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Commodities Daily Report

Saturday| January 19, 2013

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
Saturday| January 19, 2013

Agricultural Commodities
News in brief
Winter sowing warms up, raises hopes of good harvest
Winter sowing has inched up marginally, raising hopes of a good harvest for a third straight year, official data showed on Friday. However, winter farm production would still not be adequate to offset the summer losses following dry spells over vast regions across key producing states till July. According to the farm ministry data, sowing of winter wheat has dropped marginally till Friday to 29.49 million hectares from 29.59 million hectares in the previous year. Similarly, the planting of various pulse varieties, barring gram, fell to 14.23 million hectares, compared to 14.32 million hectares a year earlier. However, the drop in areas under wheat and key pulses were offset by higher planting of cereals, gram and oilseeds. The sowing of coarse cereals has risen by 3.7% to 6.05 million hectares. Similarly, the sowing of oilseeds has gone up by 2.5% to 15.24 million hectares. Total area under winter crops has risen to 59.20 million hectares, compared with 59.15 million hectares in 2011-12, the data showed. Asked about the impact of Thursday's rains in certain parts of the country, a senior official said, "There have been sporadic instances of rains, especially in some parts of Madhya Pradesh and Rajasthan, oilseeds crops have not been affected much. Some showers are expected to occur at few places in west Uttar Pradesh, Haryana, Punjab and Rajasthan again in the next two days. Such moderate unseasonal showers won't affect crops, but if there is hailstorm, it could potentially cause some losses of crops." (Source: Financial Express)

Market Highlights (% change)
Last Prev. day

as on Jan 18, 2013
WoW MoM YoY

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

20039 6064 53.75 95.56 1687

0.38 0.42 -1.12 0.07 -0.22

1.91 1.90 -2.06 2.14 1.60

3.01 2.50 -2.06 6.02 2.54

20.40 20.84 7.17 -4.81 1.96

.Source: Reuters

Refined veg oil import set to rise
The de- freezing of import rates on crude palm oil (CPO), along with a marginal 2.5% import duty levy as announced by Union Food Minister K V Thomas yesterday, is set to encourage refined oil imports into India, hitting domestic refineries. The new tariff and duty changes are yet to be notified. Many refineries themselves might import and just pack and market it but their refining capacities will not be used optimally. The share of refined oil has gradually increased in the overall import of vegetable oils over the past six years from a miniscule 3% during the period November 2006 to October 2007 to 16% in the corresponding period of 2011- 12. This is a direct threat to domestic refineries, which depend largely on import of crude palm oil (CPO). (Source: Business Standard)

Rupee payment mechanism with Iran helps Basmati rice exporter
Since the commencement of new Rupee payment mechanism with Iran, country's biggest exporter destination of aromatic Basmati rice, the inordinate delay in settlement of dues of the exporters because of US sanctions have considerably come down. India launched Rupee settlement mechanism from April 2012 for avoiding US and European Union sanctions under which state-owned UCO bank was appointed as the agency from India which has a tie with four Iranian banks - Parsian, Pasargad, Saman and EN Banks for carrying out settlements of dues. As per the official data, Iran is the biggest destinations for Basmati rice and the country had imported 3.2 million tonne of aromatic rice during 201112. Out of total imports, close to 1.5 million tonne is shipped from India for meeting Iran’s domestic demand. (Source: Financial Express)

IGC has increased world wheat production estimate
IGC estimates that total harvested area is expected to increase by 2.1% in 2013-14, the highest since 1998. Winter wheat condition is good in Europe but drought is still persistent in US HRW (Hard Red Winter) growing areas. World production estimate for 2012-13 has been increased from previous estimate of 654 million tonnes to 656 million tonnes as production is expected to improve in Australia, Canada, china and EU. IGC has estimated that world wheat trade will be 137 million tonnes as compared to previous estimate of 134 million tonnes in 201213 as Australia, Canada and India are expected to export more. No change is reported in Consumption; however carryover stocks have been increased by a million to 174 million tonnes. This might pressurize market. (Source: Agriwatch)

Cold wave, rains in North raise fears of fungal disease
The cold wave and rains accompanied by hailstorms across North India have raised the spectre of pest and fungal disease attacks on key winter crops, such as wheat and rapeseed mustard. Experts, however, said it was too early to comment on the impact on output. The frost that occurred in the first week of January has had some impact in certain pockets of key growing areas in Rajasthan, which account for half of India’s mustard output. An official of the Directorate of Rapeseed Mustard Research in Bharatpur said about 10-15% of the crop had been affected in different pockets of some adjoining districts, such as Dausa and Alwar, among others. “However, it is too early to comment on the impact of frost on the crop as the output depends on the temperatures in February and early March, the official said. (Source: Business Line)

Panel favours right to reject poor quality grain
If the suggestions of Parliament’s standing committee on food are incorporated in the final version of the ambitious Food Security Bill, then beneficiaries of the Public Distribution System (PDS) will for the first time have a right to reject inferior quality food grains. The committee, which presented its report to Lok Sabha Speaker Meira Kumar yesterday, has said the central government should prescribe a minimum quality norm for grain to be distributed under the proposed law. The committee also recommended that the State Food Commissions proposed to be set up be vested with powers to check the quality of grains before taking delivery from the central government. More, the committee said, endconsumers should get the right of refusal to accept delivery of grain are below the prescribed norms. The standing committee in its report has said that under the proposed Bill, grain should be supplied at a uniform five kg per person per month, irrespective of any BPL or APL distinction at a flat rate of ₹ per kg for rice, ₹ 2 for wheat and ₹ 1 per kg for coarse 3 cereals. Committee chairman Vilas Muttemwar said many representatives of political parties and others have complained about the quality of grain supplied through the PDS and had expressed fear that this might also be done under the new law. “The presence of foreign particles in food grains supplied through the PDS is less in big grain producing states like Punjab, Haryana and Andhra Pradesh, but was more in the main consuming states like Kerala, Tamil Nadu and northeastern states. (Source: Business Standard)

U.S. cotton hits fresh 8-month highs on hopes of China demand
Cotton jumped to fresh eight-month peaks on Friday as speculative investors continued to pile into fiber amid expectations of strong export demand from China, where the government continues to bolster its strategic reserve. The most-active March contract on ICE Futures U.S. settled up 0.77 cents, or 0.99 percent, at 78.55 cents per lb. After four straight days of gains, it was the front-month contract's strongest weekly performance since October. The bulls pointed to healthy export sales data on Thursday, expectations for the lowest U.S. crop acreage in many years, and forecasts of continued buying by China, which already holds half the global surplus in its strategic reserve, as factors supporting the market. (Source: Reuters)

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Commodities Daily Report
Saturday| January 19, 2013

Agricultural Commodities
Chana
Chana Spot as well as futures traded on a positive note yesterday. Futures increased due to short coverings but corrected from higher levels towards the end of the day on account of continuous rise in imports which is easing supplies in the domestic markets coupled with higher output expectations for the coming season. The spot settled 0.64% higher while the April settled marginally lower by 0.06% on Friday. Although chana prices witnessed 17% gains in 2012 on the back of lower availability, sentiments have turned negative since December 2012 on account of continuous supplies of imported chana from Australia coupled with higher output expectations.

Market Highlights
Unit Rs/qtl Rs/qtl Last 3925 3949 Prev day 0.64 -0.13

as on Jan 18, 2013 % change WoW MoM -1.88 -3.87 -3.04 -5.00 YoY 22.24 28.38

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

Source: Reuters

Sowing progress
Total pulses acreage as on 18th Jan 2013 stood at 142.33 lakh ha, down th by 0.65% yoy. As on 11 Jan 2013, stood at 140.87 lakh ha. Chana sowing is almost complete and acreage so far is at 91.68 lakh ha, up by 5.4% as on 11th Jan. Chana acreage is marginally higher by 3% this year in Rajasthan at 14.80 th lakh ha, In Maharashtra Chana acreage is up at 10.92 lakh ha as on 11 Jan 2013 vs normal area of 10.6 lakh ha and 2012 area of 7.04 lakh ha. th While in AP it is up at 7.14 lakh ha as on 11 Jan 2013, up by 26%. (Source: State farm dept)

Technical Chart - Chana

NCDEX April contract

Demand supply fundamentals
Chana fresh crop arrivals have started in Karnataka & Andhra Pradesh and would pick up soon in Maharashtra too. However, arrival pressure will built up February onwards when harvesting commence in MP. 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 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. 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. Assocham estimates, 21 mn tn of pulses demand in 2012-13 and is likely to reach at 21.42 mn tn in 2013-14 and 21.91 MT in 2014-15. (Source: Agriwatch).
Source: Telequote

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

valid for Jan 19, 2013 Resistance 3550-3585

3480-3500

Trade Scenario
USDA revealed that Myanmar beans and pulses export is up by 56 per cent to 110498 MT as compared with same period in last year. Out of the total export, 73 percent (80721 MT) was exported to India followed by Singapore (11316 MT). (Source: Agriwatch dated Dec 27) 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.

Outlook
Chana April contract may extend the gains of the previous session on Friday, however, sharp upside may by capped as higher shipments of imported chana and expectations of better output next season may pressurize prices at higher levels. Any adverse report with respect to weather may bring an upside rebound in the prices and thus a close watch on weather is crucial at this point of time.

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Commodities Daily Report
Saturday| January 19, 2013

Agricultural Commodities
Sugar
Sugar traded on a positive note in the spot as well as the futures markets, and have started showing some signs of recovery in the physical market as demand is seen emerging at lower levels. Hopes that the government will increase import duty also supported prices. Also report of lower cane planting is seen supporting an upside in the sugar prices. the spot as well as the Futures settled with gains of 0.5% and 0.31% respectively. There are reports that drought in parts of Maharashtra and Karnataka has hurt fresh sugarcane plantings, which may affect cane availability for sugar year 2013-14 starting October. Although this will have long term implications, outlook for short term remains bleak amid sufficient supplies. 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. Raw sugar futures on ICE as well as Liffe white sugar continued to trade lower for the fifth consecutive session and settled 1.11% and 0.27% lower on Friday on account of a supply glut situation on the back of a sugar surplus for the third consecutive year.

Market Highlights
Unit Sugar Spot- NCDEX (Kolhapur) Sugar M- NCDEX Jan'13 Futures Rs/qtl Last 3267

as on Jan 18, 2013 % Change Prev. day WoW 0.50 0.74 MoM -1.20 YoY 11.64

Rs/qtl

3243

0.25

1.31

2.17

15.45

Source: Reuters

International Prices
Unit Sugar No 5- LiffeMar'13 Futures Sugar No 11-ICE Mar '13 Futures $/tonne $/tonne Last 492 408.22

as on Jan 18, 2013 % Change Prev day WoW -1.11 -0.27 -4.43 -4.17 MoM -3.28 -3.37 YoY -23.79 -26.20

.Source: Reuters

Domestic Production and Exports
Mills in the country have produced 7.96 mln tn sugar in the first three months of the season, up nearly 2.5% 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. 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.

Technical Chart - Sugar

NCDEX Feb contract

Source: Telequote

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

valid for Jan 19, 2013 Resistance 3275-3285

Global Sugar Updates
According to the Brazil Agriculture Ministry, The 2012/13 cane crush was at 531.35 million tonnes as of Dec. 31, up from 491.16 million tonnes crushed the previous year. The 2013/14 crush will likely surpass the current one. Brazil's main center-south cane crop will produce between 580 million and 590 million tonnes of sugar cane in 2013/14. Brazil will likely favor ethanol production over sugar from the 2013/14 cane crop. The 2012/13 sugar crop in Thailand, the world's second-biggest exporter, could drop below a forecast 9.4 million tonnes due to lower-thanexpected yield. The crushing season started on Nov. 15 and 1.9 million tonnes of sugar has been produced so far (Source: Reuters)

3245-3255

Outlook
Sugar prices may recover further in the coming weeks as demand is seen emerging at lower levels. Reports of lower cane planting in some parts of Maharashtra and Karnataka may also bring some stability in the prices. Further, it is expected that government will take some measure to control prices, which are below the cost of production levels, from falling further so as to protect the interest of the millers.

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Commodities Daily Report
Saturday| January 19, 2013

Agricultural Commodities
Oilseeds
Soybean: Soybean futures corrected marginally yesterday on
account of profit taking. Dwindling supplies in the domestic markets have supported prices over the last couple of days. Prices were also influenced by the edible oil prices which rose sharply after the government hiked import duty on crude palm oil from Zero to 2.5%. Arrivals in the domestic markets declined to 1.5 lakh bags, while demand is comparatively lower amid crushing disparity. According to first advance estimates, Soybean output is pegged at 126.2 lakh tn for 2012-13. Soy meal exports fell by 34% in December to 5.10 lakh tn, according to SOPA. The country had exported 7,78,382 tn in December 2011. During the first three months of the current oil year (Oct-Sep), exports declined by 27% to 10.78 lakh tn.

Market Highlights
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 3249 3222 746.2 746.9

as on Jan 18, 2013 % Change Prev day -0.03 0.58 -0.07 0.07 WoW 2.01 4.41 1.86 2.96 MoM -2.96 -3.61 3.58 3.29 YoY 34.31 37.25 6.87 7.20

International Markets
Soybean futures on the CBOT settled marginally lower by 0.07% yesterday on account of profit taking towards the end of the week. Reports of dry weather in Argentina have boosted the prices. Higher exports to a single destination in one day also led to a rise in the prices. By law, exporters must report promptly the sale of 100,000 tonnes or more of a commodity to the same destination in one day. Sales of smaller amounts are reported on a weekly basis. Argentina soy planting advanced quickly in the last week to cover more than 90% of the targeted 19.7 mn ha. The next harvest will come in March and is projected by the govt at 55 mn tn or higher, depending on the weather. According to the USDA monthly crop report, Brazil will produce a record 82.5 mn tn of soybeans in 2012-13 due to hefty expansion in acreage and improving yield prospects. With the harvest just beginning in some areas, Brazil's planted area will likely increase by 9.2 percent to 27.34 mn ha. Refined Soy Oil: Ref soy oil and MCX CPO traded on a positive note after the government increased import duty on crude palm oil to 2.5% making the imports expensive. India's palm oil imports rose 27.4% on month at 783,091 tn in December, boosted mainly by poor domestic supply of alternatives and attractive overseas prices due to record stocks in key supplier Malaysia. To reduce imports and protect domestic industries, govt lifted duty on crude palm oil from 0 % to 2.5 % and also stated that the base import price on crude palm oil which is currently $447 per ton may be reviewed fortnightly. Increase in duty may reduce imports and support the upside in the prices. However, this may hurt exports from Malaysia which is already gripped with huge stocks of palm oil. Thu, BMD palm oil declined 1.7% on Thursday, while MCX CPO also erased earlier gains and settled marginally higher by 0.36%. In the short sentiments for Malaysian palm oil will turn negative and as India takes cues from Malaysian palm oil the impact on the domestic prices will be nullified. Rape/mustard Seed: Mustard seed April Futures corrected from higher levels yesterday and settled 0.37% lower. Rabi oilseeds sowing are now up by 2.23% at 8.54 mn ha as of Jan. 18. Arrivals are expected to commence in February and thus no major upside in the prices is seen. Rapeseed area stood at 6.62 mn ha as of Jan. 11, up by 3.5% from a year ago. Rapeseed output is expected to rise by 5% to 6.5 mn tn from 6 mn tn last year.
International Prices Soybean- CBOTJan'13 Futures Soybean Oil - CBOTJan'13 Futures Unit USc/ Bushel USc/lbs Last 1429 51.68 Prev day -0.07 0.37 WoW 0.32 5.73

Source: Reuters

as on Jan 18, 2013 MoM -4.48 3.80
Source: Reuters

YoY 20.41 2.48

Crude Palm Oil

as on Jan 18, 2013 % Change Prev day WoW 0.64 0.11 3.92 2.32

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

Last 2358 441.9

MoM 7.33 9.27

YoY -25.45 -15.39

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 4170 4009 Prev day 0.60 -2.08

as on Jan 18, 2013 WoW -1.30 -4.68 MoM -1.30 -3.35
Source: Reuters

YoY 19.23 9.99

Technical Chart –Soybean

NCDEX Feb contract

Source: Telequote

Outlook
Soybean complex may recover from lower levels due to lower supplies in the domestic markets and good demand for its oil. Mustard seed prices may decline further on likely higher output and expectations of arrivals to commence soon. CPO may recover in the intraday taking cues from the BMD palm oil futures.

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

valid for Jan 19, 2013 Support 705-712 3180-3205 3420-3440 431-437 Resistance 720-725 3245-3275 3480-3500 447-453

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Commodities Daily Report
Saturday| January 19, 2013

Agricultural Commodities
Black Pepper
Pepper Futures opened sharply lower yesterday extending previous days losses. However, prices recovered towards the end due to low stocks and thin supplies. Good winter demand also supported the prices. Prices have also increased over the last few days due to arrivals of good quality pepper from Kerala. Earlier, prices had corrected as Food Safety and Standards Authority of India sealed the entire quantity of pepper stored in six warehouses in Kerala of about 5,000 tonnes. Harvesting of the fresh crop has commenced and is expected to gain momentum in the coming days. However, winter demand coupled with low stocks in the domestic markets has supported prices at lower levels. FMC is probing into complaints against movement in the pepper market which has pressurized prices. Exports demand for Indian pepper in the international markets is also weak due to price parity. The Spot settled 0.48% higher while the Futures settled 0.6% lower on Friday. Spices Board has announced plans to import high yielding Madagascar variety that was behind the record productivity in Vietnam. It could raise productivity of Indian pepper from 2,000 kg/ha to 7,000 kg/ha. Pepper prices in the international market are being quoted at $7,850/tn(C&F Europe). Vietnam, Malaysia and Indonesia Austa variety are quoted at $7,000/tn and Brazil black pepper is quoted at $6,600/tn.

Market Highlights
Unit Pepper SpotNCDEX (Kochi) Pepper- NCDEX Feb'13 Futures Rs/qtl Rs/qtl Last 39017 36750 % Change Prev day 0.48 -0.60

as on Jan 18, 2013 WoW 1.18 2.58 MoM 0.48 -6.51 YoY 23.28 17.69

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. 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 Jan 19, 2013 Support 35970-36430 Resistance 37170-37450

Production and Arrivals
The arrivals in the spot market were reported at 20 tonnes while off takes were reported at 20 tonnes on Friday. 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 prices are expected to recover after correcting over the last two day on account of low stocks coupled with thin arrivals. Winter buying demand may also support prices. However, increasing supplies coupled with higher output expectations may cap sharp gains. FSSAI’s sealing of huge quantity of pepper and FMC’s probe into complaints against price movement may also pressurize the prices.

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Commodities Daily Report
Saturday| January 19, 2013

Agricultural Commodities
Jeera
Jeera Futures corrected sharply snapping the gains earlier this week tracking higher sowing figures. Prices traded on a positive note due to fresh enquiries. Higher sowing as well as conducive weather in Gujarat, the main jeera growing region have pressurized prices. Sowing is complete. According to Gujarat State Agri Dept. sowing in Gujarat is reported at 3.244 lakh ha till Jan, 2013 compared with 3.64 lakh ha last year. In Rajasthan, sowing is expected to increase by 1015%. The spot settled marginally higher by 0.36% while the Futures settled 2.51% 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 $2,875-2,900 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 Spot- NCDEX (Unjha) Jeera- NCDEX Mar '13 Futures Rs/qtl Rs/qtl Last 14365 13673 Prev day 0.36 -2.51

as on Jan 18, 2013 % Change WoW -0.47 -0.40 MoM -5.16 -8.21 YoY -9.19 -10.81

Source: Reuters

Technical Chart – Jeera

NCDEX March contract

Production, Arrivals and Exports
Arrivals in Unjha were reported at 2,500 tn on Friday. Production of Jeera in 2011-12 is expected around 40 lakh bags as against 29 lakh bags in 2010-11 (55 kgs each). 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 -0.98 -3.21

as on Jan 18, 2013 % Change

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

Last 5583 6388

WoW -1.92 -3.68

MoM 4.04 17.90

YoY 10.90 39.23

Outlook
Jeera prices are expected to correct today extending yesterday’s losses. Higher sowing figures in Gujarat may pressurize prices. However, export demand at lower levels may support prices. Demand from domestic traders and millers at lower levels may also support prices. In the medium term, prices are likely to stay firm as Syria and Turkey have stopped shipments.

Technical Chart – Turmeric

NCDEX April contract

Turmeric
Turmeric Futures corrected sharply yesterday as huge carryover stocks have pressurized prices at higher levels. However, some fresh export enquiries cushioned the fall in the spot prices. Good demand from upcountry market has supported the prices. Lower production estimates have also supported the prices. There are reports of some crop damage in Erode region. 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 as well as the Futures settled 0.98% and 3.21% lower on Friday.

Source: Telequote

Production, Arrivals and Exports
The spot markets remained closed on account of Pongal festival. 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 may trade on the downside today. Higher carryover stocks and weak overseas demand may pressurize prices. However, demand from stockists and weather concerns may support prices. Lower production expectations may also support prices.
.

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

Valid for Jan 19, 2013
Support 13360-13520 6180-6280 Resistance 13780-14070 6500-6640

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Commodities Daily Report
Saturday| January 19, 2013

Agricultural Commodities
Kapas
NCDEX Kapas traded in a rangebound manner yesterday and settled 0.33% higher towards the end. However, MCX cotton settled marginally lower by 0.06% on Friday. However, demand is expected to pick up at lower levels to meet the cotton yarn export registrations. Registration for exports of cotton yarn has hit the highest in at least two years on burgeoning demand from India’s perennially importing countries i.e. Bangladesh and China. Although, Cotton advisory Board has pegged cotton output lower at 334 lakh bales, Cotton Association of India (CAI), expects output to be around 353 lakh bales in 2012-13. According to the data released by Cotton Corporation of India, Supplies until Jan 13 are down 6.3 percent to 12.5 mn bales of 170 kg each, down from 12.9 mn bales a year earlier. Arrivals were down by 10 percent as th on 16 Dec. ICE Cotton traded on a positive note hitting a fresh 8 month high on back of index buying and settled 0.99% higher on Friday. Hopes of demand from China led to a sharp increase over the week. Concerns about the quality of cotton to be released by China also supported the prices.

Market Highlights
Unit Rs/20 kgs Rs/Bale Last 925.5 16350

as on Jan 18, 2013 % Change Prev. day WoW MoM 0.33 -1.39 -10.10 -0.06 -0.24 -0.24 YoY #N/A -9.67

NCDEX Kapas Futures MCX Cotton Futures

Source: Reuters

International Prices
ICE Cotton Cot look A Index Unit USc/Lbs Last 78.55 81.35

as on Jan 18, 2013 % Change Prev day WoW 0.99 3.87 0.00 0.00 MoM 4.61 0.00 YoY -20.33 -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.
Source: Telequote
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Technical Chart - Cotton

MCX Jan contract

Global Cotton Updates
China, the world's biggest buyer of cotton, began selling a tiny fraction of its massive stockpile of the fibre on Monday, in a move to ease domestic supply shortages. Beijing has been building a strategic stockpile of cotton since 2011, paying above global prices to support its farmers, but the policy has hurt China's textile mills, which have been struggling with tight supplies, and high prices, at home. Many in the industry were expecting China to reward mills that buy state reserves with new import quotas enabling them to buy cheaper overseas supplies. But no such deal was announced. 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 Jan 19, 2013 Support 905-915 16280-16320 Resistance 930-940 16420-16500

Outlook
Cotton prices may trade on a mixed note today. Higher output expectations by Cotton Association of India have turned the sentiments negative for the cotton prices. However, downside may be limited as farmers may not sell their stocks at lower prices. Reports that the Government may purchase cotton from farmers to avoid distress sales may also support prices. Also, anticipated export demand from the neighboring countries may support prices.

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