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Commodities Daily Report

Monday| October 29, 2012

Agricultural Commodities

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

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

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Commodities Daily Report


Monday| October 29, 2012

Agricultural Commodities
News in brief
Cabinet approval to FCRA Bill boosts trader sentiment
With the Union cabinet clearing the Forward Contract (Regulation) Acts Amen-dment Bill, raising a lot of optimism for a resurgence in the commodity futures market, traders have responded positively. The turnover of all commodity exchanges turned positive in the first fortnight of October, after four quarters of sustained decline. Data compiled by the Forward Markets Commission (FMC), the commodity derivatives market regulator, showed an eight per cent rise in overall turnover to Rs 709,841 crore in the fortnight, compared to Rs 657,000 crore in the corresponding period last year. The Bill aims to provide financial autonomy to the FMC, which can become self-sufficient by collecting revenues in the form of fees from the exchanges. The Bill seeks to increase the penalty on defaulters to Rs 50 lakh from the existing Rs 25 lakh. While the business in agri commodities remained up by 30 per cent to Rs 100,055 crore in the first fortnight of October compared to Rs 76,981 crore in the same period last year, overall turnover in bullion declined 11.2 per cent from Rs 352,868 crore to Rs 313,275 crore in the period under consideration. (Source: Business Standard)

Market Highlights (% change)


Last Prev. day

as on Oct 26, 2012


WoW MoM YoY

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

18625 5664 53.56 86.28 1711

-0.71 -0.72 0.00 0.27 -0.06

-0.89 -0.95 -0.07 -6.32 -1.86

-0.26 -0.09 0.22 -6.15 -2.91

10.96 12.17 7.43 -1.28 4.64

Source: Reuters

Rabi oilseed planting begins on sluggish note


Planting of oilseeds for the rabi season has started on a sluggish note on delayed kharif harvest. Early data from the Agriculture Ministry suggests that sowing of key rabi oilseeds such as rapeseed, mustard and safflower are yet to gain momentum. As of October 25, the acreage under rabi oilseeds stood at 8.37 lakh hectares, down by more than half of last years 20.15 lakh ha in the corresponding period. Rapeseed mustard has, so far, been planted in about 6.71 lakh ha against 18.55 lakh ha in the corresponding period last year. Farmers are waiting for the temperatures to come down, said B.V. Mehta, Executive Director of Solvent Extractors Association of India, expressing optimism that sowing will pick up over the next two to three weeks. Further, the delay in harvesting of kharif crops such as rice and other cereals may push back the rabi planting by a couple of weeks. Besides, the farmers are also waiting for the minimum support price (MSP) announcement from the Government to decide on their plantings. (Source: Business Line)

Consumers, farmers squeezed as grain giants tighten grip


A global race for grain trading power is putting more of the world's vital cereals in the hands of fewer companies, with a string of recent acquisitions raising fears that consumers will pay even more for their food, while farmers are squeezed. The four "ABCD" firms - ADM, Bunge (BG.N), Cargill CARG.ULand Louis Dreyfus LOUDR.UL - dominate global grain trading along with top global commodities trader Glencore (GLEN.L) and Japan's Marubeni (8002.T), both of which have made major acquisitions in the last few months. With food price volatility increasingly coming to the fore, most recently in the wake of drought in the U.S. and other key producing regions, concern is growing among importers about extra upward pressure on prices. "The increasing concentration of power in the global grain market is not healthy. This will lead to grain prices being controlled by top trading companies," said Rusman Heriawan, deputy agriculture minister of Indonesia, Asia's top wheat importer.
(Source: Reuters)

Hoping for high prices, farmers hold on to soya produce


Soya bean farmers are holding on to their produce because prices, though higher than the minimum support price, are less than their expectations. But processors think farmers will have no option but to sell their stocks sooner or later. Supplies to Madhya Pradesh and Maharashtra markets are much below the normal at this time of the year. Farmers' expectations have increased because of a drought in the United States. Some APMCs have made arrangements for the storage of soya bean and are giving pledge loans to farmers against the stored produce. Millers think farmers will not be able to hold their stocks for long as the carrying costs are high. "Considering this, farmers' expectations of better prices do not seem to be rational. This season's soya crop in India is expected to be the biggest ever. Farmers will bring the bean to the market sooner or later. Possibly, oil crushing and refining plants will streamline their sales based on seed purchases," said Dinesh Sharma, managing director, Ruchi Soya Industries. (Source: Economic Times)

Pro-Bt cotton farmers flay move for moratorium on field trials


The farmers who are in favour of Bt cotton have flayed the recommendations of a Supreme Court panel that called for a 10-year moratorium on field trials of biotech crops. They said biotechnology gave the seeds in-built protection against harmful insects, helping them get additional yields. They called for efforts to make the regulatory system more robust to address fears and apprehensions over the geneticallymodified crops. We need to reinforce checks and balances to ensure systematic trials and implementation of all guidelines. But to stop all research into biotech crops is short sighted and regressive, they said. Addressing a press conference here recently, representatives of three district-level farmers groups termed the moratorium anti farmer.
(Source: Business Line)

China soybean imports to reach record 57.5 mln T in 2012


China's soybean imports are expected to rise 9.3 percent to a record 57.5 million tonnes this year as a result of dwindling domestic output and soaring demand, state news agency Xinhua said on Sunday, citing data from the Ministry of Agriculture. Ministry figures showed China's soybean growing area is 13.8 percent smaller than it was last year, the fifth consecutive year of decline, and total soybean output is likely to fall to a three-year low of 9.8 million tonnes. Soy yields per hectare were expected to decline 5.3 percent year on year as a result of a summer drought, Xinhua said. (Source: Reuters)

TN coast faces threat from building storm in Bay


Tamil Nadu coast is facing a threat from a monsoon depression located 700 km south east of Chennai on Sunday. The system is expected to intensify into a deep depression (only a spin away from being categorized as a cyclone), the India Meteorological Department (IMD) said. Global forecasts suggest the storm will hit north east Sri Lanka and adjoining south east Tamil Nadu coast by Wednesday. Meanwhile, the Arabian Sea is also expected to witness some intensified weather activity, with a lowpressure area in the south east basin steadily growing in strength. This is expected to become a storm of near-cyclone strength over east-central Arabian Sea. From here, the westerly winds might steer the system back towards the west coast of India and take it for a landfall somewhere over Gujarat coast, according to initial outlook. (Source: Business Line)

What's eating Australia? Foreign buyers at the farm gate - RTRS


Australia risks losing an opportunity to become a farmyard for Asia, as growing unease over foreigners buying rural land threatens to provoke protectionist policies that may deter much needed investment in agriculture. "I think we are going to see a continued interest. The soft commodities boom around the world and the demand for food will continue to drive that interest," said Jock Laurie, head of Australia's top farming lobby, the National Farmers' Federation. (Source: Reuters)

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Commodities Daily Report


Monday| October 29, 2012

Agricultural Commodities
Chana
Chana Spot as well as November futures extended further gains and settled higher by 3.06% and 1.75% on Saturday on account of ongoing festive season demand. Chana sowing has started in Maharashtra, AP and Karnataka and is expected to commence soon in MP and Rajasthan too. In Maharashtra, 1.09 lakh ha area has been covered so far which is only 8.8% of the targeted 12.32 lakh ha by the state dept. In AP, chana acreage stood at 41000 hectares as on 17 October, 2012 compared with 98000 hectares during the same period last year. 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 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. Monsoon has recovered across India, especially in Rajasthan, one of the major chana growing states, and may prove beneficial for the chana sowing.
st th

Market Highlights
Unit Rs/qtl Rs/qtl Last 4750 4769 Prev day 3.06 1.75

as on Oct 27, 2012 % change WoW MoM 2.15 10.38 0.89 10.37 YoY 33.80 36.14

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

Source: Reuters

Technical Chart - Chana

NCDEX Nov contract

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. Improved rains towards the end of monsoon season have raised prospects of sowing. 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)

Source: Telequote

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

valid for Oct 27 2012 Resistance 4805-4840

4680-4720

Outlook
Chana futures may remain firm in the current week on account 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. Although short term trend remain positive for chana, we expect prices to come under downside pressure in the month of November as supply pressure may ease amid shipments from Australia and Canada.

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Commodities Daily Report


Monday| October 29, 2012

Agricultural Commodities
Sugar
Sugar November futures settled higher by 1.52% on Saturday on account of festive demand. Also, The food ministry dropped a plan to recommend a 10% duty on raw sugar imports as of now amid strong opposition from the industry, which supported the prices. Prices had declined considerable in the last one month on the back of higher quota. 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. Liffe white sugar settled 0.26% higher on short coverings while ICE raw sugar closed 0.92% lower on Friday due to good supplies 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 3701

as on Oct 27, 2012 % Change Prev. day WoW 0.00 -1.31 MoM -2.06 YoY 13.88

Rs/qtl

3342

1.52

1.06

-3.07

10.63

Source: Reuters

International Prices
Unit Sugar No 5- LiffeDec'12 Futures Sugar No 11-ICE Mar '13 Futures $/tonne $/tonne Last 545.2 430.00

as on Oct 26, 2012 % Change Prev day WoW 0.26 -0.92 -0.89 -3.54 MoM -4.40 -1.12 YoY -20.94 -24.91

Domestic Production and Exports


Crushing has started across Maharashtra and will commence soon in UP too. 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


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. Favorable weather since 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 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 Support

valid for Oct 27, 2012 Resistance 3365-3378

3310-3328

Outlook
Sugar prices may recover as demand is expected to emerge at lower levels. However higher quota is seen offsetting festive season demand which might cap the gains. 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


Monday| October 29, 2012

Agricultural Commodities
Oilseeds
Soybean: After Soybean prices continued to trade on a positive
week for the third consecutive week due to good export demand for soy meal. Also, demand for soy oil ahead of the festive season supported the prices. Also farmers are holding back their stocks in anticipation of better prices. The spot as well as the Futures settled 2.28% and 1.07% higher w-o-w. New soybean arrivals at MP stood at 450000 bags, Maharashtra170000 bags and Rajasthan 100000 bags on Wednesday. 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 marginally lower by 0.18% on supply pressure. However, farmers have slowed their sales expecting better prices for their crop. According to the latest crop progress report released by USDA, as on 23 Oct 2012, US soybean harvest is 80 per cent complete as compared to 71 per cent last week and 69 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. Argentina's 2012-13 soybean planting is Just 2% of the record 19.7 mn ha seen going to soybeans this season, down 4.2% from a year earlier as a series of recent heavy rains has slowed progress. Production is expected to reach 55-60 mn tn crossing record 52.7 mn tn in 2009-10. Brazil could also churn out 81 mn tn of oilseed and replace the drought-stricken US as the world's top soybean producer.

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 3313 3345 717.1 703.3

as on Oct 27, 2012 % Change Prev day 0.39 -0.37 1.18 0.36 WoW 2.28 1.07 4.27 3.62 MoM 7.36 8.82 5.37 10.46 YoY 50.39 51.54 12.43 10.33

Source: Reuters

as on Oct 26, 2012 International Prices Soybean- CBOTNov'12 Futures Soybean Oil - CBOTDec'12 Futures Unit USc/ Bushel USc/lbs Last 1561 50.96 Prev day -0.18 -0.95 WoW 1.76 -1.20 MoM -0.75 -1.34
Source: Reuters

YoY 28.98 0.14

Crude Palm Oil

as on Oct 27, 2012 % Change Prev day WoW 1.30 -0.21 4.34 2.43

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

Last 2500 434.3

MoM -1.54 2.38

YoY -15.25 -15.52

MYR/Tonne Rs/10 kg

*Closing for 23rd October 2012.

Source: Reuters

RM Seed
Unit RM Seed SpotNCDEX (Jaipur) RM Seed- NCDEX Nov '12 Futures Rs/100 kgs Rs/100 kgs Last 4070 4325 Prev day 0.00 -0.30

as on Oct 27, 2012 WoW -3.67 2.03 MoM 3.83 14.81


Source: Reuters

Refined Soy Oil: Ref soy oil as well as MCX CPO traded on a bullish
note last week on higher palm oil exports and good demand for edible oil in the domestic markets. Exports of Malaysian palm oil products for Oct. 1-25 rose 11 percent. 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. 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: Mustard Futures traded on a positive note due to low stocks coupled with festive season demand for its oil. Higher demand for mustard meal is also supporting prices. However, prospects of better sowing pressurized the prices in the spot. The Futures settled 2.03% higher w-o-w. Mustard sowing as on th 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. Outlook Edible oil complex is expected to trade on a positive note in the coming week on account of good demand for edible oil in the domestic markets. However, in the short term prices may again come under downside pressure as arrivals are expected to improve in the coming weeks.

YoY 35.38 40.06

Technical Chart Soybean

NCDEX Nov contract

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 25, 2012 Support 688-695 3270-3305 4240-4280 434-439 Resistance 709-714 3375-3400 4360-4395 448-452

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Commodities Daily Report


Monday| October 29, 2012

Agricultural Commodities
Black Pepper
Pepper futures traded on a positive note last week due to good festive demand. However, expectations of better output this season have capped sharp gains. Festive season demand has also supported the prices in the spot. 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 Futures settled 0.75% and 1.17% higher w-o-w. th According to the circular released on June 13 2012 the existing Special margin of 10% (cash) on the long side stands withdrawn on all running contracts and yet to be launched contracts in Pepper from beginning of day Friday June 15, 2012. Pepper prices in the international market are being quoted at $8,850/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 Nov '12 Futures Rs/qtl Rs/qtl Last 42757 44020 % Change Prev day 0.18 -0.35

as on Oct 27, 2012 WoW 0.75 1.17 MoM 1.55 1.35 YoY 24.21 27.72

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 27, 2012 Support 43500-43780 Resistance 44300-44620

Production and Arrivals


The arrivals in the spot market were reported at 28 tonnes while offtakes were 30 tonnes on Saturday. 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). 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. 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


Monday| October 29, 2012

Agricultural Commodities
Jeera
Jeera Futures corrected last week as exporters refrained from buying at higher levels. Also, prospects of better sowing this season have pressurized prices. However, expectations of good export demand supported prices in the spot. Festive demand is also expected to be good in the coming days. Over the last couple of days, exporters have been buying actively due to escalated tensions between Syria and Turkey. Good rains in Gujarat have increased expectations of better sowing prospects ahead of the rabi sowing and have restricted any sharp gains. The spot as well as the Futures settled 1.41% and 6.72% lower w-o-w. According to markets sources about 75% exports target has already been achieved due to a supply crunch in the global markets. Around 45 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 $2,900 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 14994 14425 Prev day -0.30 -2.55

as on Oct 27, 2012 % Change WoW -1.41 -6.72 MoM 3.99 5.77 YoY 5.23 7.99

Source: Reuters

Technical Chart Jeera

NCDEX Nov contract

Production, Arrivals and Exports


Unjha markets witnessed arrivals of 5,500 bags, while off-takes stood at 5,500 bags on Saturday. Production of Jeera in 2011-12 is expected to be around 40 lakh bags as compared to 29 lakh bags in 2010-11 (each bag weighs 55 kgs). (Source: spot market traders). According to Spices Board of India, exports of Jeera in April 2012 stood at 2,500 tonnes as compared to 2,369 tonnes in April 2011, an increase of 6%.

Source: Telequote

Market Highlights
Prev day 0.00 1.13

as on Oct 27, 2012 % Change

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

Last 5021 5022

WoW 0.00 -4.74

MoM -8.92 -11.27

YoY -10.41 -11.62

Outlook
Jeera futures are expected to trade downwards. Exporters may stay away at higher prices. However, prices may recover if the export demand increases. Festive buying may also lend support to the prices. In the medium term (October-November 2012), prices are likely to stay firm as there are limited stocks with Syria and Turkey.

Technical Chart Turmeric

NCDEX Nov contract

Turmeric
Turmeric Futures traded on a negative note on last week due to lack of fresh orders from the upcountry market and exporters. Stockists also have good carryover stocks with them. 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 markets remained closed due to festive and is expected to reopen today. The Futures settled 4.74% lower w-o-w. 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.

Source: Telequote

Production, Arrivals and Exports


There were no arrivals in Erode and Nizamabad mandis as they remained closed on Saturday. 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.

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

valid for Oct 27, 2012 Support 14110-14270 4900-4960 Resistance 14585-14720 5064-5110

Outlook
Turmeric prices are expected to trade downwards today. Lack of fresh orders may pressurize prices. However, a reduction in the special cash margin, lower sowing figures and lower arrivals may support prices.

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Commodities Daily Report


Monday| October 29, 2012

Agricultural Commodities
Kapas
NCDEX Kapas futures settled 0.50% lower on account of short coverings. ICE cotton futures closed lower by 0.43% on account of profit taking and also pace in US harvest weighed on the prices.. Cotton harvesting has commenced in US, in all 38% is harvested as compared to 28% a week ago, versus 39% same period a year ago. Cotton crop condition is 42% in Good/Excellent state same as compares to last week, and 29% same period a year ago as on 23 Oct 2012.
NCDEX Kapas Futures MCX Cotton Futures

Market Highlights
Unit Rs/20 kgs Rs/Bale Last 995 16330

as on Oct 27, 2012 % Change Prev. day WoW -0.50 0.10 -0.49 -1.69 MoM 8.68 -1.69 YoY -8.82

Source: Reuters

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

International Prices
ICE Cotton Cot look A Index Unit Usc/Lbs Last 72.42 81.35

as on Oct 26, 2012 % Change Prev day WoW -0.43 -5.86 0.00 0.00 MoM 4.17 0.00 YoY -29.20 #N/A

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 Nov contract

Outlook
Kapas futures in intraday is expected to trade on a positive note on account of improved demand and procurement by CCI might maintain the upside in prices. Also, Prices might take support as farmers are not willing to sell their produce at lower levels. 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.

Source: Telequote

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

valid for Oct 27, 2012 Support 970-982 965-978 16000-16150 Resistance 1008-1022 1005-1018 16400-16520

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