Commodities Daily Report

Monday| October 22, 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

Monday| October 22, 2012

Agricultural Commodities
News in brief
Suspension of futures in farm produce during lean season has made life easier
The buzz around commodity futures trading has got louder with the Union Cabinet clearing the Forward Contract Regulation (Amendment) Bill. The need for a standalone regulator was long felt as trade in the online commodity exchange have grown leaps and bounds in the last few years. Ramesh Abhishek, Forward Markets Commission Chairman spoke to Business Line on FCRA and various other issues relating to the commodity market. We have already done away with contracts expiring during lean season in 15 commodities. It has made life much easier. Before this measure was introduced, there was a distortion in spot and future prices during the last few days of expiry of the contract. Traders tend to buy from the spot market to give delivery on the futures exchange. This led to a scarcity, particularly, during the lean period when the arrivals are thin he said. (Source: Business Line)

Market Highlights (% change)

Last Prev. day

as on Oct 19, 2012

WoW MoM YoY

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

18682 5684 53.85 90.05 1723

-0.58 -0.60 0.47 -2.23 -1.18

0.04 0.14 1.96 -1.97 -2.00

0.76 1.32 -0.07 -6.80 -2.54

9.73 11.06 9.99 4.25 2.82

Source: Reuters

Food Ministry against giving wheat bonus of Rs 130/quintal to farmers in 2013-14

The Food Ministry has opposed a proposal to give a bonus of Rs 130 per quintal to farmers over and above the wheat support price for the next season, saying the move would lead to increase in subsidies by Rs 5,000 crore and fuel the price rise. The Agriculture Ministry has proposed no change in the minimum support price (MSP) of wheat at Rs 1,285 per quintal for 2013-14 season (April-March), but has suggested a bonus of Rs 130 per quintal over and above the MSP. In its comments on a Cabinet Committee on Economic Affairs' note, the Food Ministry has objected to the proposal of giving bonus to farmers and suggested to go with the recommendation of the Commission for Agricultural Costs and Prices (CACP), sources said. Normally, bonus is announced to boost procurement. The Food Ministry argued that is no need to increase procurement as wheat stocks in the central pool is more than double the actual requirement, it said. As on October 1, the government has wheat stock of 31.42 million tonnes against the buffer norm of 14 million tonnes. Wheat production has been targetted at 85.59 million tonnes for the coming season. (Source: The economic Times)

Now, defined criteria to determine commodities' launch on exchanges

In order to curb the free flow of contracts on the exchange platform, the Forward Markets Commission (FMC) is planning to frame a set of criteria for agri commodities for determining their launch on futures exchange. According to sources, FMC would categorize all commodities currently being produced, consumed and traded in India. Beginning from the top, the proposed four categories would begin with the most popular soya, bullion, base metals, steel and energy and end with the least popular region-specific agri commodities such as isabgul and funnel seed. The remaining two categories would entail highly turbulent, like guar, and smoothly-traded ones, including coffee and rubber. With primary focus on narrow commodities in short-supply or uncertainty about their crop size season due to vagaries of nature, the criteria are expected to restrict the launch of unpopular commodities. Also, commodity traders would be more focused on popular commodities, which they know better in order to reduce chances for incurring losses. Currently, exchanges do research and extensive due diligence on their own before submitting a contracts launch proposal to FMC. There are no defined criteria as on today.
(Source: Business Standard)

Madhya Pradesh targets record rice procurement

After purchasing a record nine million tonnes (mt) of wheat in 2012-13, Madhya Pradesh is now planning to almost double its annual rice procurement from farmers from 6,35,000 tonnes last year to 1.3 mt. The state has already started procuring rice from Punjab and Haryana. It is expected rice procurement by Madhya Pradesh, Bihar and Maharashtra would be more than that by Punjab and Haryana, the traditional contributors of rice to the central stock. Rice procurement in Bihar is likely to rise 31.03 per cent to 2.01 mt in 2012-2013, while in Maharashtra, it is expected to rise 68 per cent to 3,00,000 tonnes. Bihar plans to set up about 8,500 rice procurement centres this year, the highest in the country. Procurement in Punjab is expected to rise just 10 per cent to 8.5 mt, while in Haryana, it is expected to be fall 16.54 per cent to 1.67 mt. (Source: Business Standard)

Guar seed, gum prices rise on relisting buzz; confidence soars

Guar prices are inching up following speculation that the commodity would be relisted on the futures market, easing worries of farmers who have made huge investments this year in anticipation of good returns. The price of guar gum in Jodhpur spot market in Rajasthan was quoted at Rs 31,000 a tonne, up from Rs 20,000 a tonne a fortnight ago. Similarly, guar seed prices firmed to Rs 12,000 per quintal from a low of Rs 6,000 a quintal a fortnight ago. Supplies of guar seed in markets across Rajasthan, Haryana and Punjab are likely to pick up post-Diwali. "The fresh harvest is likely to hit the market in the first week of November. But farmers will hold the produce till they get the right price to recover their investment," said Surendra Rajpurohit, owner of Jodhpur-based Surbhi Guar Trading Corporation. This year, there is an acute shortage of guar seeds as farmers cleared their last year's harvest and the entire carryforward stock to maximise their returns. (Source: Economic Times)

Cabinet panel clears Textile Ministry plan for dilution of norms

The Cabinet Committee on Economic Affairs (CCEA) has approved the Textile Ministrys recommendation for 60 per cent dilution in the mandatory Jute Packaging Materials Act (JPMA) of 1987 for packing sugar in 2012-13. The committee has also permitted 10 per cent dilution in JPMA for packing foodgrains. The Act directs all sugar factories to use jute bags for packing sugar to the extent of 100 per cent. According to Manish Poddar, the committee is likely to issue an order to this effect next week. . (Source: Business Line)

GM crops panel report not objective, say experts

The recommendation of the Parliamentary Committee on genetically modified (GM) crops that field trials of such crops be banned and a moratorium on commercialisation of GM crops imposed has evoked strong reaction from scores of scientists across the world. This (the recommendation) is highly detrimental to development of science and harnessing the potential of biotechnology for reviving the countrys agriculture to accelerate poverty reduction and reduce malnourishment, as many as 65 economists and social scientists from within India and outside have jointly said in a statement. (Source: Business Line)

Heavy rains forecast for TN, Kerala for two more days
Northeast monsoon has been vigorous over Rayalaseema and Tamil Nadu and active over interior Karnataka and Kerala during 24 hours ending Sunday morning. Rainfall occurred at most places over Tamil Nadu, Kerala and Lakshadweep, an India Meteorological Department (IMD) update said. As expected, active northeast monsoon conditions have opened up a front off the west coast also. (Source: Business Line)

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Commodities Daily Report

Monday| October 22, 2012

Agricultural Commodities
Chana November futures settled lower by 2.01% on account of profit taking. Also, prospects of better sowing of this rabi crop pressurized the prices. Chana sowing has started in some parts of Maharashtra, AP and Karnataka and is expected to commence soon in MP and Rajasthan too. In AP, chana acreage stood at 41000 hectares as on 17 October, 2012 compared with 98000 hectares during the same period last year. Prices have gained considerable since the beginning of October amid festive season buying and lower supplies caused by lower output in 2011-12 season. CACP has recommended a hike in minimum support price (MSP) of gram by Rs.200 to Rs.3000 a quintal and Masoor by Rs.100 to Rs.2900 a quintal for upcoming 212-13 Rabi season to boost the production of pulses. As per the NCDEX circular dated 1 October, Special Margin of 10% (in cash) on the Long Side on all the running contracts and yet to be launched contracts in Chana have been withdrawn with effect from beginning of day Thursday, October 04, 2012. Good rains in the month of August and September has raise prospects of 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.
Source: Telequote
st th

Market Highlights
Unit Rs/qtl Rs/qtl Last 4650 4727 Prev day -1.37 -4.16

as on Oct 20, 2012 % change WoW MoM -1.06 4.95 -3.47 7.82 YoY 36.38 41.48

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

Source: Reuters

Technical Chart - Chana

NCDEX Nov contract

Sowing progress and demand supply fundamentals

According to the Ministry of Agriculture 99.81 Lakh hectare area has been planted under Kharif pulses as on 21th September, 2012 compared to 108.28 lakh hectare (ha) same period last year. According to the first advance estimates of 2012-13 season, kharif pulses output is estimated lower by 14.6% at 5.26 million tonnes compared with 6.16 mn tn last year. Kharif pulses harvesting would commence from next month. According to the Fourth advance estimates of 2011-12 season, 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. 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)

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

valid for Oct 22, 2012 Resistance 4775-4825

4640-4682

Outlook
Chana futures are expected to open lower in the start but might recover in the later sessions on account of festive season demand and tight supplies. However, reports of higher sowing of Rabi pulses this season might pressurize the prices in the medium term. Although short term trend remain positive for chana, we expect prices to come under downside pressure in the month of November as supply pressure may ease amid shipments from Australia and Canada.

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Commodities Daily Report

Monday| October 22, 2012

Agricultural Commodities
Sugar
Sugar November futures settled marginally up by 0.36% on Saturday due to short coverings. Further, food ministry is keeping a close watch on sugar sales by millers in the open market and warned against failure to sell the entire quota allocated to them for the October-November period, which capped the upside. India, which is likely to produce a sugar surplus for its third year in a row, has decided to allow exports for another year, Food Minster K.V. Thomas said, reflecting confidence about domestic supplies in the world's top consumer of the sweetener. Mills and traders will have to wait for a formal order to export sugar in the new season that began on Oct. 1. Millers based in western and southern India and global trading firms bought sugar at around $500/ton a CIF basis, as the price in the domestic market has jumped more than 23% to $680/ tn in the past three months. Liffe white sugar and ICE raw sugar closed 1.28% and 2.22% higher respectively on account of short coverings. Prices have corrected over the last couple of days due to good supplies from Brazil. Higher output and lower imports expectations for the 2012-13 season from China coupled with weak international markets is keeping prices under downside pressure.

Market Highlights
Unit Sugar Spot- NCDEX (Kolkata) Sugar M- NCDEX Nov '12 Futures Rs/qtl Last 3750

as on Oct 20, 2012 % Change Prev. day WoW -0.35 0.00 MoM -2.34 YoY 19.05

Rs/qtl

3307

-2.42

-2.74

-6.98

15.31

Source: Reuters

International Prices
Unit Sugar No 5- LiffeDec'12 Futures Sugar No 11-ICE Mar '13 Futures $/tonne $/tonne Last 547.9 449.56

as on Oct 19, 2012 % Change Prev day WoW 1.28 2.22 -1.15 1.91 MoM -0.74 6.70 YoY -24.52 -25.35

Source: Reuters

Domestic Production and Exports

The area under sugarcane is estimated at 52.88 lakh ha for 2012-13 crop season, up from 50.99 lakh ha on same period a year ago. 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. Despite of higher acreage, the producers body has estimated next years sugar output lower at 24 mn tn, down by 2mn 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 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.

Technical Chart - Sugar

NCDEX Nov contract

Source: Telequote

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

valid for Oct 22, 2012 Resistance 3322-3340

Global Sugar Updates

Sugarcane harvesting in Brazil was down 7.9% as on 1st October 2012 at 24 mn tn. Unica expects the main center-south cane to yield 32.7 mn tn sugar output in 2012-13, down 1.2 % from the 33.1 mn tn forecast in April. Favorable weather in the second half of September should allow harvest and exports to run on schedule despite a couple of days of rain last week that slowed crushing. Thus sharp upside in the international prices may be capped. The International Sugar Organization said 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 ISO said the stocks/consumption ratio could rise to around 40 percent in 2012/13, from 37.6 percent in 2011/12. (Source: Reuters)

3270-3285

Outlook
Sugar prices may remain under downside pressure as higher quota is offsetting festive season demand. Approval to unrestricted exports may benefit India only if the global sugar prices gain considerably. However, supply pressure from Brazil is keeping international sugar markets under downside pressure.

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Commodities Daily Report

Monday| October 22, 2012

Agricultural Commodities
Oilseeds
Soybean: Soybean futures traded on a positive note last week due
to bargain buying at lower levels. Reports of improved soymeal export demand along with festive season demand for edible oil supported the prices. Also, farmers were not ready to sell their stocks at lower levels. The Spot as well as the Futures settled 1.5% 4.43% higher w-o-w. New soybean arrivals at MP stood at 450000 bags, Maharashtra170000 bags and Rajasthan 100000 bags on Wednesday. Arrivals are expected to improve to 6-6.5 lakh bags in MP in the coming weeks. According to first advance estimates, Soybean output is pegged at 126.2 lk tn for 2012-13. However, drop in area under groundnut, sunflower & castor seed may lead to lower output of these oilseeds in 2012-13 which is estimated 9.6% lower at 187.8 lakh tn. CBOT Soybean settled lower by 0.73% on account of macroeconomic worries. Also the weekly export sales data was lower than the expectations. Some bargain buying was seen after the prices reached a 3 month low have supported the prices. According to the latest crop progress report released by USDA, as on 16 Oct 2012, US soybean harvest is 71 per cent complete as compared to 58 per cent last week and 58 per cent compared to 5 year average. According to the USDA October monthly report, Global soybean production is projected at 264.3 million tons, up 6.2 million mostly due to an increase for the United States. Ending stocks are seen down from 169 million bushels in 2011-12 to 115 million bushels in 2012-13 season. Brazil could churn out 81 million tonnes of oilseed and replace the drought-stricken US as the world's top soybean producer, according to the USDA.

Market Highlights
Unit Soybean Spot- NCDEX (Indore) Soybean- NCDEX Nov '12 Futures Ref Soy oil SpotNCDEX(Indore) Ref Soy oil- NCDEX Nov '12 Futures Rs/qtl Rs/qtl Rs/10 kgs Rs/10 kgs Last 3239 3309 687.8 678.8

as on Oct 20, 2012 % Change Prev day 0.03 1.52 0.70 0.79 WoW 1.50 4.40 2.24 2.04 MoM -3.97 -3.29 -8.82 -2.60 YoY 48.92 51.34 10.05 9.66

Source: Reuters

as on Oct 19, 2012 International Prices Soybean- CBOTNov'12 Futures Soybean Oil - CBOTDec'12 Futures Unit USc/ Bushel USc/lbs Last 1534 51.58 Prev day -0.73 -1.38 WoW 0.77 3.39 MoM -8.10 -7.61
Source: Reuters

YoY 25.24 0.19

Crude Palm Oil

as on Oct 20, 2012 % Change Prev day WoW 0.33 -0.42 -0.12 2.05

Unit
CPO-Bursa Malaysia Nov '12 Contract CPO-MCX- Oct '12 Futures

Last 2404 424

MoM -11.13 -9.03

YoY -16.53 -12.72

MYR/Tonne Rs/10 kg

Refined Soy Oil: Ref soy oil as well as MCX CPO recovered traded
on a positive to bullish note last week due to festive season demand for the oil along firm international markets. Ref soy oil as well as MCX CPO (Nov) settled 5.4% and 2.71% higher respectively w-o-w. Exports of Malaysian palm oil products for Oct. 1-15 rose 13.1% to 769,534 tn from 680,112 tn for the Sept. 1-15 period. Malaysia, the world's No.2 producer of palm oil, will scrap a tax free export quota for the crude grade from 2013 in a bid to reduce feedstock prices for refiners who have lost market share to top supplier Indonesia. According to latest data from SEA, total vegetable oil imports in September were 993,912 tn, up from 897,018 tn in the previous month. India imported 111,163 tn of refined palm oil in September. As per MPOBs latest report, Malaysia's September palm oil stocks rose 17 percent to record high 2.48 million tons compared to previous month. Moreover, crude palm oil output in September rose 20 percent from August to 2 million tons. Indias edible oil imports should rise 5.4 percent to a record 10.31 million tonnes in 2012/13, with the entire increase met by palm oil.

Source: Reuters

RM Seed
Unit RM Seed SpotNCDEX (Jaipur) RM Seed- NCDEX Nov '12 Futures Rs/100 kgs Rs/100 kgs Last 4225 4239 Prev day -0.59 1.58

as on Oct 20, 2012 WoW 0.00 3.44 MoM 3.05 6.67

Source: Reuters

YoY 43.22 39.72

Technical Chart Soybean

NCDEX Nov contract

Rape/mustard Seed: Mustard Futures traded on a positive note

due to low stocks coupled with festive season demand for its oil. However, prospects of better sowing pressurized the prices. Mustard output was lower in 2011-12 and thus this has led to tight supplies in the domestic markets. However, on the back of higher returns and improved rains, next years output is expected to be better. The Futures settled 1.95% higher w-o-w. Outlook Edible oil complex is expected to trade on a positive note today due to festive demand. Also, the prices may take cues from the strong international markets.
Source: Telequote

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

valid for Oct 22, 2012 Support 668-674 3240-3275 4150-4185 424-427 Resistance 686-693 3355-3395 425-4320 437-442

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Commodities Daily Report

Monday| October 22, 2012

Agricultural Commodities
Black Pepper
Pepper futures corrected in the initial part of the week due to fresh arrivals of the green pepper. Also reports of higher output this year pressurized prices. However, prices recovered in later part of the week due to good festive demand. Farmers are also unwilling to sell their stocks at lower levels. Traders are buying pepper directly from the farmers. Exports demand for Indian pepper in the international markets remains weak due to huge price parity. The Spot as well as the November Futures settled 0.2% and 0.17% lower respectively w-o-w. 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 $8,850/tonne(C&F) while Indonesia Austa is quoted at $6,850/tonne (FOB). Vietnam was offering 550GL at $7,000/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
Unit Pepper SpotNCDEX (Kochi) Pepper- NCDEX Nov '12 Futures Rs/qtl Rs/qtl Last 42437 43510 % Change Prev day 0.34 0.47

as on Oct 20, 2012 WoW -0.20 -0.34 MoM 1.34 0.81 YoY 26.33 31.59

Source: Reuters

Technical Chart Black Pepper

NCDEX Nov 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 September 2012 is estimated around 80,433 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 Oct 22, 2012 Support 43000-43250 Resistance 43780-44000

Production and Arrivals

The arrivals in the spot market were reported at 20 tonnes while offtakes were 30 tonnes on Friday. 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). 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) 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 is expected to trade on a positive note today. Festive season demand is expected to support prices at lower levels. However, low export demand as well as good supplies in the international market from other origins may cap sharp gains.

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Commodities Daily Report

Monday| October 22, 2012

Agricultural Commodities
Jeera
Jeera November Futures traded on a bullish note last week on back of reports of fresh export enquiries. Arrivals increased due to better prices. Over the last couple of days, exporters have been actively buying due to escalated tensions between Syria and Turkey. Also, festive demand in the domestic markets is reported to be good. Good rains in Gujarat, have increased expectations of better sowing prospects ahead of the rabi sowing and have restricted sharp gains in the spot markets.. The spot as well as the Futures settled 2.89% and 3.51% w-o-w. According to markets sources about 75% exports target has already been achieved due to a supply crunch in the global markets. Around 4-5 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. 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 $2,770 tn (c&f) while Syria and Turkey are not offering. Carryover stocks of Jeera in the domestic market is expected to be around 4-5 lakh bags lower by around 3 lakh bags last year.

Market Highlights
Unit Jeera SpotNCDEX(Unjha) Jeera- NCDEX Nov '12 Futures Rs/qtl Rs/qtl Last 15209 15465 Prev day 0.25 1.76

as on Oct 20, 2012 % Change WoW 2.89 4.62 MoM 5.25 13.99 YoY 6.49 17.81

Source: Reuters

Technical Chart Jeera

NCDEX Nov contract

Production, Arrivals and Exports

Unjha markets witnessed arrivals of 6,000 bags, while off-takes stood at 6,000 bags on Saturday. 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 0.00 2.65

as on Oct 20, 2012 % Change

Unit Turmeric SpotNCDEX (N'zmbad) Turmeric- NCDEX Nov '12 Futures Rs/qtl Rs/qtl

Last 5021 5272

WoW -3.06 -2.77

MoM -11.69 -7.54

YoY -10.26 9.02

Outlook
Jeera futures are expected to trade on a positive note today. Reports of fresh export buying may support prices. Festive buying may also lend support to the prices. However, expectations of improved sowing may cap sharp gains. In the medium term (October-November 2012), prices are likely to witness a bounce back as there are limited stocks with Syria and Turkey.

Technical Chart Turmeric

NCDEX Nov contract

Turmeric
Turmeric Futures traded on a negatve note last week due to low demand, but recovered towards the end after the regulator removed special margins on the long side. Turmeric has been sown in 0.58 lakh hectares in A.P as on 10/10/2012. Sowing is also reported 30-35% lower during the sowing period. The Spot as well as the Futures settled 3.06% and 3.27% lower w-o-w. Special Margin of 20% (in cash) on the Long Side in Turmeric November 2012 and December 2012 expiry contracts will be withdrawn with effect from beginning of day Saturday, Oct 20, 2012.

Production, Arrivals and Exports

Arrivals in Erode and Nizamabad mandi stood at 4,000 bags and 800 bags respectively on Friday. 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 Oct 22, 2012 Support 15100-15340 5160-5210 Resistance 15625-15820 5330-5400

Outlook
Turmeric prices are expected to trade sideways today. A reduction in the special cash margin, lower sowing figures and lower arrivals may support prices. However, stockists are not buying actively, which may pressurize prices.

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Commodities Daily Report

Monday| October 22, 2012

Agricultural Commodities
Kapas
NCDEX Kapas futures on Saturday settled up by 2.21% on account of emerging demand along with reports of increase in cotton yarn exports to China also supported the upside. After witnessing and upside rally for past few sessions ICE cotton Futures closed down on Friday and settled marginally down by 1.08% on account of profit booking. Cotton harvesting has commenced in US, in all 28% is harvested as compared to 21% a week ago, versus 34% same period a year ago. Cotton crop condition is 42% in Good/Excellent state same as compares to last week, and 30% same period a year ago as on 16 Oct 2012.

Market Highlights
Unit Rs/20 kgs Rs/Bale Last 994 16610

as on Oct 20, 2012 % Change Prev. day WoW 2.21 6.60 0.91 4.07 MoM 9.71 4.07 YoY -5.09

NCDEX Kapas Futures MCX Cotton Futures

Source: Reuters

International Prices
ICE Cotton Cot look A Index Unit Usc/Lbs Last 76.88 81.35

as on Oct 19, 2012 % Change Prev day WoW -1.08 6.28 0.00 0.00 MoM 2.67 0.00 YoY -21.50 -29.20

Domestic Production and Consumption

As on 28 September, 2012, Cotton is being planted on 114 lakh hectares, down, as compared to the last years 119.6 lakh hectares. However, the acreage so far is at par with its normal area of 111.8 lakh hectares. According to the First Advance Estimates, Cotton production for 2012-13 seasons is revised upward to 334 lakh bales compared with 352 lakh bales in 2011-12 season. Also, on account of cheaper cotton available in the global markets, imports have more than double from 5 lakh bales to 12 lakh bales. According to the latest CAB report as on 04 October 2012, exports have dipped sharply by 46% to 7 million bales in the 2012/13 marketing year that began on Oct. 1 compared to 12.7 million bales estimated for 201112 season. The ending stocks figure, has been revised further upward to 3.4 million bales as compared to 2.8 million bales estimated for August 2011-12 season
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Source: Reuters

Technical Chart - Kapas

NCDEX April contract

Global Cotton Updates

Global cotton prices are mainly influenced by China, US and India. 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 17.65 mln bales and exports of 12.1 mln bales were pegged for the season 2012-13. In its October monthly demand supply report on Thursday, the Agriculture Department (USDA) raised its cotton crop for 2012/13 cotton crop season to 17.29 mln bales (prev 17.11) along with upward revision in end stocks 5.60 mln 480 pounds/bales (prev 5.30). Exports were down to 11.60 mln 480 pounds/bales (prev 11.80). China's 2012/13 cotton crop is estimated at 31.50 mln bales up from previous estimates of 31.00 mln bales given in September, imports 11.00 mln bales down from previous estimates of 12.00 million bales, consumption was pegged at 36.00 mln bales (down from prev 38.00 million bales), end stocks 36.61 mln bales (up from prev 35.51 mln bales)
Source: Telequote

Technical Chart - Cotton

MCX Oct contract

Source: Telequote

Outlook
Kapas futures in intraday is expected to trade on a positive note on account of improved demand. Also, Prices might take support as farmers are not willing to sell their produce at lower levels. In addition, supply worries due to poor quality of the fresh cotton crop delivery in the international market will give prices a further upward push. However, fresh arrivals from all over India and higher global cotton ending stocks might cap the sharp upside in medium term.

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

valid for Oct 22, 2012 Support 972-982 968-978 16360-16480 Resistance 1005-1018 1000-1015 16780-16970

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