Commodities Daily Report

Saturday| November 24, 2012

Agricultural Commodities

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

Research Team
Vedika Narvekar - Sr. Research Analyst vedika.narvekar@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
Saturday| November 24, 2012

Agricultural Commodities
News in brief
FMC consulting govt on lifting ban on guar futures
Commodity markets regulator FMC today said it is in a consultation process with the Commerce Ministry on the issue of lifting ban on guar futures. Last month, the matter was discussed at the meeting of the government-constituted Advisory Committee, which suggested relaunch of the guar futures. Guar exporters have expressed their concern with the Directorate General of foreign Trade (DGFT), an agency that promotes and facilitates trade under the Commerce Ministry, he added. However, the regulator said it was "not in a hurry" to take decision on guar futures as its priority was to ensure transparent platform for price discovery and hedging. Leading agri-commodity bourse NCDEX has also sought FMC to give permission to re-list guar gum and guar seed futures. Traders and analysts are of the opinion that the time is apt for regulator to lift the ban on guar futures because the harvesting of guar seed is underway in most growing states including Rajasthan and Gujarat and higher production. (Source: Business Standard)

Market Highlights (% change)
Last Prev. day

as on Nov 22, 2012
WoW MoM YoY

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

18507 5627 55.13 87.12 1728

-0.06 -0.02 0.02 -0.30 0.27

1.08 0.94 0.86 1.95 -0.09

-1.53 -1.58 2.38 -3.25 0.30

15.20 16.92 5.88 -10.11 2.96

.Source: Reuters

Farm min says policy flaw makes govt biggest wheat buyer, seeks CCI probe
A key technical wing of the agriculture ministry has blamed the Centre’s open-ended grain procurement policy for the government becoming “the single largest procurer and hoarder” of wheat even as private trade is starved and prices flare up, and recommended that the Competition Commission of India (CCI) look into this anti-competitive practice. Explaining how the public sector Food Corporation of India (FCI) was suffering from “diseconomies of scale” due to higher procurement incidentals like hefty state levies and largesse, the Commission for Agricultural Costs and Prices (CACP) has said in a recent note that the “FCI’s operations need to be contained, not expanded”.
(Source: Financial Express)

Wheat coverage lags; rabi sowing gathering momentum
The area under wheat continues to trail despite sowing of rabi crop gathering momentum. Coverage in pulses and coarse cereals was also lower, but the area under rice was up marginally, thanks to enthusiastic sowing of mustard/rapeseed, the area under oilseeds is up. According to the Agriculture Ministry data, rabi crops have been planted on 280 lakh hectares (lh) so far, lower by 1.9 per cent compared with 285.9 lh during the same period a year ago. The area under wheat was 91.88 lh against 92.31 lh in the year-ago period. The area under rice is up marginally at 0.64 lh against 0.63 lh. According to the Agriculture Ministry, the area under oilseeds is up at 61.28 lh against 58.58 lh during the same time last year. Last year, the production was lower, leading to higher prices. So far, mustard/rapeseed has been covered on 52.2 lh (50.7 lh). Groundnut sowing has increased to 2.30 lh (1.59 lh) and sunflower to 3.21 lh (22.37 lh). Coverage of pulses is down at 85.10 lh (92.49 lh). The government has been banking on the rabi pulses crop to tide over the shortfall in kharif output due to erratic rainfall. A cause for concern this rabi season is the deficient rainfall to the north of Vindhayas. (Source: Business Line)

Cardamom prices up 35% on fear of lesser production next season
Cardamom prices are on the rebound due to good consumption by traders and stockists. Prices have moved up by 35% after auctions resumed on November 7 after a gap of nearly fifty days. Possibility of lesser production in the coming season due to lower rains in the producing regions is also adding to the sentiments. “With no auctions for 50 days supply pipelines and carryover stocks are almost empty. Traders and stockist are replenishing the pipelines after the sales of Diwali and demand is robust,” PC Punnoose of Cardamom Processing Marketing Company (CPMC), Kumily, told FE. Lesser rains in the cardamom producing high ranges of Kerala state during June and July is likely to delay the arrival of the next crop by one or two months from the normal time of July, traders said. “Monsoon rains were lower in Idukki and the next crop would be lesser by 50%. The drought like situation during June and July damaged most of the plants and yield would suffer,” PC Punnoose said. The last production (2011-12) could be as high as 15,00016,000, trade sources said. (Source: Financial Express)

Better farm practices spell success for soyabean farmers
India’s soyabean cultivation is a success story that any country could be proud of. Not surprisingly that production and productivity keep rising every year. This year, soyabean production is projected at a record 113.40 lakh tonnes (lt) against 106.40 lt last year. It was also a record. “Our soyabean farmers are progressive and follow good agricultural practices. They buy quality seeds and despite depending on irrigation, they are faring well,” said Rajesh Agrawal, spokesman of the Soyabean Processors Association of India. According to B.V. Mehta, Executive Director of Solvent Extractors Association of India, soyabean is now being grown in parts where sugarcane was being grown. “The yield can be much higher if there is proper irrigation facility,” he said. Agrawal said that Indian soyabean performance was at a par with global standards. “Every year, 5-10 new product lines are being introduced in soyabean,” said Agrawal. This is helping but a higher seed replacement rate can lead to even higher yields. (Source: Business Line)

Sugar industry to gain from govt's ethanol blending plan
The government’s decision to implement mandatory blending of ethanol with petrol at market price has turned out to be a boon for the sugar industry as realisation may surge by up to 22 % to Rs 33 per litre from next month. The Cabinet Committee on Economic Affairs (CCEA) yesterday approved the proposal for oil marketing companies to directly fix the price of bio-ethanol with the producers. Mandatory blending of ethanol with petrol could now be implemented from as early as next month. “A market-driven price is welcome for ethanol as it will bring stability to the blending programme and benefit the industry and farmers. In the absence of a domestic benchmark price for ethanol, the landed import price of Rs 33-34 per litre can be considered as the new price,” said Vinay Kumar, managing director, National Federation of Cooperative Sugar Factories. (Source: Business Standard)

Rains to continue over South into next week
Thursday’s low-pressure area over south-west Bay of Bengal has further weakened into an elongated trough of low pressure in the region. The trough, which is capable of sustaining rain to some extent, lay extended from Southwest to West-central Bay of Bengal. It carried an embedded cyclonic whirl that was positioned over southwest Bay of Bengal and adjoining Tamil Nadu. Satellite imagery showed rain-bearing clouds rising over south coastal Andhra Pradesh, Tamil Nadu, East-central Bay of Bengal and Andaman Sea. (Source: Business Line)

Ukraine says traders prepared to halt wheat exports
Ukraine's grain traders are ready to halt milling wheat exports on an informal basis, as they approach a critical limit, in order to protect the domestic market after a poor harvest, the agriculture ministry said. Exports of milling wheat have reached 5.2 mln tns so far this season
(Source: Business Standard)

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Commodities Daily Report
Saturday| November 24, 2012

Agricultural Commodities
Chana
Chana spot that has declined considerably in the past few weeks on account of subdued demand and expected higher shipments, settled higher by 0.34% on account of lower level demand. Futures settled 0.7% higher amid short coverings. Total pulses acreage sa on 23rd November is down by 8% to 85.1 lakh hectares. Acreage was down by almost 17% till the previuos week and thus shown some recovery in the sowing. Area under Chana cultivation in Maharashtra is up by 20 percent at 4.9 th lakh hectares as on 16 Nov. While in Andra Pradesh it is at 4.64 lakh hectares compared with 3 lakh hectares. However, in Rajasthan, sowing is much behind last year’s level due to late harvesting of kharif crops on account of delayed and deficient rains. 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 400 per qtl for 2012-13 season to Rs 3200. Higher returns and favorable soil condition will definitely boost acreage in the coming season. 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.

Market Highlights
Unit Rs/qtl Rs/qtl Last 4415 4269 Prev day 0.34 0.71

as on Nov 23, 2012 % change WoW MoM -3.74 -7.05 -8.94 -10.48 YoY 37.97 33.53

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

Source: Reuters

Technical Chart - Chana

NCDEX Dec contract

Sowing progress and demand supply fundamentals
Source: Telequote

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)

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

valid for Nov 24, 2012 Resistance 4305-4338

4190-4235

Outlook
Chana futures may open higher initially amid short coverings; however, selling at higher levels is advisable as fundamentals remain supportive for the downside. Expectations of ease in supplies amid higher shipments coupled with subdued demand will keep bearishness intact. Going forward, prices may also take cues from sowing progress of Rabi pulses which is expected to gain momentum in the coming days.

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Commodities Daily Report
Saturday| November 24, 2012

Agricultural Commodities
Sugar
Sugar spot continued to remain weak on reports of upward revision in sugar production for 2012-13 season. However, futures settled 0.9% higher on report that government may allocate non levy quota for four month. However, in Maharashtra, Farmers associations have been agitating for higher cane prices have threatened to stop trucks leaving sugar mills. There are reports that the government has decided to allocate the open market sale quota for the next four months (December-March) instead of current system of quarterly release. 9.84 lakh tons of sugar has been produced in the current sugar season 2012-13 upto 15th November, 2012 that is 2 lakh tons higher to the production in the same period last year of 7.76 lakh tons. (Source: PIB) Maharashtra Finance Minister Jayant Patil on 18 Nov said most of the cooperative sugar factories in western Maharashtra have agreed to pay Rs 2,500 for a tonne of sugarcane as first advance to farmers. According to sources, the UP Government may announce a hike of Rs 20-30 a quintal over the next few days against Rs 240 a quintal last season. Also, Tamil Nadu State Government for the 2012-13 season fixed State Advised Price (SAP) for a tonne of sugarcane at Rs 2,350 linked to a sugar recovery of 9.5 per cent from last season price of Rs 2,100 a ton. Liffe white sugar settled lower by 2.26% and 2.55% respectively. Higher pace of crushing in Brazil coupled with higher sugar surplus forecast for fourth straight year has led to a sharp decline in international sugar prices.
th

Market Highlights
Unit Sugar Spot- NCDEX (Kolhapur) Sugar M- NCDEX Nov '12 Futures Rs/qtl Last 3442

as on Nov 22, 2012 % Change Prev. day WoW -0.23 -0.07 MoM -0.85 YoY 12.91

Rs/qtl

3300

0.92

-4.57

-1.26

12.47

Source: Reuters

International Prices
Unit Sugar No 5- LiffeMar'13 Futures Sugar No 11-ICE Mar '13 Futures * $/tonne $/tonne Last 510.6 425.33

as on Nov 23, 2012 % Change Prev day WoW -2.26 -2.55 -2.98 -4.01 MoM -6.43 -2.74 YoY -15.06 -17.21

*Prices as on Nov 21, 2012

.Source: Reuters

Technical Chart - Sugar

NCDEX Dec contract

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 year’s sugar output lower at 24 mn tn, down by 2mn tn compared to the current year. 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.

Source: Telequote

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

valid for Nov 24, 2012 Resistance 3312-3328

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 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)

3265-3283

Outlook
Sugar prices may trade sideways with downward bias as upward revision in the production of sugar this season might pressurize the prices. Also sufficient supplies due to higher non-levy quota might cap the upside. But, any further delay in cane crushing in Maharashtra and UP may lead to a sharp upward reversal in the sugar prices.

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Commodities Daily Report
Saturday| November 24, 2012

Agricultural Commodities
Oilseeds
Soybean: Soybean Dec futures traded on a positive note and
settled higher by 0.7% yesterday on account of short coverings after the recent fall. Average daily arrivals have increased to 5.5 lakh bags compared to 1.5 lakh bags during Diwali period. 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 Dec '12 Futures Ref Soy oil SpotNCDEX(Indore) Ref Soy oil- NCDEX Dec '12 Futures Rs/qtl Rs/qtl Rs/10 kgs Rs/10 kgs Last 3242 3243 730.2 716.8

as on Nov 23, 2012 % Change Prev day -0.86 0.70 0.23 0.91 WoW -0.49 0.86 3.97 3.63 MoM -2.14 -3.05 1.82 1.92 YoY 41.45 41.62 12.85 9.65

Source: Reuters

International Markets
CBOT soybean prices closed on a positive note on Friday after remaining closed for a holiday on Thursday taking cues of bullish economic data of China, the world's top soy buyer. As per Argentina's Agriculture Ministry weekly crop progress report, farmers have planted 31 percent of the estimated acreage for soybean to 5.921 million hectares, down 13 percent from the previous year. 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. Brazil's government on 8 Nov 2012 edged up its forecast for a record 2012/13 soybean crop to between 80.1 and 83 mn tn.
th

as on Nov 23, 2012 International Prices Soybean- CBOTNov'12 Futures Soybean Oil - CBOTDec'12 Futures Unit USc/ Bushel USc/lbs Last 1419 49.04 Prev day 0.75 1.05 WoW 1.19 3.33 MoM -8.66 -4.44
Source: Reuters

YoY 23.05 -3.43

Crude Palm Oil

as on Nov 23, 2012 % Change Prev day WoW -1.43 -0.62 -3.94 -0.30

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

Last 2267 431.9

MoM -5.70 -0.55

YoY -29.16 -15.61

MYR/Tonne Rs/10 kg

Source: Reuters

RM Seed
Unit RM Seed SpotNCDEX (Jaipur) RM Seed- NCDEX Dec'12 Futures Rs/100 kgs Rs/100 kgs Last 4250 4193 Prev day -1.16 0.14

as on Nov 23, 2012 WoW 0.29 -0.76 MoM 4.42 -3.05
Source: Reuters

Refined Soy Oil: Ref soy oil traded on a positive note due to
increasing demand for the edible oil. MCX CPO traded lower yesterday tracking the weak international BMD prices amid fall in exports. Exports of Malaysian palm oil products for Nov. 1-20 fell 3.8 percent to 1,010,417 tonnes compared with 1,050,548 tonnes shipped during Oct. 1-20According 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.

YoY 36.33 29.65

Technical Chart –Soybean

NCDEX Dec contract

Rape/mustard Seed: Rm seed futures settled marginally higher by
0.14%. Prospects of better sowing are seen exerting pressure on the th prices. Rabi oilseeds sowing as on 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 2012-13 season.

Outlook
Edible oil complex may recover and trade on positive note on account of firm demand from solvent extractors coupled with firm international market. However, higher crushing led by robust demand soy meal in the domestic as well as global markets may restrict a sharp downside.

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 24, 2012 Support 705-710 3165-3200 4080-4135 422-427 Resistance 722-728 3280-3315 4225-4260 436-440

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Commodities Daily Report
Saturday| November 24, 2012

Agricultural Commodities
Black Pepper
Pepper futures traded on a positive note yesterday due to good festive as well as overseas demand. Pepper prices have corrected sharply due to skepticism over reports that FMC has launched probe into complaints against pepper market movement. Also expectations of better output in the domestic as well as the international markets pressurized prices. Farmers are 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. The Spot as well as the Futures settled 0.22% and 1% higher on Friday. Pepper prices in the international market are being quoted at $7,400/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 Dec '12 Futures Rs/qtl Rs/qtl Last 38628 38495 % Change Prev day 0.22 1.00

as on Nov 23, 2012 WoW -4.35 -3.82 MoM -9.66 -12.55 YoY 9.40 6.12

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 24, 2012 Support 37750-38110 Resistance 38820-39110

Production and Arrivals
The arrivals in the spot market were reported at 20 tonnes while offtakes were 20 tonnes on Friday. As per IPC, Global pepper production in 2012 is projected at 3.27 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. Currently, pepper is in the fruit formation stage in Kerala.

Outlook
Pepper is expected to trade sideways today. Reports that FMC is probing into complaints against price movement may pressurize prices. Liquidation pressure from farmers as well as low export demand may pressurize prices. However, festive season as well as winter demand may support prices at lower levels.

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Commodities Daily Report
Saturday| November 24, 2012

Agricultural Commodities
Jeera
Jeera Futures traded on a negative bearish tone yesterday tracking the ongoing sowing of the crop. The sowing is expected to gain momentum in the coming days, and have pressurized prices. Also, higher stocks for delivery on the exchange warehouses have also pressurized prices. However, export demand has supported prices at lower levels. 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 as well as the Futures settled 0.05% and 2.09% lower on Friday. 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 $2,825 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 Dec '12 Futures Rs/qtl Rs/qtl Last 15195 14538 Prev day -0.05 -2.09

as on Nov 23, 2012 % Change WoW 0.87 1.03 MoM 1.34 0.78 YoY 7.53 7.88

Source: Reuters

Technical Chart – Jeera

NCDEX Dec contract

Production, Arrivals and Exports
Unjha markets witnessed arrivals of 9,000 bags, while off-takes stood at 9,000 bags on Friday. 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 0.29 -2.61

as on Nov 23, 2012 % Change

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

Last 5100 5146

WoW 0.76 -3.85

MoM 1.57 2.47

YoY -7.79 10.24

Outlook
Jeera futures are expected to trade downwards today. Prices may correct as farmers are liquidating their stocks for want of cash. Also higher stocks for delivery on the exchange warehouse may pressurize prices. However, sharp downside may be capped due to export demand. In the medium term (November-December 2012), prices are likely to stay firm as there are limited stocks with Syria and Turkey.

Technical Chart – Turmeric

NCDEX Dec contract

Turmeric
Turmeric Futures corrected sharply yesterday on account of profit booking. Prices have gone up over the last two sessions on reports that Turmeric Farmers’ Association of India have decided to fix their own Minimum Support Price at Rs. 10,000/qtl, stating their cost of production is about Rs. 8,700/qtl. However, the spot remained weak on low overseas demand. 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 settled 0.29% higher while the Futures settled 2.61% lower on Friday. Production, Arrivals and Exports Arrivals in Erode and Nizamabad mandi stood at 4,500 bags and 1,000 bags respectively on Friday. Turmeric production in 2012-13 is expected around 50-60% lower compared to last year. Production in 2011-12 is projected at historical high of 90 lakh bags (1 bag= 70 kgs). 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 sideways today. Prices may gain as farmers are unwilling to sell their stocks at lower prices and have set their own MSP at Rs. 10,000/qtl. However, low overseas demand may pressurize prices.

Source: Telequote

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

Valid for Nov 24, 2012
Support 14200-14350 5030-5080 Resistance 14680-14820 5200-5240

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Commodities Daily Report
Saturday| November 24, 2012

Agricultural Commodities
Kapas
NCDEX Kapas futures extended losses and settled marginally lower on the back of improved arrivals that are pressurizing the prices. Also dull demand supported the downside. 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. ICE cotton markets underwent huge losses and settled 3.52% lower on ongoing global cotton surplus concerns.

Market Highlights
Unit Rs/20 kgs Rs/Bale Last 968 16170

as on Nov 23, 2012 % Change Prev. day WoW 0.47 0.16 -0.12 -0.19 MoM -2.71 -0.19 YoY #N/A -1.76

NCDEX Kapas Futures MCX Cotton Futures

Source: Reuters

International Prices
Cotton harvesting has commenced in US, in all 84% is harvested as compared to 75% a week ago, versus 85% 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 20 Nov 2012.
ICE Cotton Cot look A Index Unit Usc/Lbs Last 69.83 81.35

as on Nov 23, 2012 % Change Prev day WoW -3.52 -3.08 0.00 0.00 MoM -3.91 0.00 YoY -23.52 -29.20

Domestic Production and Consumption
According to Cotton Advisory Board’s (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 year’s 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 year’s 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 trade sideways with negative bias as harvesting pressure is weighing on the prices. Also weak international market might exert downside pressure on the prices. However, 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 24, 2012 Support 945-957 950-963 15920-16040 Resistance 978-988 983-995 16280-16400

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