production in 2012 is projected at 3.36 lk tn, up by 12.7% compared with 2.98 lk tn in 2011. Indonesian pepper output Is expected to rise by 24% and in Vietnam by 10%. According to previous estimates, 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). Brazil is also expected to produce 22,000 tn this year. 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 downwards today. Liquidation pressure from farmers as well as low export demand may pressurize prices. Good supplies in the international market from other origins may also keep prices under check. However, festive season as well as winter demand may support prices at lower levels.

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Commodities Daily Report

Monday| November 12, 2012

Agricultural Commodities
Jeera
Jeera Futures recovered from lower levels and traded on a positive note last week on reports of fresh export enquires. However, gains were capped on increasing arrivals since farmers are selling their stocks as they need cash during the festive season. The sowing of the crop has started and is expected to gain momentum in the coming days, thus pressuring prices. Sowing in Gujarat is currently lower by 15-20%. Festive demand is also expected to improve. Exporters have been buying due to tensions between Syria and Turkey. The spot as well as the December Futures settled 1.31% 1.53% 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. 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 $2,850 tn (c&f) while Syria and Turkey are not offering. Carryover stocks of Jeera in the domestic market is expected to be around 4-5 lakh bags lower by around 3 lakh bags last year.

Market Highlights
Unit Jeera SpotNCDEX(Unjha) Jeera- NCDEX Nov '12 Futures Rs/qtl Rs/qtl Last 15064 14468 Prev day 0.18 -1.11

as on Nov 10, 2012 % Change WoW 1.31 2.08 MoM -0.37 -4.05 YoY 5.43 8.04

Source: Reuters

Technical Chart Jeera

NCDEX Dec contract

Production, Arrivals and Exports

Unjha markets witnessed arrivals of 8,000 bags, while off-takes stood at 8,000 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 -0.04

as on Nov 10, 2012 % Change

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

Last 5062 5392

WoW 2.25 4.62

MoM -1.04 3.37

YoY -5.13 20.95

Outlook
Jeera futures are expected to trade sideways with a negative bias today. Prices may witness downside pressure as farmers are liquidating their stocks for want of cash. However, prices may recover on fresh export demand. Festive buying may also lend support to the prices. In the medium term (November-December 2012), prices are likely to stay firm as there are limited stocks with Syria and Turkey.

Technical Chart Turmeric

NCDEX Dec contract

Turmeric
Turmeric Futures traded on a positive note in the initial part of the week due to good orders from the upcountry markets. However, prices corrected from higher levels due to profit booking as well as weak overseas demand. Stockists have good carryover stocks with them, capping sharp gains in the spot. Turmeric has been sown in 0.58 lakh hectares in A.P as on 10/10/2012. Sowing is also reported 30-35% lower during the sowing period. The Spot as well as the December Futures settled 2.25% and 1.54% higher w-o-w. Production, Arrivals and Exports Arrivals in Erode and Nizamabad mandi stood at 10,000 bags and 700 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. Outlook Turmeric prices are expected to trade sideways today. Good demand from North India is expected to support prices. However, large stocks may pressurize prices.
Source: Telequote

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

Valid for Nov 12, 2012

Support 14720-14845 40380-40690 Resistance 15100-15220 41150-41325

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Commodities Daily Report

Monday| November 12, 2012

Agricultural Commodities
Kapas
NCDEX Kapas futures again closed marginally down by 0.36% as weak international market as well as arrival pressure is weighing on the prices. As on 4th November 2012, 13.02 lakh bales of Cotton has arrived so far, down by 29% compared to last year 18.57 lakh bales during the same period. U.S. ICE cotton futures settled higher by 0.46% on short coverings
Source: Reuters

Market Highlights
Unit Rs/20 kgs Rs/Bale Last 966 16080

as on Nov 10, 2012 % Change Prev. day WoW -0.36 0.63 -0.19 0.50 MoM 1.74 0.50 YoY -4.51

NCDEX Kapas Futures MCX Cotton Futures

Cotton harvesting has commenced in US, in all 64% is harvested as compared to 50% a week ago, versus 68% same period a year ago. Cotton crop condition is 43% in Good/Excellent state compared to 29% th same period a year ago as on 6 Nov 2012.

International Prices
ICE Cotton Cot look A Index Unit Usc/Lbs Last 69.58 81.35

as on Nov 9, 2012 % Change Prev day WoW 0.46 -1.16 0.00 0.00 MoM -3.50 0.00 YoY -30.97 -29.20

Domestic Production and Consumption

According to Cotton Advisory Boards (CAB) latest estimates for 2012-13 season that commenced in October, domestic cotton production is pegged 334 lakh bales, down 5.6% from the previous years estimates of 353 lakh bales. Lower opening stocks coupled with estimated lower output will result in lower supplies this season at 374 lakh bales, a decline of 8.7% compared with last years 410.77 lakh bales. On the consumption front, domestic consumption is estimated higher at 270 lakh bales on the back of higher mill consumption. However, after witnessing record exports in 2011-12 season, Indian exports could witness significant fall this season on the back of lower availability along with unattractive domestic cotton prices. CAB estimates cotton exports at 70 lakh bales this season, compared with 128.8 lakh bales last year.

Source: Reuters

Technical Chart - Kapas

NCDEX April contract

Global Cotton Updates

The U.S. government has raised its 2012/13 forecast for global cotton inventory to above 80 million 480-pound bales for the first time due to larger-than-expected output in the United States, the world's third largest producer, and falling demand from China, the world's largest consumer. In its monthly crop report, the U.S. Department of Agriculture increased its estimate for 2012/13 ending stocks for a fourth straight month to a new all-time high of 80.27 million bales. Higher global ending stocks are seen capping the upside in the cotton prices this year too. However, downside is also limited as prices are again nearing its 12 year average price of 65 cents per pound. Markets will now take cues from the Chinese demand for cotton and trade policies of India with respect to cotton exports. In its November monthly demand supply report, the Agriculture Department (USDA) raised its cotton crop for 2012/13 cotton crop season to 17.45 mln bales (Prev 17.29) along with upward revision in end stocks 5.80 mln 480 pounds/bales (Prev 5.60). Exports were unchanged at 11.60 mln 480 pounds/bales.
Source: Telequote

Technical Chart - Cotton

MCX Nov contract

Source: Telequote

Outlook
Cotton prices may trade sideways with downward bias on account of weak international markets. Although harvesting pressure may build mid November onwards, but still no major downside is expected in the domestic markets as farmers will not sell their stocks at very low prices. Also, CCI procurement at MSP levels may support prices from falling sharply.

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

valid for Nov 12, 2012 Support 940-954 938-952 15680-16920 Resistance 976-989 973-986 16180-16260

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