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Commodities Daily Report

Thursday| January 17, 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


Thursday| January 17, 2013

Agricultural Commodities
News in brief
Farmers in North focus on increasing wheat yields
Assured returns on wheat and the growing uncertainty on remuneration for other rabi crops have led farmers across Punjab, Haryana and Madhya Pradesh to boost corp yields. To hedge against the risks of rising production costs, they have also increased mechanisation. Indias average wheat productivity is 3.14 tonnes a hectare, against the global average of three tonnes a hectare. Productivity in France stands at seven tonnes a hectare, while in China it is 4.8 tonnes a hectare. By upgrading the variety of seeds, adopting modern equipment such as laser land levellers and using micro nutrients to replenish the soil, traditional wheat- growing states have enhanced productivity. Farmers in Haryana said by using laser land levellers, they were able to cut the requirement of water by 30 per cent and raise yields five to six per cent. (Source: Business
Standard)

Market Highlights (% change)


Last Prev. day

as on Jan 16, 2013


WoW MoM YoY

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

19818 6002 54.67 94.24 1683

-0.85 -0.90 0.11 1.03 -0.04

0.77 0.51 -0.26 1.22 1.69

2.34 1.78 -0.49 7.18 0.79

20.35 20.83 7.61 -6.42 1.66

.Source: Reuters

India hard-sells buffalo meat, oilmeal to China


India is lobbying hard to sell buffalo meat, tobacco and oilmeal to China encouraged by its success in convincing its neighbour to buy Basmati rice from the country. New Delhi has raised the red flag over the huge trade imbalance in Beijings favour and has said that buying more farm products from the country by removing unnecessary quality restrictions is one of the ways to bridge it. We are seriously pushing China to start buying buffalo meat and tobacco from us and also resume import of oilmeal. Expediting the formalities for Basmati imports is also something we are stressing on so that exports can start, Commerce Ministry Joint Secretary Asit Tripathy told Business Line. Chinas trade surplus with India was nearly $40 bn in 2011-12 and touched $29 in the first eight months of the current fiscal. (Source: Business Line)

NCDEX Spot ties up with CBI to provide credit to farmers


NCDEX Spot Exchange (NSPOT), the leading e-spot exchange, today said it has tied up with the Central Bank of India (CBI) to provide credit to farmers, processors and market participants. With this, depositors of NSPOT accredited warehouses would be able to avail loans against their produce from the Central Bank of India, an exchange statement said here. The initiative is expected to benefit the farmers as it will provide them with another avenue to avail credit and trade their produce at a later stage, as and when they desire. It would also help farmers to avoid forced sale at the peak of supply season, the statement said. CBI would benefit from the existing customers of NCDEX Spot Exchange and be able to benefit the small farmers. The collateral management agency is Arya Collateral. "This is a part of the NCDEX's efforts to provide end to end solutions to the value chain participants of Agri-commodities, especially small farmers," NCDEX chief financial officer M K Anandakumar said.
(Source: Financial Express)

Crop loss fears lift agricultural insurance take-up-Swiss Re


Farmers have spent 20% more on agricultural insurance in recent years to protect against crop losses from increasingly frequent bad weather events, according to reinsurer Swiss Re The rise in extreme weather disasters, such as the widespread drought in the United States last year, has reduced food output at a time when the world's population is expected to grow by a third by 2050, the worlds second biggest reinsurer said in a report on Wednesday. Global agricultural insurers took in $23.5 bn in annual premiums in 2011, up by a fifth from 2005, in a market dominated by emerging countries, Swiss Re said. China and India accounted for nearly two-thirds of the $5 bn in premiums paid in emerging countries. Government-backed initiatives to boost agriculture in emerging markets have helped to increase crop values and commodity prices - increasing the need for insurance, Swiss Re said. Swiss Re said the agriculture insurance market could still grow fourfold in emerging markets. (Source: Reuters)

Olive oil prices set to zoom as drought looms over Spain


Olive oil aficionados are in for a price shock. Hit by drought, Spain, the largest olive producer, has slashed the crop by about half. As a result, prices of olive oil have firmed up by over 50 per cent in the past six months forcing the importers here to pass on the cost hike to consumers. Besides, a weaker rupee against the Euro has further exerted pressure on the importers here. Some brands, such as Leonardo and Borges, have partially hiked prices in past few months, attributing it to the weaker currency. However, a bigger price hike is in the offing. There is tremendous pressure on companies to pass on the costs. Prices could go up by about 60 per cent by March as we dont have any choice, said V.N. Dalmia, President, Indian Olive Association. (Source: Business Line)

Russia has enough grain to avoid imports, lobby says


Russia is not seeing significant grain imports, suggesting that the country is experiencing no physical deficit even though it has run out of wheat to export, the head of Russia's Grain Union said on Wednesday. "Worries about a deficit are unfounded. Prices are above world prices and the market is clearly overheated. This has brought export to a grinding halt," Arkady Zlochevsky told a news conference. "Import is in some kind of frozen state even though economics allow it."He said corn exports had fallen off as wheat exports, which stood at 9.77 mn tns for the first six months of the 2012/13 marketing year, had declined. (Source: Reuters)

Natural rubber use up 3% in AprDec; output rises by 2%


Natural rubber consumption in the country rose by 3 per cent to 7.42 lakh tonnes in the first three quarter of this fiscal. Its production also increased by about 2 per cent to 6.93 lakh tonnes during the same period, Rubber Board data said. India consumed 7.19 lakh tonnes tonnes of natural rubber and produced 6.82 lakh tonnes in AprilDecember of 201112 financial year. Import of natural rubber rose 23 per cent to 1.69 lakh tonnes in AprilDecember of 201213 fiscal from 1.37 lakh tonnes in the yearago period, while the exports declined by 53 per cent to 10,608 tonnes from 22,763 tonnes during the same period. In December last year, the production of natural rubber increased marginally to 1.10 lakh tonnes from 1.07 lakh tonnes in the same month in 2011, while, its consumption declined to 78,000 tonnes from 84,795 tonnes during the corresponding period.Rubber imports fell sharply to 13,611 tonnes in December last year from 21,146 tonnes, whereas, exports of the commodity rose to 1,429 tonnes from 1,077 tonnes in the same period. (Source: Business Line)

India cotton likely to rise on export demand


Cotton prices in India, the world's second-largest producer, are expected to rise next week on a likely rise in export demand from neighbouring Bangladesh and Pakistan, after remaining steady this week on buying by state-run agencies. "Exporters are getting good number of queries from Bangladesh and Pakistan. Both countries are ramping up yarn productions," said a trader based in Rajkot, Gujarat. Fibre prices in local markets steadied on buying by state-run Cotton Corporation of India, who had already purchased more than 1.3 mn bales of 170 kg each from farmers at pre-agreed rates. And traders expect the government to buy additional 7 mn bales that could outweigh rising supplies in spot markets.
(Source: Reuters)

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Commodities Daily Report


Thursday| January 17, 2013

Agricultural Commodities
Chana
Chana Spot as well as April futures declined further on Wednesday on account of continuous rise in imports which is easing supplies in the domestic markets coupled with higher output expectations for the coming season. The spot as well as the April Futures settled 0.75% and 0.34% lower respectively on Wednesday. Although chana prices witnessed 17% gains in 2012 on the back of lower availability, sentiments have turned negative since December 2012 on account of continuous supplies of imported chana from Australia coupled with higher output expectations.

Market Highlights
Unit Rs/qtl Rs/qtl Last 3917 3990 Prev day -0.75 0.03

as on Jan 16, 2013 % change WoW MoM -3.11 -3.10 -2.78 -2.68 YoY 16.19 19.78

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 pick up 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 17, 2013 Resistance 3510-3530

3450-3470

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


Thursday| January 17, 2013

Agricultural Commodities
Sugar
Sugar futures witnessed marginal gains in the futures markets, and have started showing some signs of recovery in the physical market as demand is seen emerging at lower levels. Also report of lower cane planting is seen supporting an upside in the sugar prices. 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 continued to trade lower for the third consecutive session and settled 0.48% and 0.91% lower on Wednesday on account of a supply glut situation on the back of a sugar surplus for the third consecutive year.

Market Highlights
Unit Sugar Spot- NCDEX (Kolhapur) Sugar M- NCDEX Jan'13 Futures Rs/qtl Last 3257

as on Jan 16, 2013 % Change Prev. day WoW 0.12 0.21 MoM -1.75 YoY 10.89

Rs/qtl

3222

-0.19

0.44

0.59

14.42

Source: Reuters

International Prices
Unit Sugar No 5- LiffeMar'13 Futures Sugar No 11-ICE Mar '13 Futures $/tonne $/tonne Last 499.6 410.00

as on Jan 16, 2013 % Change Prev day WoW -0.48 -0.91 -1.46 -1.44 MoM -0.12 -0.49 YoY -20.77 -23.13

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.

.Source: Reuters

Technical Chart - Sugar

NCDEX Feb contract

Source: Telequote

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)

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

valid for Jan 17, 2013 Resistance 3260-3270

3240-3248

Outlook
Sugar prices may recover further 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


Thursday| January 17, 2013

Agricultural Commodities
Oilseeds
Soybean: Soybean futures extended the gains of the previous
session on account of dwindling supplies in the domestic markets. Government considering increasing import duty on edible oil was also seen supporting the firm market sentiments on Wednesday. Arrivals in the domestic markets declined to 1.5 lakh bags, while demand is comparatively lower amid crushing disparity. 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.

Market Highlights
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 3240 3207 746.7 743.7

as on Jan 16, 2013 % Change Prev day 0.03 0.20 0.40 0.81 WoW 1.00 2.15 2.82 3.68 MoM -5.04 -5.05 2.07 1.93 YoY 31.76 30.35 4.99 4.98

International Markets
Soybean futures on the CBOT traded on a positive note hitting a 3 week high and settled 1.63% higher on reports of dry weather in Argentina. Higher exports to a single destination in one day also boosted the prices. By law, exporters must report promptly the sale of 100,000 tonnes or more of a commodity to the same destination in one day. Sales of smaller amounts are reported on a weekly basis. Argentina soy planting advanced quickly in the last week to cover more than 90% of the targeted 19.7 mn ha. 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 1437 51.31 Prev day 1.63 0.86 WoW 1.18 4.20

Source: Reuters

as on Jan 16, 2013 MoM -3.98 3.39


Source: Reuters

YoY 20.01 0.49

Crude Palm Oil

as on Jan 16, 2013 % Change Prev day WoW 2.45 1.52 4.01 -0.63

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

Last 2387 439.4

MoM 16.90 7.88

YoY -24.58 -16.98

MYR/Tonne Rs/10 kg

Refined Soy Oil: Ref soy oil and MCX CPO gained sharply on
Wednesday on expectations government might increase import duty on edible oil. This would increase import cost and thereby prices in the domestic markets. According to Intertek Testing Services, Malaysias Jan 1-15 palm oil exports declined 20.7% from 5,70,510 tn from 7,19,817 tn during Dec 1-15.Although exports remain weak despite change in export duty structure, market expects exports to pick up as the Malaysian board has kept export duty Zero for February too. Indias palm oil imports rose 27.4 percent in December from the previous month. MPOB data released on Thursday revealed further increase in stock piles by 2.4% in December, while exports declined 0.7% in December. Malaysian crude palm oil production this year will rise marginally to 18.9 million tonnes compared to 18.8 million tonnes in 2012 as yields improve, an industry regulator said on Monday. output is still lagging far behind that of top supplier Indonesia where production is expected to hit 27 million tonnes this year.

Source: Reuters

RM Seed
Unit RM Seed SpotNCDEX (Jaipur) RM Seed- NCDEX Jan'13 Futures Rs/100 kgs Rs/100 kgs Last 4195 4190 Prev day -2.44 -0.90

as on Jan 16, 2013 WoW -1.29 -1.34 MoM -2.78 3.08


Source: Reuters

YoY 19.60 11.11

Technical Chart Soybean

NCDEX Feb contract

Rape/mustard Seed: Mustard seed April Futures declined further


on Wednesday and settled 0.95% lower. Rabi oilseeds sowing which was up by 1.3% as on Dec 28, is now up by 3% at 8.4 mn ha as of Jan. 4. Arrivals are expected to commence in February and thus no major upside in the prices is seen. Rapeseed area stood at 6.62 mn ha as of Jan. 11, up by 3.5% from a year ago. Rapeseed output is expected to rise by 5% to 6.5 mn tn from 6 mn tn last year.

Source: Telequote

Outlook
Soybean complex may trade higher due to lower supplies in the domestic markets as well as positive international markets. Mustard seed prices may decline further on likely higher output and expectations of arrivals to commence soon. CPO may trade higher as Malaysia has set export tax at 0% for the month of February.

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 17, 2013 Support 705-711 3180-3200 3390-3410 429-434 Resistance 720-725 3250-3270 3460-3495 444-450

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Commodities Daily Report


Thursday| January 17, 2013

Agricultural Commodities
Black Pepper
Pepper Futures traded on a positive note yesterday due to low stocks and thin supplies. 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 settled as well as the Futures settled 0.4% and 0.74% higher on Wednesday. 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). Vietnam and Indonesia Austa variety are quoted at $7,000/tn and Malaysia Austa reported at $6950-7000/tn.

Market Highlights
Unit Pepper SpotNCDEX (Kochi) Pepper- NCDEX Feb'13 Futures Rs/qtl Rs/qtl Last 38800 37230 % Change Prev day 0.40 0.74

as on Jan 16, 2013 WoW 1.39 6.05 MoM 0.20 -4.90 YoY 24.65 21.51

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 17, 2013 Support 36320-36720 Resistance 37540-37960

Production and Arrivals


The arrivals in the spot market were reported at 31 tonnes while off takes were reported at 30 tonnes on Wednesday. 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 prices are expected to continue to trade higher on account of low stocks coupled with thin arrivals. 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 pressurize the prices.

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Commodities Daily Report


Thursday| January 17, 2013

Agricultural Commodities
Jeera
Jeera Futures witnessed a volatile session yesterday. Prices opened higher extending previous days gains but corrected sharply in the later part of the day due to profit taking. However, prices reovered sharply towards the end due to fresh enquiries. Prices have corrected sharply on account of higher sowing as well as conducive weather in Gujarat, the main jeera growing region. Sowing is complete. According to Gujarat State Agri Dept. sowing in Gujarat is reported at 3.244 lakh ha till Jan, 2013 compared with 3.64 lakh ha last year. In Rajasthan, sowing is expected to increase by 10-15%. The spot as well as the Futures settled 0.55% and 0.54% higher on Wednesday. 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 $2,875-2,900 tn (c&f) while Syria and Turkey are not offering. Carryover stocks of Jeera in the domestic market is expected to be around 5-6 lakh bags.

Market Highlights
Unit Jeera Spot- NCDEX (Unjha) Jeera- NCDEX Mar '13 Futures Rs/qtl Rs/qtl Last 14333 13903 Prev day 0.55 0.54

as on Jan 16, 2013 % Change WoW -1.34 -1.52 MoM -4.37 -4.92 YoY -10.32 -12.68

Source: Reuters

Technical Chart Jeera

NCDEX March contract

Production, Arrivals and Exports


Arrivals in Unjha were reported at 2,500 tn on Wednesday. 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 -1.24 -0.06

as on Jan 16, 2013 % Change

Outlook
Jeera prices may trade sideways with positive bias. Fresh export enquiries may support prices. Demand from domestic traders and millers at lower levels may also support prices. However, higher sowing figures in Gujarat may pressurize prices. In the medium term, prices are likely to stay firm as Syria and Turkey have stopped shipments.
Turmeric SpotNCDEX (N'zmbad) Turmeric- NCDEX Apr '13 Futures

Unit Rs/qtl Rs/qtl

Last 5622 6562

WoW -1.12 -1.14

MoM 6.96 23.35

YoY 8.79 41.24

Turmeric
Turmeric Futures recovered from lower levels initially due to short coverings but corrected towards the end on huge carryover stocks.. Good demand from upcountry market 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 remained closed on account of Pongal and Makar Sankranti while the Futures settled 1.08% lower on Tuesday.

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 correct from higher levels in the intraday extending previous days losses. Higher carryover stocks and weak overseas demand may pressurize prices. However, demand from stockists and weather concerns may support prices. Lower production expectations may also support prices.
.

Source: Telequote

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

Valid for Jan 17, 2013


Support 13540-13720 6420-6500 Resistance 14000-14200 6670-6760

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Commodities Daily Report


Thursday| January 17, 2013

Agricultural Commodities
Kapas
NCDEX Kapas as well as MCX Cotton opened lower but recovered from lower levels due to short coverings and settled marginally higher by 0.11% and 0.12% on Wednesday. Prices had declined considerably in the past few weeks on account of lower demand and higher output expectations. However, demand is expected to pick up at lower levels to meet the cotton yarn export registrations. 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 lakh bales, Cotton Association of India (CAI), expects output to be around 353 lakh bales in 2012-13.. According to the data released by Cotton Corporation of India, Supplies until Jan 13 are down 6.3 percent to 12.5 mn bales of 170 kg each, down from 12.9 mn bales a year earlier. Arrivals were down by 10 percent as th on 16 Dec. ICE Cotton traded on a bullish note on account of index buying and settled 1.47% higher on Wednesday. Concerns about the quality of cotton to be released by China also pulled up the prices.

Market Highlights
Unit Rs/20 kgs Rs/Bale Last 923.5 16330

as on Jan 16, 2013 % Change Prev. day WoW MoM 0.11 -1.96 -11.29 0.12 -0.61 -0.61 YoY #N/A -11.11

NCDEX Kapas Futures MCX Cotton Futures

Source: Reuters

International Prices
ICE Cotton Cot look A Index Unit USc/Lbs Last 77.33 81.35

as on Jan 16, 2013 % Change Prev day WoW 1.47 3.40 0.00 0.00 MoM 2.94 0.00 YoY -20.71 -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.
Source: Telequote
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Technical Chart - Cotton

MCX Jan contract

Global Cotton Updates


China, the world's biggest buyer of cotton, began selling a tiny fraction of its massive stockpile of the fibre on Monday, in a move to ease domestic supply shortages. Beijing has been building a strategic stockpile of cotton since 2011, paying above global prices to support its farmers, but the policy has hurt China's textile mills, which have been struggling with tight supplies, and high prices, at home. Many in the industry were expecting China to reward mills that buy state reserves with new import quotas enabling them to buy cheaper overseas supplies. But no such deal was announced. 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

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

valid for Jan 17, 2013 Support 905-915 16250-16290 Resistance 930-935 16360-16400

Outlook
Cotton prices may trade on a mixed note 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, anticipated export demand from the neighboring countries may support prices.

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