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Agri Insight

A Comprehensive Fundamental Analysis Report on Agri Commodities

2 September 2010

TECHNICAL RECOMMENDATIONS
DOMESTIC MARKET RECOMMENDATION Commodity Soybean CBOT Soybean NCDEX Soy Oil CBOT Soy Oil MCX Soy Oil NCDEX RM Seed NCDEX CPO BMD CPO MCX Castor seed NCDEX Pepper NCDEX Turmeric NCDEX Jeera NCDEX Chilli NCDEX Cardamom MCX Wheat NCDEX Maize NCDEX Barley NCDEX Barley MCX Guar seed NCDEX Guar Gum NCDEX Chana NCDEX Mentha Oil MCX Gur NCDEX Cocud NCDEX Kapas NCDEX Kapas MCX Potato MCX Potato NCDEX Rubber NMCE Contract Sep-10 Sep-10 Sep-10 Sep-10 Sep-10 Sep-10 Nov-10 Aug-10 Sep-10 Sep-10 Sep-10 Sep-10 Sep-10 Sep-10 Sep-10 Sep-10 Sep-10 Sep-10 Sep-10 Sep-10 Sep-10 Aug-10 Sep-10 Sep-10 Apr-11 Apr-11 Sep-10 Sep-10 Sep-10 S3 988.5 1990 38.71 478.3 477.7 522.2 2460 400.1 3729 19176 11802 13015 3907 1297 1214 1035 1195 1160 1918 4379 2191 759.0 1019.7 1110 657 655 404 344 15173 S2 996.0 2001 39.06 479.6 479.4 524.9 2483 402.3 3748 19394 12182 13193 3934 1330 1219 1043 1198 1152 1959 4467 2209 764.5 1034.9 1120 659 658 414 350 15658 S1 1000.3 2018 39.31 482.3 481.9 528.1 2509 406.3 3767 19589 12372 13364 3965 1351 1223 1052 1201 1176 2013 4596 2220 771.8 1065.5 1132 662 663 421 353 15929 CLOSE 1004.5 2035 39.55 484.9 484.5 531.3 2535 410.3 3786 19784 12562 13536 3996 1372 1227 1060 1205 1199 2067 4724 2232 779.1 1096.0 1144 665 668 428 357 16199 R1 1012.0 2046 39.91 486.3 486.1 534.0 2558 412.5 3805 20002 12942 13713 4023 1405 1233 1068 1207 1191 2108 4813 2249 784.6 1111.3 1154 667 671 438 363 16685 R2 1019.5 2057 40.26 487.6 487.8 536.7 2581 414.7 3824 20220 13322 13891 4050 1438 1239 1076 1210 1183 2149 4901 2267 790.1 1126.5 1164 669 674 448 369 17170 R3 1023.8 2073.7 40.51 490.3 490.3 539.9 2607 418.7 3843.0 20415 13512 14062 4081 1459.5 1242 1085 1213 1207 2203 5030 2278 797.4 1157.1 1176.0 671.9 679.1 454.7 372.0 17440.7 Recommendations* Sell at 1010/12 TP 1000 SL 1020 Sell at 2040/43 TP 2015 SL 2058 Sell at 39.60 TP 39.10 SL 39.70 Sell at 485.50/486 TP 482.50 SL 488 Sell at 485.50/486 TP 482.50 SL 488 Sell at 533/34 TP 528 SL 537 Sell at 2545/50 TP 2510 SL 2570 Sideways Sideways Buy at 19550/570 TP 19780 SL 19380 Sell at 12730/750 TP 12380 SL 12850 Buy at 13500 TP 12650 SL 13400 Buy at 3990 TP 4050 SL 3955 Sideways Sell at 1229/30 TP 1219 SL 1240 Buy at 1059 TP 1075 SL 1048 Buy at 1204 TP 1213 SL 1195 Sideways Buy at 2055 TP 2100 SL 2030 Buy at 4690 TP 4760 SL 4650 Sell at 2235/40 TP 2212 SL 2250 Buy at 777 TP 784 SL 772 Buy at 1085 TP 1100 SL 1075 Sideways Buy at 664 TP 669 SL 660 N/A Sell at 430 TP 422 SL 433.50 Sell at 358/59 TP 352.50 SL 361.50 Sell at 16300/400 TP 16000 SL 16650

Oilseeds

Spices

Cereals & Pulses

Others

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Agri Insight
A Comprehensive Fundamental Analysis Report on Agri Commodities

Commodity Contract Open High Low Close Sep-10 19880 20025 19612 Oct-10 20071 20221 19810 Pepper Sep-10 13080 13132 12562 Turmeric Oct-10 12390 12390 11882 Sep-10 13425 13719 13370 Oct-10 13600 13988 13572 Jeera Sep-10 3972 4019 3961 Oct-10 4312 4324 4275 Chilli Sep-10 2028 2040 2012 Oct-10 2020 2044 2013 Soybean Sep-10 484.6 485.2 481 Oct-10 483.6 484.3 478.8 Soy Oil Sep-10 532.5 533.5 527.6 Oct-10 539.1 539.5 534.05 RM Seed Sep-10 2235 2255 2226 Oct-10 2275 2301 2266 Chana Sep-10 2008 2095 2000 Oct-10 2025 2117 2018 Guar Seed Sep-10 4579 4773 4556 Oct-10 4615 4833 4615 Guar Gum Sep-10 1232 1234.8 1225.2 Oct-10 1249.6 1251.6 1243.4 Wheat Maize Sep-10 1057 1067.5 1051

19784 19971 12562 11882 13531 13736 3996 4293 2034.5 2038 484.5 483.95 531.3 538.15 2235 2287 2070 2091 4724 4787 1228.4 1247.4 1061

% Change Volume % Change Open Interest % Change -0.56% 12517 -12.89% 11359 -3.94% -0.62% 3137 -1.75% 4387 5.92% -3.99% 5110 148.66% 7535 0.20% -3.99% 1245 271.64% 1885 12.54% 0.76% 11391 8.33% 11616 -2.27% 0.89% 6213 15.89% 15228 0.44% 0.23% 1045 1.46% 7775 -0.77% -0.05% 310 14.81% 2455 -0.61% 0.15% 55810 33.93% 102070 -9.33% 0.27% 35870 -10.37% 77270 2.30% -0.31% 83840 0.04% 91070 -8.48% -0.14% 50220 24.96% 94680 -0.08% -0.57% 59750 45.48% 123670 0.60% -0.35% 44980 65.00% 74570 5.04% -0.04% 93650 -16.96% 135200 -6.18% 0.35% 66900 14.75% 110430 -3.81% 2.42% 353720 34.25% 130300 -11.60% 2.65% 259390 99.33% 109110 30.14% 2.85% 9715 56.57% 15075 -9.24% 2.97% 21230 105.02% 28655 11.72% -0.44% 2400 -49.15% 28420 -0.84% -0.45% 1390 2.96% 19910 1.22% 0.71% 1990 -9.55% 10900 -0.27%

Stocks Update (As on August, 31 2010) Commodity Pepper Turmeric Jeera Chilli Soybean RM Seed Chana Guar Guar Gum Maize Wheat In Demat (MT) 4288 4607 6346 3015 3368 120050 44683 20050 19573 0 16950 In process (MT) 10 30 466 0 90 968 658 0 0 0 0

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Agri Insight
A Comprehensive Fundamental Analysis Report on Agri Commodities

SPICES
PEPPER
Review The NCDEX Pepper futures traded down on yesterdays trading session due to extended selling. However, prices recovered during closing hours but failed to sustain the gains. Subdued domestic and export demand further added to the down side and futures ended the day in red. Outlook The NCDEX pepper futures are expected to trade down initially on account of extended selling pressure and long liquidation. Steady spot market activity in absences of any fresh market news is likely to support the fall in prices. However, prices may recover during late hours due to short covering at lower levels. International market rates are; India MG-1 ASTA is at $4500 per ton while Vietnam ASTA is at $4600 per ton; Indonesia ASTA is at $ 4450 per ton and Brazil is at $4250 per ton, Sri Lanka is at $3990 Lower prices quoted by Sri Lanka are affecting prices here Indian traders are also importing pepper from Sri Lanka as it is costing much lower than prices offered here Prices quoted at spot market of Kochi were to `20,000 per quintal for MG-1 and `19,600 per quintal for Ungarbled pepper on Wednesday As per Spices Board data, international price of Pepper in New York market was $4.52 per kg during the week ended 27th August 2010, which was higher than $3.31 per kg quoted in the same period last year

TURMERIC
Review The turmeric futures traded down during Wednesdays trading session due to heavy selling pressure where all running contract hit 4% lower circuit. Sluggish spot market activity supported the down side. Expectation of better crop during next season also weighed on sentiments. Outlook The turmeric futures are expected to trade positive today on account of fresh buying at exchange platform. Exchange has reduced the special margin on all long positions. This will provoke new buyers to enter into the market. However, NCDEX has reduced the special margin of 15% on the Long side of Turmeric contracts (Symbol: TMCFGRNZM) to 5%, effective from September 2, 2010 As per trade sources, the total stock position of turmeric in all over India is at 11-12 lakh Spot market of Erode was closed yesterday due to festival of Janmashtmi Prices quoted at spot markets of Nizamabad were almost unchanged `14,000 per quintal and arrivals were 200 bags down by 300 bags from previous day (each bag=70 kg) As per Spices Board data, international price of Turmeric in New York market was $5.07 per kg during the week ended 27th August 2010, which was higher than $2.09 per kg quoted in the same period last year

JEERA
Review The Jeera future witnessed heavy volatility during yesterdays trading session due to short covering. However, prices took small correction during the day. Reduced arrivals supported the prices and futures ended the day on positive note. Outlook The NCDEX Jeera futures are expected open up on short covering during todays trading session. Fresh buying at lower level can also be noticed. However, sluggish domestic and export demand might limit the gains. Spot market of Unjha will be closed for two days due to janmashtmi

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Agri Insight
A Comprehensive Fundamental Analysis Report on Agri Commodities

According to market sources, Syria prices are hovering around $3150-3200 per tonne, Indian prices are quoting at $2600-2800 per tonne and Turkey prices are quoting in the range of $2500- 2800 Prices reported at spot market of Unjha were almost unchanged `13,300-13,350 per quintal for uncleaned down by `60-70 and ` 13,950-14,100 per quintal Average daily arrivals at spot market of Unjha are reported around 1500-2000 bags As per Spices Board data, international price of Jeera in New York market was $3.35 per kg during the week ended 27th August 2010, which was higher than $2.69 per kg quoted in the same period last year

CHILLI
Review The NCDEX Chilli futures traded positive during Wednesdays trading session due to extending fresh buying. Prices took decent correction but reversed back the direction on account of short covering. Reduced arrivals at spot market also supported the upside. Outlook The chilli futures are expected to trade positive today on account of fresh buying at lower levels. Reduced arrivals amid stable demand might also support the upside. According to trade sources, export demand form Bangladesh is supporting the prices Daily average arrivals at Guntur market were reduced to 15,000-20,000 bags (each bag=40 kg) and prices were hovering in the range of `3,900- 4,200 up by `200 on Wednesday As of now only 40% of chilli crop sowing has be completed According to estimates, stocks at spot market of Guntur are around 30-40 lakh bags As per Spices Board data, international price of Chilli in New York market was $2.43 per kg during the week ended 27th August 2010, which was higher than $2.32 per kg quoted in the same period last year Spices Export from India Commodity Pepper Jeera Chilli Turmeric Cardamom April-July 2009 Volume Value (Rs. (Tons) Lakh) 6,650 16,720 62,800 21,790 235 10,494.51 18,092.38 37,820.27 12,893.21 1,516.99 April-July 2010 Volume Value (Rs. (Tons) Lakh) 6,750 13,500 77,750 18,350 185 11306 15,281.63 48,141.75 24,789.55 2,222.50 % Change in 2010 Volume 2% -19% 24% -16% -21% Value 8% -16% 27% 97% 47%

SOY COMPLEX
SOYBEAN
Review The soybean futures traded in a weaker note during first half of Wednesday on follow through selling backed by weak overseas market. Bearish domestic fundamental factors such as poor buying interest from crushers, nearing of new harvest season and higher inventory of edible oil had a bearish impact on the market. Towards end of the day, prices gained on short covering and ended the day in green. Outlook The soybean futures are forecast to trade on a positive note during early hours of Thursday on extended short covering and tracking firm eCBOT market. But, sharp rise may not be seen as the underlying fundamental factors are bearish for the market

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Agri Insight
A Comprehensive Fundamental Analysis Report on Agri Commodities

Indian soybean crop has been performing well and weather conditions are also supporting the growth Indian Meteorological Department has projected September month rainfall at 115% of Long Period Average with a model error of +15% Soybean production for 2010-11 season would be around last years level despite lower acreage Favourable weather condition is improving the yield level The crop will ready for harvest in 15-20 days, we may expect fresh arrivals at the end of September month According to National Centre for Soybean, the yield level this year is likely to be 1200-1250 kg/hectare as the weather conditions are very good for the crop Soybean is sown in an area of 9.2 million hectares against 9.5 million hectares last year On global front, CBOT soybean futures ended lower on Wednesday on follow through selling Projection of record soybean harvest in US had a bearish impact on the market

SOY OIL
Review Bearish trend in refined soy oil futures extended for fourth day on Thursday on follow through selling. The weakness in soybean market extended its effect to soy oil market also. Sluggish demand for edible oil and huge inventories were the major pressurizing factors during the day. Towards end of the day, prices erased some of its earlier losses on short covering. Outlook The refined soy oil futures are expected to trade on a positive note during early trading hours on short covering and taking cues from firm overseas market. However, sharp rise may not be seen as the domestic fundamental factors are bearish for the market. Bearish domestic fundamental factors like poor off-take from retailers, build up in inventory and projection of bumper soybean harvest is likely to limit the gains. India is getting ready for harvesting of new soybean crop, which is likely to have a negative impact. Edible oil stock at various ports is estimated above 1 million tons. Poor retail demand is likely to keep prices down. The spot price is quoting at `480-482 per 10 kg.

RM SEED
Review The mustard seed futures extended its bearishness for third consecutive day on follow through selling. Bearish fundamental factors such as poor demand from crushers and anticipation of record kharif oilseeds production kept the market in red. Weakness in soy market also extended its weakness to mustard seed market. Spot market remained subdued on poor trade participation. Outlook The mustard seed futures are forecast to extend its bearish trend for the day. Weak trend in soy market is likely to lend support to mustard seed market. Sluggish demand from crushers in the spot market is likely to pressurize the prices. Poor crush margin is prompting crushers to abstain from active buying. Higher edible oil inventory and projection of record Kharif oilseeds production is also major factor for the market. As on 31st August, NCDEX warehouses are having a stock of 120,050 tons. The spot price is quoting at `2671 per quintal.

PULSES
CHANA
Review Chana futures witnessed a positive trend at opening hours of Wednesday on extended short covering. But, later it shed the gains and fell marginally on emergence of fresh selling. Weak demand for chana in the spot market led the futures to end the day in red. Outlook

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Agri Insight
A Comprehensive Fundamental Analysis Report on Agri Commodities

The chana futures are expected to trade lower on Thursday on emergence of fresh selling and on poor mill demand Kharif pulses crop is nearing its harvesting stage and likely to hit major market in couple of days Dal millers are away from active buying as they are anticipating further drip in the prices An excellent rainfall forecast for the month of September is raising the hopes of better and early sowing of Rabi chana Market participants are anticipating hike in MSP of chana like other kharif pulses, which may attract more area under chana cultivation The spot price of Chana at Delhi Lawrence Road Mandi is steady at `2270 per quintal Kharif pulses production is expected to top 16.5 million tons this year NCDEX warehouse stock of Chana fell to 44,683 tons as on 31st August from 45,079 tons reported on 30th August 2010

Guar seed
Review The guar seed and guar gum futures staged a strong rally on Wednesday on follow through buying and on emergence of demand for guar gum. Limited supply and reports of crop damage in few places supported the rally. Outlook The guar seed and guar gum futures are projected to trade on a positive note on follow through buying Emerging demand for guar gum from exporters is likely to support the prices The warehouse stocks are declining indicating good demand for the produce Higher production forecast for upcoming season had already factored into the market Guar seed production in 2010-11 is expected to be around 70-80 lakh bags due to higher acreage and favourable weather condition According to latest sowing data, guar seed sowing in Rajasthan has been done in an area of 28.43 lakh hectares as on 19th August against 25.81 lakh hectares in the same period last year NCDEX warehouse stocks are at 20,050 tons of guar seed and 19,573 tons of guar gum as on 31st August 2010

Wheat
Review Wheat futures on Indian exchanges witnessed a choppy trend with weak bias. There was selling pressure in the market on governments decision to release additional wheat stocks into the market. Poor millers demand in the spot market also had a bearish impact on the market. Outlook The wheat futures are expected to trade extend its bearishness on Thursday on follow through selling Government has decided to retain export restriction of wheat, which will lead to build up in inventory Last week, centre released 412,000 tons of wheat for open market sale The spot price of wheat at Delhi Lawrence Road mandi is quoting at `1220-1225 per quintal In 2009-10, India produced 80.5 million tons of wheat, up 2.54% Y/Y India is having a huge stock of wheat and is likely to be released before start of new season

Maize
Review The maize futures traded on a positive note on Wednesday on buying support and limited supply in the spot market. Strong buying interest from user industries lifted the spot prices.

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Agri Insight
A Comprehensive Fundamental Analysis Report on Agri Commodities

Outlook The maize futures are projected to trade on a positive note on Thursday on follow through buying Limited supply in the spot market and strong demand is pushing the spot prices Spot price at Nizamabad rose to `1125 per quintal from `1090 per quintal Starch industry and poultry feed manufacturers are major buyers of maize in the spot market Production in 2010-11 is expected to touch 20 million tons on higher acreage and improved yield There are reports of crop damage in Karnataka, which is likely to push up the prices

Disclaimer The report contains the opinions of the author that are not to be construed as investment advice. The author, directors and other employees of Karvy, and its affiliates, cannot be held responsible for the accuracy of the information presented herein or for the results of the positions taken based on the opinions expressed above. The above-mentioned opinions are based on the information which is believed to be accurate and no assurance can be given for the accuracy of this information. There is risk of loss in trading in derivatives. The author, directors and other employees of Karvy and its affiliates cannot be held responsible for any losses in trading. Commodity derivatives trading involve substantial risk. The valuation of the underlying may fluctuate, and as a result, clients may lose their entire original investment. In no event should the content of this research report be construed as an express or an implied promise, guarantee or implication by, or from, Karvy Comtrade that you will profit or that losses can, or will be, limited in any manner whatsoever. Past results are no indication of future performance. The information provided in this report is intended solely for informative purposes and is obtained from sources believed to be reliable. Information is in no way guaranteed. No guarantee of any kind is implied or possible where projections of future conditions are attempted. We do not offer any sort of portfolio advisory, portfolio management, or investment advisory services. The reports are only for information purposes and not to be construed as investment advice. For a detailed disclaimer please go to following URLs: http://www.karvycomtrade.com/disclaimer.asp http://www.karvycomtrade.com/riskDisclaimer.asp

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