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Commodities Daily Report

Tuesday| December 4, 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

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Commodities Daily Report
Tuesday| December 4, 2012

Agricultural Commodities
News in brief
Coffee exports dip over 8% on weak global prices
India’s coffee exports declined by over a eight per cent to 0.3 million tonnes ( mt) till November of the current calendar year impacted by weak global prices as a result of higher supplies, according to the Coffee Board. The country had shipped 0.32 mt of the bean in the corresponding period last year, its said. Global demand remained firm but less lucrative price curbed shipments despite ample domestic availability for the export purpose, he added. During the January- November period of this year, the country shipped 0.30 mt of coffee, of which robusta and arabica varieties stood at 0.15 mt and 56,018 tonnes, respectively, according to data released by the Board. (Source: Business Standard)

Market Highlights (% change)
Last Prev. day

as on Dec 3, 2012
WoW MoM YoY

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

19305 5871 54.78 89.09 1720

-0.18 -0.15 0.94 0.20 0.51

4.32 4.34 -1.22 0.92 -1.81

4.01 4.00 2.08 2.30 0.32

14.59 16.25 7.17 -11.76 -1.57

.Source: Reuters

Australia trims wheat output forecast on dry weather
Australia, the world's No. 2 wheat exporter, on Tuesday trimmed its forecast for production in the 2012/13 marketing year by 2.3 percent from its previous estimate to 22.03 million tonnes, citing dry weather across key growing states. The wheat forecast was lowered from an estimate of 22.54 million tonnes in September, data from the government's commodities forecaster showed. Australia's Agricultural and Resource Economics and Sciences (ABARES) said wheat production was curbed by poor rainfall on the east coast and Western Australia, the largest wheat producing states. However, despite poor rains, ABARES said favourable lower layer soil profiles in many areas allowed crops to continue developing during the Australian spring. (Source: Reuters)

UP mills produce 2.6 million quintals of sugar till now
Bogged down by the inordinate delay of the Uttar Pradesh government in announcing the sugarcane State Advised Price ( SAP) for 2012- 13 crushing season, the sugar mills have, nonetheless, started to function and produced nearly 2.6 million quintals of the sweetener. About 100 units of the total 125 sugar mills in UP are crushing cane and the remaining are likely to join soon. The state mills had crushed about 31.9 million quintals of cane with the sugar recovery rate still lower at 8.24 per cent. It would improve as the crushing advances. Meanwhile, the millers are making another pitch for lower cane prices in the state claiming difficult market conditions for the sugar sector. UP Sugar Mills Association, an affiliate of Indian Sugar Mills Association, has written afresh letter to state chief minister Akhilesh Yadav urging the government to retain cane price at last year’s level. (Source: Business
Standard)

New rains sustain floods in Argentina's soy belt
ains expected to hit Argentina's grains belt this week will sustain the floods that have fanned global supply worries by swamping and blocking access to key soy, corn and wheat areas, local experts said on Monday. Importers need all the South American grains they can get after a string of disappointing harvests from global breadbaskets Russia, the United States and Australia. International grains prices have soared this year on the back of thin supplies and growing food demand while Argentine farm output - particularly in key agricultural province Buenos Aires - has come under pressure from months of heavy rains. Even normal rainfall at this point poses a problem in Argentina, the world's top exporter of soyoil and soymeal. (Source: Reuters)

Cardamom turns bullish on unfavourable weather
The cardamom market continued to move up on export buying and domestic buying at last week auctions. Individual auction average at all the auctions stayed above Rs 825 a kg, except for one auction where it was at Rs 807 last Monday. Exporters were seen buying and an estimated 30 tonnes of cardamom were bought by them. They are said to be having orders in hand, but at lower rates, and hence they are waiting for the prices to decline, trade sources in Bodinayakannur said. Upcountry buyers were very active and covering good quantities. A bullish sentiment has emerged in the market given the unfavourable weather conditions prevailing in the growing areas so far this year. Besides, inventories in the upcountry markets are said to be empty. Retailers all over the country are also said to be “buying small quantities”, market sources told Business Line. (Source: Business Line)

Rain expected in central Brazil; soy planting near done
A cold front off Brazil's southeast coast should bring rain to top soygrowing state Mato Grosso this week, with isolated showers in the south helping farmers finish planting what should be a record crop, analysts said on Monday. Soy planting is complete in central Brazil, though it is still unfolding in parts of the south after an unusually dry November, putting Brazil's overall sowing at 84 percent of the expected total, compared to 93 percent a year earlier, analyst AgRural said. Recent rains have brought some relief, however. No. 2 soy state Parana received 14mm (0.55 inches) of rain on Friday, when a downpour left 72mm in Mato Grosso do Sul, Somar said. Parts of Rio Grande do Sul got 15mm of rain on Saturday. "Good rainfall reaching much of Rio Grande do Sul and western Parana over the past seven days brought relief to many producers," Parana-based AgRural said in its report. (Source: Reuters)

Extractors body seeks import duty on crude palm oil
The Solvent Extractors Association of India (SEA) has urged the Government to impose 10 per cent import duty on crude palm oil and 20 per cent on RBD palmolein. The move will help farmers who are experiencing sharp fall in prices of fresh palm fruit bunches and soyabean. Besides helping farmers, the Government can generate revenue of Rs 4,000-5,000 crore, said Vijay Data, President, SEA, in a letter addressed to Finance Minister P. Chidambaram, Agriculture Minister Sharad Pawar, Consumer Affairs minister K.V. Thomas and Commerce Minister Anand Sharma. There are reports that farmers have uprooted oil palm trees in Tamil Nadu after the steep fall in CPO prices in the international markets, said Data. Malaysia and Indonesia have huge palm oil stock of over five million tonnes. In order to get rid of this excess stock, these palm oil producing countries are pushing their exports into India. The Government should also consider de-freezing the tariff value on RBD palm oil and other oils to align with current market price as being done for RBD palmolein on fortnightly basis to check the undue advantage, said SEA. (Source: Business Line)

Libya pays extra for food imports as sellers fear disarray
Libya is having to pay extra for food imports and traders say some foreign firms are diverting shipments elsewhere due to fears - dismissed as unfounded by Tripoli - that growing disarray in the country could delay payments. The North African state, much of which is desert, is a big food buyer and has stepped up purchases of staples including wheat and sugar since the end of fighting last year that toppled dictator Muammar Gaddafi. Tripoli shop shelves are now full of foreign produce. But while international traders had viewed oil producing Libya as a lucrative market, some now say they are backing off from trade. (Source: Reuters)

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Commodities Daily Report
Tuesday| December 4, 2012

Agricultural Commodities
Chana
Chana futures extended the losses of the previous session and settled lower by almost 1.6% during the first trading session of the week. Improved sowing of Rabi pulses, subdued demand and higher imports is seen pressurizing Chana prices. Total pulses acreage as on 30th November is down by 6.4% to 102.49 lakh ha from 109.56 lakh ha last season. Acreage was down by almost 17% till the week ended 16th Nov and by 7% till the previous week thus showing marginal recovery in the sowing. In Maharashtra Chana acreage is up by 31% at 7.03 lakh ha as on 30th th Nov 2012. While in AP it is up by 22.8% at 5.22 lakh ha as on 28 Nov. However, in Rajasthan, sowing is down by 19.2% at 12.18 lakh ha as on th 30 Nov. 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 4130 4029 Prev day -4.05 -1.59

as on Dec 3, 2012 % change WoW MoM -6.67 -8.74 -5.18 -11.57 YoY 33.88 33.54

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

Source: Reuters

Technical Chart - Chana

NCDEX Jan contract

Source: Telequote

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)

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

valid for Dec 4, 2012 Resistance 4065-4105

3920-3975

Outlook
After declining sharply in the past few sessions, chana futures may recover in the early part of the session. However, sentiments remain weak and selling at higher levels is suggested for the intraday. Expectations of ease in supplies amid higher shipments coupled with subdued demand will keep bearishness intact. 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
Tuesday| December 4, 2012

Agricultural Commodities
Sugar
Sugar futures declined on Monday on account of sufficient supplies in the domestic as well as global markets. Sugar production has marginally declined to 23.30 lakh tn in the first two months of the 2012-13 marketing year that started in October against 23.92 lakh tonnes in the year-ago period, industry body ISMA said. In a move to curb any further spike in sugar prices considering lower sugar production for the marketing year 2012-13, Government has allocated total 70 lac tons of non-levy sugar quota for Dec-March 201213 period which is higher from 59.5 lac tons sugar quota allocated by government last year same period . Out of total 70 lac tons, Government released 66 lakh tn non-levy sugar quota and 2 lakh tn levy conversion sugar quota. Also, there is an extension of around 2 lakh tn from Oct, 2012 - Nov, 2012 which the millers have to release upto 10th December, 2012. Liffe white sugar and ICE sugar settled higher by 1.41% and 2.12% respectively on Monday on account of short covering and weak Dollar.

Market Highlights
Unit Sugar Spot- NCDEX (Kolhapur) Sugar M- NCDEX Dec '12 Futures Rs/qtl Last 3422

as on Dec 3, 2012 % Change Prev. day WoW -0.13 -0.12 MoM -1.64 YoY 9.18

Rs/qtl

3280

-0.33

-0.30

-3.16

10.14

Source: Reuters

International Prices
Unit Sugar No 5- LiffeMar'13 Futures Sugar No 11-ICE Mar '13 Futures $/tonne $/tonne Last 523.4 438.89

as on Dec 3, 2012 % Change Prev day WoW 1.41 2.12 2.75 3.13 MoM -2.82 1.91 YoY -16.18 -17.98

.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 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.

Technical Chart - Sugar

NCDEX Jan contract

Global Sugar Updates
Thailand, the world's second-largest exporter after Brazil, has slashed its output forecast in the year to October 2013 to 9.4 million tonnes from 10 million due to poor rain. About 1 mn tn of cane have been crushed in Thailand as the harvest progresses, producing up to 56,000 tn of sugar so far, a 28% increase from the same year-ago period. 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. 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)

Source: Telequote

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

valid for Dec 4, 2012 Resistance 3315-3330

3265-3280

Outlook
Sugar prices may remain range bound as sufficient supplies available may offset the positive markets sentiments caused by delay in cane crushing in UP. International markets may continue to trade with downward bias on account of global supply glut.

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Commodities Daily Report
Tuesday| December 4, 2012

Agricultural Commodities
Oilseeds
Soybean: Soybean December futures rebounded after a sharp fall
on Saturday on account of short coverings. However, spot continued to decline on Monday. Arrivals remained at around 4.5 lakh bags on Monday. However, demand from solvent extractors also remained strong. According to first advance estimates, Soybean output is pegged at 126.2 lakh tn for 2012-13.
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 3165 3151 733.7 720.5

Market Highlights

as on Dec 3, 2012 % Change Prev day -1.49 1.43 -0.18 1.42 WoW -3.71 -3.36 -1.33 -1.26 MoM -5.15 -5.62 4.29 5.35 YoY 42.95 40.27 16.49 13.30

International Markets
CBOT soybean settled higher by 1.41% on Monday on long liquidation and profit-taking, along with forecasts for welcome rains in crop areas of Brazil. Net sales of 319,100 MT for the 2012/2013 marketing year were down 41 percent from the previous week and 37 percent from the prior 4-week average. Beneficial rains are expected in Brazil's southern grain belt over the weekend, boosting crop prospects after the main corn and soy region received far less rain than usual in November. December will start with more concentrated rains over Brazil's center and south. Growers advanced seedings by 11% points during the week through Thursday, covering 58% of the 19.4 mn ha expected to be sown this season. Although, the rate of planting picked up as the weather moderated after the Pampas was lashed by harsh August-October storms, it is still 8% below last years level. The Argentine could produce 55 million to 58 mn tn of soybeans this th season if the weather cooperates. 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.

Source: Reuters

as on Dec 3, 2012 International Prices Soybean- CBOTJan'13 Futures Soybean Oil - CBOTDec'12 Futures Unit USc/ Bushel USc/lbs Last 1454 49.9 Prev day 1.04 0.99 WoW 2.04 1.28 MoM -6.72 -1.05
Source: Reuters

YoY 29.08 -0.34

Crude Palm Oil

as on Dec 3, 2012 % Change Prev day WoW -2.05 -0.05 -7.24 -2.93

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

Last 2101 420.6

MoM -12.17 -3.53

YoY -32.01 -17.61

MYR/Tonne Rs/10 kg

Refined Soy Oil: Ref soy oil recovered marginally while CPO
declined sharply as the top analysts warned that record high stocks would weigh on prices in the New Year. But losses were limited by a surprise increase in Malaysian exports that rose to 1.66 mn tn in November from October's 1.61 mn, cargo surveyor Intertek Testing Services said on Friday. Dorab Mistry, head of edible oils trading, Godrej is predicting CPO futures on BMD to trade in a range of 2300 and 2600 from now until February 2013. This will ensure high stock levels in both countries but particularly in Malaysia. Prices may plunge further if India imposes a 10% import duty on CPO and a 20% import duty on Refined Palm products. Malaysian will announce details of its proposed cut to crude palm oil export taxes by the end of December which will come into effect from Jan 01, making their exports competitive. Palm oil output in the world's biggest producer Indonesia is expected to climb 7% next year to 27 mn tn.

Source: Reuters

RM Seed
Unit RM Seed SpotNCDEX (Jaipur) RM Seed- NCDEX Dec'12 Futures Rs/100 kgs Rs/100 kgs Last 4225 4134 Prev day -2.31 0.41

as on Dec 3, 2012 WoW 0.60 0.73 MoM 0.36 -1.31
Source: Reuters

YoY 37.57 31.87

Technical Chart –Soybean

NCDEX Jan contract

Rape/mustard Seed: RM seed futures declined sharply over the
last two trading sessions on higher sowing. So far, mustard has been covered on 57.1 lakh ha up from last season’s 56.42. MSP for Mustard seed is increased to Rs 3000/qtl. India’s rapeseed output is expected to rise by 5% to 6.5 mn tn from 6 mn tn last year.

Outlook
Soybean complex may extend the losses on forecasts of welcome rains in Brazilian soy belt. Higher sowing prospects of rabi oilseeds may also pressurize prices. Mustard prices may remain under downside pressure on prospects of higher sowing and thereby better output next year. Palm oil may trade on a negative note on account of weak outlook given by the top industry analyst amid higher stocks.
Source: Telequote

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

valid for Dec 4, 2012 Support 689-699 3100-3145 4110-4150 418-422 Resistance 716-723 3215-3240 4225-4260 432-438

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Commodities Daily Report
Tuesday| December 4, 2012

Agricultural Commodities
Black Pepper
Pepper futures traded on a positive note yesterday on back of festive as well as winter demand, which has supported prices at lower levels. Stocks in the domestic markets are also reported to be low. Prices have corrected sharply over the last one month over reports that FMC is probing into complaints against movement in the pepper market. Better output expectations in the domestic as well as the international markets have also pressurized prices. Farmers are trying to liquidate their stocks ahead of the commencement of harvesting of the fresh crop. Exports demand for Indian pepper in the international markets is also weak due to price parity. However, The Spot as well as the Futures settled 1.1% and 1.64% lower on Monday. Pepper prices in the international market are being quoted at $7,550/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 38147 38420 % Change Prev day 1.10 1.64

as on Dec 3, 2012 WoW -1.27 1.45 MoM -9.19 -9.84 YoY 9.73 9.43

Source: Reuters

Technical Chart – Black Pepper

NCDEX Feb contract

Exports and Imports
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 pepper during Jan-Oct 2012 stood at 102,340 mt, lower by 12% as compared to 1,15,780 mt in the same period last year. Total exports in 2012 are forecasted at around 1,10,000 tonnes. 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 26% during January-September 2012 period to 41,923 tn as compared to 52,489 tn in the same period previous year. 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 Feb Futures Unit Rs/qtl

valid for Dec 4, 2012 Support 33400-33880 Resistance 34900-35400

Production and Arrivals
The arrivals in the spot market were reported at 20 tonnes while offtakes were reported at 16 tonnes on Monday. As per IPC, Global pepper production in 2012 is projected at 3.24 lk tn, up compared with 3.18 lk tn in 2011. Indonesian pepper output is expected to rise by 24% and in Vietnam by 10%. According to previous estimates, pepper output in Vietnam is estimated to be 1 lakh tonne in 2012 as compared to 1.1 lakh tonne in 2011. 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) Pepper production in 2012-13 is expected around 60,000-63,000 tonnes. Currently, pepper is in the fruit formation stage in Kerala.

Outlook
Pepper is expected to trade on a sideways to positive note today. Festive demand coupled with winter buying may support prices at lower levels. However, higher output expectations as well as reports that FMC is probing into complaints against price movement may cap sharp gains. Liquidation pressure from farmers as well as low export demand may pressurize prices.

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Commodities Daily Report
Tuesday| December 4, 2012

Agricultural Commodities
Jeera
Jeera Futures traded on a bearish note yesterday due to sluggish demand in the domestic market. However, prices recovered from lower levels towards the end of the session on account of short coverings. Sowing in Gujarat is lower by 25-30%, but it is expected to gain momentum in the coming days. Sluggish demand coupled with higher stocks for delivery on the exchange warehouses has pressurized prices. However, regular export demand has supported prices in the spot markets. Exporters are buying due to tensions between Syria and Turkey as they are not offering. The spot as well as the March Futures settled 0.33% and 1.04% lower on Monday. 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 $2,725 tn (c&f) while Syria and Turkey are not offering. Carryover stocks of Jeera in the domestic market is expected to be around 6-7 lakh bags compared with 5-6 lakh bags last year.

Market Highlights
Unit Jeera SpotNCDEX(Unjha) Jeera- NCDEX Dec '12 Futures Rs/qtl Rs/qtl Last 14871 14028 Prev day -0.33 -0.57

as on Dec 3, 2012 % Change WoW -0.86 -2.21 MoM -0.07 -0.81 YoY 5.25 6.47

Source: Reuters

Technical Chart – Jeera

NCDEX March contract

Production, Arrivals and Exports
Unjha markets witnessed arrivals of 5,000 bags, while off-takes stood at 5,000 bags on Monday. Production of Jeera in 2011-12 is expected around 40 lakh bags as against 29 lakh bags in 2010-11 (each bag weighs 55 kgs). (Source: spot market traders). According to Spices Board of India, exports of Jeera in April 2012 stood at 2,500 tonnes as compared to 2,369 tonnes in April 2011, an increase of 6%.
Source: Telequote

Market Highlights
Prev day -1.05 0.94

as on Dec 3, 2012 % Change

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

Last 4945 4924

WoW -1.98 -1.83

MoM -0.10 -4.24

YoY -7.07 11.55

Outlook
Jeera futures are expected to continue to trade downwards. Higher stocks for delivery on the exchange warehouses may pressurize prices. However, sharp downside may be capped due to export demand. In the medium term (December-January 2012), prices are likely to stay firm as there are limited stocks with Syria and Turkey.

Turmeric
Turmeric Futures recovered from lower levels yesterday on account of short coverings. Prices have corrected sharply as market sources expect Turmeric production to increase to 64-65 lakh bags from their earlier estimates of 61-62 lakh bags. Improved weather conditions in Andhra Pradesh and Karnataka has led to the revision in the production estimates. The upcountry as well as overseas demand is reported to be weak, further pressurizing prices. Stockists also have good carryover stocks with them. It is estimated that next year’s carryover stocks would be around 10 lakh bags. There are reports that Turmeric Farmers’ Association of India have decided to fix their own Minimum Support price of Rs.10000/qtl. The Spot settled 1.05% lower while the Futures settled 0.94% higher on Monday. Production, Arrivals and Exports Arrivals in Erode and Nizamabad mandi stood at 5,000 bags and 1,000 bags respectively on Monday. Turmeric production in 2012-13 is expected around 64-65 lakh bags. Production in 2011-12 is projected at historical high of 10.62 lakh tn. 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 continue to trade downwards today. Higher production estimates and weak upcountry demand may pressurize prices. However, prices may find support at lower levels expecting orders from North India.

Technical Chart – Turmeric

NCDEX April contract

Source: Telequote

Technical Outlook
Unit Jeera NCDEX March Futures Turmeric NCDEX April Futures Rs/qtl Rs/qtl

Valid for Dec 4, 2012
Support 14700-14850 5340-5430 Resistance 15160-15310 5570-5620

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Commodities Daily Report
Tuesday| December 4, 2012

Agricultural Commodities
Kapas
NCDEX Kapas settled lower on Monday on account of profit taking. Demand remains robust which are seen limiting the downside despite arrival pressure. As on 18th Nov 2012, 22.66 lakh bales of Cotton has arrived so far, down by 29% compared to last year 31.97 lakh bales during the same period. Cotton export registrations for the 2012-13 season stood at 4.5 lakh bales as of November 5, 2012. Cotton exports are currently on Open General License subject to a prescribed procedure of registration. U.S. cotton futures closed higher on Monday, settling higher by 0.39 percent as bargain hunting by mills helped offset speculative short selling on expectations of a record global surplus. End-user interest re-emerged after prices dipped below 70 cents earlier in the month. With local prices in China, the world's largest producer and consumer, at almost double that level.

Market Highlights
Unit Rs/20 kgs Rs/Bale Last 969 16310

as on Dec 3, 2012 % Change Prev. day WoW -0.82 1.10 -0.67 0.68 MoM -1.27 0.68 YoY #N/A -2.39

NCDEX Kapas Futures MCX Cotton Futures

Source: Reuters

International Prices
ICE Cotton Cot look A Index Unit Usc/Lbs Last 72.93 81.35

as on Dec 3, 2012 % Change Prev day WoW 0.39 2.34 0.00 0.00 MoM 3.87 1.81 YoY -20.30 -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
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. Cotton harvesting is 84% completed in US, versus 85% same period a year ago. Cotton crop condition is 43% in Good/Excellent state compared to 29% same period a year ago as on 20th Nov 2012. According to USDA attaché report, forecast of Australia’s 2012-13 cotton crop has been revised downward (nearly 6 percent) to 4 mn bales. Planting of the 2012-13 cotton crop is largely complete with total area expected to be down by as much as 25-30 percent compared to last year. Brazil’s 2012-13 cotton production forecast at 6.3 million bales, down 27 percent from 2011/12 production now estimated at 8.6 million bales. (USDA Attaché report) 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.

Source: Telequote

Technical Chart - Cotton

MCX Dec contract

Source: Telequote

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

valid for Dec 4, 2012 Support 950-960 16300-16350 Resistance 980-990 16510-16600

Outlook
Domestic cotton prices are expected to recover taking cues from the international markets. Downside is limited in the domestic markets as farmers will not sell their stocks at very low prices. Also demand remain strong at such low prices.

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