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Commodities Daily Report

Wednesday| October 31, 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 Analyst anuj.choudhary@angelbroking.com (022) 2921 2000 Extn. 6132

Vaishali Sheth - Research Associate vaishalij.sheth@angelbroking.com (022) 2921 2000 Extn. 6133
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Commodities Daily Report
Wednesday| October 31, 2012

Agricultural Commodities
News in brief
Direct subsidy won’t end MSP, PDS: Montek
Pitching for direct cash transfer of food subsidy, Planning Commission dep-uty chairman Montek Singh Ahluwalia on Tuesday assured this would not result in dismantling of current system of procuring grains at minimum support price (MSP) and distribution through PDS. “...About the cash transfer (of subsidy), the accusation is that you want to dismantle the PDS. This is completely wrong because there is no question of dismantling the minimum support prices,” Ahluwalia said at a meeting of state food ministers for strengthening PDS. The government would continue the public procurement of food grains like wheat and paddy and sell it without subsidy through PDS, he said adding that food subsidy would be transferred directly into the bank accounts of the beneficiaries to plug leakages. Echoing similar views, food minister KV Thomas said, “Among other measures to check the leakage and diversions, an alternate model of direct transfer of food subsidy is being considered”. Finance ministry has proposed to introduce direct cash transfer of food subsidy in Delhi and six union territories including Chandigarh and Puducherry. (Source: Financial Express)

Market Highlights (% change)
Last Prev. day

as on Oct 30, 2012
WoW MoM YoY

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

18431 5598 53.97 85.68 1711

-1.10 -1.19 -0.22 0.16 0.16

-1.49 -1.64 0.45 -1.14 0.13

-2.09 -2.11 3.03 -7.35 -3.93

6.61 7.61 9.01 -5.01 -0.71

Source: Reuters

Sandy slows final crop harvest in eastern U.S. states - RTRS
Light rain, wind and snow from the remnants of Hurricane Sandy will cause a brief slowdown in harvesting corn and soybeans in the eastern U.S. Midwest this week, an agricultural meteorologist said on Tuesday. There will be about 0.5 inch (1.3 cm) of rain, with wind gusts to 30 miles per hour (48 km per hour) on Tuesday through early Wednesday in Indiana, Michigan and Ohio, said Kyle Tapley, meteorologist for MDA EarthSat Weather. Tapley said colder temperatures were expected, with light snow in the eastern Corn Belt leaving about 2 inches of snow in southwest Ohio. He said the storm and harvest delays would be brief and followed by a turn back to dry weather, boosting harvest progress. Little, if any, harm is expected to crops from the fallout of the storm since farmers have been harvesting each crop at a record-fast pace. "Sandy is the big weather story but it's mainly a human life issue on the East Coast - no real impact on crops or harvest," said John Dee, meteorologist for Global Weather Monitoring. (Source: Reuters)

India's reliance on pulses import to go up
India’s reliance on imported pulses could increase this year, due to a decline of around 10 per cent in tur production in the current kharif harvesting season due to pest and worm attacks. Total imports of pulses of all varieties stand at between 2.5 and 3.5 million tonnes (mt), constituting around 15 per cent of overall annual demand. Assocham estimates India’s pulses demand at 21 mt in 2012-13, which might go up to 21.42 mt in 2013-14 and 21.91 mt in 2014-15. This year the onset of monsoon was delayed by two months, extending the season proportionately. The crop is now set for harvesting towards the end of November. ‘Pod borer’, a common pest which attacks all pulses including tur, urad and gram, caused damage in major producing regions, including Gujarat and Maharasthra, during the flowering stage of tur. Germinated with the vagaries of nature and climatic conditions, ‘pod borer’ typically affects 30-50 per cent of the crop resulting in a decline in acreage under pulses. Pradeep Jindal, director of Jindal Overseas Corporation, a Mumbai-based pulses trader, said, “The deficit from local production can safely be bridged through imports as has been done in the past. Hence, the pest attack on tur crop is not a cause of worry as of now.”
(Source: Business Standard)

Argentine storms seen cutting corn crop 20 pct, soy 10 pct
Argentina could lose 20 percent of its projected corn crop and 10 percent of its soy this season because of violent storms that have lashed the Pampas farm belt over the last three months, a local expert said on Tuesday. Consumer nations hope South American breadbaskets Argentina and Brazil will step in with enough grain supplies to soften prices squeezed higher this year by yield-killing droughts in Russia and the United States. But Argentina, the world's No. 3 soybean exporter and No. 2 corn supplier, has been swamped by unusually heavy rains since August. Pampas topsoils, barely recovered from a December-January drought that decimated 2011/12 crops, have been reduced in some areas to unplantable mush. The U.S. Department of Agriculture expects Argentina to harvest 55 million tonnes of soy and 28 million tonnes of corn in the 2012/13 crop year. (Source: Reuters)

Sugarcane price war delays crushing in Maharashtra
The deadlock over sugar cane price has yet again delayed the crushing season in top sugar producer Maharashtra. Unlike last year, state government has opted not to intervene till now. While the sugar mills are ready to pay higher price than last year's, the deadlock is about how the deal will be brokered. The mills have adopted a wait-and-watch policy now. There were reported incidents of throwing shoes at state Chief Minister Prithviraj Chavan in temple town Pandharpur and forcefully stop cane cutting in some parts of the state. "Mills are closed right now. We are ready to negotiate our first advance demand of Rs 3,000 per tonne. Either the state government or the mills should come forward to discuss the issue. However, there will be no negotiation on our demand of Rs 500 per tonne payment, in addition to the amount paid till now to the farmers towards last year's cane payment," said Raju Shetty led Swabhimani Shetkari Sangathana. (Source: Business Line)

Wheat firm, but faces biggest monthly fall in about a year
U.S. wheat rose on Wednesday for the first time in five sessions, but is on course to finish the month down nearly 5 % as weak U.S. exports and expectations of a bumper winter crop weigh on the grain. (Source: Reuters)

Grains output to touch 250 mt on better rabi crop prospects
Foodgrain output will touch 250 million tonnes in 2012-13 on improved rabi prospects, said Agriculture Minister Sharad Pawar on Tuesday. The expectation of a better rabi crop, on revival of late monsoon in August and September, would help offset the decline in kharif. Poor monsoons had hurt the kharif foodgrain output, which is set to decline by a tenth over the previous year. The kharif foodgrain production is pegged at 117.18 mt against an all-time high of 129.94 mt in 2011-12. Addressing the Conference of Food Ministers and Secretaries of States and Union Territories, Pawar called for strengthening of foodgrain procurement mechanism in eastern States such as Bihar, Jharkhand, Chhattisgarh and West Bengal. He said the move to bring green revolution in eastern India would see a rise in paddy production in these States. Last year, the total foodgrain output touched an all-time high of 257.44 mt and the target for the current year is pegged at 249.52 mt. (Source: Business Line)

Bay of Bengal cyclone ‘Nilam’ may intensify further
he US Navy’s Joint Typhoon Warning Centre expects Cyclone Nilam in the south-west Bay of Bengal to gradually intensify another round ahead of a landfall expected on Wednesday afternoon. After this, the friction effects of land will bring down storm intensity, but not before generating heavy to very heavy rainfall over the coastal areas of Tamil Nadu and Andhra Pradesh. (Source: Business Line)

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Commodities Daily Report
Wednesday| October 31, 2012

Agricultural Commodities
Chana
Chana futures that declined in the early part of the session, recovered towards the end and settled marginally higher on account of festive season demand. However, prospects of better sowing and expected higher imports are capping sharp upside in the prices. Chana sowing has started in Maharashtra, AP and Karnataka and is expected to commence soon in MP and Rajasthan too. In Maharashtra, 1.09 lakh ha area has been covered so far which is only 8.8% of the targeted 12.32 lakh ha by the state dept. In AP, chana acreage stood at 41000 hectares as on 17 October, 2012 compared with 98000 hectares during the same period last year. 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.
st th

Market Highlights
Unit Rs/qtl Rs/qtl Last 4650 4716 Prev day -1.14 -0.76

as on Oct 30, 2012 % change WoW MoM 1.36 4.49 2.06 3.95 YoY 30.25 31.22

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. Improved rains towards the end of monsoon season have raised prospects of sowing. 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)

Source: Telequote

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

valid for Oct 31, 2012 Resistance 4760-4805

4645-4685

Outlook
Chana futures may remain firm during the intraday on account of festive season demand and tight supplies. However, sharp upside may be capped on expected higher imports in the coming days. Going forward, prices may take cues from sowing progress of Rabi pulses. Although, short term trend remain positive for chana, we expect prices to come under downside pressure in the second half of November as supply pressure may ease amid shipments from Australia and Canada.

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Commodities Daily Report
Wednesday| October 31, 2012

Agricultural Commodities
Sugar
After gaining considerable in the past three-four sessions, Sugar futures witnessed profit booking and thus settled marginally lower on Tuesday. Prices had declined considerable during the first three weeks of October on the back of higher quota. However, festive season demand at lower levels is supporting the upside in the prices in the past 3-4session. Decision over hike in import duty on white sugar and duty cut on raw sugar imports shall be taken only after 3 months after considering crushing progress. 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. Liffe white sugar settled marginally up by 0.17% while ICE raw sugar closed 0.77% higher on Tuesday due to short coverings. Higher output and lower imports expectations for the 2012-13 season from China coupled with higher sugar surplus forecast for fourth straight year is keeping international prices under downside pressure.

Market Highlights
Unit Sugar Spot- NCDEX (Kolkata) Sugar M- NCDEX Nov '12 Futures Rs/qtl Last 3718

as on Oct 30, 2012 % Change Prev. day WoW 0.33 -0.84 MoM -2.31 YoY 16.20

Rs/qtl

3374

-0.38

3.21

-0.97

13.22

Source: Reuters

International Prices
Unit Sugar No 5- LiffeDec'12 Futures Sugar No 11-ICE Mar '13 Futures $/tonne $/tonne Last 544.7 434.67

as on Oct 30, 2012 % Change Prev day WoW 0.17 0.77 -0.18 -0.61 MoM -5.19 -0.10 YoY -19.93 -23.05

Source: Reuters

Domestic Production and Exports
Crushing has started across Maharashtra and will commence soon in UP too. 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 year’s sugar 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.

Technical Chart - Sugar

NCDEX Nov contract

Source: Telequote

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

valid for Oct 31, 2012 Resistance 3398-3425

Global Sugar Updates
Sugar output in Brazil jumped 57% during the first fortnight of October. th And thus output is now lower just by 3.7% as of 16 October at 26.7 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 since 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 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)

3328-3350

Outlook
Sugar prices may recover as demand is expected to emerge at lower levels. However higher quota is seen offsetting festive season demand which might cap sharp gains. Approval to unrestricted exports may benefit India only if the global sugar prices gain considerably.

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Commodities Daily Report
Wednesday| October 31, 2012

Agricultural Commodities
Oilseeds
Soybean: Soybean futures declined sharply on account of arrival
pressure, which increased significantly on Tuesday. The spot as well as the Futures settled 0.94% and 1.95% lower yesterday. Soybean arrivals at MP that stood at 100000 bags on Monday increased to over 500000 bags on Tuesday, while in Maharashtra it increased to 300000 bags from 150000 bags. In Rajasthan arrivals stood at 150000 bags on Tuesday. 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 0.43% higher on account of short coverings after prices fell 1.26% w-o-w. According to the latest crop progress report released by USDA, as on 23 Oct 2012, US soybean harvest is 80 per cent complete as compared to 71 per cent last week and 69 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. South American nations are expecting higher plantings and production this season. But Weather is not conducive for soybean sowing in both Brazil and Argentina by now. Production in Argentina is expected to reach 55-60 mn tn crossing record 52.7 mn tn in 2009-10. Brazil could also churn out 81 mn tn of oilseed and replace the drought-stricken US as the world's top soybean producer. Refined Soy Oil: Ref soy oil as well as MCX CPO traded on a bearish note on Tuesday on of account of export duty cut by Indonesia for November. This could further dent demand for Malaysian palm oil and exert pressure on the BMD palm oil futures. Exports of Malaysian palm oil products for Oct. 1-25 rose 11 percent. 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. As per MPOB’s latest report, Malaysia's September palm oil stocks rose 17 percent to record high 2.48 million tons compared to previous month.

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 3255 3251 708.2 687.7

as on Oct 30, 2012 % Change Prev day -0.94 -1.81 -0.90 -1.71 WoW -0.03 0.32 0.78 0.71 MoM 11.97 9.94 9.05 10.50 YoY 47.82 44.50 10.56 6.81

Source: Reuters

as on Oct 30, 2012 International Prices Soybean- CBOTNov'12 Futures Soybean Oil - CBOTDec'12 Futures Unit USc/ Bushel USc/lbs Last 1534 50.09 Prev day 0.43 -0.18 WoW -1.26 -2.40 MoM -1.70 -1.24
Source: Reuters

YoY 27.02 -2.11

Crude Palm Oil

as on Oct 30, 2012 % Change Prev day WoW 0.25 -0.61 -1.60 0.31

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

Last 2398 426

MoM -0.91 7.79

YoY -18.49 -17.79

MYR/Tonne Rs/10 kg

Source: Reuters

RM Seed
Unit RM Seed SpotNCDEX (Jaipur) RM Seed- NCDEX Nov '12 Futures Rs/100 kgs Rs/100 kgs Last 4325 4243 Prev day -0.57 -0.91

as on Oct 30, 2012 WoW 4.47 -0.28 MoM 5.49 13.48
Source: Reuters

YoY 42.86 33.34

Technical Chart –Soybean Rape/mustard Seed: Mustard Futures declined on Tuesday on
account of profit booking. However, sentiments for mustard seed remain positive on account of tight supplies of this oilseed amid drop in output. The Futures settled 1.16% lower on Monday. th Mustard sowing as on 25 Oct was reported at 8.37 lakh ha as compared to 20.15 lakh ha in the same period last year. However, on the back of higher returns and improved rains, next years output is expected to be better. Prospects of better sowing shall keep sentiments weak in the medium term. Outlook Edible oil complex may improve marginally during the early part of session on Wednesday on account of short coverings. However, arrival pressure before Diwali festival may pressurize prices at higher levels and thus prices may settled lower towards the end.. Export duty cut on CPO by Indonesia will make available cheaper palm oil for overseas buyers and refiners and could dent demand for Malaysian palm oil and weigh on prices.

NCDEX Nov contract

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 31, 2012 Support 676-682 3145-3205 4170-4205 424-430 Resistance 695-701 3300-3345 4275-4310 440-445

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Commodities Daily Report
Wednesday| October 31, 2012

Agricultural Commodities
Black Pepper
Pepper futures traded on a positive note due to festive demand. However, sharp gains have been capped as farmers are trying to liquidate their stocks anticipating higher output. 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 Futures settled 0.45% and 0.95% higher 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 $8,700/tn(C&F) while Vietnam was offering 550GL at $7,000/tn, Brazil Austa at $6,700/tn, and Indonesia Austa at $6,850/tn (FOB). 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 42855 44295 % Change Prev day 0.45 0.95

as on Oct 30, 2012 WoW 0.40 -0.08 MoM 1.64 2.19 YoY 24.77 27.28

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 31, 2012 Support 43850-44050 Resistance 44570-44850

Production and Arrivals
The arrivals in the spot market were reported at 75 tonnes while offtakes were 80 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). 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 sideways with a positive bias 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
Wednesday| October 31, 2012

Agricultural Commodities
Jeera
Jeera Futures corrected yesterday as exporters refrained from buying at higher levels. Also, prospects of better sowing this season have pressurized prices. Sowing in Gujarat has commenced but is currently lower by 15-20%. However, expectations of good export demand supported prices in the spot. Festive demand is also expected to be good in the coming days. Over the last couple of days, exporters have been buying actively due to escalated tensions between Syria and Turkey. The spot settled 0.1% higher whle the Futures settled 1.38% lower on Tuesday. According to markets sources about 75% exports target has already been achieved due to a supply crunch in the global markets. Around 45 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 $2,800-2825 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 15043 14300 Prev day 0.10 -1.38

as on Oct 30, 2012 % Change WoW -0.89 -5.44 MoM 3.98 4.92 YoY 5.93 4.45

Source: Reuters

Technical Chart – Jeera

NCDEX Nov contract

Production, Arrivals and Exports
Unjha markets witnessed arrivals of 4,000 bags, while off-takes stood at 6,000 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 -0.12 -1.09

as on Oct 30, 2012 % Change

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

Last 4920 5082

WoW -2.01 1.15

MoM -8.89 -7.77

YoY -11.39 5.61

Outlook
Jeera futures are expected to trade downwards. Exporters may stay away at higher prices and may buy hand to mouth. However, prices may recover if the export demand increases. Festive buying may also lend support to the prices. In the medium term (October-November 2012), prices are likely to stay firm as there are limited stocks with Syria and Turkey.

Technical Chart – Turmeric

NCDEX Nov contract

Turmeric
Turmeric Futures corrected again yesterday due to lack of fresh orders from the upcountry market and exporters. Stockists also have good carryover stocks with them. 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 0.12% and 1.09% lower on Tuesday. 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 5,000 bags and 700 bags respectively on Monday. 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 31, 2012 Support 14020-14150 4970-5026 Resistance 14440-14580 5150-5210

Outlook
Turmeric prices are expected to trade sideways today. Lack of fresh orders may pressurize prices. However, a reduction in the special cash margin, lower sowing figures and lower arrivals may support prices. also, expectations of export orders may support prices.

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Commodities Daily Report
Wednesday| October 31, 2012

Agricultural Commodities
Kapas
On Tuesday NCDEX Kapas futures settled higher by 1.06% as Cotton procurement by CCI is providing support to the prices and prices rallied again after correcting marginally on Monday. ICE cotton futures underwent losses and settled 2.33% down as cotton harvest pressure is weighing on the prices. Cotton harvesting has commenced in US, in all 38% is harvested as compared to 28% a week ago, versus 39% same period a year ago. Cotton crop condition is 42% in Good/Excellent state same as compares to last week, and 29% same period a year ago as on 23 Oct 2012.

Market Highlights
Unit Rs/20 kgs Rs/Bale Last 1005 16460

as on Oct 30, 2012 % Change Prev. day WoW MoM 1.06 0.60 11.60 0.30 -0.72 -0.72 YoY -5.62

NCDEX Kapas Futures MCX Cotton Futures

Source: Reuters

International Prices
ICE Cotton Cot look A Index Unit Usc/Lbs Last 70.92 81.35

as on Oct 30, 2012 % Change Prev day WoW -2.33 -2.41 0.00 0.00 MoM 2.56 0.00 YoY -27.88 -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 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 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 Nov contract

Source: Telequote

Outlook
Kapas futures in intraday is expected to trade firm on account of improved demand and procurement by CCI which might maintain the upside in prices. Also, Prices might take support as farmers are not willing to sell their produce at lower levels. 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 31, 2012 Support 980-991 977-988 16100-16250 Resistance 1014-1028 1010-1024 16620-16740

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