Commodities Daily Report

Saturday| September 15, 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

Saturday| September 15, 2012

Agricultural Commodities
News in brief
Commodity sector fears food prices will soar on diesel hike
Retail prices of essential food items, including sugar, wheat and edible oils, are expected to increase marginally across the country due to a rise in the cost of transport following diesel price hike by over Rs 5 per litre, industry bodies said. There could be some impact on sugar prices in those places where mills are not present. Sugar prices in North Eastern region could increase due to a rise in transport cost, Indian Sugar Mills Association (Isma) director General Abinash Verma said. Echoing similar views, Mumbai-based Solvent Extractors Association executive director B V Mehta said: It will have impact on all commodities including edible oils. We are heavily dependent on local transport for movement of oilseeds and oils from crushing center and also from ports. He said that it would be difficult to calculate at present how much price increase could be seen in edible oils. Agricultural Produce Market Committee (APMC) of Azadpur, President Rajendra Sharma, however, said: Prices of vegetables and fruits are unlikely to be affected as rates are driven purely by supply-demand situation. Roller Flour Mills Federation of India secretary Veena Sharma said: Wheat, wheat flour and other wheat products prices will be affected with rise in transportation cost. (Source:
Financial Express)

Market Highlights (% change)

Last Prev. day

as on Sept 14, 2012

WoW MoM YoY

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

18464 5578 54.3 99 1770

2.46 2.62 -1.88 0.70 0.04

4.41 4.41 -1.91 2.68 1.86

4.71 4.30 -1.88 6.76 9.95

12.13 12.89 14.10 9.74 -3.12

Source: Reuters

Sugar Bulls Ascend as Rain Returning to Top Producer Brazil

Sugar traders are the most bullish in two months on speculation rain may again disrupt the harvest in Brazil, the worlds largest producer, just as output and exports from second-ranking India decline. Sugars drop accelerated last month as dry weather in Brazil helped boost production. Sugar-cane processing in the center south, the countrys main growing region, climbed 14% to a record 46.5 million tons in the second half of August, according to data from industry group Unica. Cane processing for the season through Aug. 31 fell 9.4% to 307.6 million tons, Unica estimates show. Bruno Lima, a risk consultant a INTL FCStone Inc. in Campinas, Brazil, said by phone yesterday that The crop in India, which is already forecast to be smaller, may start late to allow for the cane to mature after a poor monsoon. India is unlikely to export any of its 1.5 million-ton surplus in the fourth quarter and in the first three months of 2013, according to Manish Gupta, head of sugar trading at Singaporebased raw materials trader Olam International Ltd. (OLAM) Exports may emerge after there is more clarity on the size of the crop, he said in an interview on Sept. 1. In Thailand, the second-biggest sweetener exporter, production will be 9.5 million to 10 million tons in 2012-13, down from 10.2 million tons this season, according to Mitr Phol Sugar Corp. (Source:
Bloomberg)

Kharif acreage continues to trail despite surge in monsoon

The revival in monsoon reduced the rain deficit further to 7 per cent as on September 14, but the shortfall in kharif acreage persisted. The total kharif area is lower by 55.62 lakh hectares (lh) over last year, though the crop sowing data continued to trickle in as reports from the interior areas continued to pour. The acreage deficit has largely been reduced in case of pulses, oilseeds and cotton, but the gap has widened in rice and coarse cereals over the previous week. In case of coarse cereals, the shortfall in acreage was mainly observed in sorghum at 2 lh over last year, bajra (19 lh), ragi (1.3 lh), while the area under maize and small millets was largely on par with last year. Among pulses, the shortfall was mainly seen in tur (1.5 lh) and moong (3.08 lh), while urad registered an increase of 1.93 lh at 23.77 lh. The area under oilseeds, such as soyabean, was up by 3.77 lh at 107.003 lh over last year. The higher acreage was mainly due to more area in Maharashtra, Rajasthan and Madhya Pradesh. However, the area under groundnut was down 4.75 lh at 38.11 lh, mainly on account of dry spells affecting the sowing in Saurashtra, Gujarat and Karnataka. The area under cotton was lower by 5.6 lh at 114 lh mainly because of less coverage in Gujarat. (Source: Business
Line)

AP to spend Rs 2,500 cr on farm mechanization

The Andhra Pradesh Government will spend Rs 2,500 crore in the next three years on farm mechanization, according to State Agriculture Minister K. Lakshminarayana. The Government has spent Rs 1,000 crore on farm implements, half of it being the subsidy component, this year. It has also spent Rs 1,800 crore for input subsidy, he said. The Minister said the State Government would strive to secure remunerative prices for virginia tobacco, even though it comes under the purview of the Union Commerce Ministry and the Tobacco Board. (Source: Business line)

Guntur spices park to be ready by year end

he proposed Spices Park in Guntur district of Andhra Pradesh, an initiative of the Spices Board of India, is expected to be set up by the end of this year. The Board is investing about R30 crore for setting up this park, aimed at benefitting chilli farmers. With the increasing demand for chillies globally, quality issues have become important and the Board has also set up a quality testing centre in Guntur, PS Sreekantan Thampi, deputy director, Spices Board said. There is a lot of demand coming from the global markets, especially the European ones, and spice farmers have to adopt good agricultural practices and advanced processing practices to cash in on the opportunity, he said. The proposed park will bring warehousing, processing and packing all under a single roof.
(Source: Financial Express)

Vegetable oil imports rise ahead of festivals

The countrys vegetable oil imports rose for the first time in three months in August on the back of lower inventories and rising festival demand. Shipments increased by 9.7 per cent to 8.97 lakh tonnes (lt) in November-August from 8.17 lt a year earlier. This is the first increase since May, the Solvent Extractors Association of India said in a press release on Friday. Imports are up 19 per cent at 81.6 lt between November and August, the Association said. Higher imports may help trim palm oil inventories in Malaysia, the worlds second-biggest producer, and curb a decline in futures. Crude palm oil imports climbed 13 per cent to 6.2 lt in August, while refined palm oil purchases declined by 2.7 per cent to 79,486 tonnes, the Association said. Soya oil imports more than doubled to 1,10,758 tonnes (52,265 tonnes) in August, while that of sunflower oil slid 22 per cent to 68,900 tonnes. Stockpiles, including those at ports and in the pipeline were down 75,000 tonnes to 15 lt as of September 1. India bought 87 lt of vegetable oils in 2010-11 and imports in 2012-13 may exceed the 95 lt estimated for this year, B.V. Mehta, Executive Director of the Association, said. (Source: Business Line)

Argentina to increase maize exports

Argentina, the world's second biggest maize exporter, will export an additional 2.75 million tonnes of maize from its 2011/12 crop, the country's Minister of Agriculture Norberto Yauhar confirmed here today. "The additional shipments, together with recent better-than-expected figures from the US Department of Agriculture, should help ease tight international markets," Yauhar said. (Source: India Education Diary)

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Commodities Daily Report

Saturday| September 15, 2012

Agricultural Commodities
Chana
Chana spot settled 1.73% lower on Friday on expectations of higher imports from Australia. Ongoing recovery in monsoon and above average rains in the past few days is showing better prospects for Rabi pulses sowing in the coming days, which is putting pressure on the prices. In Australia, chana production rose by 70.5 percent to 8.27 lakh tonnes from 4.85 lakh tonnes in previous years. 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 4550 4507 Prev day -1.73 -0.27

as on Sept 14, 2012 % change WoW MoM -6.91 -7.61 -5.57 -8.77 YoY 41.57 48.75

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 98.94 Lakh hectare area has been planted under Kharif pulses as on 1th September, 2012 compared to 105.14 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 15, 2012 Resistance 4500-4555

4325-4360

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 sharp 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

Saturday| September 15, 2012

Agricultural Commodities
Sugar
Sugar spot as well as futures traded bullish yesterday and hit the 3% upper circuit in the September contract due to festive demand ahead of the festive season. Also, reports that Maharashtra will start crushing for the 2012/13 season from Nov. 1, instead of Oct. 1 supported the prices. The Spot as well as the Futures settled 1.4% and 2.46% higher on Friday. 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 sugar traded on positive note after U.S. Federal Reserve's third stimulus action for the U.S. economy and a weaker Dollar support the prices. Liffe Sugar as well as ICE sugar settled 1.28% and 1.01% higher on Friday.

Market Highlights
Unit Sugar Spot- NCDEX (Kolkata) Sugar M- NCDEX Sept '12 Futures Rs/qtl Last 3734

as on Sept 14, 2012 % Change Prev. day WoW 1.40 0.92 MoM 1.74 YoY 23.23

Rs/qtl

3544

2.46

3.05

2.01

30.06

Source: Reuters

International Prices
Unit Sugar No 5- LiffeOct'12 Futures Sugar No 11-ICE Oct '12 Futures $/tonne $/tonne Last 576.5 442.44

as on Sept 14, 2012 % Change Prev day WoW 1.28 1.01 3.24 2.47 MoM 0.73 -2.02 YoY -16.34 #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 15, 2012 Support 3568-3590 Resistance 3635-3660

Outlook
Sugar prices may trade on a positive note due to improving demand ahead of the festive season. A delay in crushing in Maharashtra by a month may also support prices. However, sufficient supplies and improved rains may cap a sharp upside.

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Commodities Daily Report

Saturday| September 15, 2012

Agricultural Commodities
Oilseeds Soybean:
Soybean Spot traded on a positive note due to low stocks in the domestic markets, while the Futures traded on a negative note due to good monsoon conditions in the key soybean growing regions in MP. The spot settled 0.18% higher while the Futures settled 0.27% lower on Friday. CBOT Futures settled lower by 0.4% on Friday after trading on a positive note in the last two sessions as the harvest of soybean in the US overplayed the USDA demand supply report which downgraded further the yield of soybean for 2012-13 crop. U.S. Department of Agriculture pegged the soybean harvest at 2.634 billion bushels, down from last month's 2.692 billion and below the analysts' average estimate of 2.657 billion. Ending stocks next summer were projected to be the lowest in nine years at 115 million, unchanged from Augusts estimate. In the domestic markets, as on 14 September, 2012, Oilseeds have been sown in 171.17 lakh hectares so far, compared with 176.97 lakh ha same period last year. Soybean area is higher at 106.9 lakh ha. In 2011-12 season, soybean was sown under 107 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 4519 3843 800.2 799.9 Prev day 0.18 -0.27 0.27 0.11

as on Sept 14, 2012

WoW -0.77 0.07 -0.68 0.24

MoM 0.47 -2.40 2.57 1.43

YoY 119.05 87.10 27.40 32.84

Source: Reuters

as on Sept 14, 2012 International Prices Soybean- CBOTSept'12 Futures Soybean Oil - CBOTSept '12 Futures Unit USc/ Bushel USc/lbs Last 1737 56.64 Prev day -0.40 0.32 WoW 0.27 1.02 MoM 8.02 10.02
Source: Reuters

YoY 25.88 -1.15

Crude Palm Oil

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

as on Sept 14, 2012

Last 2715 535.6

Prev day -2.83 -0.04

WoW -3.35 -1.34

MoM -4.06 -3.34

YoY -20.15 15.81

MYR/Tonne Rs/10 kg

Source: Reuters

RM Seed
Unit RM Seed SpotNCDEX (Jaipur) RM Seed- NCDEX Sept '12 Futures Rs/100 kgs Rs/100 kgs Last 4250 4170 Prev day 0.59 2.16

as on Sept 14, 2012 WoW -1.16 -0.95 MoM -1.86 -5.25

Source: Reuters

Refined Soy Oil: NCDEX Soy Oil settled marginally higher due to
festive season demand while MCX CPO settled marginally lower tracking lower BMD prices. 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% to 2.09mt. Exports of Malaysian palm oil products for September 1-10 jumped 30% 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 mt in July compared to the previous month. Palm oil output is expected to be 23-25 mt, and around 18 mt 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). Rape/mustard Seed: Mustard seed spot as well as futures settled higher on supply tightness in the short term. 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.

YoY 50.84 54.50

Technical Chart Soybean

NCDEX Oct contract

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 15, 2012 Support 770-774 3770-3815 4105-4135 528-532 Resistance 782-785 3870-3905 4215-4225 539-542

Outlook
Edible oil complex may trade sideways. Lower soybean stocks may support prices at lower levels. However, prices may witness downside correction on expectations of improved yield of domestic soybean.

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Commodities Daily Report

Saturday| September 15, 2012

Agricultural Commodities
Black Pepper
Pepper Futures traded on a positive note for the third consecutive day yesterday due low stocks in the domestic markets which have supported prices at lower levels. The arrivals are also reported to be very thin and there is a supply crunch. Traders are buying pepper directly from the farmers. However, lack of demand from the upcountry markets as well as lower demand for Indian pepper in the international markets has capped sharp gains. The Spot as well as the Futures settled 0.49% and 0.13% higher on Friday. 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 $8,250/tonne(C&F) while Indonesia Austa is quoted at $6,750/tonne (FOB). Vietnam was offering 550GL at $6,900/tonne. 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 41587 42225 Prev day 0.49 0.13

as on Sept 14, 2012 WoW 0.55 -0.13 MoM -0.58 -0.25 YoY 18.75 17.82

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 15, 2012 Support 42800-43100 Resistance 43700-43950

Production and Arrivals

The arrivals in the spot market were reported at 6 tonnes while offtakes were 4 tonnes on Saturday. No arrivals have been reported this week. 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 on a positive note in the intraday. Low stocks and very thin arrivals may support prices. However, prices may correct due to lower demand at higher levels in the domestic as well as international markets. Also, demand from the upcountry markets is said to be weak.

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Commodities Daily Report

Saturday| September 15, 2012

Agricultural Commodities
Jeera
Jeera Futures traded on a positive note yesterday anticipating higher exports data. According to markets sources about 75% exports target has already been achieved due to good supply crunch in the global markets. However, good rains have pressurized prices. Around 10 lakh bags of Jeera are reported across India. 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 unchanged while the Futures settled 0.62% higher on Friday. Production in Syria and Turkey is being reported around 17,000 tonnes and around 4,000-5,000 tonnes, lesser than expectations. Jeera prices of Indian origin are being offered in the international market at $2,800-2,850 tn (c&f) while Syria and Turkey are not offering. Carryover stocks of Jeera in the domestic market is expected to be around 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 14750 13838 Prev day 0.00 0.62

as on Sept 14, 2012 % Change WoW -1.76 1.37 MoM -9.72 -14.64 YoY -3.55 -2.81

Source: Reuters

Technical Chart Jeera

NCDEX Oct contract

Production, Arrivals and Exports

Unjha markets witnessed arrivals of 3,500 bags, while off-takes stood at 3,500 bags on Friday. 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 0.45 0.13

as on Sept 14, 2012 % Change

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

Last 5661 6018

WoW 1.41 0.33

MoM 3.92 0.37

YoY 5.92 23.42

Turmeric
Turmeric October Futures traded on a positive note yesterday and hit the 2% upper circuit as farmers are not selling stocks demanding higher floor price of Rs.9000/tn. Lower sowing figures have also supported prices at lower levels. However, there are sufficient stocks with the traders which have capped any sharp gains. Rainfall in Nizamabad is 15% lower than the normal as on 12/9/2012. Turmeric has been sown in 0.54 lakh hectares in A.P as on 12/9/2012. Sowing is also reported 30-35% lower during the sowing period. The Spot as well as October Futures settled 0.45% and 2% higher on Friday. 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 Nizamabad mandi stood at 2,500 bags while Erode remained closed on account of mandi election 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

Outlook
Turmeric prices are expected to trade on a positive note taking cues from lower sowing figures and lower arrivals. Demand for higher floor prices may also support prices. Traders also expect fresh export orders in the coming days. The regulators decision to disallow creating of fresh positions in September contract has also created a fear in the minds of the traders. However, 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 15, 2012 Support 13680-13800 5690-5730 Resistance 14160-14300 5900-5960

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Commodities Daily Report

Saturday| September 15, 2012

Agricultural Commodities
Kapas
In intraday NCDEX Kapas and MCX Cotton futures closed down by 0.35% and 1.8% respectively as reports of crop relief to standing cotton crop in Gujarat and Andhra Pradesh is capping the upside. 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 3.34% higher on Friday on U.S. Federal Reserve's third stimulus action for the U.S. economy boosted the commodity markets. Cotton harvesting has commenced in US, in all 4% is harvested as compared to 6% a year ago, versus 5% of 5-year average. In its September monthly demand supply report on Wednesday, the Agriculture Department (USDA) raised its estimate for the global cotton surplus by next July to a record of 76.5 million 480-pound bales, nearly a two-million bale increase from last month's estimate.

Market Highlights
Unit Rs/20 kgs Rs/Bale Last 1006 16890

as on Sept 14, 2012 % Change Prev. day WoW -0.35 0.05 -1.80 -3.43 MoM -11.60 -5.33 YoY -

NCDEX Kapas Futures MCX Cotton Futures

Source: Reuters

International Prices
ICE Cotton Cotlook A Index Unit Usc/Lbs Last 75.39 81.35

as on Sept 14, 2012 % Change Prev day WoW 3.34 0.55 0.00 0.00 MoM 5.31 0.00 YoY -27.57 -29.20

Source: Reuters

Domestic Production and Consumption

As on 14 September, 2012, Cotton is being planted on 114 lakh hectares; lower by 5.6lakh hectares compared to the last years 119.6 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

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.

Technical Chart - Cotton

MCX Oct contract

Source: Telequote

Outlook
In intraday cotton futures may trade sideways with a downward bias as the key cotton growing states, Andhra Pradesh and Gujarat are reported to have above average rains, raising the yield prospects to the cotton crop in these regions. However, strong international markets as well as reports of China stockpiling for new season might provide support to the prices in at lower levels.

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

valid for Sept 15, 2012 Support 980-991 978-988 16630-16750 Resistance 1020-1030 1015-1028 17050-17200

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