Commodities Daily Report

Monday| September 3, 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

Monday| September 3, 2012

Agricultural Commodities
News in brief
Law to tighten cotton trade data on anvil
A law to strengthen statistical data on cotton trade is in the offing, said V. Srinivas, Joint Secretary, Union Textiles Ministry. The data for policy making should be accurate or near. There is consensus on statistical strengthening of cotton trade data across governments, industry and trade, he said. Better data collection is important because right now there are differences in the production data presented by States, production data assessed by the Cotton Advisory Board with regard to consumption and stock, thus making it difficult for the Ministry to coordinate and identify on real-time basis, the actual position with data available. A Cotton Distribution Bill with monthly collection of data in public domain will therefore be highly beneficial, he said. Several countries have a weekly collection of data for publication. But considering the size of our country and the data available, monthly collection should be good enough, he said. Reverting to contract defaults, Srinivas said that the International Cotton Advisory Committee has reported a sharp increase in contract defaults in 2010-11 at 10 per cent compared with 2 per cent in normal years. Significant defaults contribute to uncertainty. By May 2011, textile mills defaulted on high value cotton contract with traders in anticipation of cheap cotton being available in the near future. There is therefore a need for further analytical work in this regard, the Joint Secretary said. (Source: Business Line)

Market Highlights (% change)

Last Prev. day

as on Aug 31, 2012

WoW MoM YoY

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

17542 5315 55.52 96.47 1684.60

0.29 0.52 -0.27 0.48 4.25

-1.73 -1.85 0.05 0.33 0.89

2.32 2.22 0.16 7.45 4.01

8.64 9.82 21.25 8.63 -7.87

Source: Reuters

Protesters end blockade of key Brazil grains highways ALLL3.SA RTRS

Grains trucks in Brazil's key soy and corn state Mato Grosso resumed their journeys to rail and seaport terminals after indigenous protesters lifted a blockade on two key highways, transport police and a grains shipment company said on Friday. "The traffic is quite intense now. There were a lot of vehicles waiting, mostly carrying grains," federal highway policewoman Carla Santana told Reuters. worker at the America Latina Logistica rail terminal in Alto Arraguaia said the pace of grains deliveries had picked up on Friday. The worker, who asked not to be named as he was not authorized to speak to the media, said the impact of the roadblocks was minimal as the terminal had continued to load train wagons with stocks from its warehouses. Brazilian daily newspaper O Estado de Sao Paulo said the indigenous protesters decided to lift the blockade after government officials agreed to meet with them in Brasilia to hear their complaint. They are demanding the repeal of a recent modification to a law that facilitates construction works such as hydroelectric dams inside indigenous reserves. (Source: Reuters)

Potato prices decline in Bengal

After ruling firm for almost five months starting February this year, potato prices in West Bengal is on a declining trend. The State Governments restriction on sale of potatoes to other States effective August 1, coupled with a pick up in the release of the tuber from cold storages across the State has helped bring down prices. The rise in prices of the tuber during the first few months of this year was primarily on account of lower production. Potato production dropped to about 85 lakh tonne in 2011-12, against 95 lakh tonne last year. Farmers were also holding their stock in anticipation of further rise in prices. This led to 3-4 per cent lower release from cold storage as on end June, De said. However, now with the release of potatoes picking up, prices have started inching down, he added. Cold storages have released close to 47-48 per cent of total potatoes stored as on August 31, against about 46 per cent during an average year. This has helped bring down prices, he said. The 403-odd cold storages in the State can hold about 58 lakh tonne of potatoes. (Source: Business Line)

Wheat Allocation Helps To Contain Uptrend

lmost 13 lakh T Wheat allocation for OMSS and non wheat producing states for the month of Sep,Oct has successed to derail firm sentiments in the domestic market to some extent.However,the quantity is not ample to stablize market for whole of the months it is meant for.Out of 13 lakh T 3 lakh t has been reserved for non wheat producing states. Millers will get wheat at Rs 1285 per qtl. instead of Rs1175 perqtl. Millers have to pay freight charges from FCI godowns to destined destination.if south Indian millers(Tamil Nadu)sources it from Punjab,Ludhiyana,they will have to almostRs 1425 per qtl.Simply freight will be paid by millers.The share of U.P is 2.10 lakh T,West bengal gets 1.33 lak T and Rajasthan 1.12 lakh T.the allocation for southern States has been made based on their offtake of wheat through the public distribution system. However, mills are betting on the three lt that has been set aside for non-wheat procuring States.Lower allocation for southern millers may be problematic as prices in souther India is ruling higher than expectation.More allocation for these regions is required. (Source: Agriwatch)

Wheat prices fall after Russia rules out export limits

Wheat prices fell more than 1 percent on Friday to post their biggest loss in a week in reaction to month-end fund positioning, profit taking, and bearish news that Russia said it will not limit grain exports. Corn and soybeans also declined on profit-taking after corn soared to a droughtinduced record high early in the month and soybeans set a record high on Thursday. "Funds are taking a little risk reduction this time of the year. A lot of this is window dressing, end-of-month and end-of-week trade but I don't think a lot of people wanted to be short over the long weekend either," said Sterling Smith, market strategist for Citigroup. Chicago Board of Trade (CBOT) grain futures markets will be closed on Monday, the US Labour Day Holiday. (Source: Business Recorder)

Russian Wheat Production Dips To 39 MMT

The Russian wheat crop this year has been pegged lower than last 9 years due to decreased yield on excessive heat during vegetative and maturity stage.Normally Russia produces 50 to 55 million T wheat.This year production is likely to come down to 39 million T.This clearly signifies that Rusiian market has less wheat for offering global market.There is a growing fear now in the market that Russia may ban wheat export at the end of this year.Export tariff too may be imposed in the latest emerging scenario.harvesting is in last stage now.The wheat harvest in the south is expected to fall by 7.5 million tonnes to 15.2 million, in the Volga region by 3.5 million tonnes to 6.5 million, and in the Urals region to fall by 3 million tonnes to 2 million, the lowest level since 1998. (Source: Agriwatch)

Indonesias Palm Oil Exports up 20 percent in July IPOA

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. Exports to India in Jan - July 2012 were 3.08 million tonnes, while China and EU shipped 1.75 and 2.25 million tonnes respectively. Total exports so far this year have been 10.13 million tonnes. (Source: Agriwatch)

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Commodities Daily Report

Monday| September 3, 2012

Agricultural Commodities
Chana
NCDEX Chana September futures which declined sharply in the previous session witnessed short coverings on Saturday on account good rains in August coupled with improved sowing of kharif pulses. Monsoon has recovered in the month of August in Northwest and Central India that may prove beneficial for the chana sowing, 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.

Market Highlights
Unit Rs/qtl Rs/qtl Last 4800 4738 Prev day -0.36 1.89

as on Sept 1, 2012 % change WoW MoM -1.14 -3.03 -0.17 0.28 YoY 34.08 29.38

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 97.7 Lakh hectare area has been st planted under Kharif pulses as on 31 August, 2012 compared to 104.18 lakh hectare (ha) same period last year. Sowing is reported lower mainly in Rajasthan. 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%. In Maharashtra, Kharif Pulses sowing is down by 6% at 18.77 lakh hectares. 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

valid for Sept 3, 2012 Support 4745-4782 Resistance 4853-4885

Outlook
Emergence of fresh demand at lower levels may support chana price in the short term. 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

Monday| September 3, 2012

Agricultural Commodities
Sugar
Sugar witnessed profit booking at higher levels and thus settled lower on Saturday. Sharp downside was capped on account of various factors that include emergence of festive season demand, Poor rains, and concerns over Sugar output in Maharashtra amid divergence of cane towards fodder etc. According to IMD there are indications that El Nino would affect the monsoon in September. However, some climate models, however, have begun to predict temperature patterns in the Indian Ocean turning favorable for the monsoon, which may negate the effect of El Nino. If the same hold true, then this may help increase cane yield. Apart from the 45 lakh tonnes quota released during the start of the quarter Jul-Sept, government released additional 2.66 lac tn to be sold off by 31st August. Sugar mills have been directed to sell at least 70% of July-September quota (45 lakh tonnes) by August. Another additional quota of 4 lac tn has also been released on 7th August, 2012 to be sold off by 31stAugust. The quota is sufficient to meet the festive season demand and thus helped contain prices. In the international markets Liffe Sugar as well as ICE sugar settled 1.31% and 0.15% higher on Friday.

Market Highlights
Unit Sugar Spot- NCDEX (Kolkata) Sugar M- NCDEX Sept '12 Futures Rs/qtl Last 3779

as on Sept 1, 2012 % Change Prev. day WoW -0.54 0.79 MoM -4.18 YoY 28.12

Rs/qtl

3501

-0.96

2.37

-0.40

28.90

Source: Reuters

International Prices
Unit Sugar No 5- LiffeOct'12 Futures Sugar No 11-ICE Oct '12 Futures $/tonne $/tonne Last 566.4 439.56

as on Aug 31, 2012 % Change Prev day WoW 1.31 0.15 3.53 0.97 MoM -8.17 -12.63 YoY -24.56 #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

Source: Telequote

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 2.489 million tons of sugar, raw value, up from 1.692 million tons in June but lower from 3.06 million tons sugar exported last year same period. The global sugar surplus remains on target to fall in 2012/13 season, though declines will be less than previously suggested, while adverse weather in several producers may stop prices dropping far below recent levels. (Source: Reuters) According to the International Sugar Organization (ISO), the global sugar surplus is forecast to halve to around 3 mln tn in 2012/13 (OctoberSeptember) from a surplus of 6.5 million tonnes in 2011/12).

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

valid for Sept 3, 2012 Support 3550-3570 Resistance 3622-3645

Outlook
Sugar prices are expected to trade sideways on account of mixed views over next years output. Although sufficient supplies may keep the upside capped, sharp downside will also be restricted amid emergence of fresh demand at lower levels amid festive season ahead.

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Commodities Daily Report

Monday| September 3, 2012

Agricultural Commodities
Oilseeds Soybean: Soybean futures settled higher on Saturday taking cues
from strong export figures on Indonesia Palm oil exports. CBOT Soybean settled marginally lower by 0.32% on Friday due to profit booking. According to the newsletter, Pro farmer, Soybean production was seen at 2.60 bn bushels on a yield of 34.8 bushels/ acre, lower compared to the USDAs soybean output estimates of 2.692 billion bushels and yield at 36.1 bushels/ acre. 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. According to weekly crop progress report, the condition of U.S soybeans declined to 30% during last week from 31% in good to excellent condition due to weather concerns in the US Midwest. 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. India's oil meal exports fell to 2.75 lakh tn in July from 2.82 lakh tn a year earlier led by a sharp drop in the overseas sales of rapeseed meal. Soy meal exports rose to 1.68 lakh tn in July, from 1.39 tn a year ago. In the domestic markets, as on 31 August Oilseeds have been sown in 167.15 lakh hectares so far, compared with 174 lakh hectares same period last year. Soybean area is higher at 106.9 lakh hectares. 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.
st 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 4520 3998 792.1 801.7 Prev day -0.20 1.28 0.40 1.32

as on Sept 1, 2012

WoW -1.50 0.01 -0.08 -0.48

MoM 0.00 -12.12 1.89 2.89

YoY 99.47 78.36 19.91 24.90

Source: Reuters

as on Aug 31, 2012 International Prices Soybean- CBOTSept'12 Futures Soybean Oil - CBOTSept '12 Futures Unit USc/ Bushel USc/lbs Last 1764.50 56.42 Prev day -0.32 -0.30 WoW 1.55 0.32 MoM 2.53 7.36
Source: Reuters

YoY 27.91 -1.54

Crude Palm Oil

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

as on Sept 1, 2012

Last 2920 558.1

Prev day 0.17 1.23

WoW -3.22 -0.99

MoM 0.65 -1.10

YoY -14.12 12.07

MYR/Tonne Rs/10 kg

Refined Soy Oil: NCDEX Soy Oil and MCX CPO settled higher on
Saturday on account of higher exports of Indonesias palm oil in the month of July. 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). Although, Malaysia's July palm oil stocks rose 17.6 percent to 1,998,870 tn from a revised 1,699,117 tn in June, the export demand is expected to regain momentum amid supply shortage of edible oil globally. Indonesia, the world's top palm oil producer, has lowered its earlier output forecast by 8 percent to 23.6 million tonnes this year.

Source: Reuters

RM Seed
Unit RM Seed SpotNCDEX (Jaipur) RM Seed- NCDEX Sept '12 Futures Rs/100 kgs Rs/100 kgs Last 4370 4408 Prev day 0.69 0.55

as on Sept 1, 2012 WoW -0.90 -1.89 MoM 1.33 1.08

Source: Reuters

YoY 49.08 50.19

Technical Chart Soybean

NCDEX Oct contract

Rape/mustard Seed: Mustard seed futures settled lower by on

Saturday taking cues from the oilseed complex. Mustard output was lower in 2011-12 season. However, with on the back of higher returns and improved rains, next years output is expected to be better. According to a circular issued by NCDEX, existing Special Cash Margin of 5% on the Long side shall be increased to 15% on all the running and yet to be launched contracts w.e.f beginning of 18/07/2012.

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 Aug 01, 2012 Support 794-798 3930-3965 4405-4440 552-555 Resistance 808.50-813 4025-4065 4495-4525 561-564

Outlook
Oilseeds may trade with positive bias during the intraday on account higher export so f Crude palm oil from Indonesia. Concerns over kharif oilseeds output barring soybean may also support the upside. But with commencement of arrivals towards the September end may cap sharp upside in the soybean prices.

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Commodities Daily Report

Monday| September 3, 2012

Agricultural Commodities
Black Pepper
Pepper Futures traded sideways last week as the Pepper markets were closed for most part of the week due to Onam, a local festival. However, lower demand for. Lower demand for Indian pepper in the international markets due to huge price parity pressured the prices. The spot traded lower due to low demand in the domestic markets. However, low stocks in the domestic markets supported prices at lower levels. Farmers are also unwilling to sell their stocks at lower levels. The Spot as well as the Futures settled 0.57% and 0.59% lower w-o-w. 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 $63006400/tonne (FOB). Vietnam was offering its produce at $6,000/tonne for 500 GL. Brazil was offering its pepper at $6,150/tonne for the 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 40828 41375 Prev day -0.42 0.15

as on Sept 1, 2012 WoW -0.57 -0.59 MoM -4.24 -5.09 YoY 15.91 12.82

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 3, 2012 Support 42000-42300 Resistance 42870-43120

Production and Arrivals

The arrivals in the spot market were reported at 15 tonnes while offtakes were 15 tonnes on Friday while no arrivals were reported 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 today. Lack of supplies 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

Monday| September 3, 2012

Agricultural Commodities
Jeera
Jeera Futures corrected sharply last week due to good rains in Gujarat. Good rains are expected to improve moisture levels which may increase prospects of better yield next season. Export are also avoiding buying at higher levels, and waiting for the prices to correct. 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 the ongoing civil war in Syria which is hampering supplies. There are reports that there has been an increase in demand from Bangladesh for Indian Jeera. The Spot as well as the Futures settled 3.51% and 4.23% lower w-o-w. 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 $28,000-2,850 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 15452 14430 Prev day -0.99 -0.38

as on Sept 1, 2012 % Change WoW -3.51 -4.23 MoM -6.35 -12.04 YoY -1.01 -7.74

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 Saturday. 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%.

Source: Telequote

Outlook
Jeera prices are expected to trade sideways. Prices may recover due to expectation of revival in export demand. However, good rains in Gujarat may correct the prices. In the medium to long term (AugSeptember 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.

Market Highlights
Prev day 0.00 -0.69

as on Sept 1, 2012 % Change

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

Last 5574 6038

WoW 2.90 2.41

MoM -3.49 -1.11

YoY 7.40 36.42

Turmeric
Turmeric Futures traded on a mixed note last week but settled on a positive note as farmers are tracking the monsoon progress. Lower arrivals also supported prices at lower levels. However, improving monsoon capped sharp gains. Export demand is lower as orders from Pakistan have been met. Rainfall in Nizamabad is 27% lower than the normal as on 29/8/2012. Turmeric has been sown in 0.53 lakh th hectares in A.P as on 29 August 2012. Sowing is also reported 30-35% lower during the sowing period. The Spot as well as the Futures settled 2.9% and 2.41% higher w-o-w. The pre expiry margin on Turmeric has been increased to 5% for last 7 trading days increased on a daily basis on both buy and sell side from the existing 3% on daily basis for last 5 days.

Technical Chart Turmeric

NCDEX Oct contract

Production, Arrivals and Exports

Arrivals in Erode and Nizamabad mandi stood at 2,500 bags and 1,500 bags respectively on Friday. 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

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

valid for Sept 3, 2012 Support 14560-14650 5840-5940 Resistance 15080-15240 6070-6130

Outlook
Turmeric prices are expected to continue to trade sideways taking cues from lower sowing figures as well as reports of export demand from Pakistan. Traders also expect fresh export orders in the coming days. However, improving weather conditions may cap sharp gains. In the medium term (Aug to September) prices may take cues from the sowing figures.

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Commodities Daily Report

Monday| September 3, 2012

Agricultural Commodities
Kapas
NCDEX Kapas April futures and MCX Cotton October futures settled % and % lower on Saturday on account of improved rains in the month of August. Cotton prices declined sharply during the last one week 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 12% below normal rains during June 01- August 31. The month of August witnessed 99.7% th rainfall as on 29 August. However, the number one cotton growing state, Gujarat, is still reeling under deficient to scanty rains in the most past of the state. In the international markets ICE Cotton futures and Cot look Index A gained last week on worries about the potential harm Tropical Storm Isaac could cause to cotton crops as it headed toward Alabama and Mississippi -- two important states in the U.S. cotton belt.

Market Highlights
Unit Rs/20 kgs Rs/Bale Last 1051 18060

as on Sept 1, 2012 % Change Prev. day WoW -1.04 -7.16 -1.10 -1.69 MoM -9.63 16.74 YoY #N/A #N/A

NCDEX Kapas Futures MCX Cotton Futures

Source: Reuters

International Prices
Unit ICE Cotton Cotlook A Index Usc/Lbs Last 76.48 81.35

as on Aug 31, 2012 % Change Prev day WoW 0.43 2.73 0.00 0.00 MoM 8.36 0.00 YoY #N/A -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 Rasjthan. While, in rain fed areas its starts in October. As on 31 August, 2012, Cotton is being planted on 112.83 lakh hectares; lower by 4.3% compared to the last years 118.37 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.
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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. The global cotton market surplus will total more than 3 million tonnes in 2012-13 (August- July) from growing output and falling demand in China, the world's largest textile market China's 2012 cotton output is estimated at 6.97 million tonnes, down 4.2 percent from last year. China has issued fresh import quota to textile mills to procure cotton from international markets, which are 40 percent cheaper than domestic stock. This is additional to 1 million tonne issued in May this year.
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 3, 2012 Support 1020-1035 1024-1035 17420-17530 Resistance 1064-1073 1060-1072 17730-17820

Outlook
Cotton prices may remain under downside pressure in the short term on account of improved rains and thereby better crop prospects. However, no major downside is expected as international markets may start recovering from the current levels on potential harm to US cotton crop amid a tropical storm.

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