Commodities Daily Report

Monday| January 21, 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

Monday| January 21, 2013

Agricultural Commodities
News in brief
Myanmar's pulses export in Nov. surge by 25%
Myanmars beans and pulses export surge by 25% to 80369 MT in November compared to the export of 64104 MT in the same period during previous year. Meanwhile, urad accounts for 63% of the total exports in November, followed by moong (26 %) and tur (7%). India accounts for 76% of total exports in November while Singapore had a share of 14%. Export shipments so far in 2012 total at 14,64,203 MT as compared from the total 13,58,553 MT in 2011. (Source: Agriwatch)

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

Wheat exports poised to top 9.5mt this financial year

India's wheat exports are poised to rise to a record 9.5 mn tn in the current fiscal year as the government is keen to ship out 5 mn tn from official stocks to make space for the bumper harvest. Top officials said private firms would also be allowed for the first time to draw from government stocks to speed up exports as official agencies need to quickly make arrangements for the new harvest and official procurement. With adverse weather hitting output in major producing nations, exporters expect a good price in the international market. The proposal may come up in cabinet agenda on Thursday. We need to make room for fresh harvest. We think we can export another 5 mn tn of wheat from the government stock, Food Minister K V Thomas told ET. Currently, wheat from the stocks of FCI can be sold only by state-run firms such as MMTC, STC and PEC. We are working on a mechanism for allowing private players to ship wheat along with PSUs. The process will be transparent so that there is least financial burden on the government, he said. (Source: Economic Times)

North India bracing for another cold spell

North India is bracing for another cold spell in the aftermath of a western disturbance exiting Jammu and Kashmir and moving farther away. Western disturbances as low-pressure systems feature rising motion (cyclonic) of air and are loaded with moisture, which contribute to relative warmth during winter times. Passage of these systems create a void where cooler northwesterly winds carrying cold Arctic air blow in and cause air to sink (anticyclonic motion) bringing to bear cold closer to ground. The cold spell might continue for a few days together since an intervening western disturbance is forecast to be weak in strength and not capable of substantially altering the mercury profile. India Meteorological Department (IMD) said that the weak western disturbance may drift in from Wednesday. A weather warning valid for next three days said that cold wave conditions would prevail over West Madhya Pradesh, West Uttar Pradesh and Rajasthan. (Source: Business Line)

Cold conditions prevail in Punjab & Haryana

Cold conditions today prevailed in Punjab and Haryana, with mercury hovering below the normal range, a day after the two States were lashed by moderate to heavy rains. Chandigarh recorded a low of 6.9 degrees Celsius. Heavy rains had lashed the city during the past two days. In Haryana, Hisar recorded 4.6 deg C last night after being lashed by heavy rains. Karnal, which received a heavy downpour of 22.2 mm, today recorded a low of 6.4 deg C, one degree below normal, the MeT said. In Punjab, Ludhiana and Patiala had a low of 5 deg C and 7.8 deg C, respectively after receiving moderate rains yesterday. Amritsar saw the minimum settling at 7 deg C after receiving showers yesterday. The MeT in its forecast said light rain may occur at isolated places in Punjab and Haryana until tomorrow. (Source: Business Line)

Food Security: Govt may revise grain prices

The parliamentary panel on food has indicated that the government may revise the prices of foodgrains distributed through the food security scheme to contain the widening fiscal deficit. The government may revise the prices in five years, depending on grain production, procurement and stocks, said Vilas Muttemwar. At present, the targeted PDS provides subsidised grains to around 6.52 cr families BPL and almost 11.05 cr of APL families. The government sells wheat to BPL families at Rs. 4.15 a kg and the price for APL families is Rs. 6.10. Similarly, the government sells rice to APL and BPL families at Rs. 8.30 and Rs. 5.65 a kg, respectively. The ration prices have not been revised for the last 10 years. The committee has recommended that the criteria for selecting beneficiaries should be fixed in consultation with state governments based on the 2011 census. The government can revise the criteria after 10 years to review the beneficiaries, he said. According to the standing committee report, the estimated requirement of grains would be 48.8 mn tn and the subsidy would be Rs. 92,499.48 cr for a uniform entitlement of 5 kg per person. (Source: Economic Times)

India tea prices drop as supplies of poor grade rise

Tea prices in India, the worlds second-biggest producer, dropped at last weeks auction as supplies of premier quality leaf fell, though winter season demand limited the downside. The CTC (crush-tear-curl) grade was offered at 136.72 rupees per kg, down 3.5 percent, while the dust variety fell 2.5 percent to 139.36 rupees per kg. "Average price is down as share of good quality supplies is going down. During this time of the year unusually supplies of poor grade tea rises," said a member of Calcutta Tea Traders' Association. India exports CTC tea mainly to Egypt, Pakistan and the UK, and the premium orthodox variety to Iraq, Iran and Russia. (Source: Reutes)

Fertiliser subsidy demand likely to overshoot Budget estimate by 62%

As the government struggles to meet the fiscal deficit target of 5.3% of the GDP, the demand for fertiliser subsidy in the current financial year (FY13) might swell by 62% over the Budget estimate of Rs. 60,974 cr. Meanwhile, the fertiliser industry complained that there has been a delay in payment of subsidies to companies, which is creating pressure on the domestic fertiliser industry. The Fertiliser Association of India said, The on account payment for subsidy on imported phospatic (P) and pottasic ( K) fertilisers has been made only up to June 2012, and for domestic P& K fertilisers, it has been paid till July 2012. The subsidy for domestic urea has been paid up to August 2012. The association also claimed that the Budget allocation of Rs. 60,974 cr for fertiliser subsidy has already been exhausted and about Rs. 19,000 crore subsidy payment is outstanding for the period till October 2012, and an equal amount would be required for the rest of the financial year. (Source: Business Standard)

China eyes another year of rice imports to cool domestic prices

Chinese demand looks likely to act as a partial safety valve for an amply supplied rice market for a second year running, as the world's top consumer of the grain takes advantage of global prices around 25-30 % below record domestic levels. Still, Chinese demand looks unlikely to bail out Thailand - where a government rice buying scheme has built up stocks equal to half of global annual trade - as cheaper Vietnamese and Pakistani grain snatch the lion's share of business. China's rice imports jumped five-fold in 2012 to 2.6 million tonnes, making it the world's second largest buyer after Nigeria. While it might import a bit less this year, the country will still tap bumper global supplies to ease record-high domestic prices and top up stockpiles. (Source: Reuters)

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Commodities Daily Report

Monday| January 21, 2013

Agricultural Commodities
Chana
Chana futures traded on a positive note on Saturday due to improved buying at lower levels. Continuous rise in imports which is easing supplies in the domestic markets coupled with higher output expectations for the coming season have pressurized prices over the last couple of weeks. The spot settled 0.34% lower while the Future settled higher by 0.94% on Saturday. 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 3912 3560 Prev day -0.34 -9.85

as on Jan 19, 2013 % change WoW MoM -2.27 -5.74 -12.87 -16.47 YoY 21.66 14.73

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. Acreage 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 21, 2013 Resistance 3580-3610

3510-3535

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 201213 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 Futures may extend the gains of the previous session in the intraday. 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

Monday| January 21, 2013

Agricultural Commodities
Sugar
Sugar traded sideways with a negative bias in the Futures due to profit taking while the spot remained in the positive. Sugar prices 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 settled marginally higher by 0.13% while the Futures settled marginally lower by 0.18% on Saturday. 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 3271

as on Jan 19, 2013 % Change Prev. day WoW 0.13 0.81 MoM -1.19 YoY 12.18

Rs/qtl

3262

0.59

2.00

2.03

15.35

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 21, 2013 Resistance 3270-3274

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)

3250-3255

Outlook
Sugar prices may trade on a mixed note today. Prices may recover 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

Monday| January 21, 2013

Agricultural Commodities
Oilseeds
Soybean: Soybean futures traded on a mixed note but recovered
towards the end on Saturday. Dwindling supplies in the domestic markets have supported prices. 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 3237 3238 745.9 723.7

as on Jan 19, 2013 % Change Prev day -0.37 0.50 -0.04 -3.11 WoW 1.57 3.57 1.57 -0.65 MoM -2.79 -1.77 3.71 0.23 YoY 33.76 39.27 6.82 3.27

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 extending previous days gains after the government increased import duty on CPO 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 Futures traded in a range bound manner and settled marginally lower by 0.06%. 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 19, 2013 % Change Prev day WoW 0.64 0.14 3.92 2.74

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

Last 2358 442.5

MoM 7.33 10.13

YoY -25.45 -15.44

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 4315 3454 Prev day 3.48 -13.84

as on Jan 19, 2013 WoW 2.07 -17.78 MoM 1.53 -16.17

Source: Reuters

YoY 22.67 -4.16

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 21, 2013 Support 712-718 3170-3205 3420-3440 431-437 Resistance 727-732 3260-3290 3480-3500 447-453

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Commodities Daily Report

Monday| January 21, 2013

Agricultural Commodities
Black Pepper
Pepper Futures traded on a bullish note yesterday 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 marginally lower by 0.18% higher while the Futures settled 1.96% higher on Saturday. 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 $8,100/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 38947 37470 % Change Prev day -0.18 1.96

as on Jan 19, 2013 WoW 0.88 4.14 MoM 0.60 -4.58 YoY 22.54 18.97

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 21, 2013 Support 36570-37020 Resistance 37780-38100

Production and Arrivals

The arrivals in the spot market were reported at 20 tonnes while off takes were reported at 20 tonnes on Saturday. 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 trade on positive to bullish note 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. FSSAIs sealing of huge quantity of pepper and FMCs probe into complaints against price movement may also pressurize the prices.

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Commodities Daily Report

Monday| January 21, 2013

Agricultural Commodities
Jeera
Jeera Futures witnessed thin traded and the prices moved in a range bound manner on Saturday. Prices have corrected sharply tracking higher sowing figures. However, fresh enquiries restrained a major downside. 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 10-15%. The spot settled lower by 0.5% while the Futures settled 0.13% higher on Saturday. According to markets sources about 75% exports target has already been achieved due to a supply crunch in the global markets. Supply concerns from Syria and Turkey still exists. Expectations are that export orders may still be diverted to India from the international markets due to lack of supplies from Syria on back of the ongoing civil war. Production in Syria and Turkey is being reported around 17,000 tonnes and around 4,000-5,000 tonnes, lesser than expectations. Jeera prices of Indian origin are being offered in the international market at $2,850 tn (c&f) while Syria and Turkey are not offering. Carryover stocks of Jeera in the domestic market is expected to be around 5-6 lakh bags.

Market Highlights
Unit Jeera Spot- NCDEX (Unjha) Jeera- NCDEX Mar '13 Futures Rs/qtl Rs/qtl Last 14294 13690 Prev day -0.50 0.13

as on Jan 19, 2013 % Change WoW -0.33 -0.40 MoM -5.94 -8.78 YoY -9.60 -11.63

Source: Reuters

Technical Chart Jeera

NCDEX March contract

Production, Arrivals and Exports

Arrivals in Unjha were reported at 2,500 tn on Saturday. 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 0.00 -0.28

as on Jan 19, 2013 % Change

Outlook
Jeera prices witness downside pressure today extending last weeks 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.
Turmeric SpotNCDEX (N'zmbad) Turmeric- NCDEX Apr '13 Futures

Unit Rs/qtl Rs/qtl

Last 5583 6370

WoW -1.92 -2.00

MoM 4.79 17.96

YoY 11.16 40.25

Turmeric
Turmeric Futures corrected extending previous days fall 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 years 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 was closed while the Futures settled 0.28% lower on Saturday.

Technical Chart Turmeric

NCDEX April contract

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.
.

Source: Telequote

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

Valid for Jan 21, 2013

Support 13360-13530 6230-6300 Resistance 13800-14070 6450-6580

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Commodities Daily Report

Monday| January 21, 2013

Agricultural Commodities
Kapas
NCDEX Kapas traded in a rangebound manner and settled 0.54% lower towards the end. However, MCX cotton settled marginally higher by 0.18% on Saturday. 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 Indias 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 920.5 16380

as on Jan 19, 2013 % Change Prev. day WoW MoM -0.54 -1.02 -10.24 0.18 0.24 0.24 YoY #N/A -8.44

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 Boards (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 years estimates of 353 lakh bales. Lower opening stocks coupled with estimated lower output will result in lower supplies this season at 374 lakh bales, a decline of 8.7% compared with last years 410.77 lakh bales. On the consumption front, domestic consumption is estimated higher at 270 lakh bales on the back of higher mill consumption. However, after witnessing record exports in 2011-12 season, Indian exports could witness significant fall this season on the back of lower availability along with unattractive domestic cotton prices. CAB estimates cotton exports at 70 lakh bales this season, compared with 128.8 lakh bales last year.
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Source: Telequote

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. Brazils 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 attach report)
Source: Telequote

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.

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

valid for Jan 21, 2013 Support 910-914 16280-16320 Resistance 928-935 16420-16500

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