Commodities Daily Report

Wednesday| January 09, 2013

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

Wednesday| January 09, 2013

Agricultural Commodities
News in brief
Cold wave hits rabi crop
The optimism of policy makers that an increase in the rabi crop output in 2012- 13 would compensate the loss of kharif production due to monsoon delay might be dashed, as a cold wave is taking a toll. Sowing has risen 2.6% but even so, overall agricultural output this year might be lower than last year due tothe impact of the cold on pulses, vegetables and oilseeds. However, wheat output might get a boost due to the presence of moisture in the weather. While official agencies have just begun assessing the possible damage, experts estimate not less than five to 10 per cent impact due to severe cold in major producing states. The lowest temperature in Delhi was 1.9 degrees Celsius a couple of days before. The northeastern states have also witnessed a record low this year, resulting in frosting on plants. We came to know only this morning that mustard seed plants have got damaged due to frost in Rajasthan. We are sending teams to various regions of the state and collating data from other states, as well as assessing the actual quantum of damage, said Dr J S Chauhan, director, directorate of rapeseed- mustard research, Bharatpur (Rajasthan). (Source: Business Standard)

Market Highlights (% change)

Last Prev. day

as on Jan 8, 2013
WoW MoM YoY

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

19743 6002 54.97 93.15 1662

0.26 0.22 -0.47 -0.04 0.97

0.83 0.85 0.51 1.45 -0.79

1.71 1.57 1.12 8.87 -3.01

24.84 26.54 4.90 -8.05 3.36

.Source: Reuters

Govt holds on to huge wheat stocks, 3 times the requirement

Just three months prior to the commencement of the wheat procurement drive for 2013-2014 season, the government has wheat stocks which is more than three times the strategic reserve and buffer stocks norms. At the start of this month, the Food Corporation of India (FCI) and state government owned agencies had a wheat stocks of more than 34 million tonne, while the requirement is only about 10 million tonne. This implies that if a chunk of wheat stocks are not liquidated in the private market or exported during next few months, the government is expected to face acute storage crunch when purchase operations starts from April 1. (Source: Financial Express)

Oilmeal exports down on poor demand

Indias oilmeal exports fell 26% in the first nine months of the current financial year on reduced demand due to the ongoing economic uncertainty in overseas markets. Data compiled by the apex trade body, the Solvent Extractors Association (SEA) showed that oilmeal exports nosedived to 2.9 mn tn for the period between April December, 2012 compared to 3.9 mn tn in the corresponding period last year. In December however, the decline was sharper than that in the preceding months of the year. Overall shipment of oilmeal in December plunged by 43 per cent 0.54 mn tn compared to 0.95 mn tn in the same month last year. The ongoing global economic uncertainty has pulled down worldwide demand resulting in lower exports from India so far this year, said an analyst. (Source: Business Standard)

India's cotton exports to dip 60 per cent this year: USDA

cotton exports are likely to tumble by 60% to 5.7 million bales in the marketing year ending July compared to last year level, a USDA report said. India, the world's second-largest exporter, is estimated to have shipped a record 14.7 million bales in the last marketing year, it said. One bale has 170 kg of cotton. "The 2012-13 export estimate is unchanged at 5.7 million bales (of 170 kg)," the US Department of Agriculture (USDA) said in the report. China, the world's biggest cotton consumer, continues to be the major export market for Indian cotton. Indian cotton prices are trading slightly lower to world prices. Exports have also been aided by a weak rupee, it added. The USDA did not give any specific reasons for a decline in cotton exports. The domestic traders and experts said shipments could slow down due to lower Chinese purchases in the wake of huge inventories. (Source: Financial Express)

Hybrid seeds will help raise rice productivity: Study

Rice output in India can be raised at least 15- 20% through increased use of hybrid seeds, a Rabobank study said. The use of technologically advanced seeds is currently much lower in the production of rice than in other crops. Of the total annual rice output in India around 99 mn tn, according to US Department of Agriculture estimates for the 2012- 13 season only 3% is produced through hybrid seeds. The remaining quantity comes through breeding of conventional seeds. Since the genetically modified Bacillus thuringiensis rice is not allowed for commercialisation in India, scientists and technocrats would have to focus only on improved variety of hybrid seeds to raise productivity. The primary focus for rice research should be on developing hybrids with improved productivity and acceptable cooking quality requirements. Hybrid rice has the potential to raise production between 15- 20%, the study said. (Source: Business Standard)

Govt may hike levy price of sugar

The Government is likely to raise the levy price of sugar the rate at which it buys from mills to sell through ration shops by over Rs 2 to about Rs 22 per kg for the current year. For the 2011-12 marketing year (Oct-Sept), the levy price of sugar was 19.04 per kg. We have proposed increasing the levy price of sugar by over Rs 2 from last year, a senior government official told PTI. The proposal is under the consideration of the Finance Ministry. The rise in levy price would entail additional subsidy of Rs 400-500 crore, the official added. (Source: Business Line)

Cold wave triggers fear of crop damage in chana

Improved buying support ahead of Makar Sankranti festival and rise in futures perked up chana prices in the local mandis by about Rs 100 a quintal with chana (kanta) on Tuesday quoting at Rs 3,975-4,000, while chana (desi) ruled at Rs 3,700. Chana prices for most part of the year have been ruling high with decline in crop output last year. Prices zoomed to as high as Rs 4,850 in October. However, thereafter, chana witnessed a continous fall with rise in arrival of imported chana in local mandis. In the past two-and-half months, domestic chana has almost declined by over Rs 800 amid availability of cheap imported chana. However, in the past few days, rise in chana futures and buying support at lower rate besides report of damage to standing crops of chana in some parts of the State due to intense cold wave have once again lifted its prices by about Rs 100 in the past one week. (Source: Business Line)

Govt projects 37% deficit in jute bag supply this rabi season
The supply of jute bags to package food grains this rabi season would be 37 per cent lower than the requirement, according to government estimates. The shortfall is much higher than the exemption allowed by the Union Cabinet on October 11 last year. The Cabinet Committee on Economic Affairs (CCEA) had decided that 10 per cent of the total production of food grains in the country be packaged in plastic material high density polyethylene (HDPE) or polypropylene (PP) bags. According to estimates, while the requirement for jute bags in the rabi season (between December 2012 and April 2013) is about 1.89 million bales, the jute industry wouldnt be able to supply more than 1.22 million bales, a shortfall of 0.67 million bales. The Indian Jute Mills Association (IJMA), however, doesnt anticipate any deficit. (Source: Business Standard)

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Commodities Daily Report

Wednesday| January 09, 2013

Agricultural Commodities
Chana
Chana prices in the April Futures corrected from higher levels on account of profit booking. Higher output expectations have also pressurised prices at higher levels. However, lower availability in the domestic market supported the prices in the spot. The spot settled 0.5% higher while the April contract settled 1.03% lower. Although chana prices witnessed 17% gains in 2012 on the back of lower availability, sentiments have turned negative during the last one month on account of continuous supplies of imported chana from Australia coupled with higher output expectations. As a result, prices in the month of December 2012 declined 8.8%.

Market Highlights
Unit Rs/qtl Rs/qtl Last 4007 4064 Prev day 0.50 1.14

as on Jan 8, 2013 % change WoW MoM 1.76 -4.10 4.80 -0.95 YoY 16.98 18.04

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

Source: Reuters

Technical Chart - Chana

NCDEX April contract

Sowing progress
Total pulses acreage as n 4th Jan 2013 stood at 136.05 lakh ha, down by 0.44% yoy. As on 28th Dec, pulses acreage was down by 1.2%. Chana sowing is almost complete and acreage so far stood at 89.4 lakh ha, up by 3.5% as on 4th Jan. Chana acreage is marginally higher by 3% this year in Rajasthan at 14.80 th lakh ha, In Maharashtra Chana acreage is up at 10.8 lakh ha as on 4 Jan 2013 vs normal area of 10.6 lakh ha and 2012 area of 6.8 lakh ha. While in AP it is up at 6.99 lakh ha as on 19th Dec, up by 20%. (Source: State farm dept)

Demand supply fundamentals

Chana fresh crop arrival has started in Karnataka & Andhra Pradesh and would commence soon in Maharashtra too. However, arrival pressure will built up February onwards when harvesting commence in MP. 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 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. 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. 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).
Source: Telequote

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

valid for Jan 9, 2013 Resistance 3610-3650

3520-3545

Trade Scenario
USDA revealed that Myanmar beans and pulses export is up by 56 per cent to 110498 MT as compared with same period in last year. Out of the total export, 73 percent (80721 MT) was exported to India followed by Singapore (11316 MT). (Source: Agriwatch dated Dec 27) 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.

Outlook
Chana prices may remain under pressure extending yesterdays losses due to higher shipments and expectations of better output next season. However, lower supplies in the domestic markets may support prices at lower levels. Any adverse report with respect to weather may bring a sharp rebound in the prices. However, a close watch on weather is crucial at this point of time.

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Commodities Daily Report

Wednesday| January 09, 2013

Agricultural Commodities
Sugar
Sugar futures traded with a negative bias yesterday and declined 0.18% in the February contract. Higher supplies in the domestic markets kept prices under check. Higher domestic production figures in the first quarter of the current marketing season as released by ISMA also pressurized prices. Higher availability in the domestic markets and subdued demand has exerted downward pressure and thus prices plunged 2.26% in December 2012. While in the year 2012 sugar futures have gained 11.81% on the back of expected lower output in the domestic markets. 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. The government is planning to remove quantitative restrictions on sugar exports and imports and will use tariffs to regulate trade. Raw sugar futures on ICE as well as Liffe white sugar settled 0.98% and 1.01% lower on Tuesday due to 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 3235

as on Jan 8, 2013 % Change Prev. day WoW -0.10 -0.58 MoM -3.85 YoY 11.25

Rs/qtl

3210

-0.03

-1.17

-1.68

15.05

Source: Reuters

International Prices
Unit Sugar No 5- LiffeMar'13 Futures Sugar No 11-ICE Mar '13 Futures $/tonne $/tonne Last 505.8 414.89

as on Jan 8, 2013 % Change Prev day WoW -0.98 -1.01 -3.42 -4.31 MoM -2.37 -3.96 YoY -17.29 -19.94

.Source: Reuters

Domestic Production and Exports

Mills in the country have produced 7.96 mln tn sugar in the first three months of the season, up nearly 2.5% 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.

Technical Chart - Sugar

NCDEX Feb contract

Source: Telequote

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

valid for Jan 9, 2013 Resistance 3270-3280

3240-3250

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 with a negative bias today as sufficient supplies in both the domestic as well as global markets may keep prices under check. However, expectations government may remove quantitative restrictions on sugar import/export may support prices and limit the downside.

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Commodities Daily Report

Wednesday| January 09, 2013

Agricultural Commodities
Oilseeds
Soybean: soybean opened higher yesterday due to short coverings, but corrected in the later part of the day on account
of subdued demand in the domestic markets. Weaker international markets due to higher production expectations in Brazil have also pressurized prices. The spot settled higher by 1.04% while the Feb Futures settled 0.25% lower on Tuesday. Arrivals in the domestic markets declined to 1.6 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 Nov from 3.97 lakh tn year ago. Overall oil meal exports in the first eight months of the year beginning April fell to 2.4 mn tn from 3 mn tn a year ago.

Market Highlights
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 3194 3112 716.6 709.2

as on Jan 8, 2013 % Change Prev day 1.04 -0.27 0.60 0.74 WoW -3.71 -3.40 1.26 1.26 MoM -1.42 -3.44 -1.77 -1.09 YoY 30.26 26.17 -1.03 -1.01

Source: Reuters

as on Jan 8, 2013 International Prices Soybean- CBOTJan'13 Futures Soybean Oil - CBOTJan'13 Futures Unit USc/ Bushel USc/lbs Last 1414 49.14 Prev day 0.21 -0.73 WoW -0.35 -0.04 MoM -5.20 -3.40
Source: Reuters

International Markets
Soybean futures on the Chicago Board of Trade traded on a positive note on Monday on account of short coverings and settled 0.21% higher on Tuesday. Favorable crop weather in South America fueled expectations for large harvests which has pressurized prices. China has canceled another 315,000 tn of soybeans purchased from the United States. 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. In Brazil, isolated showers on Wednesday may reach most of Brazil in the next 10 days, aiding corn and soybean growth. Brazil's government food supply agency Conab forecast the soybean crop at a record 82.6 million tonnes.

YoY 15.53 -5.86

Crude Palm Oil

as on Jan 8, 2013 % Change Prev day WoW -1.16 0.27 -1.16 0.94

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

Last 2293 442.3

MoM 8.93 7.75

YoY -28.79 -17.59

MYR/Tonne Rs/10 kg

Refined Soy Oil: Ref soy oil and MCX CPO settled 0.74% and 0.27% higher respectively due to short coverings.
Indonesia, the world's top palm oil producer, reduced its export tax on crude palm oil to 7.5 percent for January from 9 percent in December. Malaysian palm oil product exports during December fell 5.7 percent to 1,568,510 tonnes from 1,663,092 tonnes in November. (Source: ITS)

Source: Reuters

RM Seed
Unit RM Seed SpotNCDEX (Jaipur) RM Seed- NCDEX Jan'13 Futures Rs/100 kgs Rs/100 kgs Last 4240 4188 Prev day 0.47 0.92

as on Jan 8, 2013 WoW -0.24 -0.90 MoM -1.40 1.26

Source: Reuters

YoY 21.45 14.30

Rape/mustard Seed: Mustard seed April Futures opened higher,

but corrected in the afternoon due to profit taking. However, prices again recovered due to supply tightness in the domestic markets and settled marginally higher by 0.06% on Tuesday. Rabi oilseeds sowing which was up by 1.3% as on Dec 28, is now up by 1.99% at 8.1 mn ha as of Jan. 4. Indian farmers have cultivated rapeseed on 6.62 million hectares as of Jan. 4, compared with 6.44 million hectares during the same period last year. Rapeseed output is expected to rise by 5% to 6.5 mn tn from 6 mn tn last year.

Technical Chart Soybean

NCDEX Feb contract

Outlook
Soybean complex may trade lower on account of weak demand in the domestic markets. Mustard seed prices may trade sideways in the intraday. Supply tightness in the domestic markets may support prices while good sowing figures of the mustard crop may pressurize prices. Palm oil may trade on a positive note tracking higher Malaysian prices, anticipating an ease in the ending stocks. Supply disruptions in Malaysia caused by monsoon driven floods may support prices. Export duty cut may reduce Malaysian palm oil stocks.
Source: Telequote

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

valid for Jan 9, 2013 Support 683-688 3070-3110 3500-3530 435-439 Resistance 694-700 3175-3215 3580-3600 446-450

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Commodities Daily Report

Wednesday| January 09, 2013

Agricultural Commodities
Black Pepper
Pepper Futures recovered from lower levels yesterday due to short coverings prices corrected on Monday as increasing supplies outweighed the demand. Prices have increased over the last few days due to arrivals of good quality pepper from Kerala. Earlier, prices had corrected 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. Harvesting of the fresh crop has commenced and is expected to gain momentum in the coming days. However, winter demand coupled with low stocks in the domestic markets has supported prices at lower levels. FMC is probing into complaints against movement in the pepper market which has pressurized prices. Exports demand for Indian pepper in the international markets is also weak due to price parity. The Spot settled lower by 0.87% while the Futures settled 0.49% higher on Tuesday. Spices Board has announced plans to import high yielding Madagascar variety that was behind the record productivity in Vietnam. It could raise productivity of Indian pepper from 2,000 kg/ha to 7,000 kg/ha. Pepper prices in the international market are being quoted at $7,300/tn(C&F Europe), 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 38013 34740 % Change Prev day -0.87 0.49

as on Jan 8, 2013 WoW 0.33 1.65 MoM -1.36 -10.92 YoY 17.22 9.56

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 Jan 9, 2013 Support 34270-34560 Resistance 34990-35140

Production and Arrivals

The arrivals in the spot market were reported at 18 tonnes while off takes were reported at 18 tonnes on Tuesday. 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 may correct from higher levels due to long liquidation. Increasing supplies coupled with higher output expectations may pressurize prices. FSSAI has sealed huge quantity of pepper and FMCs probe into complaints against price movement may also pressurise the prices. However, arrivals of good quality crop coupled with winter buying in the domestic market may support prices at lower levels.

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Commodities Daily Report

Wednesday| January 09, 2013

Agricultural Commodities
Jeera
Jeera Futures corrected yesterday tracking higher sowing as well as conducive weather in the main jeera belt of Gujarat. Demand from masala millers had boosted the prices last month. About 95% of sowing is completed and is in its final stage. According to Gujarat State st Agri Dept. sowing in Gujarat is reported at 3.074 lakh ha as on 31 Dec, 2012 compared with 2.822 lakh ha last year. In Rajasthan, sowing is expected to increase by 10-15%. The spot as well as the Futures settled 0.02% and 1.17% lower on Tuesday. 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 $2,850-2,875 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 14597 14518 Prev day -0.02 -1.17

as on Jan 8, 2013 % Change WoW -0.73 -1.78 MoM -2.15 1.79 YoY -8.74 -7.55

Source: Reuters

Technical Chart Jeera

NCDEX March contract

Production, Arrivals and Exports

Arrivals in Unjha were reported at 2,500 tn on Tuesday. 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 1.51 -0.23

as on Jan 8, 2013 % Change

Outlook
Jeera futures may trade on a mixed note today. Fresh export enquiries may support prices while higher sowing figures, thereby higher output expectations in Gujarat cap a sharp upside. In the medium term, 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 5752 6878

WoW 1.28 2.29

MoM 13.96 28.61

YoY 10.15 44.74

Turmeric
Turmeric Futures traded on a positive note yesterday due to demand from the stockists as well as North India supported prices. Reports that turmeric regions may receive rainfall in the coming days may damage the standing crop also led to a sharp rise. Lower production estimates have supported the prices. Also, arrivals of good quality crop have supported prices. however, prices corrected towards the end on account of profit taking at higher levels. There are reports of some crop damage in Erode region. 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 lower by 0.55% while the Futures settled 2.59% higher on Monday.

Technical Chart Turmeric

NCDEX April contract

Production, Arrivals and Exports

Arrivals in Nizamabad and Erode mandi stood at 1,000 bags and 7,000 bags respectively on Tuesday. 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 trade on a positive to bullish note today. Demand from stockists coupled with lower production expectations and weather concerns may support prices. However, gains may be limited as higher carryover stocks and weak overseas demand may cap sharp upside.

Source: Telequote

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

Valid for Jan 9, 2013

Support 14250-14370 6700-6800 Resistance 14690-14890 6950-7020

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Commodities Daily Report

Wednesday| January 09, 2013

Agricultural Commodities
Kapas
Kapas recovered from lower levels on account of short coverings and settled marginally higher by 0.21% on Tuesday. Estimated higher output coupled with weak international markets have led to a sharp decline in the prices over the last few sessions. 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. Cotton yarn prices have jumped 14.7 percent from Rs.170/Kg to Rs. 195/Kg in Mumbai benchmark market of cotton yarn due to spur in demand form millers and exporters. Demand is mainly coming from China. While domestic market demand is also picking up on seasonal demand. (Dated 21 Dec) ICE Cotton corrected yesterday and settled 0.78% lower on Tuesday on account of profit taking. Expectations of increase in export quota by China have supported prices. Any increase in imports from China could boost U.S. cotton prices, as the United States is the largest exporter of the fibre to China. Foreign cotton supplies can cost as much as 40 percent less than local cotton, whose price is boosted by the government's stockpiling policy.

Market Highlights
Unit Rs/20 kgs Rs/Bale Last 944 16450

as on Jan 8, 2013 % Change Prev. day WoW 0.21 -4.98 0.24 -1.26 MoM -4.74 -1.26 YoY #N/A -8.15

NCDEX Kapas Futures MCX Cotton Futures

Source: Reuters

International Prices
ICE Cotton Cot look A Index Unit USc/Lbs Last 75.12 81.35

as on Jan 8, 2013 % Change Prev day WoW -0.78 -0.03 0.00 0.00 MoM 4.46 0.00 YoY -22.52 -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

China, the world's biggest cotton consumer and importer, is studying a proposal to issue extra import quotas for textile mills which have been pushing the government to boost the amount of cheaper overseas cotton they can buy. If approved, the quotas will require mills to buy three tonnes of cotton from state reserves for every tonne they import. 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

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

valid for Jan 9, 2013 Support 930-938 16240-16320 Resistance 950-960 16500-16600

Outlook
Cotton prices may recover today due to short coverings. Higher output expectations by Cotton Association of India have turned the sentiments negative for the cotton prices. However, downside may be limited as farmers may not sell their stocks at lower prices. Reports that the Government may purchase cotton from farmers to avoid distress sales may also support prices. Also demand remains strong at low prices.

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