Commodities Daily Report

Wednesday| November 7, 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 Analyst anuj.choudhary@angelbroking.com (022) 2921 2000 Extn. 6132

Vaishali Sheth - Research Associate vaishalij.sheth@angelbroking.com (022) 2921 2000 Extn. 6133
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Commodities Daily Report

Wednesday| November 7, 2012

Agricultural Commodities
News in brief
Govt looks at changing long-term grain procurement policy
Saddled with huge foodgrain stocks and a burgeoning subsidy bill, the food ministry is working on a long-term procurement policy. Officials said one was needed due to the outcome of the present policy, wherein whatever is brought in by farmers is taken by state agencies. Food Minister K V Thomas met Prime Minister Manmohan Singh on Tuesday and also held a discussion with Agriculture Minister Sharad Pawar to discuss the contours of such a policy. Earlier, state agencies and Food Corporation of India (FCI) used to procure 25-30 per cent of the total marketable surplus of foodgrain, but in the past few years, we have procured over 35 per cent of the surplus, the official added. Such huge buying puts undue pressure on food subsidy, the requirement of which is expected to reach a little over Rs 1,00,000 crore in the 2012-13 financial year, as against the Budget Estimate of Rs 75,000 crore. Foodgrain stocks in the central pool on October 1 was estimated at about 70 million tonnes, as against the storage space of 66 mt. (Source: Business standard)

Market Highlights (% change)

Last Prev. day

as on Nov 6, 2012
WoW MoM YoY

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

18817 5724 54.43 88.71 1714

0.29 0.35 -0.31 3.57 1.90

2.10 2.26 0.85 3.54 0.21

-1.26 -1.09 5.18 -3.27 -4.46

7.74 8.86 10.65 -4.11 -0.84

Source: Reuters

Oilmeal exports down 66% at 1.22 lakh tonnes in Oct

ndia's oilmeal exports plunged 66% to 1.22 lakh tonnes in October due to high prices of soyabean seed in domestic market that led to lower crushing and availability of soyameal, an industry body said on Tuesday. The country had shipped 3.55 lakh tonne oilmeals, used primarily as cattle and poultry feed, in October 2011, Mumbai-based Solvent Extractors Association of India (SEA) said in a statement. "High price of soybean seed resulted into lesser crushing and availability of soybean meal for local as well as for the export. Lack of buying by Iran and disparity in export of soybean meal due to high price in local market resulted into steep fall in its exports," SEA said. India exported a mere 49,840 tonnes of soyameal last month compared to 2.24 lakh tonnes in October 2011, while in April-October this fiscal, soyameal exports fell to 8.72 lakh tonnes from 13.54 lakh tonnes in the year-ago period.
(Source: Financial Express)

Indian monsoons may fail more often due to climate changestudy

The Indian monsoon is likely to fail more often in the next 200 years threatening food supplies, unless governments agree how to limit climate change, a study showed on Tuesday. The monsoon rains could collapse about every fifth year between 2150 and 2200 with continued global warming, blamed mainly on human burning of fossil fuels, and related shifts in tropical air flows, it said. "Monsoon failure becomes much more frequent" as temperatures rise, Anders Levermann, a professor of dynamics of the climate system and one of the authors at the Potsdam Institute for Climate Impact Research, told Reuters. India's monsoon, which lasts from June to September, is vital for India's 1.2 billion people to grow crops such as rice, wheat and corn. India last faced a severe widespread drought in 2009 and had to import sugar, pushing global prices to 30-year highs. The researchers defined monsoon "failure" as a fall in rainfall of between 40 and 70 percent below normal levels. Such a drastic decline has not happened any year in records dating back to 1870 by the India Meteorological Department, they said. (Source: Reuters)

FCI's wheat e-auction faces hurdle

The Food Corporation of Indias (FCI) plan to sell wheat through spot exchanges may not take off smoothly, as the two spot exch-angesthe National Spot Exch-ange Ltd (NSEL) and NCDEX Spothave quoted high transaction costs of about Rs 8-12 per tonne. An FCI official said a decision is yet to be taken. We have not taken a final decision so far on the proposal sent by spot exchanges a few weeks ago. But a section of the ministry is of the view that the transaction cost is high. But, the FCI proposes to sell everything through spot exchanges once the final decision is taken, said the official. A high-level committee of the ministry of food, which takes a final decision on grain stocks with the FCI, had earmarked three million tonnes of saleable wheat for this season, until the beginning of rabi crop harvesting in March 2013. The wheat is scheduled to be distributed between NSEL and NCDEX Spot. If there is a delay in the sale of wheat by FCI, it will hurt in two ways. One, the open market prices of wheat are rising. Over the past month, prices have gone up nearly 10 per cent as there is not enough stock. Sources say FCI direly needs to release stocks in the market as new wheat will come only after April. (Source: Business Standard)

Rains head for Brazil sugarcane region - Somar - RTRS

Rain is expected to spread over Brazil's center-south sugarcane belt later this week and intensify over the weekend, possibly bringing crushing to a halt, local weather forecaster Somar said on Tuesday. Brazil's cane industry, which is responsible for about half of the world's sugar exports, has seen spot showers over the past 10 days, Somar said, but not sufficient moisture to cause mills to suspend crushing of the cane crop. The new cold front is due to start causing lighter rains over the centersouth cane region in the second half of this week but heavier volumes are expected over the weekend in the states of Minas Gerais and Goias as well as parts of Sao Paulo, which accounts for 65 percent of Brazil's cane output. (Source: Business Line)

Groundnut oils loss is cottonseed oils gain

Lower demand pulled down groundnut oil in the wholesale market, while cottonseed oil increased on festival demand on Tuesday. A Rajkot-based retailer said, People are buying more cottonseed oil, as it is cheaper than groundnut oil. Moreover, the price of groundnut oil has fluctuated greatly over the last two to three months. Though crushing of nuts has risen in the past few days, retail demand has dropped, said an oil miller in Gondal. (Source: Business Line)

Rain may continue to batter South

Scattered thundershowers have been forecast over Tamil Nadu, Kerala, coastal and south interior Karnataka. They could linger at a few places, thereafter, according to an India Meteorological Department (IMD) outlook, on Wednesday. An extended outlook valid for the next seven days also spoke about the possibility of scattered rainfall over south peninsular India. A swath of rain is forecast to extend across southern Bay of Bengal all the way from east Bay of Bengal during this period. Satellite imagery on Tuesday afternoon showed rain-bearing clouds over parts of coastal Tamil Nadu, North and South Bay of Bengal and South Andaman Sea. Another cyclonic circulation from erstwhile cyclone Nilam hung over north coastal Andhra Pradesh, from which a trough of low pressure lay extended until Assam and Meghalaya. (Source: Business Line)

U.S. analyst cuts Argentine corn crop forecast to 22.5 mln T

Private consultant Michael Cordonnier has lowered his forecast of Argentina's 2012/13 corn production to 22.5 million tonnes, from 26.0 million previously, due to excessive rains and flooding that have delayed planting. Cordonnier said he expects extensive flooding in Buenos Aires, Cordoba and Santa Fe provinces to result in a 10 percent reduction in the country's corn acreage and a 5 percent loss in yield potential.
(Source: Reuters)

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Commodities Daily Report

Wednesday| November 7, 2012

Agricultural Commodities
Chana
Chana Spot as well as futures extended the gains of the previous session on account of good demand at lower price levels. However, higher shipments in the coming weeks may ease supplies in the domestic markets, thus capping the upside in the prices. Except for Wheat, minimum support price of all other Rabi crops has been increased by CCEA for 2012-13 season. MSP of Chana/Gram is raised by Rs 200 per qtl for 2012-13 season to Rs 3000. Higher returns and favorable soil condition will definitely boost acreage in the coming season. Although overall pulses sowing is lagging by 31% to 1.87 mn ha till 2nd Nov, chana sowing is up Maharashtra and AP. Acreage is down mainly in Rajasthan. In Maharashtra, chana sowing is completed on 2.9 lakh hectares as on 2nd November, which is 24% of the targeted 12.32 lakh ha, and up by 67% compared to last year. In AP chana sowing is up by 15.9 to 1.96 lakh ha as on. In Rajasthan, sowing is down 66% at 2.78 lakh hectares as on th 10 October 2012. (State Farm Departments) As per the NCDEX circular dated 1 October, Special Margin of 10% (in cash) on the Long Side on all the running contracts and yet to be launched contracts in Chana have been withdrawn with effect from beginning of day Thursday, October 04, 2012.
st

Market Highlights
Unit Rs/qtl Rs/qtl Last 4600 4605 Prev day 2.69 1.50

as on Nov 6, 2012 % change WoW MoM -1.08 0.16 -2.35 -1.73 YoY 35.89 41.43

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

Source: Reuters

Technical Chart - Chana

NCDEX Dec contract

Sowing progress and demand supply fundamentals

Improved rains towards the end of monsoon season coupled with hike in MSP have raised prospects of Chana sowing in the 2012-13 season. Also, farm ministry has targeted 7.9 mn tn chana output for 2012-13 season, higher compared to 7.58 mn tn in 2011-12. According to the Ministry of Agriculture 99.81 Lakh hectare area has been planted under Kharif pulses in 2012-13 compared to 108.28 lakh hectare (ha) in the previous year. According to the first advance estimates of 2012-13 season, kharif pulses output is estimated lower by 14.6% at 5.26 million tonnes compared with 6.16 mn tn last year. Kharif pulses harvesting would commence from next month. 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)

Source: Telequote

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

valid for Nov 7, 2012 Resistance 4430-4485

4295-4353

Outlook
Chana futures may extend the gains of the previous session on account of lower level buying. Although, short term trend remain positive for chana, we expect prices to come under downside pressure in the second half of November as supply pressure may ease amid shipments from Australia and Canada. Going forward, prices may also take cues from sowing progress of Rabi pulses.

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Commodities Daily Report

Wednesday| November 7, 2012

Agricultural Commodities
Sugar
Sugar prices gained during the early part of the session on Tuesday on reports of delayed crushing. However, settled lower as higher stocks to meet the festive season demand is capping the upside in the prices. November futures settled 0.71% lower on Tuesday while, spot remained unchanged. Decision over cane pricing in Maharashtra and UP has delayed crushing this season too. Despite festival season, prices are under check this season as government has released higher quota of 40 lakh tonnes for October and November, compared to 34.6 lakh tonnes during 2011. Liffe white sugar settled marginally higher by 0.09% while ICE raw sugar closed 0.62% lower on Monday due to supply pressure from Brazil. Higher output and lower imports expectations for the 2012-13 season from China coupled with higher sugar surplus forecast for fourth straight year is keeping international prices under downside pressure.

Market Highlights
Unit Sugar Spot- NCDEX (Kolkata) Sugar M- NCDEX Nov '12 Futures Rs/qtl Last 3760

as on Nov 6, 2012 % Change Prev. day WoW 0.00 1.12 MoM 0.89 YoY 13.25

Rs/qtl

3370

-0.50

-0.12

-0.18

12.18

Source: Reuters

International Prices
Unit Sugar No 5- LiffeDec'12 Futures Sugar No 11-ICE Mar '13 Futures $/tonne $/tonne Last 541.4 435.33

as on Nov 6, 2012 % Change Prev day WoW 0.71 1.35 -0.07 0.67 MoM -9.36 -9.05 YoY -20.09 -22.75

Domestic Production and Exports

Although some of the mills have started operations in Maharashtra, but still crushing has not gained momentum as farmers are seeking higher cane prices. In UP too crushing normally starts in the first week of November, but this year also crushing is delayed due to disputes over cane pricing. According to the first advance estimates by agriculture ministry, Sugarcane output is pegged at 335.3 mn tn, down by 6.2% compared to 357.6 mn tn last year. Despite of higher acreage, the producers body has estimated next years sugar output lower at 24 mn tn, down by 2mn 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 6 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. With the opening stocks of 6 mn tn, domestic Sugar supplies are estimated at 30mn tn against the domestic consumption of around 22.523 mln tn for 2012-13. Thus, no curbs on exports are seen as of now.

Source: Reuters

Technical Chart - Sugar

NCDEX Dec contract

Source: Telequote

Technical Outlook
Contract Sugar Dec NCDEX Futures Unit Rs./qtl Support

valid for Nov 7, 2012 Resistance 3335-3350

Global Sugar Updates

Sugar output in Brazil jumped 57% during the first fortnight of October. th And thus output is now lower just by 3.7% as of 16 October at 26.7 mn tn. Unica expects the main center-south cane to yield 32.7 mn tn sugar output in 2012-13, down 1.2 % from the 33.1 mn tn forecast in April. Brazil exported 3.998 million tons of sugar, raw value, in October up from 2687 million tons in September. Brazil has exported only 15.59 million tons of sugar this year till October which was 17.17 million tons, raw value, last year same period. The International Sugar Organization said 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 ISO said the stocks/consumption ratio could rise to around 40 percent in 2012/13, from 37.6 percent in 2011/12. (Source: Reuters)

3285-3300

Outlook
Sugar prices may open lower on Wednesday as supplies are sufficient to meet the festive season demand. However, delayed crushing may support prices at lower levels and thus sharp fall may be restricted.

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Commodities Daily Report

Wednesday| November 7, 2012

Agricultural Commodities
Oilseeds
Soybean: Soybean futures settled lower on Tuesday on account of
supply pressure along with fall in soy meal exports in the month of October which is pressurizing the prices. Soy meal exports during October are down 49,840 tn in October, the seventh consecutive month of fall in the current fiscal year, from 223,594 tn a year ago. This is because, most export commitments were done for forward trade like Nov-Dec amid uncertainty over supplies in October. Soybean arrivals at MP stood at 5,00,000 bags on Monday, while in Maharashtra and Rajasthan it stood at 1.5 and 1 lakh bag respectively. Solvent plants are aggressive buyers in the coming days to keep up with their commitments for DOC exports. According to first advance estimates, Soybean output is pegged at 126.2 lk tn for 2012-13.

Market Highlights
Unit Soybean Spot- NCDEX (Indore) Soybean- NCDEX Nov '12 Futures Ref Soy oil SpotNCDEX(Indore) Ref Soy oil- NCDEX Nov '12 Futures Rs/qtl Rs/qtl Rs/10 kgs Rs/10 kgs Last 3336 3279 696.4 677.9

as on Nov 6, 2012 % Change Prev day 2.08 -0.39 0.64 0.48 WoW 2.49 0.86 -1.66 -1.43 MoM 3.31 0.71 3.63 1.33 YoY 50.00 46.39 9.66 6.05

Source: Reuters

as on Nov 6, 2012 International Prices Soybean- CBOTNov'12 Futures Soybean Oil - CBOTDec'12 Futures Unit USc/ Bushel USc/lbs Last 1517 48.68 Prev day 0.83 0.75 WoW -1.11 -2.81 MoM -2.21 -3.57
Source: Reuters

International Markets
CBOT Soybean settled higher by 0.83% on Tuesday on good export demand. According to the latest crop progress report released by USDA, as on 4th Nov 2012, US soybean harvest is 93% complete as compared to 87% last week and 86% compared to 5 year average. Planting of Soybean in Argentina has been delayed due to excessive moisture this season. Area and production for marketing year 201213 are maintained at 19.7 million hectares and 55 million tonnes, respectively. Brazil could also churn out 81 mn tn of oilseed and replace the drought-stricken US as the world's top soybean producer. According to the USDA October monthly report, Global soybean production is projected at 264.3 million tons, up 6.2 million mostly due to an increase for the United States. Ending stocks are seen down from 169 million bushels in 2011-12 to 115 million bushels in 2012-13 season.

YoY 27.22 -4.92

Crude Palm Oil

as on Nov 6, 2012 % Change Prev day WoW -0.87 -0.49 -4.68 0.38

Unit
CPO-Bursa Malaysia Nov '12 Contract CPO-MCX- Nov '12 Futures

Last 2280 427.6

MoM 4.16 -0.56

YoY #N/A -16.11

MYR/Tonne Rs/10 kg

Source: Reuters

RM Seed
Unit RM Seed SpotNCDEX (Jaipur) RM Seed- NCDEX Nov '12 Futures Rs/100 kgs Rs/100 kgs Last 4225 4122 Prev day -0.29 0.02

as on Nov 6, 2012 WoW -2.31 -2.85 MoM 0.60 1.95

Source: Reuters

Refined Soy Oil: Ref soy oil settled higher by 0.64% on account
festive season demand. Worries over high Palm oil stocks in Malaysia as well as reduction in Indonesias export tax led to a correction on the BMD. This could further dent demand for Malaysian palm oil and exert pressure on the BMD palm oil futures. Exports of Malaysian palm oil products for Oct. 1-25 rose 11 percent. According to latest data from SEA, total vegetable oil imports in September were 993,912 tn, up from 897,018 tn in the previous month. As per MPOBs latest report, Malaysia's September palm oil stocks rose 17 percent to record high 2.48 million tons compared to previous month. Rape/mustard Seed: After witnessing correction last week, Rm seed futures settled marginally higher by 0.02% on Tuesday. th Mustard sowing as on 25 Oct was reported at 8.37 lakh ha as compared to 20.15 lakh ha in the same period last year. However, on the back of higher returns and improved rains, next years output is expected to be better. Prospects of better sowing shall keep sentiments weak in the medium term. Outlook Edible oil complex may extend the gains of the previous session on Tuesday. However, prices may decline towards the end due to arrival pressure in the domestic markets coupled with weak international markets. Export duty cut on CPO by Indonesia will make available cheaper palm oil for overseas buyers and refiners and could dent demand for Malaysian palm oil and weigh on prices.

YoY 36.02 29.99

Technical Chart Soybean

NCDEX Dec contract

Source: Telequote

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

valid for Nov 7, 2012 Support 653-659 3255-3290 4100-4135 417-422 Resistance 672-676 3360-3391 4230-4268 431-436

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Commodities Daily Report

Wednesday| November 7, 2012

Agricultural Commodities
Black Pepper
Pepper futures traded sideways yesterday. Prices opened lower on expectations of a higher output this season. Farmers are also trying to liquidate their stocks ahead of the commencement of arrivals of the fresh crop. Exports demand for Indian pepper in the international markets remains weak due to huge price parity. However, festive as well as winter demand may support prices at lower levels and prices recovered towards the end of the session. The Spot as well as the Futures settled 0.26% and 0.2% higher on Tuesday. Pepper prices in the international market are being quoted at $8,700/tn(C&F) while Vietnam was offering 550GL at $7,000/tn, Brazil Austa at $6,700/tn, and Indonesia Austa at $6,850/tn (FOB).

Market Highlights
Unit Pepper SpotNCDEX (Kochi) Pepper- NCDEX Nov '12 Futures Rs/qtl Rs/qtl Last 42041 42620 % Change Prev day 0.26 0.20

as on Nov 6, 2012 WoW -1.90 -3.78 MoM -0.65 -3.00 YoY 21.38 22.30

Source: Reuters

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 September 2012 is estimated around 80,433 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.

Technical Chart Black Pepper

NCDEX Dec contract

Source: Telequote

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

valid for Nov 7, 2012 Support 42000-42300 Resistance 42740-42900

Production and Arrivals

The arrivals in the spot market were reported at 9 tonnes while offtakes were 9 tonnes on Tuesday. As per IPC, Global pepper production in 2012 is projected at 3.36 lk tn, up by 12.7% compared with 2.98 lk tn in 2011. Indonesian pepper output Is expected to rise by 24% and in Vietnam by 10%. According to previous estimates, 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). Brazil is also expected to produce 22,000 tn this year. 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 is expected to trade sideways today. Liquidation pressure from farmers as well as low export demand may pressurize prices. Good supplies in the international market from other origins may also keep prices under check. However, festive season demand is expected to support prices at lower levels.

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Commodities Daily Report

Wednesday| November 7, 2012

Agricultural Commodities
Jeera
Jeera Futures traded sideways with a positive bias on reports of some export enquiries. However, the sowing of the crop has started and is expected to gain momentum in the coming days, thus pressuring prices. Sowing in Gujarat is currently lower by 15-20%. Expectations of good export demand at lower levels supported prices in the spot. Festive demand is also expected to improve. Exporters have been buying due to tensions between Syria and Turkey. The spot settled 0.45% higher while the Futures (Dec) settled 0.02% lower on Tuesday. According to markets sources about 75% exports target has already been achieved due to a supply crunch in the global markets. 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. 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 $2,825 tn (c&f) while Syria and Turkey are not offering. Carryover stocks of Jeera in the domestic market is expected to be around 4-5 lakh bags lower by around 3 lakh bags last year.

Market Highlights
Unit Jeera SpotNCDEX(Unjha) Jeera- NCDEX Nov '12 Futures Rs/qtl Rs/qtl Last 15023 14475 Prev day 0.45 0.43

as on Nov 6, 2012 % Change WoW -0.13 1.22 MoM 2.75 1.38 YoY 4.53 5.14

Source: Reuters

Technical Chart Jeera

NCDEX Dec contract

Production, Arrivals and Exports

Unjha markets witnessed arrivals of 7,000 bags, while off-takes stood at 7,500 bags on Tuesday. Production of Jeera in 2011-12 is expected to be around 40 lakh bags as compared to 29 lakh bags in 2010-11 (each bag weighs 55 kgs). (Source: spot market traders). According to Spices Board of India, exports of Jeera in April 2012 stood at 2,500 tonnes as compared to 2,369 tonnes in April 2011, an increase of 6%.
Source: Telequote

Market Highlights
Prev day 2.16 4.00

as on Nov 6, 2012 % Change

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

Last 5092 5402

WoW 3.50 6.30

MoM -2.41 -1.75

YoY -9.68 15.08

Outlook
Jeera futures are expected to trade sideways. Prices may recover if the export demand increases. Festive buying may also lend support to the prices. However, improvement in sowing may cap sharp gains. In the medium term (November-December 2012), prices are likely to stay firm as there are limited stocks with Syria and Turkey.

Technical Chart Turmeric

NCDEX Dec contract

Turmeric
Turmeric Futures traded on a bullish note hitting the 4% upper circuit yesterday anticipating crop damage due to Cyclone Nilam in Andhra Pradesh. Also, fresh upcountry orders supported the prices. Stockists have good carryover stocks with them, capping sharp gains in the spot. Turmeric has been sown in 0.58 lakh hectares in A.P as on 10/10/2012. Sowing is also reported 30-35% lower during the sowing period. The Spot as well as the December Futures settled 2.16% and 4% higher on Tuesday.

Production, Arrivals and Exports

Arrivals in Erode and Nizamabad mandi stood at 6,000 bags and 700 bags respectively on Monday. 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 Dec Futures Turmeric NCDEX Dec Futures Rs/qtl Rs/qtl

Valid for Nov 7, 2012

Support 14780-14920 5280-5340 Resistance 15215-15410 5446-5536

Outlook
Turmeric prices are expected to trade upward today. Revival of domestic as well as export orders are expected to support prices. However, large stocks may pressurize prices.

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Commodities Daily Report

Wednesday| November 7, 2012

Agricultural Commodities
Kapas
NCDEX Kapas futures settled higher by 1.50% as lower level Kapas procurement by CCI is providing support and restricting the prices to fall sharply. As on 28th October 2012, 8.69 lakh bales of Cotton has arrived so far, down by 33% compared to last year 12.96 lakh bales during the same period. ICE cotton futures settled lower by 0.43% due to pace in harvesting. Cotton harvesting has commenced in US, in all 50% is harvested as compared to 38% a week ago, versus 56% same period a year ago. Cotton crop condition is 43% in Good/Excellent state compared to 42% st last week and 29% same period a year ago as on 1 Nov 2012.

Market Highlights
Unit Rs/20 kgs Rs/Bale Last 981.5 16190

as on Nov 6, 2012 % Change Prev. day WoW 1.50 -2.34 0.87 -1.64 MoM 3.81 -1.64 YoY -3.05

NCDEX Kapas Futures MCX Cotton Futures

Source: Reuters

International Prices
ICE Cotton Cot look A Index Unit Usc/Lbs Last 70.1 81.35

as on Nov 6 2012 % Change Prev day WoW -0.43 0.04 0.00 0.00 MoM 0.43 0.00 YoY -27.87 -29.20

Domestic Production and Consumption

According to Cotton Advisory Boards (CAB) latest estimates for 2012-13 season that commenced in October, domestic cotton production is pegged 334 lakh bales, down 5.6% from the previous years estimates of 353 lakh bales. Lower opening stocks coupled with estimated lower output will result in lower supplies this season at 374 lakh bales, a decline of 8.7% compared with last years 410.77 lakh bales. On the consumption front, domestic consumption is estimated higher at 270 lakh bales on the back of higher mill consumption. However, after witnessing record exports in 2011-12 season, Indian exports could witness significant fall this season on the back of lower availability along with unattractive domestic cotton prices. CAB estimates cotton exports at 70 lakh bales this season, compared with 128.8 lakh bales last year.

Source: Reuters

Technical Chart - Kapas

NCDEX April contract

Global Cotton Updates

Worries over possible supply squeeze have pushed cotton futures towards 80 cents per pound during mid October. However, in the past one week, ICE cotton futures plunged back to its 71 cents levels on account of rising certified cotton stocks. Stocks rose by a 16% since midOctober, and then jumped by 20% within two days. Harvesting is on in US and 50 percent of harvesting is completed till date. Higher global ending stocks are seen capping the upside in the cotton prices this year too. However, downside is also limited as prices are again nearing its 12 year average price of 65 cents per pound. Markets will now take cues from the Chinese demand for cotton and trade policies of India with respect to cotton exports. In its October monthly demand supply report, the Agriculture Department (USDA) raised its cotton crop for 2012/13 cotton crop season to 17.29 mln bales (Prev 17.11) along with upward revision in end stocks 5.60 mln 480 pounds/bales (Prev 5.30). Exports were down to 11.60 mln 480 pounds/bales (Prev 11.80).

Source: Telequote

Technical Chart - Cotton

MCX Nov contract

Source: Telequote

Outlook
Weak international markets may pressurize cotton prices during the initial part of the week. However, no major downside is expected in the domestic markets as farmers will not sell their stocks at very low prices. Also, CCI procurement at MSP levels may support prices from falling sharply.

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

valid for Nov 7, 2012 Support 965-972 962-970 15770-15920 Resistance 991-1000 988-998 16180-16290

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