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Commodities Daily Report

Wednesday| February 27, 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
Wednesday| February 27, 2013

Agricultural Commodities
News in brief
Finance ministry finds proposal to abolish levy sugar bitter
The finance ministry has raised objections to the food ministrys proposal to do away with levy sugar as part of its partial decontrol measure, saying it would raise the government’s subsidy burden by Rs. 800- 1,000 crore. Officials said the finance ministry is concerned that if the levy sugar mechanism is abolished, the entire burden of distributing cheap sugar through ration shops will fall on the government, which it can ill- afford at this time. At present, the burden is shared between sugar millers and the Centre. The government sells 2.6- 2.7 million tonnes of sugar annually at cheap rates through ration shops. To meet this requirement, sugar mills are required to sell 10 per cent of their annual production to the Centre at rates much lower than the market price. The government spends around Rs. 23- 25 for each kg sold through ration shops (this includes Rs. 19.50 as the purchase price and the rest as incidental charges), while it earns just around Rs. 13.50 per kg by selling the sweetener. This practically means that the government incurs a subsidy of around Rs. 10- 11 for every kg sold through ration shops. But, if the levy sugar mechanism is dismantled as formulated in the draft Cabinet note, the government will have to either purchase sugar from the open market for sale through ration shops or compensate states for selling sugar at cheap rates. (Source: Business Standard)

Market Highlights (% change)
Last Prev. day

as on Feb 26, 2013
WoW MoM YoY

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

19015 5761 54.1 92.63 1615

-1.64 -1.60 0.19 -0.52 1.83

-3.16 -3.00 -0.06 -4.17 0.72

-5.41 -5.16 0.56 -3.39 -2.49

6.09 6.12 10.37 -15.61 -9.01

.Source: Reuters

Food security Bill will burden fisc, a bad idea: Sinha
Former finance minister and BJP leader Yashwant Sinha said on Tuesday the Food Security Bill (FSB) would burden the fisc. Sinha, who is chairman of the Standing Committee on Finance, said the scheme, which envisages subsidising grains for the poor, would push up demand for food stocks to a level where the government would be forced to import grains to maintain supplies. Given that the general elections are expected to be held in 2014, Sinha’s views may end up putting the BJP in a quandary. Sinha had recently criticised the government for failing to release 70 million tonnes of grain into the market and had observed that the food subsidy would aggravate inflation. The UPA government has been keen to push through the FSB, which would ensure subsidised grains to 75% of the population — with the poor getting a higher subsidy — ahead of the general elections. (Source: Financial Express)

Cotton prices jump 7% in Feb, as buyers eye price rise
Cotton prices have witnessed a rise of around seven per cent so far this month, thanks to increased stockpiling by foreign traders in anticipation of better price expectations. This has also triggered demand from domestic millers, who are expecting healthy yarn exports this year. According to market sources, with arrivals starting to decline, prices are likely to firm up to Rs. 38,000 a candy (356 kg). Multinational trading companies active in India are said to be buying cotton in order to export it. Switzerland- based Glencore Grains, Netherland’s Louis Dreyfus Commodities and Singapore- based Olam International are active in exporting cotton from India, as prices in the international markets have started improving. Sources say global companies have so far purchased about a million bales from India. (Source: Business Standard)

Mills’ body wants Cotton Corp to fix price for MCU-5
The Southern India Mills Association (SIMA) has urged the Textiles Ministry to ask the Cotton Corporation of India to announce a selling price for the cotton the latter procured from Andhra Pradesh. The association, the apex body for spinning mills in the country, said that the corporation should in particular announce the price for the long staple variety MCU-5 to help the spinners. The Cotton Corporation has procured over 20 lakh bales of the natural fibre, including MCU-5, as part of the Government’s market intervention operations. (Source: Business Line)

Drought drains Maharashtra’s seed industry
The severe drought in Jalna district of central Maharashtra has impacted operations of the local seed industry, one of the largest in the country, besides affecting farming. Satyanarayan Rathi, President of Maha Seedsmen Association, told Business Line that the process of seed multiplication by farmers, who produce these seeds for certain seed companies, has dropped by about 50 per cent due to shortage of water. Such a disruption in the production cycle will impact seed availability in the short term, he said. The Association has more than 330 seed companies as members. Rathi said that in and around Jalna city, usually there are about 12,000 seed producing farms, typically of 10 gunthas (quarter of an acre). (Source: Business Line)

Erratic climate to hit rabi output
Erratic climatic behaviour and damage caused by Cyclone Nilam in Andhra Pradesh during the sowing season, followed by a week- long spell of unseasonal rainfall during harvesting, are set to substantially hit the rabi crop output. Cyclone Nilam hit the coastal belt of Andhra Pradesh in October last year, damaging spices and other cash crops in an estimated area of 500,000 hectares. Since re- sowing was also not possible due to time overrun, overall output of spices is set to be lower this year. No official agency has assessed the crop loss in the state but Angel Broking, a city- based commodity broking firm, estimates overall loss in turmeric and chilli output at 50 per cent and 30 per cent, respectively. The cyclone also affected the tobacco crop. The Tobacco Board estimates a decline in output in Andhra Pradesh to around 170 million kg this year, compared to 175 million kg last year. Potato, another important rabi season crop, was feared to be impacted because of a long spell of unseasonal rain in early February, the harvesting season. The rainfall continued for four days in major producing centres. (Source: Business Standard)

Higher output mashes potato prices in Bengal
Higher production has brought down potato prices in West Bengal by nearly Rs 100 a quintal over the last one month. Wholesale price of the tuber (Pokhraj variety) is ruling around Rs 430-460 a quintal this week, down from Rs 500-550 in January-end. According to Patit Paban De, member, West Bengal Cold Storage Association, loading of potatoes into cold storages will begin in early March and this is likely to keep prices steady around current levels. The State is likely to produce 12 per cent higher crop at 95 lakh tonnes (lt) this year against 85 lt last year. “The production is at a par with our expectations. Going by the current trend, we expect the production to be close to 95 lakh tonnes this year,” De told Business Line. The most common Jyoti variety is yet make its appearance in the market. (Source: Business Line)

Castor oil exports may dip 6% on low China demand
Indias castor oil exports are expected to fall six per cent due to reduced demand from Chinese sebacic acid manufacturers. As against total castor oil export of 424,000 tonnes in 2012, industry insiders expect India’s castor oil exports to be 400,000 tonnes this year. Of the total castor oil exports in 2012, 180,000 tonnes or 45 per cent was exported to China alone. China, the biggest consumer for India’s castor oil, uses most of the oil for manufacturing of sebacic acid, a castor oil derivative and exports most of the production to Europe and the US. (Source: Business Standard)

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Commodities Daily Report
Wednesday| February 27, 2013

Agricultural Commodities
Chana
Rising supplies of new crop in the domestic markets along with bumper output expectations pressurized chana prices on Tuesday. Spot prices and April futures settled 2.4% and 1.5% lower respectively in the yesterday’s trading session. Arrivals will increase further in the coming days as harvesting will commence in full pace in MP. Ministry of Agriculture in its second advance estimates, have pegged, bumper chana output for 2012-13 season at 8.57 mn tn, up 11% from 2011-12 final estimates of 7.7 mn tn.

Market Highlights
Unit Rs/qtl Rs/qtl Last 3500 3347 Prev day -2.46 -1.53

as on Feb 26, 2013 % change WoW MoM -3.85 -11.39 -2.73 -7.64 YoY -9.71 -11.31

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

Source: Reuters

Pulses Sowing 2012-13
According to the final figures from ministry of agriculture dated 22 February 2012, Chana sowing is 3.6% higher at 95.15 lakh ha compared to previous year. Acreage is up in Rajasthan, Maharashtra, MP and AP at 15.7 lakh ha, 12.53 lakh ha, 32.99 lakh ha and 7.33 lakh ha respectively.
nd

Technical Chart - Chana

NCDEX April contract

Higher returns earned in 2012, coupled with a hike in minimum support prices (MSP), have helped expand overall acreage in 2012-13 season. The Centre has hiked the MSP by 14 per cent to Rs 3,200 a quintal for chana and as part of its strategy to encourage farmers to grow more pulses to reduce import dependence.

Demand supply fundamentals
According to second advance Estimates released on 8 Feb 2013, Total pulses output for 2012-13 season has been pegged at 17.58 mn tn, down 3.3% compared to previous year. The target for 2012-13 pulses crop output was set at 18.24 million tonne during the year. However, drought conditions have hampered kharif pulses output, which has been only partially offset by Rabi pulses output, especially chana. Out of the total pulses output, kharif output is estimated at 23% lower at 5.48 mn tn while rabi pulses output is pegged 8.72% higher at 12.09 mn tn compared with the final estimates of 2011-12. There has been a sharp increase in the chana output estimates on the back of higher acreage and good yield. Chana output is expected to breach its 2010-11 record of 8.2 mn tn and is estimated at 8.57 mn tn for 2012-13. In its first advance estimates chana output was pegged at 7.9 mn tn. 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).
th

Source: Telequote

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

valid for Feb 27, 2013 Resistance 3380-3415

3290-3315

Trade Scenario
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. In Australia, total chickpea production in 2012–13 is estimated to have increased to a record 713000 tones as compared with 485000 tons in 2011-12. In Canada chickpea output is estimated at 1.58 lakh tonnes compared with 86000 tn in 2011-12.

Outlook
Increasing arrival pressure may exert downside pressure on the chana prices in the coming days. However, sharp downside may be capped as demand will emerge at lower levels. Also, prices may not sustain below Rs 3200 as farmers will not liquidate their produce below these levels.

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Commodities Daily Report
Wednesday| February 27, 2013

Agricultural Commodities
Sugar
Sugar futures extended the losses of the previous session, however, recovered towards the end on short coverings ahead of budget. Prices have declined in the past few sessions on Government’s decision to keep sugar import duty unchanged, which may boost cheaper imports further and keep domestic prices under pressure. Prices also declined as ISO forecasted higher global sugar surplus. The government last week said it has decided not to increase import duty on sugar though industry bodies and manufacturers had demanded a hike in the duty to 60% from the current 10% to curb shipment of the sweetener. India’s Agriculture Minister Sharad Pawar said that they are favoring Food Ministry’s proposal to increase the production tax on Sugar from the current Rs. 0.71/kg by Rs. 1.5/kg if mills were freed from an obligation to sell the sweetener at lower prices for public distribution. India's sugar production in the 2013/14 season is set to fall below consumption for the first time in four years as a water shortage trims acreage in three key states. Food minister KV Thomas on Thursday said the government is likely to take a decision on decontrolling the sugar industry before the Budget. Food ministry has proposed dispensing with the regulatory release mechanism and abolishing the levy system.

Market Highlights
Unit Sugar Spot- NCDEX (Kolhapur) Sugar M- NCDEX Mar'13 Futures Rs/qtl Last 3188

as on Feb 26, 2013 % Change Prev. day WoW -0.39 -1.37 MoM -2.04 YoY 9.87

Rs/qtl

3068

0.07

-0.87

-3.97

6.01

Source: Reuters

International Prices
Unit Sugar No 5- LiffeMay'13 Futures Sugar No 11-ICE Mar '13 Futures $/tonne $/tonne Last 508.8 395.33

as on Feb 26, 2013 % Change Prev day WoW 0.65 -1.22 2.66 -2.36 MoM 4.54 -3.21 YoY -23.20 -31.81

.Source: Reuters

Technical Chart - Sugar

NCDEX March contract

Domestic Production and Exports
Out of the estimated 24 mn tn sugar output for the season 2012-13, India produced 13.7 mn tn in the first four months of the season beginning October 2012, up 3 percent a year ago period. 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. Exports are not viable as international prices have also declined significantly.

Global Sugar Updates
Liffe white sugar settled 0.65% higher on account of short coverings while Raw Sugar futures on ICE settled 1.22% lower on Tuesday as early harvest and crushing has commenced in parts of Brazil. A global surplus situation has led the prices to a sharp decline. Currently the prices are trading around their 2 ½ year lows. The International Sugar Organization (ISO) last week had forecasted a global sugar surplus of 8.526 mn tn in 2012/13, up from 6.479 mn tn in 2011-12. It forecast that the sugar stocks-to-consumption ratio would rise to 40.56 percent in 2012/13 from 38.21 percent in 2011/12. Sugar traders are the most bullish since October on speculation that the slump in prices to the lowest in 2 1/2 years will spur Brazilian millers to make more biofuel and less of the raw sweetener from cane. Brazil plans to reduce taxes on ethanol to boost production and use of the biofuel. If brazil cuts tax the ethanol parity to sugar may rise and thus the share of cane directed to sugar production in the 2013-14 season may be 44 -45%, down from 49.6 % in the current period.
Source: Telequote

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

valid for Feb 27, 2013 Resistance 3075-3090

3030-3050

Outlook
Sugar prices may trade in a range bound manner during the intraday as market participants may adopt wait and watch policy ahead of budget. Supplies of sugar in both domestic and international markets are huge and thus market need strong signals to bring an upside rebound in the prices. It may be in the form of sugar decontrol or yield concerns over next year’s output.

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Commodities Daily Report
Wednesday| February 27, 2013

Agricultural Commodities
Oilseeds
Soybean: Soybean futures declined on Tuesday taking cues from
the international markets which declined on expectation of higher South American supplies. Oil meal exports rose by almost 40 per cent to 7.68 lakh tonnes in January this year, industry body Solvent Extractors Association of India said. The export of oil meals, however declined by 18 per cent to 36.79 lakh tonnes in the first 10 months of this fiscal compared to 44.85 lakh tonnes in the year-ago period. The country exported 25.36 lakh tn soybean meal in first 10 months compared to 30.82 lakh tn in the same period last year which showing a decline of 17.72%. According to the second advance estimates, 2012-13 oilseed output is pegged at 29.4 mn tn, down by 1.1%, while soybean output is pegged higher at 12.9 mn tn, up 3.2%.

Market Highlights
Unit Soybean Spot- NCDEX (Indore) Soybean- NCDEX Mar '13 Futures Ref Soy oil SpotNCDEX(Indore) Ref Soy oil- NCDEX Mar '13 Futures Rs/qtl Rs/qtl Rs/10 kgs Rs/10 kgs Last 3386 3294 702.5 689.8

as on Feb 26, 2013 % Change Prev day -0.47 -0.90 -1.49 -1.15 WoW -0.65 -3.07 -4.33 -6.06 MoM 1.62 1.18 -7.04 -5.46 YoY 30.68 28.20 -1.75 -2.39

Source: Reuters

as on Feb 26, 2013 International Prices Soybean- CBOTMar'13 Futures Soybean Oil - CBOTMar'13 Futures Unit USc/ Bushel USc/lbs Last 1448 49.02 Prev day -0.24 -2.10 WoW -1.53 -6.68 MoM 0.47 -5.91
Source: Reuters

International Markets
Soybean Futures on CBOT declined by 0.24% on Tuesday on account of higher ending stocks estimates coupled with active selling by farmers in the US Midwest. Rainfall this week in Argentina's top soyproducing province revived wilting crops as many entered important growth stages, but others were still in urgent need of rain. Argentina soybean acreage is estimated at 19.35 mn ha. U.S. farmers will harvest record soybean crops in 2013, ending three years of falling production and rebuilding nearly depleted stockpiles. German oilseeds analyst Oil World on Tuesday cut its forecast of the 2013 soybean harvest in Argentina by 2 mn tn to 50 mn tn from its Jan estimates because of dry weather, but has raised its forecast of Brazil's soybean crop by 0.5 mn tn.

YoY 11.90 -9.99

Crude Palm Oil

as on Feb 26, 2013 % Change Prev day WoW -1.32 -0.44 -4.75 -0.98

Unit
CPO-Bursa Malaysia – Mar '13 Contract CPO-MCX- Feb '13 Futures

Last 2387 452.9

MoM 1.23 2.68

YoY -26.21 -15.44

MYR/Tonne Rs/10 kg

Refined Soy Oil: Ref soy oil and CPO declined sharply on higher
global production estimates of palm oil by oil world. Expected higher soy oil stocks in the US also exerted downside pressure on the prices. Global palm oil output is estimated at 55.3 mn tn in 2012-13, up by 3.4 mn tn. U.S. soybean processors say they have been pleasantly surprised by the high oil content of the latest U.S. soybean harvest, a factor that has contributed to strong profit margins and should pad year-end soy oil inventories. India's vegetable oil imports soared 27 percent from a month ago to an all-time high in January on purchases of cheap palm oil. To curb imports, the tariff value of crude palm oil, the edible oil India imports most, has been raised from $ 815 a tonne to $ 848 a tonne, a rise of 4.04%.

Source: Reuters

RM Seed
Unit RM Seed SpotNCDEX (Jaipur) RM Seed- NCDEX Apr'13 Futures Rs/100 kgs Rs/100 kgs Last 3656 3401 Prev day -2.21 -0.82

as on Feb 26, 2013 WoW -7.43 -2.10 MoM -11.14 -2.13
Source: Reuters

YoY 1.89 -5.48

Technical Chart –Soybean

NCDEX March contract

Rape/mustard Seed: Mustard Futures declined 0.82% on higher
output expectations. Arrivals have commenced in Rajasthan and thus prices may decline further. Mustard seed sowing is now up by 2.2% at 67.23 lakh ha. Agriculture ministry in its third advance estimates, pegged mustard output at 7.36 mn tn, up by 11.5%. MSP of mustard seed is fixed at Rs 3000 per qtl.

Outlook
Soybean may trade sideways with a negative bias tracking weak international markets. However, lower supplies in the domestic markets support the prices. Mustard seed may remain weak on expectations arrivals to improve soon along with increase in output estimates. CPO may trade on a mixed note. Prices may rise on expectations of palm oil exports to improve gradually while output may fall due to seasonally lower yield. However, higher production estimates may pressurize prices.
Source: Telequote

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

valid for Feb 27, 2013 Support 681-686 3245-3272 3360-3380 455-459 Resistance 695-701 3325-3350 3420-3440 463-466

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Commodities Daily Report
Wednesday| February 27, 2013

Agricultural Commodities
Black Pepper
Pepper March Futures declined yesterday extending previous day’s losses on account improvement in the arrivals of the new crop. Low stocks, thin supplies and delayed harvesting due to lack of skilled laborers have led to a rise in the prices over the last couple of weeks. Harvesting of the fresh crop is going in and is expected to gain momentum in the coming days. Food Safety and Standards Authority of India sealed the entire quantity of pepper stored in six warehouses in Kerala of about 8,000 tonnes. Exports demand for Indian pepper in the international markets is also weak due to price parity. The Spot as well as the Futures settled 0.96% and 0.9% lower on Tuesday. According to a circular issued by NCDEX on 09/02/2013, launch of June 2013 expiry contract in Pepper which is scheduled on February 11, 2013, has been postponed till further notice. The revised launch date will be announced in due course. 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 $7,500/tn(C&F Europe). Vietnam’s Austa is quoted at $6,925-6,975/tn, Indonesia GM-1 is quoted at $6,900/tn and Brazil Austa is quoted at $6,600/tn.

Market Highlights
Unit Pepper SpotNCDEX (Kochi) Pepper- NCDEX Mar'13 Futures Rs/qtl Rs/qtl Last 39743 37070 % Change Prev day -0.96 -0.90

as on Feb 26, 2013 WoW -3.17 -10.46 MoM -0.09 -2.92 YoY 9.36 0.58

Source: Reuters

Technical Chart – Black Pepper

NCDEX March contract

Exports and Imports
India’s pepper exports in 2012 have been reported at just 12,000 tonnes while imports reported at 15,000 tonnes making India a net importer. (Source: Agriwatch) According to Vietnam Ministry of Agriculture and Rural Development (MARD) exports of pepper in 2012 stood at 116,962 mt, Total exports in 2012 were forecasted at around 1,10,000 tonnes. Pepper imports by U.S. the largest consumer of the spice declined 9% in 2012 period to 62,458 tn as compared to 68,489 tn in 2011. 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 Mar Futures Unit Rs/qtl

valid for Feb 27, 2013 Support 36730-36880 Resistance 37270-37500

Production and Arrivals
The arrivals in the spot market were reported at 102 tonnes while off takes were reported at 98 tonnes on Tuesday. 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 estimates, pepper output in Vietnam is estimated to be 1.05 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 may trade on a mixed note today. Low stocks coupled with thin arrivals may support prices. However, improvement in arrivals may pressurize prices. Reports that farmers are holding back stocks may also support prices at lower levels.

www.angelcommodities.com

Commodities Daily Report
Wednesday| February 27, 2013

Agricultural Commodities
Jeera
Jeera Futures declined sharply yesterday as the increasing arrivals of the new crop have pressurized prices over the last few days. The arrivals of new crop are around 10,000-14,000 bags/day and are expected to increase in the coming days. Higher sowing as well as conducive weather in Gujarat, the main jeera growing region has increased output expectations. 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 as well as the Futures settled 0.1% and 0.29% lower on Tuesday. 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 $2,975-$3,000 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 13419 12885 Prev day -0.10 -0.29

as on Feb 26, 2013 % Change WoW -3.54 -4.06 MoM -4.80 -4.17 YoY -6.29 -7.10

Source: Reuters

Technical Chart – Jeera

NCDEX March contract

Production, Arrivals and Exports
Arrivals in Unjha were reported at 14,500 tn on Tuesday. Production of Jeera in 2012-13 is expected around 38-40 lakh bags (55 kgs each), same as last year. 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 -0.60 -0.03

as on Feb 26, 2013 % Change

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

Last 5442 6226

WoW -0.56 -1.77

MoM -0.18 0.42

YoY 21.00 32.52

Outlook
Jeera Futures is expected to continue to trade lower as higher arrivals may pressurize prices. However, fresh overseas demand at lower levels may support prices at lower levels. In the medium term, prices are likely to stay firm as Syria and Turkey have stopped shipments.

Turmeric
Turmeric Futures traded on a mixed note yesterday. Lower output expectations supported prices at lower levels while higher supplies of the new crop coupled with higher carryover stocks pressurized prices. Prices have gained over the last few days due to some unseasonal rains in Andhra Pradesh coupled with output concerns. There is good demand from local buyers and stockists. The Spot settled as well as the Futures settled 0.6% and 0.03% lower on Tuesday.

Technical Chart – Turmeric

NCDEX April contract

Production, Arrivals and Exports
Arrivals in Erode and Nizamabad mandi stood at 6,000 bags and 11,000 bags respectively on Tuesday. Expectations are that production may be lower by 40-50%. There are reports of some crop damage in Erode region. Turmeric production in 2012-13 is expected around 50 lakh bags. Production in Nizamabad is expected around 12 lakh bags. Production in 2011-12 is projected at historical high of 10.62 lakh tn. It is estimated that next year’s carryover stocks would be around 10 lakh bags. 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 is expected to trade on a mixed note today. Higher carryover stocks and weak overseas demand may pressurize prices at higher levels while reports of some damage to the crop coupled with lower output concerns and demand from stockists may support prices at lower levels.
Jeera NCDEX March Futures Turmeric NCDEX April Futures

Source: Telequote

Technical Outlook
Unit Rs/qtl Rs/qtl

Valid for Feb 27, 2013
Support 12700-12800 6130-6180 Resistance 13020-13140 6270-6320

www.angelcommodities.com

Commodities Daily Report
Wednesday| February 27, 2013

Agricultural Commodities
Kapas
After witnessing short coverings, Kapas prices continued with its upward trend and settled 1.33% higher on Monday. MCX march Cotton also settled 0.28% higher. Prices are on an uptrend as government last week decided to continue with current cotton exports policy. However, sufficient supplies pressurized prices at higher levels. Traders expect exports to cross government’s estimates of 8 mn bales. Cotton supplies since the beginning of the year in October 2012 until February 10, 2013 were down at 183.4 lakh bales, down from 189.27 lakh bales a year earlier.

Market Highlights
Unit Rs/20 kgs Rs/Bale Last 993 17850

as on Feb 26, 2013 % Change Prev. day WoW 1.33 7.24 0.28 3.06 MoM 9.30 3.06 YoY #N/A 6.50

NCDEX Kapas Apr Futures MCX Cotton Feb Futures

Source: Reuters

Domestic Production and Consumption
According to Cotton Advisory Board’s (CAB) estimates (23 Jan 2013) for 2012-13 season that commenced in October, domestic cotton production is pegged 330 lakh bales, down from the previous year’s estimates of 353 lakh bales. However, higher exports and domestic consumption can be met through revised higher opening stocks of 40 lakh bales and higher imports. 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 80 lakh bales this season, compared with 128.8 lakh bales last year.
th

International Prices
ICE Cotton Cot look A Index Unit USc/Lbs Last 80.33 81.35

as on Feb 26, 2013 % Change Prev day WoW 0.14 -2.25 0.00 0.00 MoM -0.24 0.00 YoY -12.36 -29.20

Source: Reuters

Technical Chart - Kapas

NCDEX April contract

Global Cotton Updates
ICE Cotton futures settled 0.14% higher on Monday on account of short coverings. Prices have declined for the last 3 weeks after touching a 9 month high due to lower world demand. However, expectations of good demand from China have supported prices at lower levels. There is strong demand from China. U.S. growers will harvest the smallest cotton crop in four years and notch the smallest exports in 12 years as world demand for the fiber drops, especially in China. At its annual Outlook Forum, USDA projected a crop of 14 million bales from planted acreage of 10 million acres. Plantings would be the smallest in four years and down 19 percent from last year. The crop, projected to be down 18 percent from 2012, would be the smallest since 2009. China is planning to issue more cotton import quotas to exportdependent textile mills that are struggling to protect margins as domestic prices soar due to a state stockpiling plan. However, according to USDA, the world's largest cotton grower and user, will import the smallest amount of cotton, 8 million bales, in five years in 2013/14 as it copes with huge domestic reserves.

Source: Telequote

Technical Chart - Cotton

MCX Feb contract

Outlook
Source: Telequote

Kapas/Cotton prices might trade with upward bias on expectations that China may release higher import quota which might boost imports. Also, expected lower US cotton acreage and output in 2013-14 may also support prices at lower levels.

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

valid for Feb 27, 2013 Support 960-975 17750-17940 Resistance 1000-1018 18260-18380

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