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Commodities Daily Report

Friday| August 31, 2012

Agricultural Commodities

Content
News & Market Highlights Chana Sugar Oilseed Complex Spices Complex Mentha Potato

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

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Commodities Daily Report


Friday| August 31, 2012

Agricultural Commodities
News in brief
Rainy week forecast for most regions
Rain-driving low-pressure systems have brought six per cent more rain than normal for the country during the past week ending Wednesday. It was only two per cent below average the previous week, which is still within the normal range. The low-pressure systems had remained elusive during June and July as the Bay of Bengal, where these get generated, idled. But things started falling into place from the latter part of July, reversing the drought conditions in the Bay. Rains, too, have followed, though their spatial distribution leaves much to be desired still. Parts of north-west India, peninsular as well as east India continue to show a rain deficit. Gujarat, where only scanty rains have fell, has fared worse. The overall deficit remains 12 per cent, though it is a significant improvement over what a bad June and July seemed to portend. Meanwhile, Climate Prediction Centre of the US National Weather Services has signaled to fresh rains developing in the Indian Ocean during the next seven days. An extended outlook by the US National Centres for Environmental Prediction said that the productive monsoon session would continue to hold until mid-September. (Source: Business Line)

Market Highlights (% change)


Last Prev. day

as on Aug 30, 2012


WoW MoM YoY

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

17542 5315 55.63 94.62 1654

0.29 0.52 -0.07 -1.45 2.32

-1.73 -1.85 0.67 -1.71 -0.96

2.32 2.22 0.36 5.39 2.09

8.64 9.82 20.83 10.93 -6.04

Source: Reuters

S. Africa seeks investments in agro-processing


South Africa has sought Indian investment for its flourishing food processing sector. Speaking at a conference on Challenges and Opportunities in agro sector in South Africa, Deputy Minister of Department of Trade and Industry Elizabeth Thabethe said that the agroprocessing sector offers opportunity for investment with the backing of the South African government through policy and various incentives. Undoubtedly, agro-food processing in South Africa is a sector that is not only open for new investments and the region, but one that is in fact viable, she said. South Africa climatic condition is conducive for growing diversity of crops, livestock and fish. There were other sub sectors with investment potential too. The establishment of preferential trade agreements such as the African Growth and Opportunity Act for the US market and a Free Trade Agreement (FTA) with the European Union, confer generous benefits for potential investors. (Source: Business Line)

Food Ministry to seek CCEA nod for additional 3 million tonne OMSS wheat sale
he Food Ministry is looking to sell additional three million tonne wheat in the open market to bulk consumers such as flour millers, a move aimed at containing price rise and offloading surplus stocks. If this proposal is approved by the CCEA, the total quantity of wheat to be sold in the open market would reach six million tonnes in this fiscal. Asked about status of 3 million tonnes of wheat sale approved in June, Thomas said, "We have already released 1.3 million tonnes of wheat under OMSS. Another one million tonnes of wheat will be sold next month and the remaining quantity will be released thereafter." As per latest data, the entire quantity allocated in the first tranche has been sold to bulk users by the Food Corporation of India (FCI). Meanwhile, wholesale prices of wheat have been rising due to short supply of the grain in the open market and fears that wheat crop in the rabi season may be down due to poor rains. As on August 1, the government has total stock of 76 million tonnes of foodgrains, out of which wheat is 47.52 million tonnes. The storage capacity is 71.41 million tonnes. (Source: Financial Express)

Sugar Mills Cautioned Against Unfair Trade Practices


Directorate of Sugar, Department of Food, Ministry of Consumer Affairs, Food & Public Distribution has been consistently getting reports about some sugar mills, resorting to the practice of issuing of sale invoices in the last of the month while the actual financial and physical transaction happens subsequently. A list of the factories against whom complaints have been recently received has been posted on the website of this department. The Chairman and the Managing Director of the concerned sugar mills have been advised to stop henceforth any practice which is against the existing rules and regulations issued under EC Act/Sugar (Control) Order. Any deviation, subsequently found out, would be dealt with strictly. (Source: PIB)

Cotton output may dip 7% in 2012-13


Cotton output in India, the worlds second-largest producer, will likely fall by 7% in the marketing year starting October due to poor monsoon showers in key producing regions of Gujarat and Maharashtra, according to textiles industry executives. Poor monsoon rains have affected cotton planting this summer and also raised fears of a drop in yield despite a recent pick-up in sowing of the crop following good showers in August. As of August 24, cotton planting trailed last years level marginally at 11.15 million hectares, according to official data. Saurashtra and Kutch regions of Gujarat, the countrys largest producer, have received 79% less than the usual rainfall by this time, while parts of Maharashtra, the second-largest producing state, have also witnessed dry spells. The situation is somewhat likely to improve in Gujarat provided the state gets a spell of rain in the next two weeks, the industry executives said.
(Source: Financial Express)

Advancing monsoon dampens chilli


For a commodity that was really hot at the beginning of this month, chilli has turned cold with advancing monsoon. On Thursday, prices surged again but that has been attributed to lower arrivals. Rain in the growing areas of Andhra Pradesh leading to increase in the water storage levels of reservoirs has been the dampener. Earlier the market had moved up only on poor storage levels. (Source: Business Line)

India's reservoirs at 61 pct of capacity


Indias reservoirs at 61 pct of capacity as on aug. 30 vs 74 pct a year ago as per the government on good rainfall in the last one week. The reservoirs level has more than doubled in the last four weeks as rainfall has improved in the country. (Source: Business Line)

World food prices jumped 10 percent in July-World Bank - RTRS


World food prices jumped 10 percent in July as drought parched crop lands in the United States and Eastern Europe, the World Bank said in a statement urging governments to shore up programs that protect their most vulnerable populations. Severe drought in the United States has sharply cut corn and soybean yields this year, while a dry summer in Russia, Ukraine and Kazakhstan has hurt wheat output. "However, negative factors such as exporters pursuing panic policies, a severe El Nino, disappointing Southern hemisphere crops, or strong increases in energy prices could cause significant further grain prices hikes such as those experienced four years ago," the bank said. (Source: Reuters)

Rain washes off Assam tea output


The Indian Tea Association (ITA) has projected some 18% production decline in Assam in July following heavy rainfall and recurrent pest attacks. However, production in other northern centres like Terai, Dooars and Darjeeling is estimated to decline by 4 % in July. According to data available with the Tea Board, the countrys production is down 28 million kg or 11.5% at 215.82 million kg during January-May this year.
(Source: Business Line)

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Commodities Daily Report


Friday| August 31, 2012

Agricultural Commodities
Chana
NCDEX Chana September futures which increased sharply after the report that government may not consider imposing stock limits on pulses in MP, declined towards the end considering improved rains ma increase prospects for next years output. Although Monsoon has recovered in the month of August in Northwest and Central India that may prove beneficial for the chana sowing, the overall fundamentals still remain supportive for the prices on account of supply tightness amid festive season demand. The Cabinet Committee on Economic Affairs approved the Minimum Support Prices (MSP) for Arhar (Tur) and Moong for 2012-13 season. The MSP for Arhar has been fixed at Rs.3850 per quintal and of Moong at Rs.4400 per quintal marking an increase of Rs.650 per quintal and Rs.900 per quintal respectively. Government released fourth advance estimates wherein it revised upward Chana output at 7.58 mn tn from 7.4 mn tonnes estimated in the third advance estimates and 8.22 mn tn in 2010-11.

Market Highlights
Unit Rs/qtl Rs/qtl Last 4858 4722 Prev day 1.33 0.70

as on Aug 30, 2012 % change WoW MoM 0.82 -2.06 -1.54 -0.99 YoY 34.20 30.26

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

Source: Reuters

Technical Chart - Chana

NCDEX Sept contract

Sowing progress and demand supply fundamentals


According to the Ministry of Agriculture 88.3 Lakh hectare area has been th planted under Kharif pulses as on 24 August, 2012 compared to 99.78 lakh hectare (ha) same period last year. Sowing is reported lower mainly in Rajasthan. Rajasthan Agriculture Department states that, planted area under Kharif Pulses is down at 15.33 lakh hectares ha compared to 24.14 lakh ha same th period last year. (Dated 17 August, 2012). Sowing which was down by more than 55% has gained momentum after improvement in rainfall in the last one week and is now down by 35%. In Maharashtra, Kharif Pulses sowing is down by 7% at 18.63 lakh hectares. While in AP it is up by 5% at 6.98 lakh hectares. According to the Fourth advance estimates, Pulses output is pegged at 17.21 mn tn in 2011-12 compared with 18.24 mn tn produced in the year 2010-11. While Chana output in 2011-12 is estimated at 7.58 million tones, Tur is estimated at 2.65 million tones, Urad is estimated at 1.83 million tones, Moong is estimated at 1.71 million tones. As per the latest release, Ministry of Commerce & Industry revealed that 20.23 lakh tones of peas, 2.03 lakh tons of Chana, 4.32 lakh tons of Urad & Moong, 1.12 lakh tons of Masoor and 4.26 lakh tons of Tur has been imported by India during April11-March 12. Assocham estimates, 21 mn tn of pulses demand in 2012-13 and is likely to reach at 21.42 mn tn in 2013-14 and 21.91 MT in 2014-15. (Source: Agriwatch) India's consumption of pulses is on the rise, while the growth in output in not consistent amid vagaries of weather, which may lead to increase in imports this year. However, rupee weakness may turn import costlier.
Source: Telequote

Technical Outlook
Contract Chana Sept Futures Unit Rs./qtl

valid for Aug 31, 2012 Support 4650-4690 Resistance 4760-4795

Outlook
Chana prices may extend the gains of the previous sessions on account of emergence of fresh demand at lower price levels In the medium term to long term, the trend remains positive as supplies may not be sufficient to meet the rising demand of the commodity. Also lower sowing of kharif pulses may support chana prices.

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Commodities Daily Report


Friday| August 31, 2012

Agricultural Commodities
Sugar
Sugar spot settled 0.39% and 0.86% higher on Thursday amid various factors that include emergence of festive season demand, Poor rains, and concerns over Sugar output in Maharashtra amid divergence of cane towards fodder etc. However, futures corrected tracking international markets as well as profit booking and thus settled 0.63% lower on Wednesday. With chances of El Nino weather pattern receding, the Agriculture Ministry hopes that rainfall in September would be better than earlier forecast. Apart from the 45 lakh tonnes quota released during the start of the quarter Jul-Sept, government released additional 2.66 lac tn to be sold off by 31st August. Sugar mills have been directed to sell at least 70% of July-September quota (45 lakh tonnes) by August. Another additional quota of 4 lac tn has also been released on 7th August, 2012 to be sold off by 31stAugust. The quota is sufficient to meet the festive season demand and thus helped contain prices. In the international markets Liffe Sugar settled 0.41% higher while ICE sugar settled marginally lower by 0.05% on Thursday.

Market Highlights
Unit Sugar Spot- NCDEX (Kolkata) Sugar M- NCDEX Sept '12 Futures Rs/qtl Last 3736

as on Aug 30, 2012 % Change Prev. day WoW 0.39 0.79 MoM -1.16 YoY 25.18

Rs/qtl

3512

0.86

1.97

-2.61

28.18

Source: Reuters

International Prices
Unit Sugar No 5- LiffeOct'12 Futures Sugar No 11-ICE Oct '12 Futures $/tonne $/tonne Last 559.1 438.89

as on Aug 30, 2012 % Change Prev day WoW 0.41 -0.05 1.41 -0.95 MoM -9.85 -13.38 YoY -25.83 #N/A

Source: Reuters

Domestic Production and Exports


The area under sugarcane is estimated at 52.88 lakh ha for 2012-13 crop season, up from 50.63 lakh ha on same period a year ago. Despite of higher acreage, the producers body has estimated next years output lower at 25mn tn, down by 1mn 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 7 mn tn stocks for the new season beginning October 01, 2012 compared to 5.5 mn tn year ago. India may exports 2.5-3 mn tn sugar in 2012-13. India will likely produce 25 million tonne of sugar in 2012-13 factoring in dry spells in biggest producer Maharashtra as well as Karnataka. With the opening stocks of 7 mn tn, domestic Sugar supplies are estimated at 32mn tn against the domestic consumption of around 22.523 mln tn for 2012-13. Thus, no curbs on exports are seen as of now.

Technical Chart - Sugar

NCDEX Sept contract

Source: Telequote

Global Sugar Updates


Brazilian cane mills produced 3 mn tn of sugar in the first half of August thanks to dry weather. Unica in its latest report stated said that total sugar output since the start of the crushing season is still down 12 percent from the same period a year ago. Brazil exported 2.489 million tons of sugar, raw value, up from 1.692 million tons in June but lower from 3.06 million tons sugar exported last year same period. The global sugar surplus remains on target to fall in 2012/13 season, though declines will be less than previously suggested, while adverse weather in several producers may stop prices dropping far below recent levels. (Source: Reuters) According to the International Sugar Organization (ISO), the global sugar surplus is forecast to halve to around 3 mln tn in 2012/13 (OctoberSeptember) from a surplus of 6.5 million tonnes in 2011/12).

Technical Outlook
Contract Sugar Sept NCDEX Futures Unit Rs./qtl

valid for Aug 31, 2012 Support 3454-3488 Resistance 3542-3572

Outlook
Sugar prices are expected to trade sideways on account of mixed views over next years output. Although sufficient supplies may keep the upside capped, sharp downside will also be restricted amid emergence of fresh demand at lower levels amid festive season ahead.

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Commodities Daily Report


Friday| August 31, 2012

Agricultural Commodities
Oilseeds Soybean: Soybean futures opened higher taking cues from the
international markets and considering withdrawal of special cash margin on long side of chana. However, prices witnessed correction marginally by 0.17% on Thursday owing to good rains and higher acreage. CBOT Soybean settled higher by 0.4% on Thursday due to increase in export demand from China. According to the newsletter, Pro farmer, Soybean production was seen at 2.60 bn bushels on a yield of 34.8 bushels/ acre, lower compared to the USDAs soybean output estimates of 2.692 billion bushels and yield at 36.1 bushels/ acre. Brazils grain Association expects the number 2 producers of soybean to produce record 81.3 mn tn in 2012-13. Planting in Brazil would commence from Sept. 15 & exports may soar to 37.5 mn tn, beating the 33.8-mn tn record in 2010/11 crop. According to weekly crop progress report, the condition of U.S soybeans declined to 30% during last week from 31% in good to excellent condition due to weather concerns in the US Midwest. th USDA released its monthly crop report on 10 August wherein its cut U.S. 2012/13 soybean production forecast to 2.692 billion bushels, from 3.05 billion in July. India's oil meal exports fell to 2.75 lakh tn in July from 2.82 lakh tn a year earlier led by a sharp drop in the overseas sales of rapeseed meal. Soy meal exports rose to 1.68 lakh tn in July, from 1.39 tn a year ago. In the domestic markets, as on 24 August Oilseeds have been sown in 164.29 lakh hectares so far, compared with 169.94 lakh hectares same period last year. Soybean area is higher at 106.4 lakh hectares. In 2011-12 season, soybean was sown under 102.9 lakh hectares area and recorded 12.28 million tonne output, down from 12.73 mn tn in 2010-11 season. Refined Soy Oil: NCDEX Soy Oil and MCX CPO settled marginally lower taking cues form the oilseeds complex. As per Intertek Testing Services, Malaysian palm oil product exports during Aug 1-25 rose 5.7 percent to 1,084,343 compared to 1,026,153 tonnes shipped in July 1-25. India imported 112,611 tonnes of refined palm oil in July, down 9.28 percent from June. Total vegetable oil imports in July were 870,328 tonnes, up from 783,315 tonnes in the previous month (Source: Sea of India). Although, Malaysia's July palm oil stocks rose 17.6 percent to 1,998,870 tn from a revised 1,699,117 tn in June, the export demand is expected to regain momentum amid supply shortage of edible oil globally. Indonesia, the world's top palm oil producer, has lowered its earlier output forecast by 8 percent to 23.6 million tonnes this year.
th

Market Highlights
Unit Soybean Spot- NCDEX (Indore) Soybean- NCDEX Oct '12 Futures Ref Soy oil SpotNCDEX(Indore) Ref Soyoil- NCDEX Aug '12 Futures Rs/qtl Rs/qtl Rs/10 kgs Rs/10 kgs Last 4539 4026 790.9 797.6

as on Aug 30, 2012 % Change Prev day 0.40 -0.17 0.32 -0.09 WoW -1.41 0.39 -0.15 -1.23 MoM 2.53 -8.27 1.37 1.49 YoY 98.99 77.45 18.89 22.16

Source: Reuters

as on Aug 30, 2012 International Prices Soybean- CBOTSept'12 Futures Soybean Oil - CBOTSept '12 Futures Unit USc/ Bushel USc/lbs Last 1770 56.59 Prev day 0.40 -0.09 WoW 1.27 0.75 MoM 7.34 9.71
Source: Reuters

YoY 28.33 -1.24

Crude Palm Oil


% Change Unit
CPO-Bursa Malaysia Sept '12 Contract CPO-MCX- Aug '12 Futures

as on Aug 30, 2012

Last 2920 552.3

Prev day 0.17 -0.47

WoW -3.22 -2.11

MoM 0.65 -2.63

YoY -14.12 9.69

MYR/Tonne Rs/10 kg

Source: Reuters

RM Seed
Unit RM Seed SpotNCDEX (Jaipur) RM Seed- NCDEX Sept '12 Futures Rs/100 kgs Rs/100 kgs Last 4330 4456 Prev day 0.46 0.43

as on Aug 30, 2012 WoW 0.70 0.41 MoM -0.57 0.50


Source: Reuters

YoY 47.28 49.38

Technical Chart Soybean

NCDEX Oct contract

Rape/mustard Seed: Mustard seed spot as well as futures settled


marginally higher on Thursday by 0.4% and 0.43% respectively. Mustard output was lower in 2011-12 season. However, with higher returns and improved rains, next years output is expected to be better. According to a circular issued by NCDEX, existing Special Cash Margin of 5% on the Long side shall be increased to 15% on all the running and yet to be launched contracts w.e.f beginning of 18/07/2012.

Source: Telequote

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

valid for Aug 31, 2012 Support 788-793 3955-3992 4400-4425 549-554 Resistance 802-806 4055-4085 4485-4507 561-564

Outlook
Oilseed may trade sideways as higher international prices and good export demand for soy meal may support prices at lower levels, while, good rains in Madhya Pradesh and other parts of India may also lead to a downside movement in the prices in the coming days.

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Commodities Daily Report


Friday| August 31, 2012

Agricultural Commodities
Black Pepper
Pepper Futures corrected in the initial part of the day extending previous days correction, but recovered towards the end due to some demand in the spot market. The Spot reopened yesterday after Onam. Farmers are also unwilling to sell their stocks at lower levels. Lower demand for Indian pepper in the international markets due to huge price parity has also capped any sharp upside. Good supplies from Indonesia have also pressurized the prices. The Spot settled 0.7% lower while the Futures settled 0.06% higher on Thursday. th According to the circular released on June 13 2012 the existing Special margin of 10% (cash) on the long side stands withdrawn on all running contracts and yet to be launched contracts in Pepper from beginning of day Friday June 15, 2012. Pepper prices in the international market are being quoted at $8,0008,400/tonne(C&F) while Indonesia Austa is quoted at $6300-6400/tonne (FOB). Vietnam was offering its produce at $6,000/tonne for 500 GL. Brazil was offering its pepper at $6,150/tonne for the B-Asta grade. As per circular dt. 29/06/2012 issued by NCDEX, Hassan will be available as an additional delivery centre for all the yet to be launched contracts. (not applicable to the currently available contracts-till Dec 2012 expiry).

Market Highlights
% Change Unit Pepper SpotNCDEX (Kochi) Pepper- NCDEX Sept '12 Futures Rs/qtl Rs/qtl Last 40800 41535 Prev day -0.70 0.06

as on Aug 30, 2012 WoW -0.35 -0.60 MoM -4.47 -5.69 YoY 16.66 12.30

Source: Reuters

Technical Chart Black Pepper

NCDEX Sept contract

Exports
According to Spices Board of India, exports of pepper in April 2012 fell by 47% and stood at 1,200 tonnes as compared to 2,266 tonnes in April 2011. India imported 1,848 tonnes of pepper till March 2012 and has become the third country to import such large quantity after UAE and Singapore. (Source: Agriwatch) According to Vietnam Ministry of Agriculture and Rural Development (MARD) exports of black pepper in 2012 are forecasted at around 1,25,000 tonnes. Exports of Pepper from Vietnam during January till June 2012 is estimated around 73000 mt 73,000 mt, higher by 4.3% in volume and 31.7% in value compared to corresponding year last year. Exports of Pepper from Brazil during January till May 2012 are estimated around 13369 mt. (Source: Peppertradeboard). Pepper imports by U.S. the largest consumer of the spice declined 14.8% in the first 2 months of the year (2012) to 8810 tn as compared to 10344 tn in the same period previous year. Imports of Pepper in the month of February declined by 16.8% to 3999 tn as compared to 4811 tn in the month of January 2012. Exports from Indonesia posted significant decrease of 42% as compared to previous year. Exports stood at 36,500 tonnes as compared to 62,599 tonnes in the last year. During May 2012 Brazil exported 1,705 tonnes of pepper as against 1600 tn in May 2011.

Source: Telequote

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

valid for Aug 31, 2012 Support 41050-41250 Resistance 41800-42000

Production and Arrivals


There arrivals in the spot market were reported at 20 tonnes while offtakes were 20 tonnes on Monday. Global Pepper production in 2012 is expected to increase 7.2% to 3.20 lakh tonnes as compared to 2.98 lakh tonnes in 2011 with sharp rise of 24% in Indonesian pepper output and in Vietnam by 10%. According to latest report pepper output in Vietnam is estimated to be 1.35 lakh tonne as compared to 1.10 lakh tonne estimated early in the beginning of year (2012). Domestic consumption of Pepper in the world is expected to grow by 3.03% to 1.25 lakh tonnes while exports are likely to grow by 1.48% to 2.46 lakh tonnes in 2012. (Source: Pepper trade board) On the other hand production of pepper in India in 2011-12 is expected to decline further by 5% to 43 thousand tonnes as compared to 48 thousand tonnes in the last year. Production is lowest in a decade.

Outlook
Pepper prices are expected to trade sideways today. Lack of supplies may support prices at lower levels. The spot markets will remain closed due to Onam. However, prices may correct due to lower demand at higher levels in the domestic as well as international markets.

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Commodities Daily Report


Friday| August 31, 2012

Agricultural Commodities
Jeera
Jeera Futures bounced back sharply yesterday on reports or fresh export enquiries after Syria and Turkey have completely stopped their shipments. However, the spot remained flat due to good rains in Gujarat. Good rains are expected improve moisture levels which may increase prospects of better yield next season. Supply concerns from Syria and Turkey still exists. The Spot as well as the Futures settled 0.16% and 2.62% higher on Thursday. Expectations are that export orders may still be diverted to India from the international markets due to the ongoing civil war in Syria which is hampering supplies. There are reports that there has been an increase in demand from Bangladesh for Indian Jeera. Production in Syria and Turkey is being reported around 17,000 tonnes and around 4,000-5,000 tonnes, lesser than expectations. Jeera prices in the international market of Indian origin are being offered at $3,000 tn (c&f) while Syria and Turkey are not offering their produce. Carryover stocks of Jeera in the domestic market is expected to be around 7-8 lakh bags as compared to 4-5 lakh bags in the last year.

Market Highlights
Unit Jeera SpotNCDEX(Unjha) Jeera- NCDEX Sept '12 Futures Rs/qtl Rs/qtl Last 15587 14990 Prev day 0.16 2.62

as on Aug 30, 2012 % Change WoW -2.73 -3.45 MoM -4.37 -8.92 YoY 0.29 -6.27

Source: Reuters

Technical Chart Jeera

NCDEX Sept contract

Production, Arrivals and Exports


Unjha markets witnessed arrivals of 3,000 bags, while off-takes stood at 3,000 bags on Thusday. 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 -0.14 2.06

as on Aug 30, 2012 % Change

Outlook
Jeera prices are expected to trade upwards due to expectation of revival in export demand. However, good rains in Gujarat may cap sharp gains. In the medium to long term (Aug-September 2012) prices are likely to witness a bounce back as there are limited stocks with Syria and Turkey and crop there is 30% short as compared to last year.
Unit Turmeric SpotNCDEX (N'zmbad) Turmeric- NCDEX Sept '12 Futures Rs/qtl Rs/qtl Last 5603 6144

WoW 2.88 3.75

MoM 5.74 6.70

YoY 6.89 27.95

Turmeric
Turmeric Futures traded on a positive note yesterday and hitting the 2% upper circuit as farmers and stockists are tracking monsoon progress and thus, not selling their stocks anticipating better prices in the coming days. Export demand is lower as orders from Pakistan have been met. Rainfall in Nizamabad is 27% lower than the normal as on 29/8/2012. Turmeric has been sown in 0.53 lakh hectares in A.P as on th 29 August 2012. Sowing is also reported 30-35% lower during the sowing period. The Spot settled marginally lower by 0.14% while the Futures settled 2.06% higher on Thursday. The pre expiry margin on Turmeric has been increased to 5% for last 7 trading days increased on a daily basis on both buy and sell side from the existing 3% on daily basis for last 5 days.

Technical Chart Turmeric

NCDEX Sept contract

Production, Arrivals and Exports


Arrivals in Erode and Nizamabad mandi stood at 2,000 bags and 2,000 bags respectively on Thursday. Turmeric production for the year 2011-12 is projected at historical high of 90 lakh bags (1 bag= 70 kgs) compared to 69 lakh bags in 201011. Erode is expected to produce 55 lakh bags of turmeric a rise of 29% as compared to previous year. According to Spices Board of India, exports of Turmeric in April 2012 increased by 1% at 7,300 tn as compared to 7,230 tn in April 2011.
Source: Telequote

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

valid for Aug 31, 2012 Support 45680-15890 5990-6060 Resistance 15200-15400 6220-6350

Outlook
Turmeric prices are expected to continue to trade sideways taking cues from lower sowing figures as well as reports of export demand from Pakistan. Traders also expect fresh export orders in the coming days. However, improving weather conditions may cap sharp gains. In the medium term (Aug to September) prices may take cues from the sowing figures.

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Commodities Daily Report


Friday| August 31, 2012

Agricultural Commodities
Mentha Oil
Mentha oil Futures traded on a bullish note yesterday due buying by stockists at lower levels. However, spot prices did not rise sharply on lower demand from Gutkha and Pan Masala due to ban in many states. The spot as well as the Futures settled 0.85% and 2.02% higher on Thursday. Total Special Cash margin of 25% on the long side of Mentha Oil has been reduced to 10% in the May contract and 5% in June contract onwards from May 5, 2012. For detailed reference please refer to the Circular No: MCX/T&S/180/2012 dated 03/05/2012.

Market Highlights
Unit Mentha Oil- MCX Spot (Chandausi) Mentha Oil MCX Aug Futures Rs/qtl Rs/qtl Last 1531 1346 Prev day 0.85 2.02

as on Aug 30, 2012 % Change WoW 1.25 2.17 MoM 4.28 -2.74 YoY 11.72 -1.80

Source: Reuters

Production, Arrivals and Exports


According to spot market sources, the overall acreage is estimated to increase from 1.75 lakh ha to 2.1 lakh ha this year. The overall production of Mentha is expected to around 50,000 tonnes. Arrivals of the fresh crop are going on in the mandis and currently stand around 500 drums (each drum weighs 180 kgs). Exports of Mentha during April 2011 to January 2012 witnessed a decline of 6% to 12,850 tonnes as compared to 13,550 tonnes in the same period last year.

Technical Chart Mentha Oil

MCX Sep contract

Outlook
In the intraday trading session Mentha oil is expected to trade sideways with a as positive bias. Buying at lower levels may emerge from stockists anticipating good demand from pharmaceutical companies in the coming days. However, lower demand due to ban on Gutkha and Pan Masala may cap any sharp upside. In long to medium term (July-September) prices are likely to remain under pressure due to peak arrival period.

Source: Telequote

Market Highlights
Prev day 0.08 -0.77

as on Aug 30, 2012 % Change

Potato
In intraday potato futures extended further loses and closed down by 0.77% on Thursday. Commodity market regulator FMC has banned launch of new Tarkeshwar potato contracts. Also From 01-08-2012 no fresh positions shall be allowed during the Staggered Delivery period in all running contracts of Potato in MCX and NCDEX. Only squaring off of existing positions will be allowed during the Staggered Delivery period.
Potato SpotNCDEX (Agra) Potato- NCDEX Sept '12 Futures

Unit Rs/qtl Rs/qtl

Last 1139 1088

WoW -1.18 -5.01

MoM -3.46 -10.19

YoY 176.64 91.50

Production and Arrivals Scenario


Around 200-220 lakh MT potato had been stored in the country in different cold storages during the current season. Although 27-30% of the cold storage stocks are released so far from overall producing belts, they are much lower compared to normal 35-38% every year. According to NHRDF, The sowing of potato seed for Kharif production in Karnataka completed but the area sown is adversely affected due to less and delayed rains. The sowing in hills of Himachal Pradesh, Uttarakhand and Jammu and Kashmir are also completed. The seed sowing in Maharashtra for Kharif is continued, which is delayed due to delay arrival of monsoon, which is still scanty. The area for Kharif is expected to be less or may be same with delayed planting compared to last year, but it depends on further rains. With reports of crop damages in Karnataka, the supplies from this region to other states may also be affected as the overall output is expected to decline by 70-75%. In fact, the state may have to rely on the supplies from the north Indian markets.

Technical Chart Potato

NCDEX Sept contract

Source: Telequote

Technical Outlook
Unit Mentha Oil Aug Futures Potato NCDEX Sept Futures Potato MCX Sept Futures Rs/kg Rs/qtl Rs/qtl

valid for Aug 31, 2012 Support 1342-1354 1060-1074 1125-1138 Resistance 1389-1408 1096-1108 1162-1178

Outlook
Potato futures in intraday are expected to trade sideways owing to continued subdued demand in the market. Also West Bengal government has decided to curb its decision to restrict inter-state transfer of potato after October that might provide resistance to the prices in short term. However, the upcoming festive season might provide support to the prices from falling sharply in Medium term.

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