Commodities Daily Report

Thursday| December 27, 2012

Agricultural Commodities

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

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

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Commodities Daily Report

Thursday| December 27, 2012

Agricultural Commodities
News in brief
Vietnam imposes floor price for low grade rice
Vietnam will later this week impose a floor price of $370 a tonne for lowquality 35 percent broken rice for export, a trader and officials said on Wednesday, as it looks to halt price declines with demand tapering off towards year-end. The new price, based on a free-on-board Saigon Port basis, will take effect from Thursday, a Vietnam Food Association official said by telephone from Ho Chi Minh City. "We are not targeting any buyer, but the minimum price for the 35 percent broken rice is there so other (higher) grades can follow suit," the official said. Buyers and sellers can decide export prices for other varieties, the food association said in a statement, but the government hopes the floor price for the 35 percent broken grain will influence other grades. (Source: Reuters)

Market Highlights (% change)

Last Prev. day

as on Dec 26, 2012

WoW MoM YoY

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

19417 5906 54.85 90.98 1660

0.84 0.85 -0.20 2.67 0.07

0.27 0.15 -0.16 3.47 -0.58

4.75 4.79 -0.51 #N/A #N/A

22.32 24.32 4.34 -8.59 3.16

.Source: Reuters

FMC tells banks to push commodity hedging

The commodities trade regulator, the Forward Markets Commission (FMC), has started pitching with banks to promote commodity hedging on the exchange platform. It has begun doing so despite the government having had to remove the controversial clause allowing banks to participate in commodities futures from the Banking Regulation Amendment Bill, to secure its passage. In the past two weeks, FMC has had meetings with market participants and stakeholders, with bankers invited. We are asking bankers to understand the market and ask their borrowers to hedge themselves for their commodity exposure, said Ramesh Abhishek, chairman, FMC. (Source: Business Standard)

Indonesia sees unmilled rice output at 72 mln T in 2013

Indonesia expects unmilled rice output to hit 72.064 million tonnes in 2013, up from 68.965 million tonnes this year, Agriculture Minister Suswono said on Wednesday. Corn output in Southeast Asia's largest economy is seen at 19.831 million tonnes in 2013, versus 18.962 million tonnes in 2012, while soybean production will rise to 1.5 million tonnes next year from 783,000 tonnes in 2012, Suswono said. Crude palm oil output in the world's top producer is seen at 27.046 million tonnes next year, rising from 23.521 million tonnes in 2012, with coffee bean production likely to gain to 763,000 tonnes in 2013 from 657,138 tonnes, and cocoa bean output at 958,000 tonnes next year from 903,652 tonnes, Suswono said. White sugar output would climb to 2.82 million tonnes in 2013, up from 2.58 million tonnes in 2012, while rubber production would slip to 2.771 million tonnes next year from 3.040 million tonnes this year, he added. (Source: Reuters)

Coffee exports dip 9% in 2012 over glut in global market

Indias coffee exports have declined nine per cent in 2012 in line with the market expectations. The country exported 307,700 tonnes between January and December 21, 2012, against 337,715 tonnes in the previous year. The drop in exports was mainly on account of subdued demand from major consuming markets in Europe, Asia and US, as a result of global slowdown. Bumper crop in Brazil and Vietnam also contributed to the glut in the international market resulting in demand drop. (Source:
Business Standard)

India raises 2013 local wheat purchase price by 5.1 pct

India has raised the purchase price of wheat payable to farmers next year by 65 rupees to 1,350 rupees ($24.56) per 100 kg, Finance Minister P. Chidambaram said on Wednesday. India, the world's second-biggest producer of the grain, paid a minimum purchase price of 1,285 rupees per 100 kg in 2012. India sets a price to buy grains from local farmers to protect them from distressed sales, help maintain stocks for emergencies and run various welfare programmes. (Source: Reuters)

Cotton body pegs output at 350 lakh bales

Despite apprehensions over fall in acreage, the cotton output is expected to touch 350 lakh bales (of 170 kg each) this year, said Dhiren N. Sheth, President, Cotton Association of India. Although the acreage under cotton has witnessed a three per cent decrease compared with last year, the crop looks promising due to good rains received in Andhra Pradesh and Maharashtra in the later part of the monsoon. The cotton production this year is expected to be 350 lakh bales while the cotton consumption is likely to be about 265 lakh bales, leaving a sizeable surplus of about 150 lakh bales, he said recently at the 90th annual general meeting of the Association. According to the recent International Cotton Advisory Committee, Washington data, the general outlook for cotton supply and use for 2012-13 is bleak as global cotton production and mill use are forecast at 25.9 million tonnes (mt) and 23.4 mt respectively, resulting in an oversupply of 2.4 mt. The ICAC currently estimates that cotton mill use will increase in 2012-13 in India, Pakistan, Bangladesh, Uzbekistan, Indonesia, Vietnam and Thailand amongst others. (Source: Business Line)

Palm oil hits 1-month top as focus turns to Malaysia floods

Malaysian palm oil futures rose to a one month-high in light trade on Wednesday with investors turning their focus to seasonal rains that could trigger floods and curb edible oil supply in Southeast Asia. In Malaysia, the world's No.2 producer, the weather office has issued warnings of heavy rains in the coming week that may cause floods in major oil palm growing areas that account for 75 percent of national output. Rains and floods can disrupt logistics and harvesting, lowering high stocks and lifting prices that are on track for a yearly loss of above 23 percent -steepest decline since the 2008 financial crisis. (Source: Reuters)

China approves trading in rapeseed futures

China's securities regulator has given approval to the Zhengzhou Commodity Exchange to trade futures contracts in rapeseed and rapeseed meal, a move aimed at helping companies manage price risks. The new contracts will help companies' hedge against price fluctuations at a time of rising market risks and growing imports, the China Securities Regulatory Commission (CSRC) said on its website. The CSRC did not say when trading of the new contracts will start. The Zhengzhou Commodity Exchange has had a rapeseed oil contract since 2007. Chinas rapeseed output this year fell 9.1 percent to 12.2 million tonnes from a year earlier, the China National Grain and Oils Information Center said last month. (Source: Reuters)

Slack export buying crushes castorseed

Castorseed prices continued to decline on Wednesday as export demand mainly from China and Europe was very poor. According to market sources, prices may decrease further for short term. About 17,00018,000 bags of castorseed arrived in Gujarat and price was Rs 720-725 for 20 kg and 2,800-3,000 bags arrived in Saurashtra quoting Rs 695-727. Market analysts said that increased supply and reduced offtake in spot markets mainly influenced the trading sentiments. A Rajkot-based castor trader said: Low demand by China and Europe has led to a bearish trend in castor seed prices. Futures too were weak with an expectation of higher supplies to spot markets. (Source: Business Line)

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Commodities Daily Report

Thursday| December 27, 2012

Agricultural Commodities
Chana
Chana spot as well as futures declined sharply and settled 2.69% and 2.96% lower respectively on Wednesday. Higher acreage expectations and rising imports of Australian Chana are exerting downward pressure on chana prices. Sentiments have also turned negative on the back of fresh arrivals of new crop from Karnataka and AP. Although the quantity so far received is negligible, but is expected to improve in the coming weeks. Total pulses acreage as on 21 December 2012 stood at 128.26 lakh hectares, down marginally by 0.9% yoy. As on 14th December, pulses acreage was up by 0.5 percent. Chana sowing is however higher in Rajasthan, where it is up by 4% at 14.57 lakh hectares. In Maharashtra Chana acreage is up at 10 lakh ha as th th on 21 Dec, 2012. While in AP it is up at 6.64 lakh ha as on 19 Dec. In Australia, total chickpea production in 201213 is estimated to have increased to a record of around 746000 tones as compared with 485000 tons in 2011-12. India imports Chana mainly from Australia and Canada and higher availability in these countries at comparatively cheaper rates is seen boosting imports of Chana to meet the domestic shortfall. Australian Chana is quoted at lower rates -USD 625-635 per MT. 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

Market Highlights
Unit Rs/qtl Rs/qtl Last 4000 3906 Prev day -2.69 -2.96

as on Dec 26, 2012 % change WoW MoM -1.72 -9.84 -5.22 -7.81 YoY 15.79 12.47

Chana Spot - NCDEX (Delhi) Chana- NCDEX Jan'13 Futures

Source: Reuters

Technical Chart - Chana

NCDEX Jan contract

Source: Telequote

Technical Outlook

valid for Dec 27, 2012 Unit Rs./qtl Support 3820-3865 Resistance 3945-3990

Sowing progress and demand supply fundamentals

Contract

Chana fresh crop arrival started in Karnataka & Andhra Pradesh and about 200 bags new chana arrivals reported on a daily basis. Furthermore, the new crop was traded at Rs.4100-4200 per quintal. 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)

Chana Jan Futures

Outlook
During the intraday, some short coverings may be seen in Chana as prices have declined considerable in the last two sessions. However, selling at higher levels is advisable as sufficient supplies amid higher shipments and expectations of better output next season may exert downside pressure on chana prices. Harvesting of new crop have commenced in AP and Karnataka. In Maharashtra arrivals would commence in January and gradually increase February onwards once the arrivals from MP begin.

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Commodities Daily Report

Thursday| December 27, 2012

Agricultural Commodities
Sugar
Indian sugar futures settled higher on Wednesday on bargain buying, anticipating the government would raise duty on imports of the sweetener. However, sugar spot settled marginally lower on account of sufficient supplies in the domestic markets and subdued demand. The government is planning to remove quantitative restrictions on sugar exports and imports and will use tariffs to regulate trade as part of a new liberalized policy for the sector. The government extended the deadline for sale of unsold Oct-Nov nonlevy sugar quota till Dec 31. The initial deadline for sale of around 200,000 tn of the Oct-Nov quota was Dec 10. Government has allocated total 70 lac tons of non-levy sugar quota for Dec-March 2012-13 period which is higher from 59.5 lac tons last year. With lower sales realization and higher sugarcane payment to farmers, ISMA has already requested government to increase the import duties on raw sugar from current level to the normal rate of 60%, so as to avoid cane price arrears during the season. Liffe white sugar as well as ICE Raws settled 0.3% and 1.19% lower on Monday on account of supply glut in the global markets. According to Unica, Brazil's 2012-2013 center-south sugar output is expected to reach 34.05 million tonnes, an estimate 4.1% higher than its 32.7 million tonnes September forecast.

Market Highlights
Unit Sugar Spot- NCDEX (Kolhapur) Sugar M- NCDEX Jan'13 Futures Rs/qtl Last 3272

as on Dec 26, 2012 % Change Prev. day WoW -0.35 -1.34 MoM -5.04 YoY 11.57

Rs/qtl

3266

0.09

2.16

-1.57

#N/A

Source: Reuters

International Prices
Unit Sugar No 5- LiffeMar'13 Futures Sugar No 11-ICE Mar '13 Futures $/tonne $/tonne Last 516.5 423.33

as on Dec 26, 2012 % Change Prev day WoW -0.35 0.16 -0.84 -0.94 MoM -1.13 -0.52 YoY -14.57 -19.31

.Source: Reuters

Technical Chart - Sugar

NCDEX Jan contract

Domestic Production and Exports

Mills in the country have produced 4.91 mln tn sugar in the current sugar season till Dec 15, up nearly 2% from 4.82 mln tn produced a year ago. In Maharashtra, the largest sugar producer in the country, 155 mills are operational and have produced 1.88 mln tn sugar till Dec 15, compared with 1.83 mln produced a year ago by 165 mills. In Uttar Pradesh, the second largest sugar producer in the country, total output as on Dec 15 was 1.03 mln tn, about 20% lower on year, as some mills in the eastern part of the state are still to commence cane crushing. 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. The producers body has estimated sugar output lower at 24 mn tn, down by 2mn tn compared to the current year. Industry body ISMA has estimated 6.5 mn tn stocks for the new season beginning October 01, 2012 compared to 5.5 mn tn year ago. India may export 1.5 mn tn sugar in 2012-13. With the opening stocks of 6.5 mn tn, domestic Sugar supplies are estimated at 30.5 mn tn against the domestic consumption of around 22. 5mln tn for 2012-13.

Source: Telequote

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

valid for Dec 27, 2012 Resistance 3290-3210

3240-3255

Global Sugar Updates

According to the Brazil Agriculture Ministry, 2012-13 sugar output will reach 37.66 mn tn by the end of the season, less than the 39 mn tn forecast in August. Consultancy Kingsman revised up its 2012/13 world sugar surplus estimate to 9.2 million tonnes raw value on Friday, citing increased supply from producers including Brazil and China. Kingsman pegged global 2012/13 sugar output at 180.1 million tonnes raw value, up from the previous estimate of 177.3 million tonnes. (Source: Reuters)

Outlook
Sugar prices may trade on a positive note on expectations government may remove quantitative restrictions on sugar import/export. However, sharp gains may be capped on account of sufficient supplies in both the domestic as well as global markets.

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Commodities Daily Report

Thursday| December 27, 2012

Agricultural Commodities
Oilseeds
Soybean: Soybean futures declined sharply taking cues from the
weak international markets. Demand for soy meal from overseas for has also turned subdued in the current week. Arrivals in the domestic markets remained at 2.5 lakh bags, while demand is comparatively lower amid subdued overseas demand. According to first advance estimates, Soybean output is pegged at 126.2 lakh tn for 2012-13. Exports of soy meal rose to 517,103 tonnes in November from 397,659 tonnes a year ago. Overall oil meal exports in the first eight months of the year beginning April fell to 2.4 million tonnes from 3 million tonnes in the previous year.
Unit Soybean Spot- NCDEX (Indore) Soybean- NCDEX Jan '13 Futures Ref Soy oil SpotNCDEX(Indore) Ref Soy oil- NCDEX Jan '13 Futures Rs/qtl Rs/qtl Rs/10 kgs Rs/10 kgs Last 3270 3217 711.5 697.6

Market Highlights

as on Dec 26, 2012 % Change Prev day -1.30 -0.39 -0.35 0.52 WoW -3.05 -3.71 -2.03 -3.59 MoM -0.64 -1.65 -4.10 -4.54 YoY 32.01 28.14 -0.91 -2.23

International Markets
Soybean futures on the Chicago Board of Trade fell around 1.06% Wednesday on forecasts for favorable crop weather in South America. Soybeans: Net sales of 619,400 MT for the 2012/2013 marketing year down 53 percent from the previous week and 23 percent from the prior 4-week average. Last week, private exporters reported the cancellation of 540,000 tonnes of U.S. soybeans sold to China - the biggest cancellation by the world's top importer of the oilseed in at least 14 years. Brazil's government food supply agency Conab forecast the soybean crop at a record 82.6 million tonnes.

Source: Reuters

as on Dec 26, 2012 International Prices Soybean- CBOTJan'13 Futures Soybean Oil - CBOTJan'13 Futures Unit USc/ Bushel USc/lbs Last 1425 48.29 Prev day -1.06 -1.33 WoW -0.87 -0.25 MoM -0.02 -1.99
Source: Reuters

YoY 18.88 -6.74

Crude Palm Oil

as on Dec 26, 2012 % Change Prev day WoW 0.39 -0.27 5.05 0.47

Refined Soy Oil: Despite weakness in Soybean, Ref soy oil as

well as MCX CPO settled remained range bound on Wednesday. CPO prices have gained significantly last week as a cut in export duty on Malaysian palm oil is likely to boost exports and reduce palm oil stock piles. Malaysia, the world's No.2 palm oil producer, will set its crude palm oil export tax for January at zero percent, a government circular showed on Monday. (Source: Reuters). However, Indian importers will buy cheaper edible oil from overseas thus capping sharp gains in the domestic markets. India's cooking oil imports fell by a third in November from the previous month largely due to a drop in purchases of palm oil. Exports of Malaysian palm oil products for Dec. 1-20 fell 1.9 percent to 1,004,159 tn from 1,023,517 tn for the Nov. 1-20 period.

Unit
CPO-Bursa Malaysia Jan '13 Contract CPO-MCX- Dec '12 Futures

Last 2308 406.1

MoM 1.81 -3.95

YoY -27.19 -23.58

MYR/Tonne Rs/10 kg

Source: Reuters

RM Seed
Unit RM Seed SpotNCDEX (Jaipur) RM Seed- NCDEX Jan'13 Futures Rs/100 kgs Rs/100 kgs Last 4270 4172 Prev day -1.27 -0.07

as on Dec 26, 2012 WoW 1.01 1.88 MoM 1.07 -1.00

Source: Reuters

YoY 20.37 10.81

Rape/mustard Seed: Mustard seed futures declined further on

Wednesday on account of profit booking. Tight supplies till the fresh crop arrives in February coupled with winter season demand is seen supporting the upside in the mustard prices. The agriculture ministry data showed higher mustard seed planting figures. Acreage in Rajasthan, largest producing state as on 14 Dec 2012 is 2656.6 thousand ha compared to 2441 thousand ha during the same period last year (Mustard has been planted over 63.6 lakh ha so far, 3.3% higher compared with a year ago. rapeseed output is expected to rise by 5% to 6.5 mn tn from 6 mn tn last year.

Technical Chart Soybean

NCDEX Jan contract

Outlook
Soybean complex may recover in the initial part of the session on Thursday on account of short coverings and firm international markets. However, prices may again come under downside pressure on account of weak demand. Mustard seed prices may extend the losses of the previous session; however prices are expected to bounce back as sentiments remain positive amid tight supplies till the fresh crop arrives in February. Palm oil may trade on a positive note on expectations that the export duty cut may reduce Malaysian palm oil stocks.

Source: Telequote

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

valid for Dec 27, 2012 Support 686-691 3165-3195 4125-4150 407-412 Resistance 702-710 3240-3265 4200-4240 421-425

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Commodities Daily Report

Thursday| December 27, 2012

Agricultural Commodities
Black Pepper
Pepper Futures corrected sharply yesterday as Food Safety and Standards Authority of India sealed the entire quantity of pepper stored in six warehouses in Kerala of about 5,000 tonnes. The six warehouses have also been sealed. Harvesting of the fresh crop has commenced and is expected to gain momentum in the coming days. Winter demand coupled with low stocks in the domestic markets has supported prices at lower levels. However, higher output expectations capped sharp upside. FMC is probing into complaints against movement in the pepper market which has capped a sharp upside. Better output expectations in the domestic as well as the international markets have also pressurized prices over the last couple of weeks.. Exports demand for Indian pepper in the international markets is also weak due to price parity. The Spot settled as well as the Futures settled 1% and 2.41% lower on Wednesday. Pepper prices in the international market are being quoted at $7,800/tn(C&F), while Vietnam was offering Austa at $7,000/tn, Brazil Austa at $6,000-6,500/tn, and Indonesia Austa at $6,500/tn (FOB).

Market Highlights
Unit Pepper SpotNCDEX (Kochi) Pepper- NCDEX Feb'13 Futures Rs/qtl Rs/qtl Last 37689 34080 % Change Prev day -1.00 -2.41

as on Dec 26, 2012 WoW -2.60 -13.17 MoM -1.58 -10.94 YoY 12.37 3.19

Source: Reuters

Technical Chart Black Pepper

NCDEX Feb contract

Exports and Imports

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 pepper during Jan-Oct 2012 stood at 102,340 mt, lower by 12% as compared to 1,15,780 mt in the same period last year. Total exports in 2012 are forecasted at around 1,10,000 tonnes. Pepper imports by U.S. the largest consumer of the spice declined 26% during January-September 2012 period to 41,923 tn as compared to 52,489 tn in the same period previous year. 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. Brazil exported 25,900 tn pepper during Jan-Nov 2012, around 20% lower compared with 32,650 tn in the same period last year. Exports from Malaysia 8,300 tn pepper during Jan-Oct 2012, lower by 30% last year while exports in October. stood at 1,077 mt in.

Source: Telequote

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

valid for Dec 27, 2012 Support 33260-33650 Resistance 34300-34700

Production and Arrivals

The arrivals in the spot market were reported at 4 tonnes while off takes were reported at 4 tonnes on Wednesday. As per IPC, Global pepper production in 2012 is projected at 3.27 lk tn, up compared with 3.18 lk tn in 2011. Production for 2013 is projected at 316832 tn. Indonesian pepper output is expected to rise by 24% and in Vietnam by 10%. According to previous estimates, pepper output in Vietnam is estimated to be 1 lakh tonne in 2012 as compared to 1.1 lakh tonne in 2011. 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) Pepper production in 2012-13 is expected around 60,000-63,000 tonnes. Currently, pepper is in the fruit formation stage in Kerala.

Outlook
Pepper is expected to continue to trade on a negative/bearish note today. Reports that FSSAI has sealed huge quantity of pepper is expected to maintain pressure on the prices. Good arrivals coupled with higher output expectations as well as reports that FMC is probing into complaints against price movement may pressurize prices. However, winter buying may support prices at lower levels.

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Commodities Daily Report

Thursday| December 27, 2012

Agricultural Commodities
Jeera
Jeera Futures traded on a bearish note for the fourth consecutive session yesterday. Improvement in the ongoing sowing has built pressure on the prices. Fresh export enquiries coupled with demand from stockists and masala millers had boosted the prices over the last couple of days. According to Gujarat State Agri Dept. sowing in Gujarat th is reported at 2.635 lakh ha as on 18 Dec, 2012 compared with 2.319 lakh ha last year. In Rajasthan, sowing is expected to increase by 1015%. Higher stocks for delivery on the exchange warehouse were pressurizing prices during the last one month. The spot as well as the Futures settled 1.05% and 2.68% lower on Wednesday. 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 $2,750-2,850 tn (c&f) while Syria and Turkey are not offering. Carryover stocks of Jeera in the domestic market is expected to be around 5-6 lakh bags.

Market Highlights
Unit Jeera SpotNCDEX(Unjha) Jeera- NCDEX Mar '13 Futures Rs/qtl Rs/qtl Last 14877 14865 Prev day -1.05 -2.68

as on Dec 26, 2012 % Change WoW -1.18 0.52 MoM -1.50 3.86 YoY -0.75 -7.94

Source: Reuters

Technical Chart Jeera

NCDEX March contract

Production, Arrivals and Exports

Arrivals in Unjha were reported at 4,000 tn on Wednesday. Production of Jeera in 2011-12 is expected around 40 lakh bags as against 29 lakh bags in 2010-11 (55 kgs each). 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 -0.27 2.51

as on Dec 26, 2012 % Change

Outlook
Jeera futures may trade on a negative note. Higher stocks for delivery on the exchange warehouses coupled with improvement in sowing in Gujarat may pressurize prices. However, good demand may support prices at lower levels. In the medium term (Dec-Jan), prices are likely to stay firm as there are limited stocks with Syria and Turkey.
Turmeric SpotNCDEX (N'zmbad) Turmeric- NCDEX Apr '13 Futures

Unit Rs/qtl Rs/qtl

Last 5258 6452

WoW -0.75 18.87

MoM 4.78 29.66

YoY -1.69 34.19

Turmeric
Turmeric Futures opened lower yesterday but recovered sharply towards the later part of the day as stockists were buying at lower levels. However, lack of fresh orders pressurized prices in the spot. There are reports of some crop damage in Erode region. Buyers are looking for turmeric with higher curcumin level at 5% which is unavailable, thereby supporting prices in the spot markets. Expectations are that production may be lower by 40-50%. Production is expected around 55 lakh bags. It is estimated that next years carryover stocks would be around 10 lakh bags. There are reports that Turmeric Farmers Association of India have decided to fix their own MSP of Rs.10000/qtl. The Spot settled 0.27% lower while the Futures settled 2.51% higher on Wednesday.

Technical Chart Turmeric

NCDEX April contract

Production, Arrivals and Exports

Arrivals in Nizamabad and Erode mandi stood at 500 bags and 4,000 bags respectively on Wednesday. Turmeric production in 2012-13 is expected around 64-65 lakh bags. Production in 2011-12 is projected at historical high of 10.62 lakh tn. 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 may recover today extending yesterdays gains on account of buying by stockists. However, higher carryover stocks and weak overseas demand may pressurize prices at higher levels. Also, traders expect upcountry demand to improve in the coming days.

Source: Telequote

Technical Outlook
Unit Jeera NCDEX March Futures Turmeric NCDEX April Futures Rs/qtl Rs/qtl

Valid for Dec 27, 2012

Support 14530-14720 6300-6410 Resistance 14990-15300 6580-6660

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Commodities Daily Report

Thursday| December 27, 2012

Agricultural Commodities
Kapas
NCDEX Kapas futures and MCX Cotton extended the losses of the previous session settled sharply lower by 1.9% and 0.43% on Wednesday. Although, Cotton advisory Board has pegged cotton output lower at 334 th lakh bales, Cotton Association of India (CAI), in its latest 90 annual general meeting said that Cotton production in the season 2012-13 is expected to be around 350 lakh bales, while the consumption is likely to be around 265 lakh bales. According to the data released by Cotton Corporation of India, Supplies until Dec. 16 fell to 6.2 million bales of 170 kg each, down from 6.9 th million bales a year earlier. Arrivals were down by 12.5 percent as on 9 December. However, it is still below expectations as many farmers, who are waiting for better returns, hold back their produce. The USDA monthly report cuts cotton stocks estimate to 79.64 million bales, from last month's forecast of 80.27 million. The government has procured 20.74 lakh quintals of cotton at the minimum support price (MSP) so far in the 2012-13. ICE Cotton futures settled higher on bargain buying. Global Cotton Prices are expected to recover on account of good demand from china.

Market Highlights
Unit Rs/20 kgs Rs/Bale Last 996.5 16340

as on Dec 26, 2012 % Change Prev. day WoW -1.92 -4.23 -0.43 -1.74 MoM 3.53 -1.74 YoY #N/A -8.36

NCDEX Kapas Futures MCX Cotton Futures

Source: Reuters

International Prices
ICE Cotton Cot look A Index Unit Usc/Lbs Last 77.06 81.35

as on Dec 26, 2012 % Change Prev day WoW 0.86 1.54 0.00 0.00 MoM 8.14 0.00 YoY -12.34 -29.20

Source: Reuters

Technical Chart - Kapas

NCDEX April contract

Domestic Production and Consumption

According to Cotton Advisory Boards (CAB) estimates (4 Oct 2012) 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.
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Source: Telequote

Technical Chart - Cotton

MCX Jan contract

Global Cotton Updates

Net Upland sales of 283,900 running bales for the 2012/2013 marketing year were down 32 percent from the previous week and 24 percent from th the prior 4-week average. (Dated 13 Dec 2012). Cotton harvesting is 84% completed in US, versus 85% same period a year ago. Cotton crop condition is 43% in Good/Excellent state compared to 29% same period a year ago as on 20th Nov 2012. Brazils 2012-13 cotton production forecast at 6.3 million bales, down 27 percent from 2011/12 production now estimated at 8.6 million bales. (USDA Attach report)
Source: Telequote

Outlook
Cotton prices may witness short coverings in the initial part of the trading session, however, may settle lower towards the end as higher output expectations by Cotton Association of India has turned the sentiments negative for the cotton prices. However, sharp downside in the domestic markets is expected to be limited in the coming weeks as farmers will not sell their stocks at very low prices. Also demand remains strong at low prices.

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

valid for Dec 27, 2012 Support 980-989 16420-16490 Resistance 1005-1020 16650-16750

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