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Commodities Daily Report

Wednesday| December 26, 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
Wednesday| December 26, 2012

Agricultural Commodities
News in brief
Government set to remove cap on sugar import, export
The government is planning to remove quantitative restrictions on sugar exports and imports and will use tariffs to regulate trade as part of a new liberalised policy for the sector. "We should have a stable export-import policy," said a food ministry official. Officials from the departments of agriculture, consumer affairs and food met last week to discuss the proposal. Until September this year, uncapped sugar exports were allowed under Open General Licence. But fresh permission has not been given in the new sugar season which started on October 1. However, white and raw sugar can be imported with a 10% duty. (Source: Economic
Times)

Market Highlights (% change)
Last Prev. day

as on Dec 24, 2012
WoW MoM YoY

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

19255 5856 54.96 88.61 1658.6

0.07 0.14 -0.20 88.66 1659.1

0.06 -0.04 0.18 87.2 1697

4.04 4.07 -0.89 88.28 1751.3

20.56 22.53 4.24 101.34 1594.2

.Source: Reuters

High cane prices to dent sugar companies’ profitability
Profitability margins of sugar firms are set to remain lower this crushing season, due to substantially higher cane price and sugar mills’ inability to pass the same on to consumers because of the government’s continuous intervention, forecasts IMaCS, a subsidiary of credit rating agency ICRA Ltd. The agency estimates sugar price to remain lower in near term on higher carry over stocks. (Source: Business Standard)

China’s Soybean Imports Seen Rising 4.2% by Oil World
China’s soybean imports are forecast to climb 4.2% in the year through September, with U.S. exports to the country little changed from the previous year, researcher Oil World said. China may purchase 61.7 million metric tons of the oilseed in 2012-13 from 59.2 million tons a year earlier, the Hamburg- based researcher wrote in an e-mailed report. The country, the world’s biggest buyer of the commodity, canceled 840,000 tons of purchases from the U.S. last week, prompting futures of the oilseed traded in Chicago to slide 4.2% in the period. (Source: Bloomberg)

Maharashtra cotton growers say MSP too low; all political parties agree
Caught between a falling price and a rising cost of production, cotton growers in Maharashtra have made a strong pitch for a subsidy, either from the central or state government The trigger was procurement through the Maharashtra State Cooperative Cotton Growers Marketing Federation at the minimum support price (MSP) of Rs. 3,900 a quintal announced by the central government. However, growers say, the cost of production is Rs. 5,000- 5,500 a qtl. Cutting across party lines, members from both the ruling Congress- NCP coalition and the opposition Shiv SenaBJP- MNS had, during the recently concluded winter session of the state legislature, strongly demanded a higher price for cotton growers. They recalled the price had zoomed to Rs. 7,000 a qtl three years earlier, following a spurt in demand from China. They have called for procurement at Rs. 6,000 a qtl. (Source: Business Standard)

Pepper contracts to have mineral oil test
Strengthening quality norms for agri commodities, the Forward Markets Commission (FMC) is in the process of drafting a ‘concept paper’ incorporating guidelines put out by other statutory bodies, including the Food Safety and Standards Authority of India (FSSAI) and the Bureau of Indian Standards (BIS). The decision comes in the wake of FSSAI, on December 18, sealing around 5,000 tonnes of pepper worth Rs. 180 crore deposited in six warehouses registered with the National Commodity & Derivatives Exchange (NCDEX), India’s second largest commodity exchange. FSSAI found traces of mineral oil – a prohibited substance – used for polishing pepper, in the stocks. The 40- member Advisory Committee headed by FMC Chairman Ramesh Abhishek, in a meeting on October 7, discussed the need to replicate quality parameters laid out by other statutory bodies, to follow uniform quality standards across India. Set to be ready in about a fortnight, the paper would also look at quality guidelines mandated by other statutory bodies, including Agmark and Hazard Analysis and Critical Control Points ( HACCP) in addition to the above- mentioned agencies. Later, the commodity markets regulator would seek public opinion, which has become a common practice for the FMC, before finalising the guidelines. (Source: Business Standard)

Castor Seed Prices Trade Lower on Low China Demand
Low demand by China and Europe has led to a bearish trend in castor seed prices. Futures too are weak with an expectation of higher supplies to spot markets in March and April. “Currently, demand is dull in China and Europe. It’s early to say how the export position will be in the coming days,” said Atul Chaturvedi, CEO of Adani Wilmar, who added that the current prices were reasonable. Currently, castor seed supplies to Gujarat markets was at 15,000 bags of 75 kg each. Current export contracts were being signed at $1,400 to $1,450 a tonne. “Export demand took off a week ago. China, Europe, Japan and US buyers know that the Indian crop is good. Hence, buying is according to their need,” said Kanubhai Thakkar, MD of Gokul Refoils And Solvent (Source: Economic
Times)

India to have 15 million bales of cotton surplus, says CAI
Even as cotton acreage in India has witnessed a decline this kharif season due to erratic monsoon, the country would have about 15 million bales ( each weighing 170 kg) of surplus cotton in cotton year 2012- 13 ( October-September). According to latest estimates by the Cotton Association of India (CAI), India’s cotton production this year is expected to be close to 35 million bales, of which consumption is estimated to be around 26.5 million bales, leaving a sizeable surplus of about 15 million bales. (Source: Business Standard)

Suspend rubber imports, says growers’ body
Indian Rubber Growers Association has urged the Centre to suspend import of natural rubber under advance licence till prices improve. In a memorandum, it also demanded that import duty on all rubbermanufactured goods, including tyres, be raised to 8 per cent. Domestic prices have fallen from Rs 242 to Rs 163 over a period of the past one year, the association said. Prices have been fluctuating in recent times; gap with international prices has been widening. Price volatility is not good for the health of the sector, it added. It may be noted that 1.91 lakh tonnes were imported during 2010-11, while imports had gone up to 2.14 tonnes the very next year. The first year under reference saw 71 per cent being contracted under advance licence for duty free import while it was 70 per cent in the second. (Source: Business Line)

CCEA nod for Rs 100/quintal rise in wheat MSP likely today
The Cabinet Committee on Economic Affairs (CCEA) is likely to approve tomorrow a proposal to raise the minimum support price (MSP) of wheat by Rs 100 per quintal to Rs 1,385 for the year starting April 2013. It may also take a call on another proposal moved by the food ministry, for allowing additional export of 2.5 million tonnes of wheat from government godowns. The CCEA meeting is scheduled for tomorrow. The proposal of wheat MSP and export of FCI wheat are on the agenda list,” a source said. (Source: Business Standard)

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Commodities Daily Report
Wednesday| December 26, 2012

Agricultural Commodities
Chana
Chana January futures which remained firm during the initial part of the session on Monday, settled lower by 0.4% on account of profit taking. Prices have shown some signs of recovery during the last week on emergence of demand at lower levels coupled with reports of lower st pulses acreage as on 21 December 2012. Total pulses acreage as on 21 December 2012 stood at 128.26 lakh hectares, down marginally by 0.9% yoy. As on 14th December, pulses acreage was up by 0.5 percent. Chana sowing picked pace mainly in Rajasthan, where it is up by 4% at 14.57 lakh hectares. In Maharashtra Chana acreage is up at 10 lakh ha as th th on 21 Dec, 2012. While in AP it is up at 6.64 lakh ha as on 19 Dec. In Australia, total chickpea production in 2012–13 is estimated to have increased to a record of around 746000 tones as compared with 485000 tons in 2011-12. India imports Chana mainly from Australia and Canada and higher availability in these countries at comparatively cheaper rates is seen boosting imports of Chana to meet the domestic shortfall. Australian Chana is quoted at lower rates -USD 625-635 per MT. 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
th

Market Highlights
Unit Rs/qtl Rs/qtl Last 4111 4025 Prev day 0.08 -0.40

as on Dec 24, 2012 % change WoW MoM 1.69 -7.22 -1.83 -5.41 YoY 27.91 26.53

Chana Spot - NCDEX (Delhi) Chana- NCDEX Jan'13 Futures

Source: Reuters

Technical Chart - Chana

NCDEX Jan contract

Sowing progress and demand supply fundamentals
Chana fresh crop arrival started in Karnataka & Andhra Pradesh and about 200 bags new chana arrivals reported on a daily basis. Furthermore, the new crop was traded at Rs.4100-4200 per quintal. 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 26, 2012 Resistance 4050-4080

3985-4000

Outlook
Chana prices may remain firm during the intraday on fresh demand at lower prices. Chana sowing is nearing its end and is expected to be marginally higher compared to last year. Overall Pulses sowing might decline marginally. Sufficient supplies amid higher shipments and expectations of better output next season may exert downside pressure on chana price in the short term. Harvesting of new crop have commenced in AP and Karnataka. In Maharashtra arrivals would commence in January and gradually increase February onwards once the arrivals from MP begin.

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Commodities Daily Report
Wednesday| December 26, 2012

Agricultural Commodities
Sugar
After gaining significantly during the last week, sugar prices witnessed profit booking and Monday and settled 0.18% lower. Spot also declined marginally by 0.2%. The government is planning to remove quantitative restrictions on sugar exports and imports and will use tariffs to regulate trade as part of a new liberalized policy for the sector. The government extended the deadline for sale of unsold Oct-Nov nonlevy sugar quota till Dec 31. The initial deadline for sale of around 200,000 tn of the Oct-Nov quota was Dec 10. Government has allocated total 70 lac tons of non-levy sugar quota for Dec-March 2012-13 period which is higher from 59.5 lac tons last year. With lower sales realization and higher sugarcane payment to farmers, ISMA has already requested government to increase the import duties on raw sugar from current level to the normal rate of 60%, so as to avoid cane price arrears during the season. Liffe white sugar as well as ICE Raws settled 0.3% and 1.19% lower on Monday on account of supply glut in the global markets. According to Unica, Brazil's 2012-2013 center-south sugar output is expected to reach 34.05 million tonnes, an estimate 4.1% higher than its 32.7 million tonnes September forecast.

Market Highlights
Unit Sugar Spot- NCDEX (Kolhapur) Sugar M- NCDEX Jan'13 Futures Rs/qtl Last 3284

as on Dec 24, 2012 % Change Prev. day WoW -0.22 -0.94 MoM -4.49 YoY 12.00

Rs/qtl

3263

-0.18

1.87

-1.36

#N/A

Source: Reuters

International Prices
Unit Sugar No 5- LiffeMar'13 Futures Sugar No 11-ICE Mar '13 Futures $/tonne $/tonne Last 516.5 422.67

as on Dec 24, 2012 % Change Prev day WoW -0.35 -1.19 -0.83 -2.01 MoM -1.13 #N/A YoY -13.79 -17.77

.Source: Reuters

Technical Chart - Sugar

NCDEX Jan contract

Domestic Production and Exports
Mills in the country have produced 4.91 mln tn sugar in the current sugar season till Dec 15, up nearly 2% from 4.82 mln tn produced a year ago. In Maharashtra, the largest sugar producer in the country, 155 mills are operational and have produced 1.88 mln tn sugar till Dec 15, compared with 1.83 mln produced a year ago by 165 mills. In Uttar Pradesh, the second largest sugar producer in the country, total output as on Dec 15 was 1.03 mln tn, about 20% lower on year, as some mills in the eastern part of the state are still to commence cane crushing. 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. The producers body has estimated sugar output lower at 24 mn tn, down by 2mn tn compared to the current year. Industry body ISMA has estimated 6.5 mn tn stocks for the new season beginning October 01, 2012 compared to 5.5 mn tn year ago. India may export 1.5 mn tn sugar in 2012-13. With the opening stocks of 6.5 mn tn, domestic Sugar supplies are estimated at 30.5 mn tn against the domestic consumption of around 22. 5mln tn for 2012-13.

Source: Telequote

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

valid for Dec 26, 2012 Resistance 3275-3285

3240-3252

Global Sugar Updates
According to the Brazil Agriculture Ministry, 2012-13 sugar output will reach 37.66 mn tn by the end of the season, less than the 39 mn tn forecast in August. Consultancy Kingsman revised up its 2012/13 world sugar surplus estimate to 9.2 million tonnes raw value on Friday, citing increased supply from producers including Brazil and China. Kingsman pegged global 2012/13 sugar output at 180.1 million tonnes raw value, up from the previous estimate of 177.3 million tonnes. (Source: Reuters)

Outlook
Sugar prices may trade on a positive note on expectations government may remove quantitative restrictions on sugar import/export. However, sharp gains may be capped on account of sufficient supplies in both the domestic as well as global markets.

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Commodities Daily Report
Wednesday| December 26, 2012

Agricultural Commodities
Oilseeds
Soybean: Soybean January contract that remained weak during the
most part of the last week, settled higher on Saturday taking cues from the international markets. Arrivals in the domestic markets have started dwindling, while demand from solvent extractors remained strong. According to first advance estimates, Soybean output is pegged at 126.2 lakh tn for 2012-13. Exports of soy meal rose to 517,103 tonnes in November from 397,659 tonnes a year ago. Overall oil meal exports in the first eight months of the year beginning April fell to 2.4 million tonnes from 3 million tonnes in the previous year.
Unit Soybean Spot- NCDEX (Indore) Soybean- NCDEX Jan '13 Futures Ref Soy oil SpotNCDEX(Indore) Ref Soy oil- NCDEX Jan '13 Futures Rs/qtl Rs/qtl Rs/10 kgs Rs/10 kgs Last 3313 3230 714 694

Market Highlights

as on Dec 24, 2012 % Change Prev day -0.63 -2.02 -0.70 -1.16 WoW -2.90 -4.37 -2.40 -4.88 MoM 1.59 -1.33 -2.98 -4.36 YoY 37.18 #N/A 2.65 0.12

International Markets
After remaining under downside pressure last week on signs of softer demand from China, CBOT soybean recovered on Monday on account of short coverings. Last week, private exporters reported the cancellation of 540,000 tonnes of U.S. soybeans sold to China - the biggest cancellation by the world's top importer of the oilseed in at least 14 years. Brazil's government food supply agency Conab forecast the soybean crop at a record 82.6 million tonnes. As per the USDA monthly crop report, U.S. soybean end stocks are forecasted at 130 mn bsh, below its November estimate of 140 mn. Also, global soybean end stocks were forecast to 59.93 mn tn from 60.02 mn in November.

Source: Reuters

as on Dec 24, 2012 International Prices Soybean- CBOTJan'13 Futures Soybean Oil - CBOTJan'13 Futures Unit USc/ Bushel USc/lbs Last 1440 48.94 Prev day 0.63 0.47 WoW -3.78 -1.71 MoM 2.24 0.84
Source: Reuters

YoY 23.80 -3.96

Crude Palm Oil

as on Dec 24, 2012 % Change Prev day WoW 0.70 -0.29 4.64 -0.02

Refined Soy Oil: Ref soy oil January contract as well as MCX CPO
settled witnessed correction and settled lower by 1.16% and 0.29% on Wednesday. CPO prices have gained significantly last week as a cut in export duty on Malaysian palm oil is likely to boost exports and reduce palm oil stock piles. Malaysia, the world's No.2 palm oil producer, will set its crude palm oil export tax for January at zero percent, a government circular showed on Monday. (Source: Reuters). However, Indian importers will buy cheaper edible oil from overseas thus capping sharp gains in the domestic markets. India's cooking oil imports fell by a third in November from the previous month largely due to a drop in purchases of palm oil. Exports of Malaysian palm oil products for Dec. 1-20 fell 1.9 percent to 1,004,159 tn from 1,023,517 tn for the Nov. 1-20 period.

Unit
CPO-Bursa Malaysia – Jan '13 Contract CPO-MCX- Dec '12 Futures

Last 2299 407.2

MoM -0.04 -6.05

YoY -27.48 -23.53

MYR/Tonne Rs/10 kg

Source: Reuters

RM Seed
Unit RM Seed SpotNCDEX (Jaipur) RM Seed- NCDEX Jan'13 Futures Rs/100 kgs Rs/100 kgs Last 4325 4175 Prev day 0.93 -2.13

as on Dec 24, 2012 WoW 0.23 2.71 MoM 0.87 0.34
Source: Reuters

YoY 29.98 #N/A

Rape/mustard Seed: Mustard seed futures which gained
significantly during the last week witnessed profit booking on Monday and settled 2.3% lower. Tight supplies till the fresh crop arrives in February coupled with winter season demand is seen supporting the upside in the mustard prices. The agriculture ministry data showed higher mustard seed planting figures. Acreage in Rajasthan, largest producing state as on 14 Dec 2012 is 2656.6 thousand ha compared to 2441 thousand ha during the same period last year (Mustard has been planted over 63.6 lakh ha so far, 3.3% higher compared with a year ago. rapeseed output is expected to rise by 5% to 6.5 mn tn from 6 mn tn last year.

Technical Chart –Soybean

NCDEX Jan contract

Outlook
Soybean complex may trade with downward bias during the intraday. However, no major downside is expected in the coming week as supplies in the domestic markets will start dwindling while demand remains robust, thus supporting the upside in soy prices. Mustard seed prices may extend the losses of the previous session on account of higher area under cultivation, while Palm oil may recover on expectations that the export duty cut may reduce Malaysian palm oil 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 26, 2012 Support 684-689 3160-3195 4080-4130 410-413 Resistance 698-706 3255-3315 4210-4275 420-424

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Commodities Daily Report
Wednesday| December 26, 2012

Agricultural Commodities
Black Pepper
Pepper Futures traded on a negative note on Monday after reports that Food Safety and Standards Authority of India has sealed the entire quantity of pepper stored in six warehouses in Kerala of about 5,000 tonnes. The six warehouses have also been sealed. Winter demand coupled with low stocks in the domestic markets has supported prices over the last fortnight. However, higher output expectations capped sharp upside. FMC is probing into complaints against movement in the pepper market which has capped a sharp upside. Better output expectations in the domestic as well as the international markets have also pressurized prices over the last couple of weeks. 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. The Spot settled as well as the Futures settled 0.2% and 0.16% lower on Monday. Pepper prices in the international market are being quoted at $7,800/tn(C&F), while Vietnam was offering Austa at $7,000/tn, Brazil Austa at $6,000-6,500/tn, and Indonesia Austa at $6,500/tn (FOB).

Market Highlights
Unit Pepper SpotNCDEX (Kochi) Pepper- NCDEX Feb'13 Futures Rs/qtl Rs/qtl Last 38068 34920 % Change Prev day -0.20 -0.16

as on Dec 24, 2012 WoW -1.69 -10.80 MoM -1.61 -8.96 YoY 10.34 3.76

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. 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. Brazil exported 25,900 tn pepper during Jan-Nov 2012, around 20% lower compared with 32,650 tn in the same period last year. Exports from Malaysia 8,300 tn pepper during Jan-Oct 2012, lower by 30% last year while exports in October. stood at 1,077 mt in.

Source: Telequote

Technical Outlook
Contract Black Pepper NCDEX Feb Futures Unit Rs/qtl

valid for Dec 26, 2012 Support 34590-34750 Resistance 35175-35440

Production and Arrivals
The arrivals in the spot market were reported at 16 tonnes while offtakes were reported at 19 tonnes on Monday. As per IPC, Global pepper production in 2012 is projected at 3.27 lk tn, up compared with 3.18 lk tn in 2011. Production for 2013 is projected at 316832 tn. 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 negative note today. good arrivals coupled with higher output expectations as well as reports that FMC is probing into complaints against price movement may pressurize prices. However, festive demand coupled with winter buying may support prices at lower levels.

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Commodities Daily Report
Wednesday| December 26, 2012

Agricultural Commodities
Jeera
Jeera Futures traded on a negative note on Monday extending previous day’s correction. Improvement in the ongoing sowing has built pressure on the prices. Fresh export enquiries coupled with demand from stockists and masala millers have boosted the prices over the last couple of days. According to Gujarat State Agri Dept. th sowing in Gujarat is reported at 2.635 lakh ha as on 18 Dec, 2012 compared with 2.319 lakh ha last year. About 75% sowing is completed in Gujarat. In Rajasthan, sowing is expected to increase by 10-15%. Higher stocks for delivery on the exchange warehouse were pressurizing prices during the last one month. The spot as well as the Futures settled 0.4% and 1.85% 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 $2,750-2,850 tn (c&f) while Syria and Turkey are not offering. Carryover stocks of Jeera in the domestic market is expected to be around 5-6 lakh bags.

Market Highlights
Unit Jeera SpotNCDEX(Unjha) Jeera- NCDEX Mar '13 Futures Rs/qtl Rs/qtl Last 15034 15275 Prev day -0.40 -1.85

as on Dec 24, 2012 % Change WoW 0.31 4.46 MoM -0.72 4.75 YoY 1.37 #N/A

Source: Reuters

Technical Chart – Jeera

NCDEX March contract

Production, Arrivals and Exports
Arrivals in Unjha were reported at 5,500 tn on Monday. Production of Jeera in 2011-12 is expected around 40 lakh bags as against 29 lakh bags in 2010-11 (55 kgs each). (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 -0.18 -0.94

as on Dec 24, 2012 % Change

Unit Turmeric SpotNCDEX (N'zmbad) Turmeric- NCDEX Apr '13 Futures Rs/qtl Rs/qtl

Last 5272 6294

WoW 0.29 18.31

MoM 3.36 23.12

YoY -1.55 36.17

Outlook
Jeera futures may to trade on a negative note. Higher stocks for delivery on the exchange warehouses coupled with improvement in sowing in Gujarat may pressurize prices. However, good demand may support prices at lower levels. In the medium term (Dec-Jan), prices are likely to stay firm as there are limited stocks with Syria and Turkey.

Turmeric
Turmeric Futures corrected on Monday in the preceding day on lack of fresh bulk orders. The orders from North India have also dried up. There are reports of some crop damage in Erode region. Buyers are looking for turmeric with higher curcumin level at 5% which is unavailable, thereby supporting prices in the spot markets. Expectations are that production may be lower by 40-50%. Production is expected around 55 lakh bags. 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 MSP of Rs.10000/qtl. The Spot settled unchanged while the Futures settled 0.41% higher on Saturday.

Technical Chart – Turmeric

NCDEX April contract

Production, Arrivals and Exports
Arrivals in Nizamabad and Erode mandi stood at 1,000 bags and 5,000 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 trade on a negative note today due to lack of fresh bulk orders. Higher carryover stocks and weak overseas demand may also pressurize prices. However, demand from the stockists may support prices at lower levels. Also, traders expect upcountry demand to improve in the coming days.

Source: Telequote

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

Valid for Dec 26, 2012
Support 15030-15155 6160-6230 Resistance 15470-15680 6390-6500

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Commodities Daily Report
Wednesday| December 26, 2012

Agricultural Commodities
Kapas
NCDEX Kapas futures and MCX Cotton which had gained considerable in the previous session settled sharply lower by 2.3% and 1.5% on Monday on account of profit booking. According to the data released by Cotton Corporation of India, Supplies until Dec. 16 fell to 6.2 million bales of 170 kg each, down from 6.9 th million bales a year earlier. Arrivals were down by 12.5 percent as on 9 December. However, it is still below expectations as many farmers, who are waiting for better returns, hold back their produce. Although, Cotton advisory Board has pegged cotton output lower at 334 th lakh bales, Cotton Association of India (CAI), in its latest 90 annual general meeting said that Cotton production in the season 2012-13 is expected to be around 355 lakh bales, while the consumption is likely to be around 265 lakh bales. The USDA monthly report cuts cotton stocks estimate to 79.64 million bales, from last month's forecast of 80.27 million. The government has procured 20.74 lakh quintals of cotton at the minimum support price (MSP) so far in the 2012-13. ICE Cotton futures settled higher on bargain buying. Prices are expected to recover on account of good demand from china. ICE has reduced Cotton No. 2 maintenance margin requirements by 14.3 percent to $1,500 per contract from $1,750 w.e.f Friday, 14/12/2012

Market Highlights
Unit Rs/20 kgs Rs/Bale Last 1016 16410

as on Dec 24, 2012 % Change Prev. day WoW -2.31 -2.40 -1.56 -1.44 MoM 5.94 -1.44 YoY #N/A -0.18

NCDEX Kapas Futures MCX Cotton Futures

Source: Reuters

International Prices
ICE Cotton Cot look A Index Unit Usc/Lbs Last 76.4 81.35

as on Dec 24, 2012 % Change Prev day WoW 0.29 0.73 0.00 0.00 MoM #N/A 0.00 YoY -15.75 -29.20

Source: Reuters

Technical Chart - Kapas

NCDEX April contract

Domestic Production and Consumption
According to Cotton Advisory Board’s (CAB) estimates (4 Oct 2012) 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.
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Source: Telequote

Technical Chart - Cotton

MCX Jan contract

Global Cotton Updates
Net Upland sales of 283,900 running bales for the 2012/2013 marketing year were down 32 percent from the previous week and 24 percent from th the prior 4-week average. (dated 13 Dec 2012). 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. 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)
Source: Telequote

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

valid for Dec 26, 2012 Support 992-1004 16430-16550 Resistance 1035-1055 16750-16870

Outlook
Cotton prices may extend the losses on the previous session on Wednesday. However, downside is expected to be limited in the domestic markets as farmers will not sell their stocks at very low prices. Also demand remains strong at low prices.

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