Commodities Daily Report

Wednesday| September 12, 2012

Agricultural Commodities

Content
News & Market Highlights Chana Sugar Oilseed Complex Spices Complex Kapas/Cotton

Research Team
Vedika Narvekar - Sr. Research Analyst vedika.narveker@angelbroking.com (022) 2921 2000 Extn. 6130 Anuj Choudhary - Research Associate anuj.choudhary@angelbroking.com (022) 2921 2000 Extn. 6132

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Commodities Daily Report

Wednesday| September 12, 2012

Agricultural Commodities
News in brief
Weak El Nino may set in, to last through February
El Nino, the warm water effect that disrupts weather pattern, may develop later this month but would be a weak one. It is expected to continue through December-February, according to the US Climate Prediction Centre and the International Research Institute for Climate and Society. Statistical model consensus indicates a borderline weak El Nino, though the warmth across the Pacific Ocean continued, leading to calls for an official forecast of a weak effect. Key aspects of the tropical atmosphere did not support the development of El Nino conditions In August, the US climate body said on its Web site.Due to of the lack of clear atmospheric anomaly patterns, ENSO-neutral conditions persisted during August. However, it said, there are ongoing signs of a possibly imminent transition towards El Nino in the atmosphere as well as the ocean. The Australian Bureau of Meteorology had reported in August that development of El Nino stalled in the second half of July. It also reported renewed trends consistent with early stages of El Nino. This perhaps explains why monsoon in the country, which gets impacted by El Nino conditions, played truant during June-July before exploding in August. (Source: Business Line)

Market Highlights (% change)

Last Prev. day

as on Sept 11, 2012

WoW MoM YoY

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

17853 5390 55.25 97.17 1732

0.49 0.50 -0.34 0.65 0.18

2.36 2.20 -0.65 1.96 2.30

1.43 0.97 -0.05 4.09 7.37

4.00 4.59 19.63 9.12 -6.61

Source: Reuters

Thai sugar exports may fall in 12-13 on rough weather

Sugar exports by Thailand, the worlds second-largest supplier, may fall 2.6% in due to an expected dip in output, a senior industry executive said on Tuesday. Exports may decline to 7.5 million tonne (mt) in 2012-13, compared with 7.7 mt in thecurrentyear,Kannika Vongkusolkit, research and marketing strategist at Mitr Phol Sugar Corp, told reporters on the sidelines of the Kingsman Indian Sugar Conference here. The country will likely produce 9.5 to 10mt of sugarin2012-13,downfrom 10.2 mt in the current year, due to poor rainfall, Vongkusolkit said. Global sugar output is expected to rise marginally to 180 mt in the year starting October from the previous forecast of 179.9 mt and compared with 177.6 mt in the current year, according to global research firm Kingsman. The global sugar surplus for the coming season will likely decline by5.9%fromtheinitialprojection as output falls in second-largest producer India could drop, said the research firm, as consumption is rising.
(Source: Financial Express)

Minimum days for work under NREGA may be raised to 150

AN empowered group of ministers on Tuesday agreed to raise the minimum number of days for mandatory employment under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) by 50 days for one year to provide relief to the poor in drought-affected states. It also decided to offer a 5% interest subvention on rescheduled crop loans for one year in such states, aimed at easing the financial burden on farmers already distressed by poor monsoon. Currently, the government offers guaranteed work to each rural household for 100 days a year under the MGNREGA. Farmers, whose crop loans have been rescheduled into term loans due to their inability to pay on time, pay a 12% interest. As of June 30, the total crop loans issued by banks in the six drought-hit states such as Karnataka, Maharashtra, Gujarat, Rajasthan, Punjab and Haryana stood at R60,820.41 crore. The country has witnessed an 8% deficit in rainfall so far (Source: Business Line)

Govt approves additional wheat for bulk consumers under OMSS

With the government approving tender for close to 3 lakh tonne of wheat under the Open Market Sale Scheme (OMSS) for bulk consumers last week, the scarcity of supplies for the flour millers has eased to a large extent. Under OMSS, the Food Corporation of India (FCI) has released more than 1.4 million tonne of wheat till now from its reserves during the current fiscal. An EGoM had sanctioned release of three million tonne of wheat under OMSS to bulk buyers from FCIs excess stocks. Due to scarcity of Wheat in the open market, the market price of wheat has spiked by R300 per quintal to R1,650 per quintal in key growing regions of northern India during last one month. Private traders have been asking the government to allocate more grain to private traders as FCI has stocks of more than 46 million tonne of wheat which is far above strategic reserve and buffer stocks norms. Meanwhile, the flour millers have asked for wheat exports ban after the country allowed shipment of food grains in September last year after a four year old ban. However commerce ministry official said only two million tonne had been exported since September. (Source: Financial Express)

Maharashtra sugar turnover likely to fall

Sugar production in Maharashtra is expected to take a big hit due to a 40 per cent drop in the availability of sugarcane during the 2012-13 crushing season. State cooperation minister Harshvardhan Patil said, "According to our estimates, sugarcane availability for the ensuing crushing season will be 54.5 million tonne (mt) against 77.1 mt in 2011-12, while output would fall to 6.3 mt compared to last year's 8.9 mt. This would impact the industry's turnover as it would be down to Rs 25,000 crore against last year's Rs 40,000 crore." He said the industry's tax payment to the state and the central government would decline. According to Patil, the state's opening quota is estimated to be 2.25 mt and sugar output is projected at 6.3 mt. So, by the end of the coming crushing season, the total availability of sugar for the state would be 8.55 mt. Due to inadequate sugarcane availability, Patil said the participation of sugar factories in the 2012-13 season would also fall. He said the central government should remove the 10 per cent import duty on raw sugar imports, especially when factories are keen on refining here.
(Source: Business Standard)

Ministers'group on bio-ethanol likely to meet today

The Group of Ministers (GoM) on bio-ethanol, headed by the Agriculture Minister Sharad Pawar, is scheduled to meet tomorrow to discuss increasing prices of bio-ethanol for blending with petrol and other related issues. At present, the government has fixed a provisional price of ethanol at Rs 27/litre. This is the rate at which oil marketing companies procure ethanol from sugar mills to implement the mandatory 5 per cent ethanol blending with petrol. (Source: Business Line)

New contracts to be introduced on September 10, 2012 & Premium/Discount for the same
Members are hereby informed that the amounts of Premium/Discount for differences in grades/delivery, location/grade and location/packaging cost differences which would be treated as good delivery for the new contracts to be introduced on September 10, 2012 on the Exchange. The exchange plans to launch more than two agricultural contracts this fiscal

India vegoil imports to rise to 10 mln T for in 2012/13

India's edible oil imports are likely to rise more than 4 percent to 10 million tonnes in the 2012/13 marketing year as domestic output in the world's top buyer lags rising demand, an industry official said. The estimate by Solvent Extractors Association of India Executive Director B.V. Mehta is higher than the 9.6 million tonnes that India is expected to import in the current 2011/12 marketing year that ends on October 31.
(Source: Reuters)

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Commodities Daily Report

Wednesday| September 12, 2012

Agricultural Commodities
Chana
Chana futures extended the losses for the third straight session and settled at 4% lower circuit owing to improved rains in the Chana producing regions, making the soil favorable for Rabi sowing. The spot prices also settled lower by 2.44% on Tuesday. India's monsoon rains were 8% below average as on 11 September, 2012. Monsoon has recovered across India, especially in Rajasthan, one of the major chana growing states, and may prove beneficial for the chana sowing. However, the overall fundamentals still remain supportive for the prices on account of supply tightness amid festive season demand. The Cabinet Committee on Economic Affairs approved the Minimum Support Prices (MSP) for Arhar (Tur) and Moong for 2012-13 season. The MSP for Arhar has been fixed at Rs.3850 per quintal and of Moong at Rs.4400 per quintal marking an increase of Rs.650 per quintal and Rs.900 per quintal respectively. Government released fourth advance estimates wherein it revised upward Chana output at 7.58 mn tn from 7.4 mn tonnes estimated in the third advance estimates and 8.22 mn tn in 2010-11.
th

Market Highlights
Unit Rs/qtl Rs/qtl Last 4625 4517 Prev day -2.44 -4.00

as on Sept 11, 2012 % change WoW MoM -3.32 -6.13 -3.32 -7.29 YoY 42.96 41.47

Chana Spot - NCDEX (Delhi) Chana- NCDEX Sept '12 Futures

Source: Reuters

Technical Chart - Chana

NCDEX Oct contract

Sowing progress and demand supply fundamentals

According to the Ministry of Agriculture 98.2 Lakh hectare area has been planted under Kharif pulses as on 7th September, 2012 compared to 104.4 lakh hectare (ha) same period last year. Rajasthan Agriculture Department states that, planted area under Kharif Pulses is down at 19.42 lakh hectares ha compared to 25.55 lakh ha same st period last year. (Dated 31 August, 2012). Sowing which was down by more than 55% has gained momentum after improvement in rainfall in the last one week and is now down by 24%. According to the Fourth advance estimates, Pulses output is pegged at 17.21 mn tn in 2011-12 compared with 18.24 mn tn produced in the year 2010-11. While Chana output in 2011-12 is estimated at 7.58 million tones, Tur is estimated at 2.65 million tones, Urad is estimated at 1.83 million tones, Moong is estimated at 1.71 million tones. As per the latest release, Ministry of Commerce & Industry revealed that 20.23 lakh tones of peas, 2.03 lakh tons of Chana, 4.32 lakh tons of Urad & Moong, 1.12 lakh tons of Masoor and 4.26 lakh tons of Tur has been imported by India during April11-March 12. 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) India's consumption of pulses is on the rise, while the growth in output in not consistent amid vagaries of weather, which may lead to increase in imports this year. However, rupee weakness may turn import costlier.

Source: Telequote

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

valid for Sept 12, 2012 Resistance 4575-4612

4400-4460

Outlook
Chana futures are expected to remain sideways as improved rains may cap the upside. However, festive demand couple with tight supplies may restrict the downside in the prices. In the medium term to long term, the trend remains positive as supplies may not be sufficient to meet the rising demand of the commodity. Also lower sowing of kharif pulses may support chana prices.

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Commodities Daily Report

Wednesday| September 12, 2012

Agricultural Commodities
Sugar
Sugar futures settled marginally higher by 0.09% on Tuesday as the industry body revised down its estimates on sugar output. However, spot declined by 1.05%. Indian Sugar Mills Association (ISMA) has forecast sugar production for 2012-13 season at 24 mn tn. This is about 8 per cent lower than 26 mt produced in 2011-12 season and from its initial forecast of 25 mn tn for 2012-13 season. India's monsoon rains were 31 percent above average in the week to Sept. 5, the second straight week of heavier than normal rains, reducing the threat of a prolonged drought in the south Asian country. The Indian government has provided an additional 10 days to sugar mills to sell around 200,000 tonnes of unsold non-levy sugar stocks of August. In the international markets steady harvesting in the centre-south of Brazil, the world's main growing region, has weighed on sugar prices with more supplies expected from northern hemisphere harvests in coming months. Liffe Sugar settled 0.34% lower while ICE sugar settled 0.05% higher on Tuesday.
Sugar No 5- LiffeOct'12 Futures Sugar No 11-ICE Oct '12 Futures

Market Highlights
Unit Sugar Spot- NCDEX (Kolkata) Sugar M- NCDEX Sept '12 Futures Rs/qtl Last 3650

as on Sept 11, 2012 % Change Prev. day WoW -1.05 -2.12 MoM -0.54 YoY 20.46

Rs/qtl

3472

0.09

-1.45

-1.00

26.90

Source: Reuters

International Prices
Unit $/tonne $/tonne Last 556.5 432.00

as on Sept 11, 2012 % Change Prev day WoW -0.34 0.05 0.78 2.26 MoM -4.30 -6.54 YoY -25.17 #N/A

Source: Reuters

Domestic Production and Exports

The area under sugarcane is estimated at 52.88 lakh ha for 2012-13 crop season, up from 50.63 lakh ha on same period a year ago. Despite of higher acreage, the producers body has estimated next years output lower at 25mn tn, down by 1mn tn compared to the current year. Sugar production in India the worlds second-biggest producer touched 26 million tonne since October 1, 2011. Industry body ISMA has estimated 7 mn tn stocks for the new season beginning October 01, 2012 compared to 5.5 mn tn year ago. India may exports 2.5-3 mn tn sugar in 2012-13. India will likely produce 25 million tonne of sugar in 2012-13 factoring in dry spells in biggest producer Maharashtra as well as Karnataka. With the opening stocks of 7 mn tn, domestic Sugar supplies are estimated at 32mn tn against the domestic consumption of around 22.523 mln tn for 2012-13. Thus, no curbs on exports are seen as of now.

Technical Chart - Sugar

NCDEX Oct contract

Global Sugar Updates

Brazilian cane mills produced 3 mn tn of sugar in the first half of August thanks to dry weather. Unica in its latest report stated said that total sugar output since the start of the crushing season is still down 12 percent from the same period a year ago. Brazil exported 2.06 mn tn raw sugar in August 2012, down from 2.08 mn tn exported in July. The International Sugar Organization said on Friday it expected a global sugar surplus of 5.86 million tonnes in the season running from October 2012 to September 2013, up from the prior season's surplus of 5.19 million tonnes. The wider surplus reflects expectations for a record global crop of 177.39 million tonnes, raw value, up 2.25 percent from the prior season as production in top grower Brazil rises. The ISO said the stocks/consumption ratio could rise to around 40 percent in 2012/13, from 37.6 percent in 2011/12. (Source: Reuters)

Source: Telequote

Technical Outlook
Contract Sugar Oct NCDEX Futures Unit Rs./qtl

valid for Sept 12, 2012 Support 3525-3545 Resistance 3580-3595

Outlook
Sugar prices may remain sideways as improved rains have offset the firm market sentiments led by higher festive season demand. In the medium term, although sufficient supplies may keep the upside capped, sharp downside will also be restricted on the back of emergence of fresh demand at lower levels amid series of festivals ahead.

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Commodities Daily Report

Wednesday| September 12, 2012

Agricultural Commodities
Oilseeds Soybean: After a sharp downside in the prices last week, soybean
futures bounced back in the current week on account of short coverings. NCDEX futures settled 0.24% higher on Tuesday while spot continued to decline on higher output prospects. CBOT Soybean extended its previous days fall and settled 0.96% lower on Tuesday. USDA upgraded the Good-to-Excellent condition of Soybean from 30% last week to 32% in its weekly crop progress report. The area harvested was also reported higher at 4% against 1% in the same period a year ago. In the domestic markets, as on 7 September, 2012, Oilseeds have been sown in 170 lakh hectares so far, compared with 175 lakh ha same period last year. Soybean area is higher at 106.9 lakh ha. In 2011-12 season, soybean was sown under 102.9 lakh hectares area and recorded 12.28 million tonne output, down from 12.73 mn tn in 2010-11 season. Soy meal exports fell to 10,005 tn in August, from 165,610 tn a year ago. (Source: Solvent Extractors' Association of India). Soybean exports from Brazil declined from 4.13 mn tn in July to 2.4 mn tn in the month of August. (Source: Reuters) Brazils grain Association expects the number 2 producers of soybean to produce record 81.3 mn tn in 2012-13. Planting in Brazil would commence from Sept. 15 & exports may soar to 37.5 mn tn, beating the 33.8-mn tn record in 2010/11 crop. USDA released its monthly crop report on 10 August wherein its cut U.S. 2012/13 soybean production forecast to 2.692 billion bushels, from 3.05 billion in July.
th th

Market Highlights
% Change Unit Soybean Spot- NCDEX (Indore) Soybean- NCDEX Oct '12 Futures Ref Soy oil SpotNCDEX(Indore) Ref Soyoil- NCDEX Aug '12 Futures Rs/qtl Rs/qtl Rs/10 kgs Rs/10 kgs Last 4454 3808 796.9 792.2 Prev day -0.49 0.24 -0.51 -0.25

as on Sept 11, 2012

WoW -2.24 -5.07 -0.14 -1.88

MoM -1.22 -15.52 2.44 1.64

YoY 113.72 80.19 26.50 30.15

Source: Reuters

as on Sept 11, 2012 International Prices Soybean- CBOTSept'12 Futures Soybean Oil - CBOTSept '12 Futures Unit USc/ Bushel USc/lbs Last 1697 55.31 Prev day -0.96 -1.16 WoW -4.21 -3.93 MoM 2.63 7.31
Source: Reuters

YoY 22.98 -3.47

Crude Palm Oil

% Change Unit
CPO-Bursa Malaysia Sept '12 Contract CPO-MCX- Aug '12 Futures

as on Sept 11, 2012

Last 2832 538.9

Prev day 0.28 -0.66

WoW -3.67 -3.99

MoM -1.46 -2.88

YoY -16.71 14.78

MYR/Tonne Rs/10 kg

Refined Soy Oil: NCDEX Soy Oil and MCX CPO settled lower by
0.25% and 0.66% on account of higher stocks of palm oil. Malaysia's August palm oil stocks likely climbed to their highest in nine months as still-high production offset a strong rise in exports. Stocks in the world's second largest palm oil producer most probably climbed 4.5 percent to 2.09 million tonnes. Exports of Malaysian palm oil products for September 1-10 jumped 30 percent to 460,939 tonnes from 354,614 tonnes shipped during August 1-10 Palm oil exports from Indonesia increased by 20 percent to 1.5 million tonnes in July compared to the previous month. Palm oil output is expected to be 23-25 million tonnes, and around 18 million tonnes is likely to be exported. India imported 112,611 tn of refined palm oil in July, down 9.28 percent from June. Total vegetable oil imports in July were 870,328 tn, up from 783,315 tn in the previous month (Source: Sea of India).

Source: Reuters

RM Seed
Unit RM Seed SpotNCDEX (Jaipur) RM Seed- NCDEX Sept '12 Futures Rs/100 kgs Rs/100 kgs Last 4100 4031 Prev day -4.65 -0.96

as on Sept 11, 2012 WoW -5.20 -7.69 MoM -5.33 -8.05

Source: Reuters

YoY 45.26 45.73

Technical Chart Soybean

NCDEX Oct contract

Rape/mustard Seed: Mustard seed spot as well as futures settled

lower on account of improved rains that have raised hopes of better sowing next year. Mustard output was lower in 2011-12 season. However, on the back of higher returns and improved rains, next years output is expected to be better. Rainfall deficit in Rajasthan has come down sharply due to rainfall in last 4-5 days. It will ensure higher area under rapeseed as its prices are trading near record high level. Sowing of rapeseed starts from October and north-western Rajasthan is the top producing area in the country.

Source: Telequote

Technical Outlook
Contract Soy Oil Oct NCDEX Futures Soybean NCDEX Oct Futures RM Seed NCDEX Oct Futures CPO MCX Sept Futures Unit Rs./qtl Rs./qtl Rs./qtl Rs./qtl

valid for Sept 12, 2012 Support 769-774 3690-3645 3950-4010 529-534 Resistance 782-788 3850-3890 4120-4160 543-548

Outlook
Edible oil complex is expected to trade sideways with negative bias on prospects of better soybean output and improved conditions for rabi sowing, especially, for mustard seed.

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Commodities Daily Report

Wednesday| September 12, 2012

Agricultural Commodities
Black Pepper
Pepper prices extended its previous days fall and traded on a negative note yesterday due to lack of demand from the upcountry markets. Lower demand for Indian pepper in the international markets due to huge price parity also pressurized prices. Low stocks in the domestic markets have supported prices at lower levels. Traders are buying pepper directly from the farmers on a cash and carry basis. The Spot as well as the Futures settled 0.06% and 0.085% lower on Tuesday. th According to the circular released on June 13 2012 the existing Special margin of 10% (cash) on the long side stands withdrawn on all running contracts and yet to be launched contracts in Pepper from beginning of day Friday June 15, 2012. Pepper prices in the international market are being quoted at $8,100/tonne(C&F) while Indonesia Austa is quoted at $67506800/tonne (FOB). Vietnam was offering 550GL at $6,900/tonne. Brazil was offering its pepper at $6,250/tonne for B-Asta grade. As per circular dt. 29/06/2012 issued by NCDEX, Hassan will be available as an additional delivery centre for all the yet to be launched contracts. (not applicable to the currently available contracts-till Dec 2012 expiry).

Market Highlights
% Change Unit Pepper SpotNCDEX (Kochi) Pepper- NCDEX Sept '12 Futures Rs/qtl Rs/qtl Last 41041 41400 Prev day -0.06 -0.85

as on Sept 11, 2012 WoW 0.60 0.29 MoM -3.20 -5.17 YoY 17.93 16.34

Source: Reuters

Technical Chart Black Pepper

NCDEX Oct contract

Exports
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 black pepper in 2012 are forecasted at around 1,25,000 tonnes. Exports of Pepper from Vietnam during January till June 2012 is estimated around 73000 mt 73,000 mt, higher by 4.3% in volume and 31.7% in value compared to corresponding year last year. Exports of Pepper from Brazil during January till May 2012 are estimated around 13369 mt. (Source: Peppertradeboard). Pepper imports by U.S. the largest consumer of the spice declined 14.8% in the first 2 months of the year (2012) to 8810 tn as compared to 10344 tn in the same period previous year. Imports of Pepper in the month of February declined by 16.8% to 3999 tn as compared to 4811 tn in the month of January 2012. 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. During May 2012 Brazil exported 1,705 tonnes of pepper as against 1600 tn in May 2011.

Source: Telequote

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

valid for Sept 12, 2012 Support 42100-42350 Resistance 42880-43150

Production and Arrivals

The arrivals in the spot market were reported at 6 tonnes while offtakes were 4 tonnes on Saturday. Global Pepper production in 2012 is expected to increase 7.2% to 3.20 lakh tonnes as compared to 2.98 lakh tonnes in 2011 with sharp rise of 24% in Indonesian pepper output and in Vietnam by 10%. According to latest report pepper output in Vietnam is estimated to be 1.35 lakh tonne as compared to 1.10 lakh tonne estimated early in the beginning of year (2012). 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) On the other hand production of pepper in India in 2011-12 is expected to decline further by 5% to 43 thousand tonnes as compared to 48 thousand tonnes in the last year. Production is lowest in a decade.

Outlook
Pepper prices are expected to trade sideways to in the intraday due to low demand from the upcountry markets. However, low stocks and very low arrivals may support prices at lower levels. However, prices may correct due to lower demand at higher levels in the domestic as well as international markets.

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Commodities Daily Report

Wednesday| September 12, 2012

Agricultural Commodities
Jeera
Jeera Futures traded on a positive note yesterday due to low arrivals in the spot markets as farmers are not selling at lower prices. Buyers are also said to be active at lower levels. Around 10 lakh bags are reported across India. The spot remained low due to good rains. 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. The Spot settled 0.2% lower while the Futures settled 0.42% higher on Tuesday. Production in Syria and Turkey is being reported around 17,000 tonnes and around 4,000-5,000 tonnes, lesser than expectations. Jeera prices in the international market of Indian origin are being offered at $2,800-2,850 tn (c&f) while Syria and Turkey are not offering their produce. Carryover stocks of Jeera in the domestic market is expected to be around 7-8 lakh bags as compared to 4-5 lakh bags in the last year.

Market Highlights
Unit Jeera SpotNCDEX(Unjha) Jeera- NCDEX Sept '12 Futures Rs/qtl Rs/qtl Last 14842 13880 Prev day -0.20 0.42

as on Sept 11, 2012 % Change WoW -3.52 -2.70 MoM -8.61 -13.10 YoY -3.31 -6.02

Source: Reuters

Technical Chart Jeera

NCDEX Oct contract

Production, Arrivals and Exports

Unjha markets witnessed arrivals of 3,000 bags, while off-takes stood at 3,000 bags on Tuesday. Production of Jeera in 2011-12 is expected to be around 40 lakh bags as compared to 29 lakh bags in 2010-11 (each bag weighs 55 kgs). (Source: spot market traders). According to Spices Board of India, exports of Jeera in April 2012 stood at 2,500 tonnes as compared to 2,369 tonnes in April 2011, an increase of 6%.

Outlook
Jeera prices are expected to trade sideways. Prices may find support at lower levels. Good rains in Gujarat may cap any sharp gains. In the medium term(September-October 2012) prices are likely to witness a bounce back as there are limited stocks with Syria and Turkey and crop there is 30% short as compared to last year.

Source: Telequote

Market Highlights
Prev day 0.59 -1.33

as on Sept 11, 2012 % Change

Unit Turmeric SpotNCDEX (N'zmbad) Turmeric- NCDEX Sept '12 Futures Rs/qtl Rs/qtl

Last 5492 5950

WoW 1.60 -1.62

MoM 0.83 2.52

YoY 2.76 22.73

Turmeric
Turmeric October Futures opened weak, but recovered from lower levels due to short coverings as the prices corrected sharply over the last three days. Sufficient stocks with the traders have also pressurized prices. The farmers were not selling their stocks demanding higher floor price. Rainfall in Nizamabad is 27% lower than the normal as on 5/9/2012. Turmeric has been sown in 0.54 lakh hectares in A.P as on th 5 September 2012. Sowing is also reported 30-35% lower during the sowing period. The Spot settled 0.59% higher while the Futures settled 1.33% lower on Tuesday. No fresh positions will be allowed in respect of Turmeric September 20, 2012 expiry contract from September 08, 2012 till the expiry of the contract. Only squaring up of existing positions will be allowed.

Technical Chart Turmeric

NCDEX Oct contract

Production, Arrivals and Exports

Arrivals in Erode and Nizamabad mandi stood at 7,000 bags and 1,500 bags respectively on Tuesday. Turmeric production for the year 2011-12 is projected at historical high of 90 lakh bags (1 bag= 70 kgs) compared to 69 lakh bags in 201011. Erode is expected to produce 55 lakh bags of turmeric a rise of 29% as compared to previous year. 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.

Source: Telequote

Outlook
Turmeric prices are expected to trade sideways taking cues from lower sowing figures and lower arrivals. The regulators decision to disallow creating of fresh positions in September contract has also created a fear in the minds of the traders. However, traders also expect fresh export orders in the coming days. Also, lower arrivals may support prices at lower levels. In the medium term (September) prices may take cues from the sowing figures.

Technical Outlook
Unit Jeera NCDEX Oct Futures Turmeric NCDEX Oct Futures Rs/qtl Rs/qtl

valid for Sept 12, 2012 Support 13825-13970 5510-5600 Resistance 14300-14500 5760-5810

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Commodities Daily Report

Wednesday| September 12, 2012

Agricultural Commodities
Kapas
In intraday NCDEX Kapas opened down initially but recovered in the later session and closed 0.54% up as reports of rise in china cotton imports by 48% provided support to the prices. Cotton prices declined sharply in the last few weeks as cotton advisory board in its latest meeting has made and upward revision in the end stocks estimates. Further improved rains in August and higher imports of cheaper global cotton also supported the weak market sentiments. According to the latest report by IMD, India received 9% below normal rains during June 01- August 31. However, reports of above average rains in the past few days in Gujarat, the top producer of Cotton has provided some relief to the standing cotton crop. ICE cotton Futures settled 0.98% lower on Monday as the US weekly crop report showed an upward revision in the cotton crop condition as compared to same period last year. According to the Weekly USDA report, Cotton crop condition is US is 41% good/excellent as compared to 42% a week ago and 28% a year ago. Also cotton harvesting has commenced in US, in all 4% is harvested as compared to 6% a year ago, versus 5% of 5-year average.

Market Highlights
Unit Rs/20 kgs Rs/Bale Last 1022 17530

as on Sept 11, 2012 % Change Prev. day WoW 0.54 -2.34 -0.11 -0.85 MoM -11.48 -2.56 YoY -

NCDEX Kapas Futures MCX Cotton Futures

Source: Reuters

International Prices
ICE Cotton Cotlook A Index Unit Usc/Lbs Last 74.28 81.35

as on Sept 11, 2012 % Change Prev day WoW -0.93 -0.81 0.00 0.00 MoM -1.73 0.00 YoY -34.49 -29.20

Source: Reuters

Domestic Production and Consumption

In India Cotton harvesting commences by mid September from the North Indian irrigated states like Punjab, Haryana and Rajasthan. While, in rain fed areas its starts in October. th As on 7 August, 2012, Cotton is being planted on 113.46 lakh hectares; lower by 4.1% compared to the last years 119.13 lakh hectares. However, the acreage so far is at par with its normal area of 111.8 lakh hectares. According to the latest updates by Cotton Advisory Board (CAB), Cotton production for 2011-12 seasons is revised upward to 357 lakh bales compared with 347 lakh bales estimated earlier. Also, on account of cheaper cotton available in the global markets, imports have more than double from 5 lakh bales to 12 lakh bales. On the demand front, exports increased to around 127 lakh bales from the earlier estimates of 115 lakh bales taking total cotton consumption to around 382 lakh bales. Thus, the ending stocks figure for 2011-12 season, that would end in September, has been revised upward to 28 lakh bales from the previous estimates of 25 lakh bales. However, 28 lakh bales is the lowest since 2004-05 caused by robust exports.

Technical Chart - Kapas

NCDEX April contract

Source: Telequote

Technical Chart - Cotton

MCX Oct contract

Global Cotton Updates

Global cotton prices are mainly influenced by China, US and India. China is the largest producer, consumer, and importer of Cotton, While India is the second largest producer, consumer and exporter of Cotton. US is third largest producer and a largest exporter of Cotton in the world. USDA estimated US Cotton planting for the season 2012-13 at 12.64 mln acres as compared to 14.74 mln acres last season (2011-12). Ending stocks were at 4.8 mln bales (480 pounds/bales) with Production of 17 mln bales and exports of 12.1 mln bales were pegged for the season 2012-13. China's 2012 cotton output is estimated at 6.97 million tonnes, down 4.2 percent from last year. China's cotton imports in August rose 48 percent on the year to 305,600 tonnes. Total imports in the first eight months of the year were 3.77 million tonnes, up 123 percent from the same period last year, according to the report by the China National Cotton Reserves Corp.

Source: Telequote

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

valid for Sept 12, 2012 Support 990-1005 990-1006 17200-17380 Resistance 1035-1043 1034-1042 17600-17710

Outlook
In intraday cotton futures may trade sideways as good monsoon in key growing states might put pressure on the prices but reports of China stockpiling for new season might provide support to the prices. However, if Prices in international market fall further, imports might be cheaper which would lead to higher ending stocks, which might provide resistance to the prices in short term.

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