Commodities Daily Report

Friday| October 19, 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

Friday| October 19, 2012

Agricultural Commodities
News in brief
Do not allow guar futures till FCRA bill cleared: Assocham
The government should not allow re-listing of guar futures till the passage of the FCRA bill, industry body Assocham said today. In March this year, FMC had banned futures trading in guarseed and guargum, which is increasingly used in oil and gas industry, to curb price volatility and speculation. "Assocham has cautioned the government for re-listing guargum and guarseeds in the future market till the Forward Contract Regulation Amendment (FCRA) Bill to accord adequate powers to FMC with a view to regulate the market and penalise any insider trading, cartelisation and price manipulations," a release said. The chamber's statement comes in the backdrop of the recent meeting of an expert committee which discussed the proposal on re-listing of guar futures. The FMC is yet to take a final call on this issue. As the futures trade affects spot price volatility, Assocham suggested development of organised spot markets with electronic platforms, warehousing and testing labs to facilitate efficient and transparent trade.
(Source: Money Control)

Market Highlights (% change)

Last Prev. day

as on Oct 18, 2012

WoW MoM YoY

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

18792 5719 53.58 92.1 1743

0.97 1.03 1.38 -0.02 -0.47

-0.07 0.19 1.77 0.03 -1.44

1.77 2.53 -0.56 -4.68 -1.38

10.01 11.43 9.46 6.62 4.05

Source: Reuters

Conditions favourable for onset of North-East monsoon

The India Meteorological Department (IMD) has declared that the SouthWest monsoon has withdrawn from the entire country on Thursday. But it stopped short of announcing the onset of the North-East monsoon, although thundershowers have been reported from many parts of Tamil Nadu and Kerala during the 24 hours ending in the morning. The IMD said that conditions continued to remain favourable for commencement of the North-East monsoon over Tamil Nadu, Kerala and adjoining areas of Andhra Pradesh and Karnataka on Friday. Satellite imagery showed convective (rain-bearing) clouds rising over south Tamil Nadu, South Andaman Sea, South-West Bay of Bengal, Comorin area and South-East Arabian Sea. A rain warning for the next two days said that heavy rainfall would occur at one or two places over Tamil Nadu and Kerala. An extended outlook for the next seven days said that thundershowers would continue to break out at many places over extreme south peninsular India. (Source: Business Line)

Withdrawal of Special Margin on Turmeric contracts

Trading and Clearing members are hereby informed that in terms of Byelaws, Rules and Regulations of the Exchange, Special Margin of 20% (in cash) on the Long Side in Turmeric (SYMBOL: TMCFGRNZM) November 2012 and December 2012 expiry contracts will be withdrawn with effect from beginning of day Saturday, October 20, 2012. (Source: NCDEX)

Govt considering hike in import duty on white sugar: KV Thomas

Food Minister K V Thomas has said the government is considering raising import duty on white sugar to 20 per cent in order to check it from flooding the domestic market. Import duty on raw sugar may also be scrapped, he added. A cabinet note will be moved in the next 10-15 days after consultation with the ministries concerned, he added. "There are different proposals before us. One is to increase import duty on white sugar to 20 per cent. The other one is to bring down import duty on raw sugars to zero. We are examining these proposals," Thomas said. At present, import duty on white sugar as well as raw sugar is 10 per cent, each. Thomas further said scrapping of import duty on raw sugar is necessary as imported sweetener would be refined in the domestic market, generating employment here. The minister also said that the free sugar export policy in the current marketing year (Ocotber 2012 to September 2013) will continue. In May, sugar exports were kept under the Open General Licence (OGL) only till September. Sugar production in the country is estimated to be 26 million tonnes this year, higher than the annual demand of 22 million tonnes. (Source: Business Today)

Invest in seed technology to boost farm income

Investing in seed technology is the best that farmers in the countrys predominantly rainfed areas can be given to boost their incomes and combat effects of global climate change, according to K.C. Bansal, Director of the National Bureau of Plant Genetic Resources (NBPGR). There is no better technology than seed for rainfed agriculture, which accounts for 40 per cent of our crops and 50 per cent of our farm workforce. And that is why we are working towards identifying genetic resources for rainfed agriculture, he said at a panel discussion on Agriculture and Technology, organised by IndoAsiancommodities.com, here. Speaking on the occasion, Vibha Ahuja, General Manager, Biotech Consortium of India Ltd, said that the current long-drawn regulatory processes were an impediment to the spread of technology. Bemoaning the restrictions on field trials of genetically modified crops in many States, she said that while civil society groups may be against these varieties, they are not the only stakeholders. Think of the farmers who are waiting for new technologies, she added. (Source: Business Line)

Malaysia seeks to buy Indian wheat on long term

Malaysia has sought to import wheat from India on a long-term basis through diplomatic channel. The Malaysian Agriculture Minister, Noh Bin Omar, explored the possibility of wheat imports from India with the Food Minister, K.V. Thomas, on Thursday. Malaysia has been importing wheat from India, but in small quantities and mainly through the private trade. They are keen to import wheat on a long-term basis. We have asked them to send a technical team to check the quality. Once they decide, we can take it forward, Thomas told reporters. The Food Minister said such exports would be from the central pool stocks. Wheat exports from India have picked up on rising demand amid squeeze in global supplies. So far, the total exports under open general licence have touched 6.3 million tonnes, he said. India had produced an all-time high of 93.9 mt last year. The trade balance is currently in favour of Malaysia from which India is expected to import over two million tonnes of palm oil and other products. (Source: Business LIne)

Cotton yarn exports to rise

Monsanto Co MON.N has temporarily stopped charging royalties on its While estimates for cotton exports in 2012-13 have been lowered by the Cotton Advisory Board (CAB) following Chinas decision to reduce import by half, export of cotton yarn to that country is on the rise. Export of cotton yarn to China is expected to continue its uptrend as cotton available in that country is priced nearly 20 cents per pound more than in the international markets. Besides, wages are on the rise. As a result, China is now cutting on spinning activities and focusing more on valueadded items. CAB has pegged the target for cotton yarn exports at 920 million kg for the current year. Last fiscal, India exported 827.68 million kg of yarn, according to the Directorate General of Foreign Trade (DGFT). Till September this year, India exported 461.52 million kg, according to data released by DGFT. (Source: Business Standard)

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Commodities Daily Report

Friday| October 19, 2012

Agricultural Commodities
Chana
Chana futures opened lower initially on account of short coverings. However, prices recovered sharply owing to festive season demand and comparatively thin supplies. Chana futures settled 0.64% higher on Thursday. Prices have gained considerable since the beginning of October amid festive season buying and lower supplies caused by lower output in 2011-12 season. Prices had declined in the month September on improved rains and reports of expected higher output in Australia, the largest supplier of chickpeas to India. In Australia, chana production rose by 70.5 percent to 8.27 lakh tonnes from 4.85 lakh tonnes in previous year. However, series of festivals ahead and thus emergence of demand at lower prices led prices to gain in the last 2-3 sessions. CACP has recommended a hike in minimum support price (MSP) of gram by Rs.200 to Rs.3000 a quintal and Masoor by Rs.100 to Rs.2900 a quintal for upcoming 212-13 Rabi season to boost the production of pulses. As per the statement of Finance Minister P. Chidambaram, India has raised the subsidy on imported pulses to Rs. 20/kg from the earlier Rs. 10/kg, this move is expected to increase pulses imports. 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. Good rains in the month of August and September has raise prospects of Rabi pulses sowing in the coming days that would commence soon. Monsoon has recovered across India, especially in Rajasthan, one of the major chana growing states, and may prove beneficial for the chana sowing.
st

Market Highlights
Unit Rs/qtl Rs/qtl Last 4689 4864 Prev day -1.46 0.64

as on Oct 18, 2012 % change WoW MoM 2.10 1.64 3.80 6.97 YoY 33.02 46.02

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

Source: Reuters

Technical Chart - Chana

NCDEX Nov contract

Source: Telequote

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

valid for Oct 19, 2012 Resistance 4855-4915

4722-4770

Sowing progress and demand supply fundamentals

According to the Ministry of Agriculture 99.81 Lakh hectare area has been planted under Kharif pulses as on 21th September, 2012 compared to 108.28 lakh hectare (ha) same period last 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. According to the Fourth advance estimates of 2011-12 season, 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. 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)

Outlook
Chana futures are expected to trade with positive bias ahead of festive season demand and tight supplies. However, reports of higher sowing of Rabi pulses this season might pressurize the prices in the medium term.

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Commodities Daily Report

Friday| October 19, 2012

Agricultural Commodities
Sugar
Sugar futures declined on Thursday on account of higher non levy quota of 40 lakh tn for the month of October and November to meet the festive season demand. Further, food ministry is keeping a close watch on sugar sales by millers in the open market and warned against failure to sell the entire quota allocated to them for the October-November period. India, which is likely to produce a sugar surplus for its third year in a row, has decided to allow exports for another year, Food Minster K.V. Thomas said, reflecting confidence about domestic supplies in the world's top consumer of the sweetener. Mills and traders will have to wait for a formal order to export sugar in the new season that began on Oct. 1. Millers based in western and southern India and global trading firms bought sugar at around $500/ton a CIF basis, as the price in the domestic market has jumped more than 23% to $680/ tn in the past three months. Liffe white sugar and ICE raw sugar closed 2.58% and 1.59% lower respectively due to good supplies from Brazil. Higher output and lower imports expectations for the 2012-13 season from China coupled with weak international markets is keeping prices under downside pressure.

Market Highlights
Unit Sugar Spot- NCDEX (Kolkata) Sugar M- NCDEX Oct '12 Futures Rs/qtl Last 3800

as on Oct 18, 2012 % Change Prev. day WoW 0.80 1.96 MoM -2.54 YoY 22.09

Rs/qtl

3416

-0.67

1.18

-4.26

21.48

Source: Reuters

International Prices
Unit Sugar No 5- LiffeDec'12 Futures Sugar No 11-ICE Mar '13 Futures $/tonne $/tonne Last 541 439.78

as on Oct 18, 2012 % Change Prev day WoW -2.58 -1.59 -3.01 -1.30 MoM -3.96 1.80 YoY -23.41 -25.26

Domestic Production and Exports

The area under sugarcane is estimated at 52.88 lakh ha for 2012-13 crop season, up from 50.99 lakh ha on same period a year ago. 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 Nov contract

Source: Telequote

Global Sugar Updates

Sugarcane harvesting in Brazil was down 7.9% as on 1st October 2012 at 24 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. Favorable weather in the second half of September should allow harvest and exports to run on schedule despite a couple of days of rain last week that slowed crushing. Thus sharp upside in the international prices may be capped. 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)

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

valid for Oct 19, 2012 Support 3290-3310 Resistance 3345-3362

Outlook
Sugar prices may remain sideways as higher quota is capping the upside while, festive season demand may restrict fall in the prices. Approval to unrestricted exports may benefit India only if the global sugar prices gain considerably. However, supply pressure from Brazil is keeping international sugar markets under downside pressure.

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Commodities Daily Report

Friday| October 19, 2012

Agricultural Commodities
Oilseeds
Soybean: Soybean futures rebounded on Thursday on account of
bargain buying led by festive season demand for edible oil. Also, farmers are ready to sell their produce at such low levels. The Futures settled 0.7% lower and spot closed 1.11% lower. New soybean arrivals at MP stood at 450000 bags, Maharashtra170000 bags and Rajasthan 100000 bags on Tuesday. Arrivals are expected to improve to 6-6.5 lakh bags in MP in the coming weeks. According to first advance estimates, Soybean output is pegged at 126.2 lk tn for 2012-13. However, drop in area under groundnut, sunflower & castor seed may lead to lower output of these oilseeds in 2012-13 which is estimated 9.6% lower at 187.8 lakh tn. CBOT Soybean settled higher by 2.4% on good weekly export sales data of 5.252 lakh tns. However, the data was lower than the expectations of 6.5-8.5 lakh tns. Also, bargain buying as the prices have reached a 3 month low due to harvest pressure have supported the prices. According to the latest crop progress report released by USDA, as on 16 Oct 2012, US soybean harvest is 71 per cent complete as compared to 58 per cent last week and 58 per cent compared to 5 year average. 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. Brazil could churn out 81 million tonnes of oilseed and replace the drought-stricken US as the world's top soybean producer, according to the USDA.
Soybean Spot- NCDEX (Indore) Soybean- NCDEX Oct '12 Futures Ref Soy oil SpotNCDEX(Indore) Ref Soy oil- NCDEX Oct'12 Futures

Market Highlights
Unit Rs/qtl Rs/qtl Rs/10 kgs Rs/10 kgs Last 3163 3165 673.3 672.1 Prev day 1.74 1.97 1.22 1.06

as on Oct 18, 2012 % Change WoW -2.04 -2.80 0.19 0.46 MoM -21.98 -8.49 -13.93 -6.49
Source: Reuters

YoY 45.76 44.93 7.41 8.41

as on Oct 18, 2012 International Prices Soybean- CBOTNov'12 Futures Soybean Oil - CBOTOct '12 Futures Unit USc/ Bushel USc/lbs Last 1546 52.3 Prev day 2.40 2.49 WoW -0.19 2.79 MoM -7.43 -6.32
Source: Reuters

YoY 26.16 1.59

Crude Palm Oil

as on Oct 18, 2012 % Change Prev day WoW 0.13 1.13 0.67 -2.42

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

Last 2396 419.6

MoM -11.72 -14.19

YoY -15.01 -13.34

MYR/Tonne Rs/10 kg

Refined Soy Oil: Ref soy oil as well as MCX CPO settled higher on
Thursday amid lower level buying by 0.55% on reports that Malaysian government said that it might stop duty free export of palm oil from Jan 2013. Exports of Malaysian palm oil products for Oct. 1-15 rose 13.1% to 769,534 tn from 680,112 tn for the Sept. 1-15 period. Malaysia, the world's No.2 producer of palm oil, will scrap a tax free export quota for the crude grade from 2013 in a bid to reduce feedstock prices for refiners who have lost market share to top supplier Indonesia. 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. India imported 111,163 tn of refined palm oil in September. 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. Moreover, crude palm oil output in September rose 20 percent from August to 2 million tons. Indias edible oil imports should rise 5.4 percent to a record 10.31 million tonnes in 2012/13, with the entire increase met by palm oil.

Source: Reuters

RM Seed
Unit RM Seed SpotNCDEX (Jaipur) RM Seed- NCDEX Oct '12 Futures Rs/100 kgs Rs/100 kgs Last 4275 4195 Prev day 1.18 0.84

as on Oct 18, 2012 WoW 1.79 3.76 MoM 5.56 2.54

Source: Reuters

YoY 45.59 38.27

Technical Chart Soybean

NCDEX Nov contract

Rape/mustard Seed: Mustard spot as well as futures settled

higher by 1.18% and 0.84% owing to supply tightness. Mustard output was lower in 2011-12 and thus this has led to tight supplies in the domestic markets. However, on the back of higher returns and improved rains, next years output is expected to be better. Outlook Edible oil complex is expected to trade on a positive note today due to festive demand. Also, the prices may take cues from the strong international markets.

Source: Telequote

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

valid for Oct 19, 2012 Support 655-662 408-414 4165-4195 417-421 Resistance 675-683 424-428 4285-4335 430-435

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Commodities Daily Report

Friday| October 19, 2012

Agricultural Commodities
Black Pepper
Pepper futures traded on a positive note yesterday on the back of festive demand. Arrivals of the new green pepper crop as well as expectations of improvement in the yield have pressurized the prices at higher levels. However, farmers are unwilling to sell their stocks at lower levels. Traders are buying pepper directly from the farmers. Exports demand for Indian pepper in the international markets remains weak due to huge price parity. The Spot as well as the November Futures settled 0.6% and 0.98% higher respectively on Thursday. 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 $8,400/tonne(C&F) while Indonesia Austa is quoted at $6,850/tonne (FOB). Vietnam was offering 550GL at $7,000/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
Unit Pepper SpotNCDEX (Kochi) Pepper- NCDEX Oct '12 Futures Rs/qtl Rs/qtl Last 42280 43070 % Change Prev day 0.60 0.09

as on Oct 18, 2012 WoW -0.08 -1.98 MoM 0.55 -1.33 YoY 25.31 31.89

Source: Reuters

Technical Chart Black Pepper

NCDEX Nov 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 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.

Source: Telequote

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

valid for Oct 19, 2012 Support 42800-43050 Resistance 43520-43760

Production and Arrivals

The arrivals in the spot market were reported at 20 tonnes while offtakes were 25 tonnes on Thursday. 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 is expected to trade on a positive note today. Festive season demand is expected to support prices at lower levels. However, low export demand as well as good supplies in the international market from other origins may cap sharp gains.

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Commodities Daily Report

Friday| October 19, 2012

Agricultural Commodities
Jeera
Jeera November Futures traded on a positive note yesterday due to some regular export enquiries, supporting the prices. Arrivals were also low. Over the last couple of days, exporters have been actively buying due to escalated tensions between Syria and Turkey. Also, festive demand in the domestic markets has supported the prices. However, reports of higher carryover stocks as compared to last year restricted sharp gains in the spot markets. Good rains in Gujarat, have increased expectations of better sowing prospects ahead of the rabi sowing. The spot as well as the November Futures settled 0.66% and 1.53% higher on Thursday. According to markets sources about 75% exports target has already been achieved due to a supply crunch in the global 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. 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 $2,770 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 Oct'12 Futures Rs/qtl Rs/qtl Last 15125 15065 Prev day 0.66 -0.69

as on Oct 18, 2012 % Change WoW 3.44 5.52 MoM 2.38 11.43 YoY 4.17 11.74

Source: Reuters

Technical Chart Jeera

NCDEX Nov contract

Production, Arrivals and Exports

Unjha markets witnessed arrivals of 4,000 bags, while off-takes stood at 4,000 bags on Thursday. 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 -0.23 -0.77

as on Oct 18, 2012 % Change

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

Last 5022 5134

WoW -3.76 -6.62

MoM -15.79 -9.20

YoY -10.99 4.39

Outlook
Jeera futures is expected to continue to trade upwards today. Reports of fresh export buying may support prices. Festive buying may also lend support to the prices. However, expectations of improved sowing may cap sharp gains. In the medium term (October-November 2012), prices are likely to witness a bounce back as there are limited stocks with Syria and Turkey.

Technical Chart Turmeric

NCDEX Nov contract

Turmeric
Turmeric Futures traded lower yesterday due to lack of demand from the stockists. However, prices recovered towards the end after the exchange removed the special margin on the long side. 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 settled 0.23% lower while the Nov Futures settled 0.85% higher on Thursday. Special Margin of 20% (in cash) on the Long Side in Turmeric November 2012 and December 2012 expiry contracts will be withdrawn with effect from beginning of day Saturday, Oct 20, 2012.

Production, Arrivals and Exports

Arrivals in Erode and Nizamabad mandi stood at 2,500 bags and 1,000 bags respectively on Thursday. 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 Oct 19, 2012 Support 15300-15480 5120-5170 Resistance 15820-15980 5320-5400

Outlook
Turmeric prices are expected to trade sideways today. A reduction in the special cash margin, lower sowing figures and lower arrivals may support prices. However, stockists are not buying actively, which may pressurize prices.

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Commodities Daily Report

Friday| October 19, 2012

Agricultural Commodities
Kapas
NCDEX Kapas futures further extended the gains and closed up by 1.97% as emerging demand due to lower prices is attracting the investors. Also, prices are taking cues from the firm international market. After witnessing and upside rally for past few sessions ICE cotton Futures closed down on Thursday and settled marginally down by 0.18% ahead of profit taking. Cotton harvesting has commenced in US, in all 28% is harvested as compared to 21% a week ago, versus 34% same period a year ago. Cotton crop condition is 42% in Good/Excellent state same as compares to last week, and 30% same period a year ago as on 16 Oct 2012.

Market Highlights
Unit Rs/20 kgs Rs/Bale Last 978 16570

as on Oct 18, 2012 % Change Prev. day WoW 2.35 3.44 1.97 2.73 MoM 5.44 2.73 YoY -4.72

NCDEX Kapas Futures MCX Cotton Futures

Source: Reuters

International Prices
ICE Cotton Cot look A Index Unit Usc/Lbs Last 77.72 81.35

as on Oct 18, 2012 % Change Prev day WoW -0.18 8.91 0.00 0.00 MoM 3.65 0.00 YoY -19.96 -29.20

Domestic Production and Consumption

As on 28 September, 2012, Cotton is being planted on 114 lakh hectares, down, as 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 First Advance Estimates, Cotton production for 2012-13 seasons is revised upward to 334 lakh bales compared with 352 lakh bales in 2011-12 season. Also, on account of cheaper cotton available in the global markets, imports have more than double from 5 lakh bales to 12 lakh bales. According to the latest CAB report as on 04 October 2012, exports have dipped sharply by 46% to 7 million bales in the 2012/13 marketing year that began on Oct. 1 compared to 12.7 million bales estimated for 201112 season. The ending stocks figure, has been revised further upward to 3.4 million bales as compared to 2.8 million bales estimated for August 2011-12 season
st

Source: Reuters

Technical Chart - Kapas

NCDEX April contract

Global Cotton Updates

Global cotton prices are mainly influenced by China, US and India. 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 17.65 mln bales and exports of 12.1 mln bales were pegged for the season 2012-13. In its October monthly demand supply report on Thursday, 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). China's 2012/13 cotton crop is estimated at 31.50 mln bales up from previous estimates of 31.00 mln bales given in September, imports 11.00 mln bales down from previous estimates of 12.00 million bales, consumption was pegged at 36.00 mln bales (down from prev 38.00 million bales), end stocks 36.61 mln bales (up from prev 35.51 mln bales)

Source: Telequote

Technical Chart - Cotton

MCX Oct contract

Outlook
Kapas futures in intraday is expected to trade on a positive note as demand is seen emerging. Also, Prices might take support as farmers are not willing to sell their produce at lower levels.
Source: Telequote

Technical Outlook
In addition, supply worries due to poor quality of the fresh cotton crop delivery in the international market will give prices a further upward push. However, fresh arrivals from all over India and higher global cotton ending stocks might cap the sharp upside in medium term.
Contract Kapas NCDEX April Kapas MCX April Cotton MCX October Unit Rs/20 kgs Rs/20 kgs Rs/bale

valid for Oct 19, 2012 Support 957-968 953-965 16280-16420 Resistance 993-1003 989-998 16720-16880

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