Commodities Daily Report

Wednesday| September 20, 2012

Agricultural Commodities

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

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

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Commodities Daily Report
Wednesday| September 20, 2012

Agricultural Commodities
News in brief
Postponement of expiry of contracts expiring on Sept 20, 2012
As per the NCDEX Circular dated 18th September 2012, there is a possibility of closure of the various physical markets due to the General Strike called by various political parties. Thus, the contracts – Barley, Chana, Red Chilli, Cotton seed Oilcake, Coriander, Gold 100 gms, Gur, Jeera, Maize, Potato, Pepper Rubber, mustard seed, Silver 5 kgs, Sugar M, Ref Soy Oil, Turmeric and Wheat, which were scheduled to expire on September 20, 2012 shall now expire on September 21, 2012. It is to be noted that the expiry dates on Market Watch screen would remain unchanged; however, the last trading day for the above contracts will now be September 21, 2012. (Source: NCDEX)

Market Highlights (% change)
Last Prev. day

as on Sept 19, 2012
WoW MoM YoY

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

18496 5600 53.9 91.73 1769

-0.25 -0.18 0.04 -3.74 0.01

3.60 3.90 -2.44 -5.44 2.20

4.75 4.42 -3.09 -4.05 9.44

9.60 10.33 13.33 2.61 -0.56

Source: Reuters

Wheat, corn, soybeans make a U-turn, head higher
Prices for key crops like wheat, corn and soybeans rose Wednesday, their first increase this week. Wheat, corn and soybean prices all rose about 2 percent after falling Monday and Tuesday. To some investors, the increase seemed like a natural leveling off. Prices for all three crops rocketed higher this summer because investors worried that a crippling drought across the Midwest would devastate crop yields. But prices, while still elevated, have plateaued with recent rains and yields came in better than expected. Investors seem to be realizing that they've already hit the highest prices for the current crop, said Spencer Patton, founder and chief investment officer of Steel Vine Investments. (Source: Reuters)

Kharif foodgrain output may be lower than last year
Kharif foodgrain output may be lower than last year’s 130 million tonnes (mt), as scanty rain in the early part of the monsoon hit plantings. Last kharif, the country had harvested 129.94 mt foodgrains, including 91.53 mt of rice. Poor rain posed a serious challenge in achieving production targets for the current kharif season, said Agriculture Secretary Ashish Bahuguna on Wednesday at a workshop on improvement in agricultural statistics. For 2012-13, the Government had set a conservative production target of 250 mt, half of which was expected to be met from kharif. Last year, the total foodgrain production, including rabi, stood at 257.44 mt. Rice and wheat production touched a record 104 mt and 93.9 mt, respectively. Kharif sowing has almost ended and harvest is set to begin in early October. The Government expects to announce the advance kharif estimates next week. Though the late revival in monsoon has helped increase acreage of key kharif crops such as rice, it would augur well for rabi plantings of mustard and wheat due to higher moisture levels in soil. The monsoon deficit, which stood at 29 per cent at the end of June, reduced in August due to widespread rains and currently stands at six per cent. Poor rain during the key sowing period of June and July affected kharif sowings. Latest data from the Agriculture Ministry estimate the shortfall at 5.4 per cent over last year. (Source: Business Line)

Food Ministry planning to sell additional 5 million tonne wheat
The Food Ministry is planning to sell additional 5 million tonne wheat in the open market to bulk consumers like flour millers and biscuit makers in a bid to check rising prices and offloading the surplus stock. "We are planning to release another 5 million tonnes of wheat to bulk consumers under the open market sale scheme (OMSS)," Food Minister K V Thomas told reporters here. If the proposal to sell additional 5 million tonne is approved by the government then the total quantity of wheat to be sold would reach 8 million tonne in this fiscal. So far, the government has released about 1.3 million tonne wheat since mid-July, with another 1 million tonne to be released in this month. (Source: Economic Times)

Government may consider hiking retail price of PDS sugar on Friday
The Cabinet Committee on Economic Affairs (CCEA) is likely to consider on Friday a proposal to raise price of sugar sold through ration shops - if approved it would be the first hike in about a decade. Sugar sold through ration shops costs Rs 13.50 per kg. The government sells 27 lakh tonnes of sugar every year to poor through public distribution system (PDS). The ministry has stated that the government will not have to pay any subsidy on levy sugar if prices are raised to Rs 25.37 per kg, sources said. For sugar sold at every rupee lower than this threshold, the government will have to incur a subsidy of Rs 270 crore a year, they added. The retail issue price of levy sugar under the PDS has been fixed at Rs 13.50 per kg with effect from March 1, 2002. (Source: Reuters)

Iran keen to sign long-term wheat import deal with India: Govt
The revival in monsoon reduced the rain deficit further to 7 per cent as on September 14, but the shortfall in kharif acreage persisted. The total kharif area is lower by 55.62 lakh hectares (lh) over last year, though the crop sowing data continued to trickle in as reports from the interior areas continued to pour. The acreage deficit has largely been reduced in case of pulses, oilseeds and cotton, but the gap has widened in rice and coarse cereals over the previous week. In case of coarse cereals, the shortfall in acreage was mainly observed in sorghum at 2 lh over last year, bajra (19 lh), ragi (1. Iran has evinced interest in importing wheat from India on a regular basis and up to two million tonnes of the grain could be shipped to the West Asian country this year, Food Minister K V Thomas has said. Few months ago, the sanction-hit Iran had sent a delegation to India to check the quality of Indian wheat. It had also taken wheat samples for quality analysis. Asked whether India will export wheat to Iran via diplomatic route, the Minister said, “We are still working on modalities”. Sources said a delegation from India will soon visit Iran to discuss about wheat exports. (Source: Business Line)

Record monsoon rain turns desert lush green
Rajasthan's desert region has gone from grey to green in little more than a month. In a dramatic late surge in the monsoon here, the threat of drought that loomed large over the region in mid-August has given way to gushing rivers and water bodies filled to the brim in Jaisalmer and Barmer districts. As on September 18, monsoon rainfall in western Rajasthan was 15% above normal, almost all of it coming since the second week of August. As late as August 22, the region had a rain deficit of 25%, with most villages facing severe water crisis that prompted the state government to declare a drought.
(Source: The Times of India)

Ravishankar re-elected turmeric merchants’ body chief
New office bearers have been elected for the Erode Turmeric Merchants and Godown Owners Association. R.K.V. Ravishankar has been re-elected president. Duraisamy has been chosen Secretary and A.B. Raju VicePresident Ramachandran and Thiagarajan will be joint secretaries, while P. Arumugam is the treasurer. (Source: Business Line)

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Commodities Daily Report
Wednesday| September 20, 2012

Agricultural Commodities
Chana
Chana Futures closed marginally up by 0.15% on Tuesday on account of short coverings while spot closed 0.51% down on expectations of higher imports to ease supplies in the domestic markets. As per the NCDEX circular dated 18 September, the expiry of chana st September contract has been postponed to 21 September on account of possible closure of the various physical markets due to the General Strike called by various political parties. Prices declined last week on improved rains and reports of expected higher output in Australia, the largest supplier of chickpeas to India. In Australia, chana production rose by 70.5 percent to 8.27 lakh tonnes from 4.85 lakh tonnes in previous year. Ongoing recovery in monsoon and above average rains in the past few days is showing better prospects for Rabi pulses sowing in the coming days. Monsoon has recovered across India, especially in Rajasthan, one of the major chana growing states, and may prove beneficial for the chana sowing. However, the overall fundamentals still remain supportive for the prices on account of supply tightness amid festive season demand. 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.
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Market Highlights
Unit Rs/qtl Rs/qtl Last 4590 4565 Prev day -0.51 -0.15

as on Sept 18, 2012 % change WoW MoM -0.76 -4.73 1.06 -4.82 YoY 44.41 51.96

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

Source: Reuters

Technical Chart - Chana

NCDEX Oct contract

Sowing progress and demand supply fundamentals
According to the Ministry of Agriculture 98.94 Lakh hectare area has been planted under Kharif pulses as on 1th September, 2012 compared to 105.14 lakh hectare (ha) same period last year. Rajasthan Agriculture Department states that, planted area under Kharif Pulses is down at 19.42 lakh hectares ha compared to 25.55 lakh ha same st period last year. (Dated 31 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 24%. 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 Oct Futures Unit Rs./qtl Support

valid for Sept 20, 2012 Resistance 4550-4585

4390-4430

Outlook
Chana futures are expected to trade with upward bias during the intraday on expectations of good demand at lower prices levels. However, sharp upside may be capped on possible higher imports and improved sowing prospects. 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.

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Commodities Daily Report
Wednesday| September 20, 2012

Agricultural Commodities
Sugar
Sugar futures declined 0.3% on Tuesday amid profit booking, while spot continued to trade on a positive note due to emerging demand at lower levels ahead of the festive season. As per the NCDEX circular, the expiry of Sugar September contract due today, has been postponed to 21st September on account of possible closure of the various physical markets due to the General Strike called by various political parties. The Cabinet Committee on Economic Affairs (CCEA) is likely to consider on Friday a proposal to raise price of sugar sold through ration shops - if approved it would be the first hike in about a decade. There are reports that Maharashtra will start crushing for the 2012/13 season from Nov. 1, instead of Oct. 1 supported the prices. Indian Sugar Mills Association (ISMA) has forecast sugar production for 2012-13 season at 24 mn tn. This is about 8 per cent lower than 26 mt produced in 2011-12 season and from its initial forecast of 25 mn tn for 2012-13 season. The Indian government has provided an additional 10 days to sugar mills to sell around 200,000 tonnes of unsold non-levy sugar stocks of August. ICE raw sugar and life white sugar futures declined on Wednesday, with dealers focused on a global surplus of the sweetener and on the progress of the harvest in Brazil.

Market Highlights
Unit Sugar Spot- NCDEX (Kolkata) Sugar M- NCDEX Sept '12 Futures Rs/qtl Last 3829

as on Sept 18, 2012 % Change Prev. day WoW 0.76 4.90 MoM 3.29 YoY 26.78

Rs/qtl

3546

-0.31

1.98

2.96

29.89

Source: Reuters

International Prices
Unit Sugar No 5- LiffeOct'12 Futures Sugar No 11-ICE Oct '12 Futures $/tonne $/tonne Last 552 424.67

as on Sept 19, 2012 % Change Prev day WoW -2.01 -1.70 -3.02 -3.04 MoM -1.34 -5.30 YoY -13.75 #N/A

Source: Reuters

Technical Chart - Sugar

NCDEX Oct contract

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 year’s output lower at 24 mn tn, down by 2mn tn compared to the current year. Sugar production in India — the world’s second-biggest producer — touched 26 million tonne since October 1, 2011. Industry body ISMA has estimated 6 mn tn stocks for the new season beginning October 01, 2012 compared to 5.5 mn tn year ago. India may export 2.5-3 mn tn sugar in 2012-13. With the opening stocks of 6 mn tn, domestic Sugar supplies are estimated at 30mn tn against the domestic consumption of around 22.523 mln tn for 2012-13. Thus, no curbs on exports are seen as of now.

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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 2.06 mn tn raw sugar in August 2012, down from 2.08 mn tn exported in July. The International Sugar Organization said on Friday it expected a global sugar surplus of 5.86 million tonnes in the season running from October 2012 to September 2013, up from the prior season's surplus of 5.19 million tonnes. The wider surplus reflects expectations for a record global crop of 177.39 million tonnes, raw value, up 2.25 percent from the prior season as production in top grower Brazil rises. The ISO said the stocks/consumption ratio could rise to around 40 percent in 2012/13, from 37.6 percent in 2011/12. (Source: Reuters)

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

valid for Sept 20, 2012 Support 3550-3575 Resistance 3625-3640

Outlook
Sugar prices may trade on a positive note due to improving demand ahead of the festive season. A delay in crushing in Maharashtra by a month may also support prices. However, sufficient supplies and improved rains may cap a sharp upside.

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Commodities Daily Report
Wednesday| September 20, 2012

Agricultural Commodities
Oilseeds Soybean: Soybean futures as well as spot declined sharply due to
good monsoon conditions in the key soybean growing regions along with commencement of harvesting in India as well US. CBOT Futures witnessed had declined on Tuesday on account of start to harvesting and up gradation of US crop condition Good to Excellent to 33% from 32% last week. According to the report, 10% of soybeans have already been harvest as against 4% last week. However, on Wednesday prices witness short coverings and thus settled marginally higher. U.S. Department of Agriculture monthly report pegged the soybean harvest at 2.634 billion bushels, down from last month's 2.692 billion and below the analysts' average estimate of 2.657 billion. Ending stocks next summer were projected to be the lowest in nine years at 115 million, unchanged from August’s estimate. Brazil’s 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. In the domestic markets, as on 14 September, 2012, Oilseeds have been sown in 171.17 lakh hectares so far, compared with 176.97 lakh ha same period last year. Soybean area is higher at 106.9 lakh ha. In 2011-12 season, soybean was sown under 107 lakh hectares area and recorded 12.28 million tonne output, down from 12.73 mn tn in 2010-11 season. Soy meal exports fell to 10,005 tn in August, from 165,610 tn a year ago. (Source: Solvent Extractors' Association of India). Soybean exports from Brazil declined from 4.13 mn tn in July to 2.4 mn tn in the month of August. (Source: Reuters)
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Market Highlights
% Change 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 4280 3569 787.5 790 Prev day -2.15 -3.38 -1.02 -0.61

as on Sept 18, 2012

WoW -3.91 -6.28 -1.18 -0.28

MoM -7.04 -11.01 -0.57 -2.17

YoY 106.66 72.56 26.33 29.90

Source: Reuters

as on Sept 18, 2012 International Prices Soybean- CBOTSept'12 Futures Soybean Oil - CBOTSept '12 Futures Unit USc/ Bushel USc/lbs Last 1640 54.91 Prev day -1.74 -0.13 WoW -3.33 -0.72 MoM -3.22 4.81
Source: Reuters

YoY 18.88 -4.17

Crude Palm Oil
% Change Unit
CPO-Bursa Malaysia – Sept '12 Contract CPO-MCX- Aug '12 Futures

as on Sept 18, 2012

Last 2705 509.8

Prev day -0.33 -2.75

WoW -4.48 -5.40

MoM -3.32 -9.64

YoY -20.44 10.20

MYR/Tonne Rs/10 kg

Refined Soy Oil: NCDEX Soy Oil settled lower tracking the oilseeds
complex. Exports of Malaysian palm oil products for Sept. 1-20 rose 14.6 percent to 928,110 tonnes from 809,814 tonnes shipped during Aug. 1-20, according to cargo surveyor Intertek Testing Services. Palm oil exports from Indonesia increased by 20 percent to 1.5 mt in July compared to the previous month. Palm oil output is expected to be 23-25 mt, and around 18 mt is likely to be exported. India imported 112,611 tn of refined palm oil in July, down 9.28 percent from June. Total vegetable oil imports in July were 870,328 tn, up from 783,315 tn in the previous month (Source: Sea of India). Rape/mustard Seed: Taking cues form the weak sentiments in the oilseeds market, mustard seed settled 2.6% down on Tuesday. Mustard output was lower in 2011-12. However, on the back of higher returns and improved rains, next years output is expected to be better. Rainfall deficit in Rajasthan has come down sharply due to rainfall in last 4-5 days. It will ensure higher area under rapeseed as its prices are trading near record high level. Sowing of rapeseed starts from October and north-western Rajasthan is the top producing area in the country.

Source: Reuters

RM Seed
Unit RM Seed SpotNCDEX (Jaipur) RM Seed- NCDEX Sept '12 Futures Rs/100 kgs Rs/100 kgs Last 4050 4116 Prev day -2.29 -2.67

as on Sept 18, 2012 WoW -1.22 2.11 MoM -5.81 -7.26
Source: Reuters

YoY 40.20 48.48

Technical Chart –Soybean

NCDEX Oct contract

Outlook
After declining sharply on Tuesday, Edible oil complex may witness short coverings taking cues form the international markets. However, overall sentiments remain bearish for the edible oil complex on account of start to harvesting in India as well as US. Expectations of improved yield of domestic soybean may also pressurize the prices.
Source: Telequote

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

valid for Sept 20, 2012 Support 736-739 3475-3525 4050-4085 500-506 Resistance 747-752 3595-3640 4140-4180 515-520

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Commodities Daily Report
Wednesday| September 20, 2012

Agricultural Commodities
Black Pepper
Pepper traded sideways on Tuesday, but corrected from higher levels towards the end due to low demand from the upcountry markets. However, low stocks in the domestic markets which have supported prices at lower levels. Traders are buying pepper directly from the farmers. Lower demand for Indian pepper in the international markets has capped sharp gains. The Spot as well as the Futures settled 0.08% and 0.11% lower on Tuesday. 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 $8,400/tonne(C&F) while Indonesia Austa is quoted at $6,750/tonne (FOB). Vietnam was offering 550GL at $6,900/tonne. 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 41505 42290 Prev day -0.08 -0.11

as on Sept 18, 2012 WoW 1.13 2.15 MoM 1.37 1.21 YoY 16.49 15.45

Source: Reuters

Technical Chart – Black Pepper

NCDEX Oct 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 Oct Futures Unit Rs/qtl

valid for Sept 20, 2012 Support 42350-42600 Resistance 43200-43500

Production and Arrivals
The arrivals in the spot market were reported at 5 tonnes while offtakes were 5 tonnes on Tuesday. 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 on a sideways in the intraday. Low stocks in the domestic markets may support prices. However, prices may correct due to lower demand at higher levels in the domestic as well as international markets. Also, demand from the upcountry markets is said to be weak.

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Commodities Daily Report
Wednesday| September 20, 2012

Agricultural Commodities
Jeera
Jeera Futures traded on a negative note on Tuesday due to profit booking at higher levels. Good rains in Gujarat also pressurized the prices. However, the spot remained positive due to low arrivals as farmers are not ready to sell their stocks. Also, expectations of higher exports data have supported the prices. According to markets sources about 75% exports target has already been achieved due to a supply crunch in the global markets. Around 10 lakh bags of Jeera are reported across India. 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. The Spot settled 0.17% lower while as the Futures settled 1.88% lower on Tuesday. 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 $2,700-2,750 tn (c&f) while Syria and Turkey are not offering. 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 14800 13995 Prev day 0.17 -1.88

as on Sept 18, 2012 % Change WoW -0.28 0.83 MoM -7.64 -9.86 YoY -2.23 -3.08

Source: Reuters

Technical Chart – Jeera

NCDEX Oct contract

Production, Arrivals and Exports
Unjha markets witnessed arrivals of 3,000 bags, while off-takes stood at 3,000 bags on Tuesday. 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 1.62 -0.43

as on Sept 18, 2012 % Change

Outlook
Jeera prices are expected to trade sideways. Prices may find support at lower levels on expectations of higher export figures. However, good rains in Gujarat may cap any sharp gains. In the medium term (September-October 2012), prices are likely to witness a bounce back as there are limited stocks with Syria and Turkey.
Unit Turmeric SpotNCDEX (N'zmbad) Turmeric- NCDEX Sept '12 Futures Rs/qtl Rs/qtl Last 5880 6062

WoW 7.05 1.88

MoM 7.97 2.36

YoY -1.81 11.60

Turmeric
Turmeric Spot traded on a bullish note on Tuesday as farmers are not selling stocks at lower levels demanding higher floor price of Rs.9000/tn. Lower sowing figures have also supported prices at lower levels. However, good stocks with the stockists lead to a correction in the Futures. Rainfall in Nizamabad is 15% lower than the normal as on 12/9/2012. Turmeric has been sown in 0.54 lakh hectares in A.P as on 12/9/2012. Sowing is also reported 30-35% lower during the sowing period. The Spot settled 1.62% higher while the Futures (October contract) settled 2% lower on Tuesday. No fresh positions will be allowed in respect of Turmeric September 20, 2012 expiry contract from September 08, 2012 till the expiry of the contract. Only squaring up of existing positions will be allowed.

Technical Chart – Turmeric

NCDEX Oct contract

Production, Arrivals and Exports
Arrivals in Erode and Nizamabad mandi stood at 3,000 bags and 1,500 bags respectively on Tuesday. 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 Oct Futures Turmeric NCDEX Oct Futures Rs/qtl Rs/qtl

valid for Sept 20, 2012 Support 13750-13900 5530-5600 Resistance 14200-14400 5770-5850

Outlook
Turmeric prices are expected to trade sideways taking cues from lower sowing figures and lower arrivals. Demand for higher floor prices may also support prices. Traders expect fresh export orders in the coming days. However, good stocks may pressurize prices at higher levels. In the medium term (September) prices may take cues from the sowing figures.

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Commodities Daily Report
Wednesday| September 20, 2012

Agricultural Commodities
Kapas
In intraday NCDEX Kapas declined sharply in the early part of the trading session, however, recovered towards the end and settled marginally higher by 0.2%. Cotton prices have declined sharply during the last week on account of improved rains which may narrow down the crop losses in Gujarat. Monsoon deficiency has further narrowed to 6% below LPA which is raising hopes of better output. Good rains in Gujarat, the top producer of Cotton has provided some relief to the standing cotton crop. ICE cotton Futures settled up marginally on Wednesday on account of bargain buying and rebound in other agricultural commodities. Cotton harvesting has commenced in US, in all 6% is harvested as compared to 4% a week ago, versus 8% same period a year ago. Cotton crop condition is 43% in Good/Excellent state as compared to 41% a week ago, and 27% same period a year ago.

Market Highlights
Unit Rs/20 kgs Rs/Bale Last 988.5 16680

as on Sept 18, 2012 % Change Prev. day WoW 0.20 -3.28 0.00 -4.85 MoM -13.10 -7.18 YoY -

NCDEX Kapas Futures MCX Cotton Futures

Source: Reuters

International Prices
ICE Cotton Cot look A Index Unit Usc/Lbs Last 75.09 81.35

as on Sept 18, 2012 % Change Prev day WoW 0.15 2.93 0.00 0.00 MoM 3.34 0.00 YoY -23.10 -29.20

Domestic Production and Consumption
As on 14 September, 2012, Cotton is being planted on 114 lakh hectares; lower by 5.6lakh hectares compared to the last year’s 119.6 lakh hectares. However, the acreage so far is at par with its normal area of 111.8 lakh hectares. According to the latest updates by Cotton Advisory Board (CAB), Cotton production for 2011-12 seasons is revised upward to 357 lakh bales compared with 347 lakh bales estimated earlier. Also, on account of cheaper cotton available in the global markets, imports have more than double from 5 lakh bales to 12 lakh bales. On the demand front, exports increased to around 127 lakh bales from the earlier estimates of 115 lakh bales taking total cotton consumption to around 382 lakh bales. Thus, the ending stocks figure for 2011-12 season, that would end in September, has been revised upward to 28 lakh bales from the previous estimates of 25 lakh bales. However, 28 lakh bales is the lowest since 2004-05 caused by robust exports. In its September monthly demand supply report on Wednesday, the Agriculture Department (USDA) raised its estimate for the global cotton surplus by next July to a record of 76.5 million 480-pound bales, nearly a two-million bale increase from last month's estimate.
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Source: Reuters

Technical Chart - Kapas

NCDEX April contract

Source: Telequote

Technical Chart - Cotton

MCX Oct contract

Global Cotton Updates
Global cotton prices are mainly influenced by China, US and India. China is the largest producer, consumer, and importer of Cotton, While India is the second largest producer, consumer and exporter of Cotton. US is third largest producer and a largest exporter of Cotton in the world. USDA estimated US Cotton planting for the season 2012-13 at 12.64 mln acres as compared to 14.74 mln acres last season (2011-12). Ending stocks were at 4.8 mln bales (480 pounds/bales) with Production of 17 mln bales and exports of 12.1 mln bales were pegged for the season 2012-13. China's 2012 cotton output is estimated at 6.97 million tonnes, down 4.2 percent from last year. China's cotton imports in August rose 48 percent on the year to 305,600 tonnes. Total imports in the first eight months of the year were 3.77 million tonnes, up 123 percent from the same period last year, according to the report by the China National Cotton Reserves Corp.

Source: Telequote

Outlook
After declining sharply during the last few weeks, cotton prices may trade with upwards bias as demand is expected to emerge at lower levels. Higher international prices after the U.S. Federal Reserve’s stimulus action may also support the sentiments in the short term.

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

valid for Sept 20, 2012 Support 965-974 960-970 16430-16550 Resistance 999-1010 992-1005 16740-16850

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