Commodities Daily Report

Monday| September 17, 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 17, 2012

Agricultural Commodities
News in brief
Rains forecast for north, east through this week
An India Meteorological Department (IMD) has said that withdrawal of monsoon from northwest India would not commence during the next five days. The process has been delayed from the normal date of September 1 following an unexpected monsoon surge on show since August. There is no sea-based low-pressure area at work currently; rather it is left to the western disturbances from across the border to sustain the ongoing rains. This is what explains the rain footprint, which is now confined to northwest, north, east and northeastern parts of the country. The overall rain deficit for the country as a whole is now seven per cent; individual deficits are 13 per cent in east and northeast India; eight per cent in northwest; six per cent in south peninsula; and two per cent in Central India. From across the border, the western disturbances move east and pass over geographies mentioned above where they interact with monsoon easterlies from the opposite side. The interactive rains are forecast to carry on for the rest of the week; helpful circulations forming within the flows may amplify the rains periodically. (Source:
Business Line)

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

Argentina 2012-13 corn harvest seen at record 25-26 mln tonnes-report

Argentina's main grains exchanges expect the country's 2012-13 corn harvest to be a record 25 million to 26 million tonnes thanks to favorable weather, state news agency Telam reported on Sunday. Argentina, the world's No. 2 corn exporter, received heavy rains last month that caused flooding in some areas, but also recharged soil moisture levels. That created ideal conditions for crops in certain regions. Until the current season, the most abundant corn production in Argentina was recorded in the 2010-11 cycle, when farmers harvested 23.8 million tonnes of grain, according to official data. "To the extent that they maintain good moisture conditions, with yields similar to those of previous years, not counting the last ... it is feasible to think of 25 million tonnes," said Julio Calzada, director Information and Economic Studies of the Rosario Stock Exchange (BCR), the official news agency reported. (Source: Reuters)

Indias coffee consumption up 3% in 2011: ICO

Coffee consumption in India grew by 3 per cent to 1.76 million bags (1.06 lakh tonnes) in the last calendar year as compared to 2010, the International Coffee Organisation (ICO) said. The country consumed 1.71 million bags of 60 kg each (1.03 lakh tonnes) in 2010, it added. The consumption of the brew in India, the worlds sixth biggest exporter, has grown at a compound annual growth rate (CAGR) of 5.7 per cent during 2001-2011, ICO said. The country consumed 1.02 million bags (61,200 tonnes) of coffee in 2001, ICO data said. The per capita consumption in India, however, remained unchanged in 2011 at 0.1 kg per person per year since 2008, it said. (Source: Business Line)

US taking tough line on Australia sugar - industry aide

The U.S. government has told domestic sugar producers that it does not plan to allow Australia to export any additional sugar to the United States under a proposed regional free trade pact, a U.S. sugar industry analyst said on Friday. That would be the second time that the United States has denied Australia, one of its closest allies in the Asia-Pacific region, additional sugar market access in a free trade agreement. Tom Earley, vice president for Agralytica Consulting, said he heard Assistant U.S. Trade Representative Sharon Bomer Lauritsen make that promise at an American Sugar Alliance meeting last month in Coeur d'Alene, Idaho. "Theyve tattooed it on USTR negotiators fingers. You just look at them. No sugar from Australia, it says right there, Earley joked to reporters at an event organized by the National Foreign Trade Council, an industry group. Earley advises the Sweeteners Users Association, which represents companies that make goods containing sugar. The group has pushed for less restrictive U.S. sugar import policies, including for Australia in the proposed Trans-Pacific Partnership (TPP) free trade pact.
(Source: Reutes)

Nearly 50% agricultural land in rainfed areas

Nearly half of the net sown land in India falls in unirrigated areas with a majority in important agricultural states like Maharashtra, Rajasthan and Karnataka, shows government data. About 76.77 million hectares of net sown area is cultivated under rainfed (unirrigated) conditions out of around 162 million hectares of such land at present in the country. Maharashtra tops the state-wise chart with largest amount of unirrigated land under agriculture at 14.1 million hectares. It is followed by Rajasthan with 11.1 million hectares, Karnataka (7.01 million hectares), Gujarat (5.9 million hectares) and Andhra Pradesh (5.7 million hectares), data showed. Punjab and Haryana, the cradle of Green Revolution of 70s, have vast majority of areas under irrigation, according to statistics available. Around 97.6 per cent of the areas is covered by irrigation in Punjab under different crops. In neighbouring Haryana, 85.3 per cent of area under principal crops is in irrigated areas. (Source: Business Line)

Floods threaten Niger's main rice crop

Floods could wipe out most of Niger's main rice harvest this year as rainswollen rivers rose to 50-year highs across West Africa, spreading devastation, a regional official said. At least 81 people have been killed in Niger since annual rains caused flooding along the banks of the Niger River, raising its waters to their highest levels since the 1920s. The country and surrounding region are still struggling to overcome food shortages caused by poor rains last year. "In Niger ... most of the rainy season rice crop, estimated at over 80,000 tonnes, risks being destroyed this year," Tiena Coulibaly, a Malian government minister told Niger's state television. Coulibaly was speaking after chairing a meeting of ministers in Niamey focused on tackling food shortages and increasing production. The comments were broadcast on Friday after a meeting on Thursday. The European Union, one of Niger's major donors said in a statement later on Friday that it has disbursed 19,678 billion CFA francs or 30 million euros ($39.44 billion) as part of a budgetary assistance measure, to help the country guarantee food security this year. (Source:
Reuters)

France to maintain ban on GMO crops

France is to maintain a temporary ban on the cultivation of genetically modified crops, Prime Minister Jean-Marc Ayrault said on Saturday, dealing a blow to farmers and seed companies who say the move is unjustified and economically harmful. The ban, which targets Monsanto's maize, the only genetically modified organisim (GMO) currently allowed in Europe, was introduced in March after a previous moratorium was annulled by France's top court last November. "The government is keeping its moratorium on the cultivation of GMO seeds currently authorised in the European Union," Ayrault told an environmental conference in Paris. As Europe's largest crop-grower, France is under pressure to soften its stance on GMO crops, particularly after experts found this year there was no evidence justifying a ban. (Source: Reuters)

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Commodities Daily Report

Monday| September 17, 2012

Agricultural Commodities
Chana
Chana spot as well as Futures traded on a bearish note last week on expectations of higher imports from Australia at cheaper rates, easing supply pressure in the domestic markets. However, prices recovered on Saturday on account of short coverings towards the end of the week. The spot as well as the Futures settled 5.68% and 5.24% lower w-o-w. 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 also 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 year. 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 4563 4535 Prev day 0.30 0.62

as on Sept 15, 2012 % change WoW MoM -5.68 -6.24 -5.24 -5.36 YoY 47.21 51.42

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

Source: Reuters

Technical Chart - Chana

NCDEX Oct contract

Source: Telequote

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.

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

valid for Sept 17, 2012 Resistance 4560-4605

4425-4460

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 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

Monday| September 17, 2012

Agricultural Commodities
Sugar
Sugar spot as well as futures traded on a positive note last week due to emerging demand at lower levels 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 2.52% and 2.78% higher w-o-w. 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 3793

as on Sept 15, 2012 % Change Prev. day WoW 1.59 2.52 MoM 2.80 YoY 25.61

Rs/qtl

3545

0.03

2.78

3.93

29.90

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 export 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 2.06 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)

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

valid for Sept 17, 2012 Support 3568-3585 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

Monday| September 17, 2012

Agricultural Commodities
Oilseeds Soybean: Soybean prices traded on a positive note due last week
due to low stocks in the domestic markets. However, the prices corrected towards the end of the week due to good monsoon conditions in the key soybean growing regions in MP. A sharp appreciation in the Rupee also put pressure on the prices. The spot as well as the Futures settled 0.13% and 0.33% lower w-o-w. 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 4490 3737 798 799.3 Prev day -0.64 -2.76 -0.27 -0.02

as on Sept 15, 2012

WoW -0.13 -0.33 -0.65 0.95

MoM -0.64 -6.58 2.01 0.79

YoY 117.64 81.72 27.16 31.38

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 15, 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 4200 4232 Prev day -1.18 1.49

as on Sept 15, 2012 WoW -0.65 3.62 MoM -0.43 -3.36

Source: Reuters

YoY 48.28 52.39

Refined Soy Oil: NCDEX Soy Oil settled higher last week due to
festive season demand while MCX CPO settled 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 traded higher last week on supply tightness in the short term. Mustard output was lower in 2011-12. 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.

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 Oct Futures Unit Rs./qtl Rs./qtl Rs./qtl Rs./qtl

valid for Sept 17, 2012 Support 764-768 3635-3690 4165-4190 528-532 Resistance 777-781 3770-3815 4270-4295 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. Strong Rupee may also pressurize the prices.

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Commodities Daily Report

Monday| September 17, 2012

Agricultural Commodities
Black Pepper
Pepper traded on a positive note last week 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 prices corrected from higher levels on Saturday on account of profit booking. The Spot as well as the Futures settled 0.44% and 1.31% higher 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 $8,250/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 42610 Prev day 0.00 0.91

as on Sept 15, 2012 WoW 0.44 1.31 MoM 0.46 1.55 YoY 18.37 18.30

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 17, 2012 Support 42580-42825 Resistance 43480-43700

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 sideways to 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

Monday| September 17, 2012

Agricultural Commodities
Jeera
Jeera Futures traded on a positive note last week anticipating higher exports data. According to markets sources about 75% exports target has already been achieved due to a supply crunch in the global markets. However, good rains have pressurized prices in the spot markets. 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 1.06% lower while the Futures settled 2.69% higher 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 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 14747 14045 Prev day -0.02 1.50

as on Sept 15, 2012 % Change WoW -1.06 2.69 MoM -9.11 -11.22 YoY -2.98 -4.36

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

Market Highlights
Prev day 0.00 0.17

as on Sept 15, 2012 % Change

Outlook
Jeera prices are expected to trade on a positive note. Prices may find support at lower levels due to good exports. 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.
Unit Turmeric SpotNCDEX (N'zmbad) Turmeric- NCDEX Sept '12 Futures Rs/qtl Rs/qtl Last 5661 6028

WoW 1.41 -1.18

MoM 3.58 3.22

YoY 5.92 20.08

Turmeric
Turmeric October Futures traded on a bullish note last week as farmers are not selling stocks at lower levels 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 in the spot market. 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 Futures (October contract) settled 1.41% and 4.42% higher w-o-w. 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

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

valid for Sept 17, 2012 Support 14020-14190 5790-5860 Resistance 14500-14650 5980-6050

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.

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Commodities Daily Report

Monday| September 17, 2012

Agricultural Commodities
Kapas
MCX Cotton corrected last week on reports of crop relief to standing cotton crop in Gujarat and Andhra Pradesh. However, NCDEX Kapas Futures remained in the positive. NCDEX Kapas settled 0.8% higher while MCX Cotton settled 3.2% lower w-o-w. 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 1009 16940

as on Sept 15, 2012 % Change Prev. day WoW 0.35 0.80 0.30 -3.20 MoM -10.59 -5.84 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

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 Unit Rs/20 kgs Rs/20 kgs Rs/bale

valid for Sept 17, 2012 Support 985-998 975-988 16670-16800 Resistance 1020-1030 1018-1028 17080-17200

Outlook
In intraday cotton futures may trade sideways. Higher international prices after the U.S. Federal Reserves stimulus action may support prices at lower levels while above average rains in the key cotton growing states, Andhra Pradesh and Gujarat may pressurize prices as it has raised the yield prospects in the cotton crop in these regions. Reports of China stockpiling for new season may also provide support to the prices in at lower levels.

Kapas MCX April Cotton MCX October

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