Commodities Daily Report

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Friday | 6 Sept, 2013
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Agricultural Commodities

Content
News & Market Highlights Chana Oilseeds Edible Oils Spices Sugar Cotton Guar Complex

Research Team
Vedika Narvekar Chief Manager- Agri Commodities vedika.narvekar@angelbroking.com (022) 2921 2000 Extn. 6130 Shruti Ghanekar Research Associate shruti.ghanekar@angelbroking.com (022) 2921 2000 Extn. 6133 Anuj Choudhary Research Analyst anuj.choudhary@angelbroking.com (022) 2921 2000 Extn. 6132

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Commodities Daily Report

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Friday | 6 Sept, 2013
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Agricultural Commodities
NEWS HIGHLIGHTS
Relocation of FMC to FinMin likely soon
A nod from the Prime Ministers Office to shift the Forward Markets Commission (FMC) from the consumer affairs department to the finance ministry is just a matter of days away, though the file in this regard is yet to be signed. It is on the cards. The decision has not been taken, a government official said. Prime Minister Manmohan Singh is in St Petersburg, Russia, to take part in a two- day G- 20 Leadership Summit from (Source: Business Standard)

Market Highlights (% change)

Last Prev. day

as on Sept 05, 2013

WoW MoM YoY

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

18980 5593 66.02 108.37 1373.1

2.22 2.66 -1.57 1.06 -1.21

3.15 3.40 -0.81 -0.40 -2.82

-1.06 -1.63 8.47 1.70 5.41

9.63 7.03 18.07 13.64 -18.79

.Source: Reuters

Cotton: Limited stocks, unlimited demand UP sugar mills set to face working capital squeeze
Sugar mills in Uttar Pradesh are set to face a huge working capital squeeze in starting operations, because of sustained losses on higher cost of output and lower realisation the season ending this month. According to the Indian Sugar Mills Association (Isma), 122 operational mills, with a combined output of 7.49 million tonnes of output, had an accumulated loss of Rs. 3,500 crore during the 2012- 13 crushing season (October-September). Abinash Verma, director- general of Isma, said the major reason for the loss was the sustained rise in cane prices without proportionate increase in their realisation. The Uttar Pradesh government raised the cane prices (state advised price or SAP) during the crushing season to Rs. 280 a quintal from Rs. 240 a quintal. The increase has resulted in a proportionate uptick in manufacturing cost. This worked out to Rs. 3,600 a quintal against realisation of Rs. 3,400 a quintal. Last year, sugar mills in UP raised working capital at Rs. 3,3003,300 a quintal. Based on the average realisation of this year, 90- 95 per cent of the total income was spent on servicing debt. Hence, sugar mills will not be able to show good financial numbers this year, a base for raising working capital, said Verma. (Source: Business Standard) Cotton season in the Bhoodapady Regulated Market Committee (RMC) has been completed due to poor production. The cotton auction sale was started in Bhoodapady RMC on June 27 and the farmers from Edapady, Konganapuram, Kolathur, Bhoodapady and the surrounding areas have brought the cotton for sale. Due to poor production, the sale was completed by the first week of September. The RMC officials said that the demand is very high but due to poor production, only limited stocks arrived and were sold. Still demand for the cotton is very high. (Source:
Business Line)

India cotton exports to fall 22 pct this year as China buys less
India's cotton exports are expected to drop by a fifth this year on account of a slump in purchases by top cotton consumer China and higher domestic prices, a Reuters survey of traders and exporters found. Lower Indian exports this year could provide some respite to soft world cotton prices CTZ3 which have shed nearly 12 percent since mid-August on expectations of higher output in the upcoming season in India, the world's second-biggest cotton producer. China holds about 60 percent of world cotton stocks in state reserves. A radical plan to ditch its stockpiling programme in favour of subsidies to farmers that could lead to a long-term cut in China's imports has also hurt market sentiment.
Source: Reuters)

Allahabad HC seeks report on sugarcane dues

The bench of the Allahabad high court ( HC) here on Thursday directed Uttar Pradesh to tell the court what had been done to settle sugarcane dues of 2,600 crore. The HC has directed the principal secretary of sugar industry and cane development, Rahul Bhatnagar, to give an affidavit by September 17. It asked for a detailed chart on the dues, interest payments and cane society commission. The orders were passed on a public interest suit by Rashtriya Kisan Mazdoor Sangathan president V M Singh seeking payment of dues. The case would be heard in the first week of October. On July 4, the HC had directed the state to ensure the settlement of dues in six weeks, giving priority to flood- affected districts.
(Source: Business Standard)

U.S. stuck with unwanted sugar as processors default

Processors have forfeited about 85,000 tons of sugar to the government, the U.S. Department of Agriculture (USDA) said on Thursday, paying back government-back loans with the sweetener for the first time since 2004. The USDA estimate represents about $35 million worth of sugar was used to repay the debt instead of cash, and leaves the government holding the unwanted product, despite last-minute efforts last week to sell the excess to ethanol producers. The news will cast new doubts about government efforts, which have cost almost $90 million since July, to deal with a sugar glut that has pushed domestic prices down over 30 percent since last year. It also comes as lawmakers debate a new farm bill, putting the sugar program under scrutiny from food manufacturers and users, who say it distorts supplies and drives up prices. (Source: Reuters)

Oilmeal exports double in Aug on weak rupee, better demand

Oilmeal exports more than doubled to 3,07,733 tonnes in August against 1,25,780 tonnes registered in the same period last year. This was largely due to fall in prices on the back of sharp rupee depreciation and better demand from the European countries. Rupee depreciated five per cent to 62.81 versus dollar in August against 59.76 registered in July. Soyabean and rapeseed meal prices were down nine per cent each at $520 and $232 a tonne against $571 and $254 a tonne in July, according to data released by the Solvent Extractors Association. Shipments to South Korea doubled to 90,275 tonnes against 41,426 tonnes in the same period last year, while that to Iran was higher at 1,08,617 tonnes (4,218 tonnes). The European countries and the US bought oilmeal extract for the first time in the last one year. They purchased 45,101 tonnes and 202 tonnes of soyabean meal. France was another surprise buyer of 23,925 tonnes of soyabean extract. (Source: Business Line)

Guargum exports fall 57%

Owing to a more than 57% fall in exports of Guargum, mostly used by USbased oil exploration companies, Indias agricultural goods exports saw moderate growth of around 6% in April-June 2013. According to the Agricultural and Processed Food Products Exports Development Authority (APEDA) data, while exports of Basmati rice, meat, wheat and fresh vegetables and fruits saw a sharp rise in the first quarter, the slowdown in guargum exports may adversely impact overall agri exports, which were more than R1.2 lakh crore in 2012-13. India exported guragum worth more than R21,000 crore last fiscal. In the first quarter of the current year, exports have fallen to R4,702 crore from the R11,000 crore achieved during the same period last year. (Source: Financial Express)

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Commodities Daily Report

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Friday | 6 Sept, 2013
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Agricultural Commodities
Chana
Chana futures opened lower extending previous days losses. However, prices recovered from lower levels on account of short coverings. Weak demand and higher supplies have pressurized prices. Also prospects of higher sowing amid good rains in the chana growing regions added to the downside pressure. The spot settled 0.34% lower while the Futures settled 0.1% higher on Thursday. As per a circular by NCDEX dated August 21 2013, Special Margin of 5% on the Short side imposed earlier has been withdrawn in Chana with effect from beginning of day Friday, August 23, 2013. As per the data released by the ministry of Agriculture, area under kharif th Pulses stood at 101.81 lakh ha as on 30 August 2013, up by 15.29 percent compared to the corresponding period last year. Pulses sowing in Gujarat as on 30 August was seen at 4.49 la ha, up by 21.35% compared to the same period last year. Also, sowing of kharif pulses in Rajasthan was seen 22.68 lakh ha, up by 20% compared to the corresponding period last year.
th

Market Highlights
Unit Chana Spot - NCDEX Chana- NCDEX Sept'13 Fut
`/qtl `/qtl

as on Sept 05, 2013 % change Last 3150 3097 Prev day -0.34 0.10 WoW -3.08 1.71 MoM 7.48 10.88
Source: Reuters

YoY -34.78 -34.90

Spread Matrix
Closing 3150 3097 3169 3209 20-Sep-13 -53 0 -

as on Sept 05, 2013 18-Oct-13 19 72 0 20-Nov-13 59 112 40 0 as on Sept 03, 2013 Stocks as on 2 Sept 47361 53212 11011 111584
nd

Spot 20-Sep-13 18-Oct-13 20-Nov-13

Stock Position at NCDEX warehouse

Location Bikaner Delhi Indore Total Stocks as on 3 Sept 46499 53212 10981 110692
rd

Demand supply scenario

After producing record 18.45 mn tn Pulses, India is set to produce record crop for second year in row in 2013-14 as sowing during the ongoing kharif season is excellent propelled by good rains. Also, favorable soil moisture level has made ground for bumper Rabi harvest too. In value terms, India imported $2.3 billion of pulses in 2012-13, almost 28% higher over $1.85 billion in the previous year. However, imports may drop in 2013-14 season on expectations of higher output. Kharif Pulses witnessed a marginal decline in the output which was offset by a considerable rise in Rabi output, especially Chana during 2012-13. Higher returns earned in 2012, coupled with a hike in minimum support prices (MSP), helped expand overall chana acreage in 2012-13 seasons. Chana sowing in 2012-13 was 5.65% higher at 95.17 lakh ha compared to previous year. As per the estimates, Chana output was pegged at a record 8.8 mn tn compared with its third advance estimates of 8.49 million tonnes and a previous record of 8.2 mn tn in 2010-11.

Qty in Process 160 30 70 260

Qty in Process 160 30 0 190

309

111

938

1358

Technical Chart - Chana

NCDEX September contract

Source: Telequote

Outlook
Chana may trade on a mixed note today. Adequate stock positions, higher kharif pulses sowing and expectations of a better rabi sowing due to good rains in the chana producing regions may pressurize prices. However, expectations of pickup in demand ahead of the upcoming festive season may support prices at lower levels.

Technical Levels
Contract Chana Sept Futures Unit `/qtl Support

valid for Sept 06, 2013 Resistance 3130-3165

3030-3065

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Commodities Daily Report

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Friday | 6 Sept, 2013
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Agricultural Commodities
Soybean
Soybean futures opened sharply lower tracking weak international markets coupled with a strong Rupee. However, prices recovered from lower levels on account of short coverings and settled 0.66% lower on Thursday. Expectations of new season arrivals to commence soon have also added to the downside pressure. In the domestic markets, although area under soybean this season is at record level, concerns over output remain due to excessive rains which have obstructed growth of the crop. As per data released by the ministry of Agriculture, area under oilseeds was recorded at 188.16 la th ha on 30 Aug, 2013, an increase of 12.59 percent as compared to the corresponding period last year. Soybean sowing in Maharashtra is up by 21.4% at 38.99 la ha as on 2 September while, in MP, area under soybean is up 9.5% at 63.66 la ha. International Markets CBOT Soybean recovered from lower levels and settled 1.81% on Thursday as warm and dry weather in the US Midwest has raised fears over yield losses in soybean which is in the pod filling stage. Export demand further supported and upside in the prices. However, forecast of favorable and wet weather in the coming days capped the upside. The USDA crop progress report downgraded the good-to-excellent rating to 54% from 58% last week and 30% a year ago. USDA reported that 92% of the crop is setting pods vs. 98% a year ago. The USDA monthly crop report revised the acreage to 77.2 mn acres from its earlier estimates of 77.7 mn acres. Harvest estimates have also been trimmed to 3.255 bn bsh from the earlier estimates of 3.42 bn bsh. Forecast of 2013-14 ending stocks have also been slashed from 295 mn bsh in July to 220 mn bsh. According to Agro consult, a local analyst, Brazil new soy crop is seen at a record 88.4 mn tn in 2013/14 as against 81.46 mn tn last year.
Spot 18-Oct-13 20-Nov-13 20-Dec-13 3535 3537 3554 0 2 0 19 17 0 as on Sept 05, 2013 18-Oct-13 -63.15 48 0 20-Nov-13 -27.15 84 36 0
nd

Market Highlights

as on Sept 05, 2013 % Change Prev day WoW -0.89 -7.49 -0.66 1.81 -0.24 0.51 -0.94 -0.49 -0.06 1.99

Unit Soybean Spot- NCDEX Soybean- NCDEX Oct '13 Fut Soybean-CBOT Sept'13 Fut RM Seed Spot- NCDEX RM Seed- NCDEX Sept'13 Fut
`/qtl `/qtl

Last 3568 3535 1423 3691 3580

MoM 5.22 20.61 7.01 -0.06 11.53

YoY -21.91 -11.72 -18.59 -17.05 -17.55

USc/Bsh
`/qtl `/qtl

Source: Reuters

Soybean Spread Matrix

Closing 3568 18-Oct-13 -33 20-Nov-13 -31

as on Sept 05, 2013 20-Dec-13 -14

Mustard Seed Spread Matrix

Spot 20-Sep-13 18-Oct-13 20-Nov-13 Closing 3691.15 3580 3628 3664 20-Sep-13 -111.15 0 -

RM Seed stock Position at NCDEX warehouse

Location Alwar Bharatpur Bikaner Hapur Jaipur Kota Sriganganagar Total Stocks as on 3rd Sept 1776 251 2143 644 43048 781 432 49075 Qty in Process 0 0 0 0 60 0 0 60 Stocks as on 2nd Sept 1776 251 2484 644 45111 1180 524 51970

as on Sept 03, 2013 Qty in Process 0 0 0 0 60 0 0 60 NCDEX October contract

Source:Telequote

Outlook
Soybean prices may trade on a mixed note today. Expectations of commencement of arrivals of early sown soy crop and appreciation in the Rupee may pressurize prices. However, weather concerns in the domestic as well as the US may limit the downside and support prices.

Rape/mustard Seed
After declining sharply in the previous session, Mustard seed recovered from lower levels on account of short coverings and settled 0.51% higher on Thursday. Good demand for mustard seed amid lean supply period of other oilseeds have pushed up the prices over the past few weeks. However, abundant supplies due to a bumper output have capped sharp gains. However,. Agriculture ministry in its fourth advance estimates, pegged mustard output at 7.82 mn tn, up by 18.4% compared to 2011-12 season.

Technical Chart Soybean

Outlook
Mustard seed futures may trade on a mixed note. Good demand due to lean supply period of other oilseeds may continue to support prices. However, ample supplies as well as weak oilseeds may cap sharp gains and pressurize prices at higher levels. prospects of a better sowing in the upcoming season may also pressurize prices.

Technical Levels
Contract Soybean NCDEX Oct Futures RM Seed NCDEX Sept Futures Unit `/qtl `/qtl

valid for Sept 06, 2013 Support 3450-3490 3500-3540 Resistance 3580-3620 3615-3650

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Commodities Daily Report

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Friday | 6 Sept, 2013
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Agricultural Commodities
Refined Soy Oil
Ref soy oil futures corrected on Thursday and settled 0.67% lower on account of appreciation in the Rupee. Prices also declined on expectations arrivals of new season soy crop to commence soon which would ease supplies in the coming weeks. However, festive demand limited the downside and supported prices at lower levels. India meet 50-55 percent of its edible consumption through imports and thus rupee factor is a major determinant of edible oil prices. As per the data released by the Solvent Extractors' Association of India Imports of vegetable oils, including non-edible oils declined 6.13% to 889,493 tn in July. Monthly soy oil imports rose 69% as local supplies are almost before the soybean crop enters the markets. Stockpiles of edible oil at ports on Aug 1 stood at 610,000 tn, the trade body said, higher than 695,000 tn on July 1. Stocks were still on the higher side despite the decline in monthly imports.

Market Highlights
% Change Unit `/10 kg `/10 kg USc/ Bushel MYR/Tonne `/10 kg Last 697.75 697.25 43.19 2400 547.80 Prev day -0.46 -0.67 -0.85 0.04 -1.32

as on Sept 05, 2013

Ref Soy oil SpotNCDEX Ref Soy oil- NCDEX Sept '13 Fut Soybean Oil- CBOTSept'13 Fut
CPO-Bursa Malaysia Sept '13 Fut CPO-MCX- Aug '13 Futures

WoW -2.83 -2.63 -1.35 -1.80 -4.33

MoM 3.89 5.21 1.10 3.90 10.24

YoY -13.07 -13.90 -24.70 -16.90 -1.51

Source: Reuters

Refined Soy Oil Spread Matrix

Spot 20-Sep-13 18-Oct-13 20-Nov-13 Closing 697.75 697.25 681.75 677.65 20-Sep-13 -0.5 0 18-Oct-13 -16 -15.5 0 -

as on Sept 05, 2013 20-Nov-13 -20.1 -19.6 -4.1 0 as on Sept 05, 2013

Outlook
Soy oil may trade on a mixed note with a negative bias. Appreciation in the Rupee, coupled with expectations of arrivals of the early soy crop and comfortable stocks of imported edible may pressurize prices. However, festive demand may support prices at lower levels.

Crude Palm Oil

MCX CPO Futures continued to decline and settled 1.327% lower on Thursday on account of appreciation in the Rupee. Prices on the KLCE settled marginally higher by 0.04% due to short coverings. However, festive demand supported prices at lower levels. Malaysian palm oil futures inched up earlier this week on expectations that healthy exports will persist into September coupled with a weak Ringgit boosting export hopes. Prices on the KLCE had earlier declined to the lowest level this year and have spurred export demand for most consumed cooking oil. Also, an increase in the output is expected due to seasonally higher yield period, which may cap sharp upside and pressurize prices. Exports of Malaysian palm oil products in August increased 7.5% to 1,511,755 tons tonnes from 1,406,935 tonnes shipped in July. Malaysia has set the export tax for Palm oil at 4.5% for September, unchanged since March. According to Malaysian Palm oil Board, exports increased 0.53% in July against June, while end stocks increased 1%. Exports increased due to Ramadan demand. India's refined palm oil imports declined 27.8% in July to 213,853 tn from 296, 230 tn in June as a weak Rupee made imports expensive.

CPO Spread Matrix

31-Aug-13 30-Sep-13 31-Oct-13 Closing 547.8 542.4 540.3 31-Aug-13 0 30-Sep-13 -5.4 0 -

31-Oct-13 -7.5 -2.1 0

Technical Chart Ref Soy Oil

NCDEX September contract

Technical Chart Crude Palm Oil

MCX Sept contract

Source: Telequote

Outlook
CPO futures may trade on a mixed note with a negative bias today on expectations of appreciation in the Rupee. However, sentiments for Malaysian palm oil futures remain positive on hopes of healthy exports to continue in the month of September thereby keeping stock levels lower.

Technical Outlook
Contract Soy Oil Sept NCDEX Futures CPO MCX Sept Futures Unit `/qtl `/qtl

valid for Sept 06, 2013 Support 688-692 538-543 Resistance 702-706 553-557

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Commodities Daily Report

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Friday | 6 Sept, 2013
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Agricultural Commodities
Spices
Jeera
Jeera opened lower extending previous days losses. However, prices recovered towards the end of the day as escalated tensions in Syria have boosted export demand, thus supporting prices and settled 0.05% higher. However, expectations of higher sowing in the coming season have capped sharp gains. According to IBIS, India exported 9462.64 tn of jeera in June. The major destinations were UAE, Nepal, Vietnam & USA. 1% Jeera of Indian origin Singapore is being offered at $2,100/tn (FOB Mum) while Europe at $2,300/tn (CNF). (Source: Agriwatch) In the global markets, there is a supply crunch due to the ongoing geopolitical tensions in Syria and Turkey, which has raised supply concerns from these two major exporting countries. Export orders are diverted to India. Production is also expected to decline in Syria and Turkey.

Market Highlights
Unit `/qtl `/qtl `/qtl `/qtl Last 13828 13723 5168 5140 Prev day -0.25 0.05 0.00 1.10

as on Sept 05, 2013 % Change WoW 1.12 2.50 1.29 3.13 MoM 2.09 5.11 -2.48 9.18 YoY -8.34 -1.29 -5.55 -14.39

Jeera Spot- NCDEX Jeera- NCDEX July '13 Sept Turmeric Spot- NCDEX Turmeric- NCDEX Sept '13 Fut

Source: Reuters

Jeera Spread Matrix

Spot 20-Sep-13 18-Oct-13 20-Nov-13 Closing 13827.5 13722.5 13902.5 14102.5 20-Sep-13 -105 0 18-Oct-13 75 180 0 -

as on Sept 05, 2013 20-Nov-13 275 380 200 0 as on Sept 054, 2013 20-Sep-13 -28.45 0 18-Oct-13 95.55 124 0 20-Nov-13 203.55 232 108 0 as on Sept 03, 2013 Stocks as on Qty in 2nd Sept Process 1382 2637 4019 8546 NCDEX Sept contract 9 121 130 0

Arrivals production and Exports

Arrivals in Unjha were reported at 9,000 bags on Thursday. Exports of Jeera in 2012 - 2013 stood at 79,900 tn, an increase of 75%. (Source:
Spices Board)

Turmeric Spread Matrix

Spot 20-Sep-13 18-Oct-13 20-Nov-13 Closing 5168.45 5140 5264 5372

Production of Jeera in 2012-13 is expected around 40-45 lakh bags (55 kgs each), marginally higher than 40 lakh bags last year. Carryover stocks from 2011-12 harvest were around 8-9 lakh bags.

Outlook
Jeera futures may trade on a mixed note. Tensions in Syria, coupled with good overseas as well as domestic demand may support prices. However, prospects of higher sowing in the coming season may pressurize prices. Overall trend remains positive for Jeera due rising tensions in Syria, one of the major suppliers of this spice.

Stock Position at NCDEX warehouse

Location Jeera Turmeric Jodhpur Unjha Total Nizamabad Stocks as on 3rd Sept 1388 2640 4028 8546 Qty in Process 0 130 130 0

Turmeric
After declining for two consecutive sessions, Turmeric futures recovered from lower levels on account of short coverings and settled 1.1% higher on Thursday. Prices decline on account of huge carryover stocks coupled with good sowing amid favorable weather conditions in the turmeric growing regions. However, fresh as well as domestic demand limited the downside.

Technical Chart Jeera

Production, Arrivals and Exports

Nizamabad and Erode remained closed on Thursday on account of Amavasya holiday. Sowing of Turmeric in AP is reported at 0.51 lakh th ha as on 4 September, as against 0.54 lakh ha last year and a normal sowing of 0.64 lakh ha. Production in 2012-13 is reported around 45 lakh bags, lower by 4050%. It is estimated that current years carryover stocks would be around 10 lakh bags. (1 bag= 75 kgs). Exports for 2012-13 stood at 80,050 tn, marginally higher than 79,500 tn last year. (Source: Spices Board) Outlook Turmeric futures may trade on a mixed note today. Fresh export as well as festive demand may support prices. However, huge carryover stocks coupled with favorable climate may cap sharp gains and pressurize prices at higher levels.

Technical Chart Turmeric

NCDEX Sept contract

Technical Outlook
Jeera NCDEX Sept Futures Turmeric NCDEX Sept Futures Unit `/qtl `/qtl

Valid for Sept 06, 2013

Support 13530-13620 5020-5080 Resistance 13830-13920 5190-5240

Source: Telequote

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Commodities Daily Report

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Friday | 6 Sept, 2013
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Agricultural Commodities
Sugar
Sugar futures traded on a mixed note with a negative bias and settled 0.17% lower on Thursday on account of ample supplies coupled with selling pressure from the mills and expectations of a higher output. However, a pickup in demand ahead of the festive season limited the downside and supported prices in the physical markets. An increase in the import duty to curb the inflows coupled with export demand on the back of a weak Rupee also supported prices at lower levels. The Food Minister said that his ministry has moved a cabinet proposal to allow state governments to hike prices of sugar for PDS. Good monsoon conditions in Maharashtra and Karnataka has led to expectations of recovery in the cane yield, keeping prices under pressure. According to the Ministry of Agriculture, Sugarcane has been planted in th 48.74 la ha as on 30 Aug 2013 as compared to 50.06 la ha last year as drought affected Maharashtra and Karnataka have reported lower area. Based on satellite images for June and field surveys carried out by ISMA (Indian Sugar Mills Association), total sugarcane acreage available for crushing in the sugar season 2013-14 will be about 51.50 lakh hectares, which is about 1.52% less than 52.30 lakh hectares last year. (Source: ET)

Market Highlights
Unit Sugar SpotNCDEX Sugar M- NCDEX Sept '13 Fut Sugar No 5- LiffeOct'13 Fut Sugar No 11-ICE October '13 Fut `/qtl 2997 `/qtl 484.9 $/tonne 366.89 $/tonne 0.79 1.00 -0.17 Last 3031

as on Sept 05, 2013 % Change Prev. day WoW 0.20 -0.43 -0.07 1.72 0.86 MoM YoY -0.64 -16.45 -0.46 -0.06 -0.30 -13.95 -12.19 -13.15

Source: Reuters

Sugar Spread Matrix

Spot 20-Sep-13 18-Oct-13 20-Nov-13 Closing 3031.45 2997 3012 3016 20-Sep-13 -34.45 0 18-Oct-13 -19.45 15 0 -

as on Sept 05,2013 20-Nov-13 -15.45 19 4 0

Domestic Production and Exports

After producing surplus sugar in the current season, sugar output is expected to decline in 2013-14 season on account of lower plantings. However, good monsoon has curbed some losses. According to the preliminary estimate of an industry body, Production is estimated to be 237 lakh tonne for 2013-14 season as compared to 250 lakh tonnes in 2012-13. According to trade body, with a domestic consumption of 235 lakh tonne and an expected production of 237 lakh tonne, the year 2013-14 will be a consecutive fourth year of surplus production for India. ISMA has estimated that the opening balance as on October 1, 2013 (for the new season 2013-14), will be around 80 lakh tonne, which is about 20 lakh tonne more than the normal opening balance.

Stock Position at NCDEX warehouse

Location Delhi Kolhapur Sangli Solapur Total Stocks as on 3rd Sept 449 3874 0 923 5246 Qty in Process 0 0 0 0 0 Stocks as 2 Sept 449 5452 0 923 6824
nd

as on Sept 03, 2013 Qty in Process 0 0 0 0 0

Technical Chart - Sugar

NCDEX Sept contract

Global Sugar Updates

LIFFE as well as ICE Sugar settled 1% and 0.79% higher respectively on Thursday as rains and cold weather in Brazil have raised fears of frost and crop damage. However, ample supplies due to higher crushing in Brazil have capped sharp gains. The ISO has estimated sugar surplus to fall to 4.5 mn tn in 2013/14 as against 10.3 mn tn last year. Brazil's main cane region produced 2.91 mn tn of sugar in the first half of August, up 15% from the 2.53 mn tn produced in the second half of July. Prices, in the long term have declined on account of abundant supplies from Brazil. According to UNICA, Brazilian mills have produced 16.749 mn tn of sugar from the start of the cane season on April 1, up 9.3 percent from a year ago. According to Datagro, Centre-South output for 2013/14 is seen at 34.18 mn tn against 34.09 mn tn last year.
Source: Telequote

Outlook
Sugar is expected to trade on a mixed note. Ample supplies, selling by the mills and expectations of a sugar surplus may pressurize prices. However, festive demand coupled with an appreciation in the Rupee is expected to support prices as this may boost export sales. Demand in the physical markets may also tend support to the prices at lower levels.

Technical Outlook
Contract Sugar Sept NCDEX Futures Unit `/qtl

valid for Sept 06, 2013 Support 2987-2992 Resistance 3001-3005

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Commodities Daily Report

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Friday | 6 Sept, 2013
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Agricultural Commodities
Kapas
NCDEX Kapas as well as MCX Cotton Futures continued to decline on Thursday tracking a strong Rupee and settled 1.01% and 2.82% lower respectively. However, demand from millers, as well as yarn exports limited the downside. Expectations of delay in harvesting by around 15 days due to heavy rains also supported prices. The government has allowed the CCI to export more cotton in the current season. Ministry of Agriculture, in its fourth Advance estimates of Food grain production wherein it pegged Cotton output at 34 million bales (1 bale= 170 kg) in 2012-13, lower than the record 35.2 million bales in the previous year. With the cotton season nearing its end, arrivals have declined considerably. According to CCI, Cotton arrivals since the beginning of the th season (Oct 2012- Sep 2013) till 14 July is reported at 331.15, down 1.48 percent compared to same period last year.

Market Highlights
Unit `20 kgs `/Bale USc/Lbs Last 1027 21690 82.4 88.75

as on Sept 05, 2013 % Change Prev. day WoW -1.01 -0.24 -2.82 -3.86 -0.52 -1.44 0.00 -0.89 MoM YoY -0.24 #N/A 7.22 24.01 -3.51 10.03 -2.04
Source: Reuters

NCDEX Kapas Apr Fut MCX Cotton Aug Fut ICE Cotton Oct 13 Cot look A Index

3.92

Cotton Spread Matrix

Closing 31-Oct-13 29-Nov-13 31-Dec-13 21690 20730 20590 31-Oct-13 0 -

as on Sept 05, 2013 29-Nov-13 31-Dec-13 -960 0 -1100 -140 0

Sowing Progress
As per the ministry of agriculture, cotton sowing was reported at 111.65 th la ha on 30 Aug 2013 as against 112.83 la ha last year. In Gujarat, cotton was sown on 26.78 la ha as on 26 August 2013, up by 14.3% compared to the same period last year. In Rajasthan, it was done th on 3 la ha as on 27 August 2013 as against 4.53 la ha last year. In AP, th cotton sowing was undertaken on 19.9 la ha as on 28 August 2013 as against 21.17 la ha last year.
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Technical Chart - Kapas

NCDEX April contract

Domestic Production and Consumption

Cotton Advisory Board (CAB) in its latest meet dated 17 April 2013 has projected cotton crop at 34 mn bales for 2012-13 season compared to the previous estimates of 33 mn bales. Mill consumption is expected to go up from 22.3 mn bales last year to 23.5 mn bales. Exports are estimated at 8.1 mn bales while imports are estimated 2.5 mn bales. However, Cotton Association of Indias estimates differ from that of the CAB which pegs cotton output for 201213 at 35.2 mn bales as on May 31 down 6% compared with 37.3 mn bales in 2011-12.
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Technical Chart - Cotton

MCX Oct contract

Global Cotton Updates

ICE cotton futures traded on a negative note and settled 0.52% lower on Thursday on account of long liquidation coupled with subdued mill demand. Also concerns from China due to cancellation of some export orders have pressurized prices. The USDA monthly report lowered US cotton output forecast to 13.05 million bales, the lowest in four years. The USDA weekly crop progress report rated good/excellent condition at 47% against 46% last week and reduced the poor/very poor at 20% against 23% last week.
Source: Telequote

ICAC has increased projections for global production and endings stocks for the 2013/14 crop year. As per USDA acreage report, the estimate for U.S. cotton planted acreage is down 17% from 2012, but is up from March 2013 estimates.

Outlook
Cotton futures may trade on a negative note on account of weak global prices coupled with Rupee appreciation. However, delay in harvest and demand from millers as well as yarn exporters may support prices.

Technical Outlook
Contract Kapas NCDEX April 14 Fut Cotton MCX Oct Futures Unit `/20 kgs `/bale

valid for Sept 06, 2013 Support 1012-1020 21300-21500 Resistance 1034-1042 21900-22100

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Commodities Daily Report

`
Friday | 6 Sept, 2013
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Agricultural Commodities
Guar Complex
Guar complex prices traded on a bullish note on Thursday and hit the upper circuit filter as farmers are unwilling to sell their stocks expecting further increase. Guar seed as well as guar gum settled 4% and higher. Guar complex, which saw a significant slump in the prices since the relaunch of the contract in May 2013, have shown signs of recovery in the last three weeks. Excessive rains (above 20% of the LPA in the week ended 30 August) may have an adverse impact on the yield. Supplies have declined in the last 2-3 weeks as farmers are not liquidating their stocks at lower levels. All these factors along with weakness in the Indian rupee supported an upside movement in the guar complex. Huge stocks, higher acreage and expected higher production in the new season beginning October 2013 have exerted downside pressure on the guar prices since past 2-3 months. According to sources, carry forward stocks are higher and despite of this farmers have increased acreage in Rajasthan amid favorable monsoon this season.
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Market Highlights
Unit Guar Seed SpotNCDEX Guar Seed- NCDEX Oct 13 Fut Guar Gum SpotNCDEX Guar Gum- NCDEX Oct 13 Fut `/qtl 6730 `/qtl 23171 `/qtl 18410 `/qtl 4.01 11.42 4.02 Last Prev day 8282 5.68

as on Sept 05, 2013 % change WoW 23.61 24.40 29.20 23.39 MoM 47.89 56.15 50.06 52.40 YoY #N/A #N/A #N/A #N/A

Source: Reuters

NCDEX Guarseed Spread Matrix

Spot 18-Oct-13 20-Nov-13 20-Dec-13 Closing 8281.8 6730 6410 6360 18-Oct-13 -1551.8 0 -

as on Sept 05, 2013 20-Nov-13 -1871.8 -320 0 20-Dec-13 -1921.8 -370 -50 0 as on Sept 05, 2013 20-Nov-13 -5581 -820 0 20-Dec-13 -5411 -650 170 0 as on Sept 03, 2013 Stocks as on 2nd Sept 50 52 20 Qty in Process 0 0 0

Monsoon and Sowing

North- west India, the largest guar growing belt has received 20 percent th above average rains since the beginning of the monsoon season till 30 August. During the last week, the rains were 47 percent above the long period average. According to Rajasthan Farm Department, Guar seed acreage as on 27 August, 2013 stood at 34.3 lakh hectares compared with 26.58 lakh hectares sown during the same period last year.
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NCDEX Guar gum Spread Matrix

Spot 18-Oct-13 20-Nov-13 20-Dec-13 Closing 23171 18410 17590 17760 18-Oct-13 -4761 0 -

Guar seed area increased significantly last year. With favorable monsoon and with attractive returns, acreage remained higher this season too.

Stock Position at NCDEX warehouse

Location Deesa Bikaner Sriganganagar Stocks as on 3rd Sept 50 52 20 Qty in Process 0 0 0

Production and Exports

According to Rajasthan Farm Departments third advance estimates, Guar seed production stood at 20.23 lakh tonnes in 2012-13. Although production is higher compared to the previous year, but still it is much below the initial expectations on account of erratic monsoon last year. In the coming season, higher sowing along with timely rains may boost guar production across India. However, if rains turn truant in the major guar growing areas, then this may adversely impact output. Exports which touched record 7.07 lakh tonnes in the FY 2011-12, declined in the FY 2012-13 as US, the largest importer of Guar gum has stocked huge inventories. However, Fuelled by demand in China and the US, guar gum export from India in April-May rose nearly 12 per cent but realization fell 57 per cent due to lower prices. (Source: Business standard)

Technical Chart - Guar Seed

NCDEX October contract

Outlook
Guar seed as well as guar gum are expected to continue to trade higher today as overall sentiments remain positive. Prices may continue to gain on expectations that the prolonged excessive rains if continue, may hamper the guar crop yield. Also farmers are also holding back their stocks expecting better realization in the coming days. However, profit taking may be seen at higher levels, capping sharp gains.

Technical Chart - Guar Gum

NCDEX October contract

Source: Telequote

Technical Outlook
Contract Guar Seed Oct (NCDEX) Guar Seed Oct (MCX) Guar Gum Oct (NCDEX) Guar Gum Oct (MCX) Unit `/qtl `/qtl `/qtl `/qtl

valid for Sept 06, 2013 Support 6570-6650 6500-6580 18070-18250 18150-18320 Resistance 6800-6880 6730-6800 18600-18770 18650-18800

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