Commodities Daily Report

Monday| January 14, 2013

Agricultural Commodities

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

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

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Commodities Daily Report

Monday| January 14, 2013

Agricultural Commodities
News in brief
Govt asks FMC to Study Transaction Tax Impact on Commodity Futures
The government has asked commodities exchange regulator Forward Markets Commission (FMC) to submit a report assessing the impact of a transaction tax on commodity futures trades in the next two weeks, minister of state for consumer affairs KV Thomas said. While raising financial resources is imperative, we have to carefully consider the impact of a transaction tax on the industry, Thomas told ET on Saturday. You dont want to kill the goose that lays the golden egg.so we have asked FMC to examine the impact of a commodity transaction tax. The regulator will present the study to us in 10-15 days. Thomas said FMCs study would be the basis for his ministrys observations on the matter, which would be conveyed to the finance ministry, the final authority to approve such a tax. The ministers comments come close on the heels of commodity exchange officials having conducted a series of meetings with media houses across Mumbai late last week to counter arguments by the BSE, Asias oldest stock exchange, which said an equivalent of a securities transaction tax should be imposed on commodity futures trading, if STT cannot be abolished. (Source: Economic Times)

Market Highlights (% change)

Last Prev. day

as on Jan 11, 2013

WoW MoM YoY

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

19664 5951 54.88 93.56 1660

0.00 -0.29 0.83 -0.28 -1.03

-0.61 -1.08 -0.12 0.50 0.72

2.26 1.71 0.66 8.93 -2.10

22.61 23.18 6.51 -5.59 0.77

.Source: Reuters

Centre seeks info on farmers distress sale

The Centre has asked for information from states on recent instances of large- scale distress sale by farmers and on steps taken to arrest such sales. This follows repeated instances of distress sale of cereals, mainly paddy, by farmers despite a steady rise in the MSP for the last few years. The information has been sought by the agriculture ministry as part of the process to devise a just MSP for the 2013- 14 kharif marketing season, sowing for which will begin from June. Though the CACP regularly seeks details on various issues from states before formalising its recommendations on MSP for different crops, inputs are also being sought on distress sale of crops to ensure farmers get the right price despite producing more, officials said. Officials said the problem of distress sale in paddy is largely prevalent in eastern states of West Bengal, Bihar, eastern Uttar Pradesh, Assam and Odisha. Together, these five states produce almost 45 per cent of the total rice produced in India. However, in 2012- 13, for the second year, running paddy prices in the open market of these eastern states have dropped below the MSP because of inept procurement facilities, forcing farmers to sell their produce in distress. (Source: Business Standard)

Vegetable Prices Cool Off in the North as Mercury Rises

As mercury rises in north India, the prices of vegetables have slowly come down in markets. The arrivals have improved now as truck movement has been restored after dense fog disrupting vegetable transportation in the last few weeks. Traders and vegetable growers say that there will be a decline in prices by 10% to 15% within the next one week. The arrivals at the Azadpur mandi have improved over the last few days as the weather became warmer. Green vegetables have started coming from the adjoining areas of Delhi. Potatoes are arriving from Uttar Pradesh and Punjab and onions are coming from Rajasthan, Gujarat and Nashik. This has resulted in a price fall in the last two days and we are hopeful that there will be a further decline as weather improves, said Raj Kumar, secretary of Azadpur mandi. (Source: Business Standard)

NCDEX to resolve black pepper delivery default issue soon

Amid protests by black pepper traders against the delivery default, leading agri-bourse NCDEX today said it will resolve the issue at the earliest as per the exchanges regulations. We will resolve the issue at the earliest as per our existing regulations, NCDEX CEO and Managing Director R. Ramaseshan told PTI when asked about seizure of its six commodity warehouses in Kerala by the Food Safety authority and consequently the delivery defaults of the commodity. Last month, six warehouses accredited by NCDEX in Ernakulam and Alappuzha district in Kerala were sealed over the complaint of adulteration in pepper stock. Commissioner Food Safety-Kerala Biju Prabhakar said: We have sealed six warehouses and have issued notice to NCDEX to ensure the commodity does not enter the market. The stock in the warehouses was about 8,000 tonnes. State-run Spices Board of India has been asked to examine the samples of the black pepper, he said. (Source: Business Line)

Wheat and cotton in India buck the global trend

In a rare occasion, wheat and cotton prices in India have bucked the global trend in the last three months due to a rapid change in fundamentals post monsoon. Wheat price on the London based benchmark LIFFE exchange recorded a gain of 3.9% at $ 331.8 a tonne, compared with 1.8% decline at $ 286.8 a tonne (Rs. 16,340 a tonne) on the NCDEX. On the benchmark NYBOT, cotton price witnessed a gain of 4.3% at $ 1,657.2 a tonne against a 1.6% decline in the commodity on Indias NCDEX. The Kapas contract closed on NCDEX on Saturday at Rs. 1,533 a quintal translating thereby Rs. 2,606 a bale. (Source: Business Standard)

Panel almost clears draft food Bill; waits for written objections from Oppn parties
Opposition parties led by the Bharatiya Janata Party ( BJP) has blocked adoption of a draft report of a Parliamentary Panel on the food Bill because of differences on issues like coverage of poor people and quantity of grains to be supplied. In the final meeting of the Parliamentary Standing Committee held yesterday, sources said out of 31 members, about 18 members from Opposition parties like BJP, BSP, AIADMK and Shiv Sena raised objections on various clauses of the draft report. Keeping in view the widespread opposition, sources said the panels Chairman Vilasrao Muttemwar asked the members to give their reservation in writing in the next two days as the committee wants to submit the report to the Speaker next week. Sources said the committee is likely to recommend giving legal right over subsidised foodgrains to 67% of the countrys population, which is in line with the governments bill introduced in the Lok Sabha in December 2011. (Source: Business Standard)

Malaysian 2013 palm oil output to inch up-MPOB

Malaysian crude palm oil production this year will rise marginally to 18.9 mn tn compared to 18.8 mn tn in 2012 as yields improve, an industry regulator said. MPOB Director General Choo Yuen May said more of the country's 5.1 mn ha of oil palm acreage coming into maturity will support production. As the second largest palm oil producer in the world, Malaysia's output is still lagging far behind that of top supplier Indonesia where production is expected to hit 27 mn tn this year. (Source: Reuters)

USDA cuts US cotton stocks, ups world supply to new high

The U.S. government took a bigger-than-expected chunk from its forecast for U.S. cotton inventory in the 2012/13 season, sending prices higher even as the monthly crop report raised its prediction for the global surplus to a fresh record of almost 82 million 480-lb bales. In its monthly update on Friday, the U.S. Department of Agriculture cut its U.S carryover by 11 percent to 4.8 million 480-lb bales as a drought in Texas, the country's main growing state, forced farmers to abandon crops at a faster than expected rate. (Source: Reuters)

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Commodities Daily Report

Monday| January 14, 2013

Agricultural Commodities
Chana
Chana April contract settled 0.23% lower on account of continuous rise in imports which is easing supplies in the domestic markets coupled with higher output expectations for the coming season. Although chana prices witnessed 17% gains in 2012 on the back of lower availability, sentiments have turned negative in the month of December on account of continuous supplies of imported chana from Australia coupled with higher output expectations. As a result, prices in the month of December 2012 declined 8.8%.

Market Highlights
Unit Rs/qtl Rs/qtl Last 4003 4086 Prev day 0.06 0.32

as on Jan 12, 2013 % change WoW MoM 1.33 -2.63 3.81 -0.49 YoY 14.97 16.68

Chana Spot - NCDEX (Delhi) Chana- NCDEX Jan'13 Futures

Source: Reuters

Sowing progress
Total pulses acreage as on 11th Jan 2013 stood at 140.87 lakh ha, up by th 0.4% yoy. As on 4 Jan 2013, pulses acreage was down by 0.4%. Chana sowing is almost complete and acreage so far is at 91.68 lakh ha, up by 5.4% as on 11th Jan. Chana acreage is marginally higher by 3% this year in Rajasthan at 14.80 th lakh ha, In Maharashtra Chana acreage is up at 10.92 lakh ha as on 11 Jan 2013 vs normal area of 10.6 lakh ha and 2012 area of 7.04 lakh ha. th While in AP it is up at 7.14 lakh ha as on 11 Jan 2013, up by 26%. (Source: State farm dept)

Technical Chart - Chana

NCDEX April contract

Demand supply fundamentals

Chana fresh crop arrival has started in Karnataka & Andhra Pradesh and would commence soon in Maharashtra too. However, arrival pressure will built up February onwards when harvesting commence in MP. 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 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. The Commission for Agriculture Costs and Prices (CACP) has suggested 10 per cent import duty on pulses to encourage domestic production. in the first six months of the new fiscal that is from April to September this year, imports were an estimated 12 lakh tonnes. 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 Apr Futures Unit Rs./qtl Support

valid for Jan 14, 2013 Resistance 3545-3565

3480-3510

Trade Scenario
USDA revealed that Myanmar beans and pulses export is up by 56 per cent to 110498 MT as compared with same period in last year. Out of the total export, 73 percent (80721 MT) was exported to India followed by Singapore (11316 MT). (Source: Agriwatch dated Dec 27) In Australia, total chickpea production in 201213 is estimated to have increased to a record of around 746000 tones as compared with 485000 tons in 2011-12. India imports Chana mainly from Australia and Canada and higher availability in these countries at comparatively cheaper rates is seen boosting imports of Chana to meet the domestic shortfall.

Outlook
Chana April contract may trade with a negative bias due to higher shipments of imported chana and expectations of better output next season. Any adverse report with respect to weather may bring a rebound in the prices and thus a close watch on weather is crucial at this point of time.

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Commodities Daily Report

Monday| January 14, 2013

Agricultural Commodities
Sugar
Sugar February contract settled marginally lower by 0.09% as higher domestic production figures in the first quarter of the current marketing season is exerting downside pressure on the sugar prices. However, spot settled 0.06% higher as demand is seen emerging at lower levels. There are reports that drought in parts of Maharashtra and Karnataka has hurt fresh sugarcane plantings, which may affect cane availability for sugar year 2013-14 starting October. Although this will have long term implications, outlook for short term remains bleak amid sufficient supplies. Government has allocated total 70 lac tons of non-levy sugar quota for Dec-March 2012-13 period which is higher from 59.5 lac tons last year. Raw sugar futures on ICE as well as Liffe white sugar settled 0.45% and 1.11% higher on Friday as dealers expected that index fund buying could help extend gains with the index's re-balancing this week. Prices had corrected earlier due to supply glut in the global markets. According to Unica, Brazil's 2012-2013 center-south sugar output is expected to reach 34.05 million tonnes, an estimate 4.1% higher than its 32.7 million tonnes September forecast.

Market Highlights
Unit Sugar Spot- NCDEX (Kolhapur) Sugar M- NCDEX Jan'13 Futures Rs/qtl Last 3245

as on Jan 12, 2013 % Change Prev. day WoW 0.06 -0.25 MoM -2.73 YoY 10.86

Rs/qtl

3198

-0.09

-0.47

-0.59

12.21

Source: Reuters

International Prices
Unit Sugar No 5- LiffeMar'13 Futures Sugar No 11-ICE Mar '13 Futures $/tonne $/tonne Last 514.8 426.00

as on Jan 11, 2013 % Change Prev day WoW 0.45 1.11 0.86 1.70 MoM -0.14 -0.21 YoY -17.25 -19.59

.Source: Reuters

Domestic Production and Exports

Mills in the country have produced 7.96 mln tn sugar in the first three months of the season, up nearly 2.5% a year ago. In Maharashtra, the largest sugar producer in the country, 155 mills are operational and have produced 1.88 mln tn sugar till Dec 15, compared with 1.83 mln produced a year ago by 165 mills. In Uttar Pradesh, the second largest sugar producer in the country, total output as on Dec 15 was 1.03 mln tn, about 20% lower on year, as some mills in the eastern part of the state are still to commence cane crushing. The producers body has estimated sugar output lower at 24 mn tn, down by 2mn tn compared to the current year. Industry body ISMA has estimated 6.5 mn tn stocks for the new season beginning October 01, 2012 compared to 5.5 mn tn year ago. India may export 1.5 mn tn sugar in 2012-13. With the opening stocks of 6.5 mn tn, domestic Sugar supplies are estimated at 30.5 mn tn against the domestic consumption of around 22. 5mln tn for 2012-13.

Technical Chart - Sugar

NCDEX Feb contract

Source: Telequote

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

valid for Jan 14, 2013 Resistance 3260-3270

Global Sugar Updates

According to the Brazil Agriculture Ministry, The 2012/13 cane crush was at 531.35 million tonnes as of Dec. 31, up from 491.16 million tonnes crushed the previous year. The 2013/14 crush will likely surpass the current one. Brazil's main center-south cane crop will produce between 580 million and 590 million tonnes of sugar cane in 2013/14. Brazil will likely favor ethanol production over sugar from the 2013/14 cane crop. The 2012/13 sugar crop in Thailand, the world's second-biggest exporter, could drop below a forecast 9.4 million tonnes due to lower-thanexpected yield. The crushing season started on Nov. 15 and 1.9 million tonnes of sugar has been produced so far (Source: Reuters)

3235-3245

Outlook
Sugar prices are expected to trade on a mixed note. However, prices may recover in the coming weeks as demand is seen emerging at lower levels. Reports of lower cane planting in some parts of Maharashtra and Karnataka may also bring some stability in the prices. Further, it is expected that government will take some measure to control prices, which are below the cost of production levels, from falling further so as to protect the interest of the millers.

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Commodities Daily Report

Monday| January 14, 2013

Agricultural Commodities
Oilseeds
Soybean: Soybean Spot as well as futures settled 0.53% higher on
Saturday on account of short coverings. Arrivals in the domestic markets declined to 1.8-2 lakh bags, while demand is comparatively lower amid subdued overseas demand for soy meal. According to first advance estimates, Soybean output is pegged at 126.2 lakh tn for 2012-13. Soy meal exports fell by 34% in December to 5.10 lakh tn, according to SOPA. The country had exported 7,78,382 tn in December 2011. During the first three months of the current oil year (Oct-Sep), exports declined by 27% to 10.78 lakh tn as against 14.69 lakh tn in the yearago period. (Source: Business line)
Unit Soybean Spot- NCDEX (Indore) Soybean- NCDEX Jan '13 Futures Ref Soy oil SpotNCDEX(Indore) Ref Soy oil- NCDEX Jan '13 Futures Rs/qtl Rs/qtl Rs/10 kgs Rs/10 kgs Last 3187 3127 734.4 728.4

Market Highlights

as on Jan 12, 2013 % Change Prev day 0.06 1.31 0.25 0.41 WoW -0.16 -0.71 3.16 3.72 MoM -3.01 -4.85 2.16 2.24 YoY 27.79 22.63 1.45 0.12

International Markets
Soybean futures on the CBOT traded on a negative note in the March contract and settled 0.47% lower on Friday due as the USDA monthly report raised US soy harvest by 1.5% from last month to 3.015mn bushels and inventories by 3.8% to 135 mn bushels. Argentina soy planting advanced quickly in the last week to cover more than 90% of the targeted 19.7 mn ha, marking progress of 5.9% points during the week and outpacing last season's planting by 5.2 points. The next harvest will come in March and is projected by the govt at 55 mn tn or higher, depending on the weather. According to the USDA monthly crop report, Brazil will produce a record 82.5 mn tn of soybeans in 2012-13 due to hefty expansion in acreage and improving yield prospects. With the harvest just beginning in some areas, Brazil's planted area will likely increase by 9.2 percent to 27.34 mn ha.
International Prices Soybean- CBOTJan'13 Futures Soybean Oil - CBOTJan'13 Futures Unit USc/ Bushel USc/lbs Last 1425 48.88 Prev day 0.51 -1.03 WoW 2.57 -1.09

Source: Reuters

as on Jan 11, 2013 MoM -3.39 -3.84

Source: Reuters

YoY 20.90 -4.44

Crude Palm Oil

as on Jan 12, 2013 % Change Prev day WoW -0.26 -0.28 -4.22 -2.51

Unit
CPO-Bursa Malaysia Jan '13 Contract CPO-MCX- Jan '13 Futures

Last 2269 430.7

MoM 6.98 6.85

YoY -29.25 -20.00

MYR/Tonne Rs/10 kg

Refined Soy Oil: Ref soy oil prices remained positive on Saturday
on account of lower supplies in the domestic markets while CPO futures declined as export figures released for first 10 days of January showed a sharp fall in exports. With the new tax structure, markets expected exports to improve. Also, MPOB data released on Thursday revealed further increase in stock piles by 2.4% in December, while exports declined 0.7% in December. Palm oil Stockpiles used in food and biofuel were 2.53 mn tn in December compared to an all-time high of 2.56 mn tn a month earlier, according to the Bloomberg survey. Output probably fell 7.9% to 1.74 mn tn, while exports dropped 3.6% to 1.6 mn tn in December, the survey showed.

Source: Reuters

RM Seed
Unit RM Seed SpotNCDEX (Jaipur) RM Seed- NCDEX Jan'13 Futures Rs/100 kgs Rs/100 kgs Last 4228 4201 Prev day 0.06 -0.12

as on Jan 12, 2013 WoW 0.54 1.11 MoM 0.06 4.09

Source: Reuters

YoY 17.92 11.97

Technical Chart Soybean

NCDEX Feb contract

Rape/mustard Seed: Mustard seed April Futures made fresh lows

and settled 0.52% lower on expectations of higher output in 201213. Rabi oilseeds sowing which was up by 1.3% as on Dec 28, is now up by 1.99% at 8.1 mn ha as of Jan. 4. Arrivals are expected to commence in February and thus no major upside in the prices is seen. Indian farmers have cultivated rapeseed on 6.62 mn ha as of Jan. 4, compared with 6.44 million hectares during the same period last year. Rapeseed output is expected to rise by 5% to 6.5 mn tn from 6 mn tn last year.

Outlook
Soybean complex may recover from lower levels due to short coverings at lower levels. Mustard seed prices may decline further on likely higher output and expectations of arrivals to commence soon. CPO may trade lower due to higher ending stocks with Malaysia.

Source: Telequote

Technical Outlook
Contract Soy Oil Feb NCDEX Futures Soybean NCDEX Feb Futures RM Seed NCDEX Apr Futures CPO MCX Jan Futures Unit Rs./qtl Rs./qtl Rs./qtl Rs./qtl

valid for Jan 14, 2013 Support 690-695 3070-3115 3430-3450 423-427 Resistance 706-710 3180-3200 3490-3510 435-440

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Commodities Daily Report

Monday| January 14, 2013

Agricultural Commodities
Black Pepper
Pepper Futures traded on a positive note on Saturday but corrected from higher levels towards the end. Prices have gained due strong demand from Tamil Nadu ahead of Pongal. Good winter demand also supported the prices. Prices have also increased over the last few days due to arrivals of good quality pepper from Kerala. Earlier, prices had corrected as Food Safety and Standards Authority of India sealed the entire quantity of pepper stored in six warehouses in Kerala of about 5,000 tonnes. Harvesting of the fresh crop has commenced and is expected to gain momentum in the coming days. However, winter demand coupled with low stocks in the domestic markets has supported prices at lower levels. FMC is probing into complaints against movement in the pepper market which has pressurized prices. Exports demand for Indian pepper in the international markets is also weak due to price parity. The Spot as well as the Futures settled 0.11% and 0.43% higher on Saturday. Spices Board has announced plans to import high yielding Madagascar variety that was behind the record productivity in Vietnam. It could raise productivity of Indian pepper from 2,000 kg/ha to 7,000 kg/ha. Pepper prices in the international market are being quoted at $7,800/tn(C&F Europe.

Market Highlights
Unit Pepper SpotNCDEX (Kochi) Pepper- NCDEX Feb'13 Futures Rs/qtl Rs/qtl Last 38606 35980 % Change Prev day 0.11 0.43

as on Jan 12, 2013 WoW 1.45 1.72 MoM -0.27 -8.21 YoY 22.96 14.88

Source: Reuters

Technical Chart Black Pepper

NCDEX Feb contract

Exports and Imports

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 pepper during Jan-Oct 2012 stood at 102,340 mt, lower by 12% as compared to 1,15,780 mt in the same period last year. Total exports in 2012 are forecasted at around 1,10,000 tonnes. Pepper imports by U.S. the largest consumer of the spice declined 26% during January-September 2012 period to 41,923 tn as compared to 52,489 tn in the same period previous year. 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. Brazil exported 25,900 tn pepper during Jan-Nov 2012, around 20% lower compared with 32,650 tn in the same period last year. Exports from Malaysia 8,300 tn pepper during Jan-Oct 2012, lower by 30% last year while exports in October stood at 1,077 mt in.

Source: Telequote

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

valid for Jan 14, 2013 Support 35430-35700 Resistance 36250-36520

Production and Arrivals

The arrivals in the spot market were reported at 23 tonnes while off takes were reported at 23 tonnes on Saturday. As per IPC, Global pepper production in 2012 is projected at 3.27 lk tn, up compared with 3.18 lk tn in 2011. Production for 2013 is projected at 316832 tn. Indonesian pepper output is expected to rise by 24% and in Vietnam by 10%. According to previous estimates, pepper output in Vietnam is estimated to be 1 lakh tonne in 2012 as compared to 1.1 lakh tonne in 2011. 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) Pepper production in 2012-13 is expected around 60,000-63,000 tonnes. Currently, pepper is in the fruit formation stage in Kerala.

Outlook
Pepper may continue to trade on a positive to bullish note on account of strong demand from Tamil Nadu due to Pongal. Winter buying coupled with arrivals of good quality crop may also support prices. However, increasing supplies coupled with higher output expectations may cap sharp gains. FSSAIs sealing of huge quantity of pepper and FMCs probe into complaints against price movement may also pressurise the prices.

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Commodities Daily Report

Monday| January 14, 2013

Agricultural Commodities
Jeera
Jeera Futures traded on a flat note on Saturday. Prices have corrected sharply and made fresh lows on account of higher sowing as well as conducive weather in Gujarat, the main jeera growing belt. About 95% of sowing is completed and is in its final stage. According to Gujarat State Agri Dept. sowing in Gujarat is reported at 3.074 lakh ha as on st 31 Dec, 2012 compared with 2.822 lakh ha last year. In Rajasthan, sowing is expected to increase by 10-15%. The spot settled 0.64% lower while the Futures settled higher by 0.13% on Saturday. 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 $2,850-2,875 tn (c&f) while Syria and Turkey are not offering. Carryover stocks of Jeera in the domestic market is expected to be around 5-6 lakh bags.

Market Highlights
Unit Jeera SpotNCDEX(Unjha) Jeera- NCDEX Mar '13 Futures Rs/qtl Rs/qtl Last 14341 13745 Prev day -0.64 0.13

as on Jan 12, 2013 % Change WoW -1.57 -4.35 MoM -4.42 -5.32 YoY -9.81 -14.47

Source: Reuters

Technical Chart Jeera

NCDEX March contract

Production, Arrivals and Exports

Arrivals in Unjha were reported at 3,000 tn on Friday. Production of Jeera in 2011-12 is expected around 40 lakh bags as against 29 lakh bags in 2010-11 (55 kgs each). 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 -1.99

as on Jan 12, 2013 % Change

Outlook
Jeera prices may continue to trade on the downside tracking higher sowing figures in Gujarat. However, fresh export enquiries may limit a sharp downside. Demand from domestic traders and millers at lower levels may also support prices. In the medium term, prices are likely to stay firm as there are limited stocks with Syria and Turkey.
Unit Turmeric SpotNCDEX (N'zmbad) Turmeric- NCDEX Apr '13 Futures Rs/qtl Rs/qtl Last 5693 6500

WoW -0.09 -3.27

MoM 9.87 25.05

YoY 10.53 39.66

Turmeric
Turmeric Futures corrected on Saturday on account of huge carryover stocks which have pressurized the prices at higher levels. Good demand from the stockists as well as North India has supported the prices over the last few weeks. Lower production estimates have also supported the prices. Also, arrivals of good quality crop have supported prices. There are reports of some crop damage in Erode region. Expectations are that production may be lower by 40-50%. Production is expected around 55 lakh bags. It is estimated that next years carryover stocks would be around 10 lakh bags. There are reports that Turmeric Farmers Association of India have decided to fix their own MSP of Rs.10000/qtl. The Spot as well as the Futures settled 0.13% and 0.36% higher on Thursday.

Technical Chart Turmeric

NCDEX April contract

Production, Arrivals and Exports

The spot markets remained closed on account of Pongal festival. Turmeric production in 2012-13 is expected around 64-65 lakh bags. Production in 2011-12 is projected at historical high of 10.62 lakh tn. 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. Outlook Turmeric may trade on a mixed note with a negative bias today. Higher carryover stocks and weak overseas demand may pressurize prices while lower production expectations coupled with demand from stockists and weather concerns may support prices.
.

Source: Telequote

Technical Outlook
Unit Jeera NCDEX March Futures Turmeric NCDEX April Futures Rs/qtl Rs/qtl

Valid for Jan 14, 2013

Support 13580-13660 6300-6400 Resistance 13820-14000 6590-6680

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Commodities Daily Report

Monday| January 14, 2013

Agricultural Commodities
Kapas
Kapas prices settled 0.91% lower on Saturday on account of estimated higher output coupled with weak exports. Registration for exports of cotton yarn has hit the highest in at least two years on burgeoning demand from Indias perennially importing countries i.e. Bangladesh and China. Although, Cotton advisory Board has pegged cotton output lower at 334 th lakh bales, Cotton Association of India (CAI), in its latest 90 annual general meeting said that Cotton production in the season 2012-13 is expected to be around 350 lakh bales, while the consumption is likely to be around 265 lakh bales. According to the data released by Cotton Corporation of India, Supplies until Dec. 16 fell to 6.2 mn bales of 170 kg each, down from 6.9 mn bales th a year earlier. Arrivals were down by 12.5% as on 9 Dec. However, it is still below expectations as many farmers, who are waiting for better returns, hold back their produce. ICE Cotton recovered from lower levels and settled 0.56% higher on Friday on account of short coverings.

Market Highlights
Unit Rs/20 kgs Rs/Bale Last 930 16340

as on Jan 12, 2013 % Change Prev. day WoW -0.91 -1.22 -0.31 -0.06 MoM -9.66 -0.06 YoY #N/A -9.27

NCDEX Kapas Futures MCX Cotton Futures

Source: Reuters

International Prices
ICE Cotton Cot look A Index Unit USc/Lbs Last 75.62 81.35

as on Jan 11, 2013 % Change Prev day WoW 0.56 0.76 0.00 0.00 MoM 2.48 0.00 YoY -20.79 -29.20

Source: Reuters

Technical Chart - Kapas

NCDEX April contract

Domestic Production and Consumption

According to Cotton Advisory Boards (CAB) estimates (4 Oct 2012) 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.
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Source: Telequote

Technical Chart - Cotton

MCX Jan contract

Global Cotton Updates

China, the world's biggest cotton consumer and importer, is studying a proposal to issue extra import quotas for textile mills which have been pushing the government to boost the amount of cheaper overseas cotton they can buy. If approved, the quotas will require mills to buy three tonnes of cotton from state reserves for every tonne they import. Brazils 2012-13 cotton production forecast at 6.3 million bales, down 27 percent from 2011/12 production now estimated at 8.6 million bales. (USDA attach report)
Source: Telequote

Outlook
Cotton prices may trade downwards today. Higher output expectations by Cotton Association of India have turned the sentiments negative for the cotton prices. However, downside may be limited as farmers may not sell their stocks at lower prices. Reports that the Government may purchase cotton from farmers to avoid distress sales may also support prices. Also demand remains strong at low prices.

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

valid for Jan 14, 2013 Support 915-923 16240-16290 Resistance 941-955 16420-16490

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