Commodities Daily Report

Friday| November 16, 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

Friday| November 16, 2012

Agricultural Commodities
News in brief
Vegetable oil imports hit new record
Indias vegetable oil imports set a new record in the recently ended oil year (November 2011October 2012), due to a sustained increase in consumption and decrease in production from domestic sources. Data compiled by the apex trade body, the Solvent Extractors Association (SEA), showed total veg oil imports jumped 17.5% to 10.19 million tonnes in 2011-12 compared to 8.67 mt in the corresponding period last year. Import of edible oil (both crude and refined) shot up to 9.98 mt this year from 8.37 mt last year. As a consequence, Indias reliance on imported edible oil increased to 60%, at an estimated domestic consumption of 16.5 mt this year, compared to 54% on a consumption of 15.5 mt last year. Domestic oilseed production has been falling continuously, due to lower productivity. Shifting to other crops due to better returns has also affected output. A ministry of agriculture report said oilseed yield fell five per cent to 1,135 kg a hectare (ha) in 2011-12 from 1,193 kg a ha in 201011, mainly on account of a decline in yields of soyabean, groundnut and rapeseed/mustard. Consequently, oilseed output fell eight per cent to 30.01 mt from 32.47 mt a year before. Overall production of veg oils was down about 700,000 tonnes due to a reduced oilseed crop in 2011-12.
(Source: Business Standard)

Market Highlights (% change)

Last Prev. day

as on Nov 15, 2012

WoW MoM YoY

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

18471 5631 54.66 85.45 1713

-0.79 -0.63 -0.65 -1.01 -0.94

-2.28 -2.24 0.83 1.20 0.01

-1.09 -0.79 3.49 -6.98 -2.54

7.90 9.37 8.43 -12.93 -3.63

Source: Reuters

Floor price for RBD palmolein import cut to $887/tonne

The Government has further slashed the tariff value, or the base import price, for refined, bleached and deodorized (RBD) palmolein to $887 a tonne from $889. The cut in base import prices is prompted by the decline in global edible oil prices. However, base import prices for other crude and refined oils were kept unchanged. The base import price is the reference price for assessing import taxes. The Government had set a new base import price of $1,053 for RBD palmolein in early August and has since reduced it gradually, based on the movement of global prices. India has emerged as the largest importer of edible oils in recent years, with RBD palmolein imports for the year-ended October 2012 at 1.57 million tonnes (mt), up 31% from 1.08 mt last year. (Source: Business Line)

Guar gum exports to fall as drillers seek substitutes

Indias exports of guar gum, a thickening agent used for oil and gas extraction, may drop for the first time in three years after a record surge in prices forced drilling companies to seek cheaper alternatives. Shipments may decline as much as 30% in the year that began on April 1 from 650,000 tns a year earlier, said P.K. Hissaria, president of the Indian Guar Gum Manufacturers Association. Exports in the six months through September were about 100,000 tns and sales will accelerate from this month with the arrival of the new crop, he said. Falling exports may weigh on prices, which have slumped about 63% since reaching a record in March, lowering costs for oil and gas drilling services companies including Halliburton Co. and Baker Hughes Inc. Lower prices will allow food companies easy access to a raw material thats also used as an ingredient in food emulsifiers, additives and thickeners. Higher inventories with the drilling companies and slowing drilling activities had reduced demand for Indian guar gum supplies, said Mitul Shah, managing director of Rama Industries, Indias third largest shipper. Guar seed production may climb to as much as 2.5 mln tns this year, enough to make at least 600,000 tns of guar gum, from about 1.5 mln tns in 201112, manufacturers associations Hissaria said. (Source: Bloomberg)

Irked by flat rentals, Bengals potato cold storages up in arms

Rising operational cost coupled with stagnant rentals for almost past three years have turned a number of cold storages in West Bengal cashstrapped. According to Patit Paban De, member, West Bengal Cold Storage Association, operational costs have gone up by 40-50 per cent in the last two years. However, there has been no hike in rentals during this period. Rising operational cost coupled with stagnant rentals for almost past three years have turned a number of cold storages in West Bengal cash-strapped. According to Patit Paban De, member, West Bengal Cold Storage Association, operational costs have gone up by 40-50 per cent in the last two years. However, there has been no hike in rentals during this period. Cash-strapped cold storages plan to shut down their operations for one day on November 19 as a mark of their protest. Only in West Bengal and Tripura the rentals are controlled by the State Government while for all other States it is decided by the cold storage associations depending on the market condition, he said. (Source: Business Line)

FMC launches probe into complaints against pepper market movement

Commodities market regulator Forward Markets Commission (FMC) is understood to have launched a probe into an alleged market manipulation of pepper futures contracts by certain market participants in collusion with some exchange officials. According to sources, certain large operating cartels who were earlier involved in guar scam are behind the unnatural price rise in pepper futures since June, Cochin Hill Produce Merchants' Association (CHPMA) sources said. These operators allegedly with insider information picked up about 6,000 tonnes of pepper from the exchange platform, hoping to make a killing by squeezing genuine hedgers/small investors, a CHPMA source said. The trade, however, expressed the fear that FMC might ban futures trading in pepper in the wake of the present happenings. (Source: Business Line)

Cool air heads into south as low languishes in Bay

The India Meteorological Department (IMD) has extended the window for possible intensification of the low-pressure area in the Bay of Bengal. This should normally be taken to mean lesser confidence in the expected outcome but some of the enabling conditions still hold. Minimum temperatures were below normal by 4-6 deg Celsius over many parts of Andhra Pradesh, north Karnataka and north Tamil Nadu during the last 24 hours. The cool north-westerlies fanned into southern peninsula in the absence of forceful easterly to north-easterly winds from the Bay of Bengal. (Source: Business Line)

Surplus wheat may get export nod

With wheat prices firming up in the global market and the Food Corporation of India procuring surplus grain, the demand to export more grain is likely to grow. The widening gap between the combined cost of procurement and holding wheat stocks, and the export prices are making the case stronger for larger exports. Sources say India, with 94 mln tns of wheat output in 2011-12 and 38 mt of procurement by FCI, is poised to allow more exports in the coming months to realise better prices and help the corporation deal with the acute storage crunch.
(Source: Financial Express)

National Spot Exchange, Belarusian bourse ink export pact

National Spot Exchange Limited (NSEL), an electronic trading platform, has signed a memorandum of understanding with Belarusian Universal Commodity Exchange (BUCE) on Thursday. The MoU will enable Indian producers to explore the possibility of exporting their produce to Eastern European countries through BUCEs network. The list of commodities that are traded at the BUCE includes timber, farm products, industrial and consumer goods. (Source: Business Line)

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Commodities Daily Report

Friday| November 16, 2012

Agricultural Commodities
Chana
Chana futures and spot settled marginally higher on Thursday on account of subdued trading activities. Overall demand for chana will be subdued in the coming days while supplies are expected to ease amid higher shipments. Except for Wheat, minimum support price of all other Rabi crops has been increased by CCEA for 2012-13 season. MSP of Chana/Gram is raised by Rs 200 per qtl for 2012-13 season to Rs 3000. Higher returns and favorable soil condition will definitely boost acreage in the coming season. Although overall pulses sowing are lagging by 20% to 37.23 lakh ha till 9 Nov, Chana sowing is up Maharashtra and AP.
th

Market Highlights
Unit Rs/qtl Rs/qtl Last 4600 4703 Prev day 0.14 0.09

as on Nov 15, 2012 % change WoW MoM -1.08 -2.43 1.86 -4.64 YoY 43.24 49.87

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

Source: Reuters

Technical Chart - Chana

NCDEX Dec contract

In Maharashtra, Chana sowing is completed on 4.6 lakh hectares as on 9 November, which is 37.5% of the targeted 12.32 lakh ha, and up by 66% compared to last year. In AP Chana sowing is up by 41% to 3.81 lakh ha. (State Farm Departments) As per the NCDEX circular dated 9 November, the pre expiry margin on Chana November 2012 contract has been increased from the existing 3% to 7% for last 5 trading days increased on a daily basis on both buy and sell sides. In Rajasthan, the third largest Chana producing states, sowing is lagging behind by almost 55% and stands at 5.45 lakh hectares as on th 9 November, 2012.
th

th

The Commission for Agriculture Costs and Prices (CACP) has suggested 10 per cent import duty on pulses to encourage domestic production. in the first six months of the new fiscal that is from April to September this year, imports were an estimated 12 lakh tonnes.

Source: Telequote

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

valid for Nov 16, 2012 Resistance 4393-4430

Sowing progress and demand supply fundamentals

Improved rains towards the end of monsoon season coupled with hike in MSP have raised prospects of Chana sowing in the 2012-13 season. Also, farm ministry has targeted 7.9 mn tn chana output for 2012-13 season, higher compared to 7.58 mn tn in 2011-12. According to the Ministry of Agriculture 99.81 Lakh hectare area has been planted under Kharif pulses in 2012-13 compared to 108.28 lakh hectare (ha) in the previous 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. 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)

4285-4315

Outlook
Chana futures may remain under downside pressure on expectations of ease in supplies amid higher shipments coupled with subdued demand. Going forward, prices may also take cues from sowing progress of Rabi pulses which is expected to increase in the coming days.

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Commodities Daily Report

Friday| November 16, 2012

Agricultural Commodities
Sugar
Sugar prices settled higher by 1.77% as delay in cane crushing in the key producing states supported the upside. Also, hike in cane prices demanded by farmers is fuelling up the prices. Usually most factories in Maharashtra, the top sugar producer in the country, start cane crushing by the first week of November, but it has been delayed this year as farmers and mills have not yet agreed on cane prices. The sugar unions are demanding Rs 3000 per qtl. In UP too crushing normally starts in the first week of November, but this year also crushing is delayed due to disputes over cane pricing. Despite festival season, prices remained under check this season as government has released higher quota of 40 lakh tonnes for October and November, compared to 34.6 lakh tonnes during 2011. Liffe white sugar as well as ICE raw sugar closed lower on Wednesday by 1.14% and 0.5% on account of higher pace of crushing in Brazil Higher output and lower imports expectations for the 2012-13 season from China coupled with higher sugar surplus forecast for fourth straight year has led to a sharp decline in international sugar prices during the past few weeks.

Market Highlights
Unit Sugar Spot- NCDEX (Kolkata) Sugar M- NCDEX Nov '12 Futures Rs/qtl Last 3673

as on Nov 15, 2012 % Change Prev. day WoW -0.17 -2.20 MoM -2.41 YoY 11.29

Rs/qtl

3451

1.77

2.53

1.83

16.75

Source: Reuters

International Prices
Unit Sugar No 5- LiffeDec'12 Futures Sugar No 11-ICE Mar '13 Futures $/tonne $/tonne Last 533.2 423.11

as on Nov 15, 2012 % Change Prev day WoW 0.43 -1.04 0.70 -0.10 MoM -4.43 -5.60 YoY -14.41 -20.57

Source: Reuters

Domestic Production and Exports

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 Dec contract

Source: Telequote

Global Sugar Updates

Sugar output in Brazil jumped 57% during the first fortnight of October. Thus, sugar output in brazil which was lower compared to last year since the beginning of the crushing season in May, is now up marginally by 0.1% at 29.3 mn tn. Brazil exported 3.998 million tons of sugar, raw value, in October up from 2687 million tons in September. Brazil has exported only 15.59 million tons of sugar this year till October which was 17.17 million tons, raw value, last year same period. 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)

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

valid for Nov 16, 2012 Resistance 3345-3358

3297-3315

Outlook
Sugar prices may trade higher as delayed crushing in key sugar producing states might support the further upside. However sharp upside might be capped due to sufficient supplies.

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Commodities Daily Report

Friday| November 16, 2012

Agricultural Commodities
Oilseeds
Soybean: Soybean futures gained marginally by 0.25 as weak
international markets after the USDA estimated an increase in its production forecast for soybean capped the upside in prices. Spot markets remained closed on account of Diwali festivals. Arrivals were lower considerably during the last week at around 340000 bags on Saturday. Soy meal exports during October are down 49,840 tn in October, the seventh consecutive month of fall in the current fiscal year, from 223,594 tn a year ago. This is because; most export commitments were done for forward trade like Nov-Dec amid uncertainty over supplies in October. According to first advance estimates, Soybean output is pegged at 126.2 lakh tn for 2012-13.

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 3281 3247 704.5 694.1

as on Nov 15, 2012 % Change Prev day 0.71 0.25 2.38 0.83 WoW -1.97 -2.04 0.96 2.46 MoM 1.33 -0.40 3.15 3.07 YoY 46.54 43.75 10.53 7.83

Source: Reuters

International Markets
CBOT Soybean settled lower by 2.15% as prospects of bumper production in south America along with higher supplies in US is weighing on the prices. The National Oilseed Processors Association (NOPA) reported the U.S. soybean crush for October at 153.536 million bushels, the largest monthly figure since January 2010 and the highest for October since 2009. According to the USDA November monthly report, The U.S. Department of Agriculture on Friday raised its estimate for soybean production by 4% from its forecast last month, saying that rainfall late in the growing season softened the impact of the U.S. drought. Area and production in Argentina for MY 2012-13 are maintained at 19.7 million hectares and 55 million tonnes, respectively. Brazil's government on 8 Nov 2012 edged up its forecast for a record 2012/13 soybean crop to between 80.1 and 83 million tonnes, despite concerns after dry October weather and planting delays
th

as on Nov 15, 2012 International Prices Soybean- CBOTNov'12 Futures Soybean Oil - CBOTDec'12 Futures Unit USc/ Bushel USc/lbs Last 1402 47.46 Prev day -2.15 -0.44 WoW -6.49 -2.69 MoM -7.11 -7.00
Source: Reuters

YoY 18.04 -9.57

Crude Palm Oil

as on Nov 15, 2012 % Change Prev day WoW -3.50 -1.60 -5.70 1.94

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

Last 2150 435.4

MoM -9.66 2.25

YoY -36.76 -15.54

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 4300 4238 Prev day 3.37 0.81

as on Nov 15, 2012 WoW -0.29 2.76 MoM 1.18 1.56

Source: Reuters

Refined Soy Oil: Ref soy oil settled higher by 2.38% on good
demand. MCX CPO settled lower by 1.60% on Thursday tracking the weak international BMD prices. Exports of Malaysian palm oil products for Nov. 1-15 were 769,087 tonnes, down 0.1 percent from 769,534 tonnes exported in the Oct. 1-15 period. 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 MPOBs latest report, Malaysia's September palm oil stocks rose 17 percent to record high 2.48 million tons compared to previous month.

YoY 37.22 32.85

Technical Chart Soybean

NCDEX Dec contract

Rape/mustard Seed: Rm seed futures settled higher by 0.81%on

supply tightness amid strong demand. Rabi oilseeds sowing as on th 10 November was reported at 43.21 lakh ha as compared to 35.18 lakh ha in the same period last year. MSP for Mustard seed is increased by 20% from Rs 2500/Quintal to Rs 3000/Quintal for 201213 season.

Outlook
Edible oil complex may trade on a positive note during the intraday on account of higher crushing led by robust demand soy meal in the domestic as well as global markets. However, sharp gains may be capped next week onwards as arrivals are expected to improve post Diwali.
Source: Telequote

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

valid for Nov 16, 2012 Support 672-678 3175-3208 4227-4265 424-429 Resistance 690-697 3298-3330 4365-4397 442-447

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Commodities Daily Report

Friday| November 16, 2012

Agricultural Commodities
Black Pepper
Pepper futures continued to trade on a negative note Tuesday on reports of better output in the domestic as well as the international markets this season. Farmers are also trying to liquidate their stocks ahead of the commencement of arrivals of the fresh crop. Exports demand for Indian pepper in the international markets remains weak due to huge price parity. However, prices found support at lower levels due to festive as well as winter buying and recovered from lower levels towards the end. The Spot remained closed while the December Futures settled marginally lower by 0.09% on Tuesday. Pepper prices in the international market are being quoted at $8,200/tn(C&F) while Vietnam was offering Austa at $7,000/tn, Brazil Austa at $6,700/tn, and Indonesia Austa at $6,500/tn (FOB).

Market Highlights
Unit Pepper SpotNCDEX (Kochi) Pepper- NCDEX Nov '12 Futures Rs/qtl Rs/qtl Last 41165 41435 % Change Prev day 0.17 0.12

as on Nov 15, 2012 WoW -1.83 -2.75 MoM -2.67 -4.32 YoY 18.09 16.49

Source: Reuters

Technical Chart Black Pepper

NCDEX Dec 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 Dec Futures Unit Rs/qtl

valid for Nov 16, 2012 Support 40260-40450 Resistance 41050-41280

Production and Arrivals

The arrivals in the spot market were reported at 18 tonnes while offtakes were 12 tonnes on Monday. As per IPC, Global pepper production in 2012 is projected at 3.36 lk tn, up by 12.7% compared with 2.98 lk tn in 2011. Indonesian pepper output Is expected to rise by 24% and in Vietnam by 10%. According to previous estimates, 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 downwards today. Liquidation pressure from farmers as well as low export demand may pressurize prices. Good supplies in the international market from other origins may also keep prices under check. However, festive season as well as winter demand may support prices at lower levels.

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Commodities Daily Report

Friday| November 16, 2012

Agricultural Commodities
Jeera
Jeera Futures corrected yesterday on long liquidation at higher levels. The sowing of the crop is going on and is expected to gain momentum in the coming days, thus pressuring prices. Sowing in Gujarat is currently lower by 15-20%. Festive demand is also expected to improve. Exporters have been buying due to tensions between Syria and Turkey. The spot remained closed due to Diwali while the December Futures settled 1.17% lower on Thursday. According to markets sources about 75% exports target has already been achieved due to a supply crunch in the global markets. 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 $2,850 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 15064 14680 Prev day 0.00 -0.53

as on Nov 15, 2012 % Change WoW 0.29 2.71 MoM -0.71 -3.41 YoY 6.01 7.88

Source: Reuters

Technical Chart Jeera

NCDEX Dec contract

Production, Arrivals and Exports

Unjha markets witnessed arrivals of 8,000 bags, while off-takes stood at 8,000 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 -0.81

as on Nov 15, 2012 % Change

Outlook
Jeera futures are expected to remain under pressure today. Prices may witness downside pressure as farmers are liquidating their stocks for want of cash. However, sharp downside may be capped due to export demand. Festive buying may also lend support to the prices. In the medium term (November-December 2012), prices are likely to stay firm as there are limited stocks with Syria and Turkey.
Turmeric SpotNCDEX (N'zmbad) Turmeric- NCDEX Nov '12 Futures

Unit Rs/qtl Rs/qtl

Last 5062 5402

WoW -1.41 -0.41

MoM 0.81 5.18

YoY -5.90 17.64

Turmeric
Turmeric Futures opened on a positive note due to good orders from the upcountry markets. Traders also expect export orders to resume in the coming days. However, prices corrected in the later part of the day on profit booking. Stockists 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 remained closed on account of Diwali while the December Futures settled 1.23% lower on Thursday. Production, Arrivals and Exports Arrivals in Erode and Nizamabad mandi stood at 10,000 bags and 700 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. Outlook Turmeric prices are expected to trade on a sideways to positive note today. Good demand from North India coupled with low arrivals in Erode mandi is expected to support prices. However, large stocks may pressurize prices.

Technical Chart Turmeric

NCDEX Dec contract

Source: Telequote

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

Valid for Nov 16, 2012

Support 14715-14865 5170-5234 Resistance 15100-15230 5348-5404

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Commodities Daily Report

Friday| November 16, 2012

Agricultural Commodities
Kapas
NCDEX Kapas futures after falling in the past few days gained further by 0.31% taking cues from the firm international market As on 4th November 2012, 13.02 lakh bales of Cotton has arrived so far, down by 29% compared to last year 18.57 lakh bales during the same period. U.S. ICE cotton futures shot up by 3.25% due to prompt delivery demand emerging from the millers despite sufficient supplies Cotton harvesting has commenced in US, in all 64% is harvested as compared to 50% a week ago, versus 68% same period a year ago. Cotton crop condition is 43% in Good/Excellent state compared to 29% th same period a year ago as on 6 Nov 2012.

Market Highlights
Unit Rs/20 kgs Rs/Bale Last 977.5 16220

as on Nov 15, 2012 % Change Prev. day WoW 0.31 0.83 0.06 0.93 MoM 0.51 0.93 YoY #N/A -4.19

NCDEX Kapas Futures* MCX Cotton Futures

*Prices as on Nov 13, 2012

Source: Reuters

International Prices
ICE Cotton Cot look A Index Unit Usc/Lbs Last 73.96 81.35

as on Nov 15, 2012 % Change Prev day WoW 3.25 6.29 0.00 0.00 MoM -1.20 0.00 YoY -21.99 -29.20

Domestic Production and Consumption

According to Cotton Advisory Boards (CAB) latest estimates for 2012-13 season that commenced in October, domestic cotton production is pegged 334 lakh bales, down 5.6% from the previous years estimates of 353 lakh bales. Lower opening stocks coupled with estimated lower output will result in lower supplies this season at 374 lakh bales, a decline of 8.7% compared with last years 410.77 lakh bales. On the consumption front, domestic consumption is estimated higher at 270 lakh bales on the back of higher mill consumption. However, after witnessing record exports in 2011-12 season, Indian exports could witness significant fall this season on the back of lower availability along with unattractive domestic cotton prices. CAB estimates cotton exports at 70 lakh bales this season, compared with 128.8 lakh bales last year.

Source: Reuters

Technical Chart - Kapas

NCDEX April contract

Global Cotton Updates

The U.S. government has raised its 2012/13 forecast for global cotton inventory to above 80 million 480-pound bales for the first time due to larger-than-expected output in the United States, the world's third largest producer, and falling demand from China, the world's largest consumer. In its monthly crop report, the U.S. Department of Agriculture increased its estimate for 2012/13 ending stocks for a fourth straight month to a new all-time high of 80.27 million bales. Higher global ending stocks are seen capping the upside in the cotton prices this year too. However, downside is also limited as prices are again nearing its 12 year average price of 65 cents per pound. Markets will now take cues from the Chinese demand for cotton and trade policies of India with respect to cotton exports. In its November monthly demand supply report, the Agriculture Department (USDA) raised its cotton crop for 2012/13 cotton crop season to 17.45 mln bales (Prev 17.29) along with upward revision in end stocks 5.80 mln 480 pounds/bales (Prev 5.60). Exports were unchanged at 11.60 mln 480 pounds/bales.
Source: Telequote

Technical Chart - Cotton

MCX Nov contract

Source: Telequote

Outlook
Cotton prices might recover and trade on a positive note taking cues from the international market. Although harvesting pressure may build mid November onwards, but still no major downside is expected in the domestic markets as farmers will not sell their stocks at very low prices. Also, CCI procurement at MSP levels may support prices from falling sharply.

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

valid for Nov 16, 2012 Support 956-967 958-968 15980-16100 Resistance 990-1002 991-1002 16350-16480

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