Commodities Daily Report

Monday| March 11, 2013

Agricultural Commodities

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

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

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Commodities Daily Report

Monday| March 11, 2013

Agricultural Commodities
News in brief
Cotton needlessly costly, complain textile mills
Textile mills are complaining of an acute cotton shortage and consequent losses due to having to import it to meet the domestic scarcity and export commitments. The two public sector agencies, Cotton Corporation of India (CCI) and the National Agricultural Cooperative Marketing Federation of India (Nafed) procured around three million bales ( 170 kg each) of cotton through market intervention about four months earlier. The quantity is equivalent to a little over a month of mill consumption. But the agencies have released hardly 20,000 bales since the procurement started in October last year. In these four months, however, the fundamentals have changed significantly, resulting in the domestic price rising higher than the global price. Yet, the ministry of textiles has not directed CCI and NAFED to release the quantity they procured. "Textile mills, today, are facing around five mn bales of shortage, which is artificially created. Consequently, textile mills are forced to import, largely from West Africa," said Manikam Ramaswami, chairman of The Cotton Textiles Export Promotion Council (Texprocil).
(Source: Business Standard)

Market Highlights (% change)

Last Prev. day

as on March 8, 2013
WoW MoM YoY

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

19683 5946 54.35 91.95 1577

1.39 1.41 -0.20 0.43 0.11

4.04 3.95 -1.01 1.40 0.30

0.22 -0.23 2.24 -4.83 -6.03

14.80 13.89 8.09 -13.39 -6.34

.Source: Reuters

U.S. farmers stick with corn planting plans despite price drop
Recent declines in U.S. corn futures prices have failed to dent growers' enthusiasm for planting the feed grain this spring, even though soybean prices have outperformed corn, farmers and analysts said. Crop insurance guarantees, money spent on fertilizer and recent rainy weather in key growing areas have cemented the acreage decisions that farmers made in the fall. The Chicago Board of Trade December corn futures contract CZ3, which tracks the crop that will be harvested this fall, shed 7.1 percent of its value over the first two months of 2013. That was the second worst winter performance for the new crop contract over the past 10 years. The only bigger decline was in 2009, when new-crop prices dropped 13.4 percent in the January/February time frame. By the end of harvest that year, when farmers were delivering their crop to elevators and processors, futures prices were just 1 cent above their endof-February level. (Source: Reuters)

Natural rubber consumption, output fall continues in Feb

The fall in production and consumption of natural rubber ( NR) continued in February, thereby affecting the local price of the commodity. While NR consumption declined 2.7 per cent to 73,000 tonnes, production suffered a more serious setback during the month. The monthly output fell to 61,000 tonnes, registering a fall of 4.7 per cent. However, compared to January, the rate of decrease in both production and consumption has slowed down in February, according to the latest figures released by the Rubber Board. (Source: Business Standard)

Argentina threatens barley export cap in bid to boost wheat crop

Grains behemoth Argentina is pushing farmers to produce more wheat by threatening to crack down on the fast-expanding barley sector, which growers are using as a hedge against export curbs, sources with direct knowledge of the situation told Reuters. With national inflation seen by private economists at 30 percent this year and global food demand rising, Argentina limits wheat and corn exports to ensure ample domestic supplies. But farmers say this policy hurts their profits and have shifted toward planting barley, which is not subject to the curbs. While Argentine barley cultivation is soaring, the wheat crop is forecast at 9.4 million tonnes this season - way under the 2011/12 crop year's 14.1 million tonnes. (Source: Reuters)

Good Supplies Cut Veggie Prices by 20-25%

Vegetable prices have dropped thanks to good supplies across the country. Onion, tomato and potato prices have fallen by almost 20%-25% in the last fortnight bringing relief to consumers. Traders say prices are likely to remain low till June. Indians consume nearly 15 million tonne onions a year. A drop in the prices of staple vegetables like onion and potato helps bring down food inflation, a major worry for the UPA government. Onion prices have crashed because supplies have improved from Maharashtra, Rajasthan, Gujarat and Madhya Pradesh. The price at Pimpalgaon is hovering around . 1,000-1,100 per quintal and will come down further when the Sukhsagar variety from West Bengal enters the market. The price will not be more than . 800-900 per quintal from next week, said Atul Sahay, a member of the Pimpalgaon APMC.
(Source: Economic Times)

India trumps Pakistan's Iran rice trade boom with oil rupees
Iran's oil export revenues are helping Indian rice exporters to claw back some of the lucrative business lost to cross-border truckers in Pakistan as a result of Western sanctions. Indian rice exports direct to Iran have bounced back, thanks to shippers being paid up front in rupees from a huge pool of oil money owed to Iran by Indian refiners. Now business is being done directly because Iran is allowed to open letters of credit in Indian rupees because the government has to pay money to Iran for the oil, said Suresh Manchanda, marketing director of a Delhi-based company which exports rice, wheat and sugar globally. (Source: Reuters)

Mexico to produce record 6.25 mln tonnes of sugar in 2012/13 cycle

Mexico is seen producing a record 6.25 million tonnes of sugar during the 2012/13 cycle, up 10.2 percent on a previous estimate, a spokesman for the national sugar committee Conadesuca said on Friday. Conadesuca had previously estimated output of 5.67 million tonnes during the current 2012/13 season. Exports were also seen up, rising nearly 15 percent to 1.63 million tonnes, the Conadesuca spokesman said. He attributed the rise in production and exports to higher-yielding crops and a larger planted area. "As prices have fallen and the price of high fructose corn syrup has risen, that meant that there was more consumption of sugar," the spokesman said. Last November, Mexico began proceedings to sell nine state-held sugar mills that together produce one fifth of the country's sugar. (Source: Reutera)

Think tank sees US ethanol output slump in 2012/13

U.S. ethanol makers will produce 12.6 billion gallons of ethanol this marketing year, well below the federal target for use of the renewable fuel, because of high corn prices due to drought, said the influential think tank Food and Agricultural Policy Research Institute on Friday. "Production recovers in 2013/14 because of lower corn prices and the need to meet RFS2 (federal biofuel use) mandates," said FAPRI in an annual report on the U.S. farm sector. It projected output of 14.6 billion gallons in the new marketing year. Cellulosic biofuel production volumes are "uncertain," FAPRI said, and its projections were well below the federal mandate. It pegged cellulosic ethanol output at 9 million gallons in the marketing year that ends on Aug 31 and 21 million in 2013/14.
(Source: Reuters)

Iraq buys 170,000 tons of rice from India, Thailand, and Uruguay
Iraq one of the major basmati rice importers bought 170,000 tons of rice, including 30,000 tons of basmati India origin; 80,000 tons of Thailand origin;, and 60,000 tons of Uruguay origin. (Source: Agriwatch)

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Commodities Daily Report

Monday| March 11, 2013

Agricultural Commodities
Chana
Chana April futures traded on a positive note last week due to value buying at lower levels. Prices have declined over the last few days due to higher supplies in the domestic markets amidst ongoing harvesting coupled along with bumper output expectations. The Spot as well as the Futures settled 0.93% and 1.11% higher w-o-w. In the union budget 2013-14, although no direct move was considered for Pulses, still The Finance Minister expressed concern about the supplydemand mismatch in pulses. He said that the aggregate demand is a concern. Stating that food inflation is worrying, he said the government would take all steps to augment the supply side.

Market Highlights
Unit Rs/qtl Rs/qtl Last 3550 3379 Prev day 0.91 -0.38

as on March 9, 2013 % change WoW MoM 0.93 -1.63 1.11 -1.37 YoY -2.74 -8.38

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

Source: Reuters

Technical Chart - Chana

NCDEX April contract

Pulses Sowing 2012-13

According to the final figures from ministry of agriculture dated 22 February 2012, Chana sowing is 3.6% higher at 95.15 lakh ha compared to previous year. Acreage is up in Rajasthan, Maharashtra, MP and AP at 15.7 lakh ha, 12.53 lakh ha, 32.99 lakh ha and 7.33 lakh ha respectively.
nd

Higher returns earned in 2012, coupled with a hike in minimum support prices (MSP), have helped expand overall acreage in 2012-13 season. The Centre has hiked the MSP by 14 per cent to Rs 3,200 a quintal for chana and as part of its strategy to encourage farmers to grow more pulses to reduce import dependence.

Demand supply fundamentals

According to second advance Estimates released on 8 Feb 2013, Total pulses output for 2012-13 season has been pegged at 17.58 mn tn, down 3.3% compared to previous year. The target for 2012-13 pulses crop output was set at 18.24 million tonne during the year. However, drought conditions have hampered kharif pulses output, which has been only partially offset by Rabi pulses output, especially chana. Out of the total pulses output, kharif output is estimated at 23% lower at 5.48 mn tn while rabi pulses output is pegged 8.72% higher at 12.09 mn tn compared with the final estimates of 2011-12. There has been a sharp increase in the chana output estimates on the back of higher acreage and good yield. Chana output is expected to breach its 2010-11 record of 8.2 mn tn and is estimated at 8.57 mn tn for 2012-13. In its first advance estimates chana output was pegged at 7.9 mn tn. 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).
th

Source: Telequote

Technical Outlook
Contract Chana Apr Futures Unit R`s./qtl Support

valid for Mar 11, 2013 Resistance 3400-3415

3355-3365

Trade Scenario
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. In Australia, total chickpea production in 201213 is estimated to have increased to a record 713000 tones as compared with 485000 tons in 2011-12. In Canada chickpea output is estimated at 1.58 lakh tonnes compared with 86000 tn in 2011-12.

Outlook
Chana is expected trade on a positive note today due to value buying at lower levels. However, increasing arrivals of the new crop coupled with higher imports may cap sharp upside. Also, prices may not sustain below Rs 3200 as farmers will not liquidate their produce below these levels.

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Commodities Daily Report

Monday| March 11, 2013

Agricultural Commodities
Sugar
Sugar futures recovered last week and traded on a positive note as some mills in Maharashtra have stopped crushing due to non availability of cane. Reports that the government may partially decontrol sugar this week also supported prices at lower levels. Prices have declined sharply over the last couple of days due to rising supplies in the physical markets and delay in lifting curbs on the controlled sector by the government. The spot settled 0.5% lower while the April Futures settled 1.57% higher w-o-w.
The government has decided not to increase import duty on sugar though industry bodies and manufacturers had demanded a hike in the duty to 60% from the current 10% to curb shipment of the sweetener. Indias Agriculture Minister Sharad Pawar said that they are favoring Food Ministrys proposal to increase the production tax on Sugar from the current Rs. 0.71/kg by Rs. 1.5/kg if mills were freed from an obligation to sell the sweetener at lower prices for public distribution. India's sugar production in the 2013/14 season is set to fall below consumption for the first time in four years as a water shortage trims acreage in three key states.

Market Highlights
Unit Sugar Spot- NCDEX (Kolhapur) Sugar M- NCDEX Mar'13 Futures Rs/qtl Last 3150

as on March 9, 2013 % Change Prev. day WoW 0.13 -0.50 MoM -0.98 YoY 8.62

Rs/qtl

3030

0.36

0.87

0.30

6.84

Source: Reuters

International Prices
Unit Sugar No 5- LiffeMay'13 Futures Sugar No 11-ICE Mar '13 Futures $/tonne $/tonne Last 534.1 416.67

as on March 8, 2013 % Change Prev day WoW 0.28 -0.11 3.93 4.69 MoM 8.40 3.08 YoY -14.61 -20.75

.Source: Reuters

Domestic Production and Exports

Out of the estimated 24 mn tn sugar output for the season 2012-13, India produced 13.7 mn tn in the first four months of the season beginning October 2012, up 3 percent a year ago period. 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. Exports are not viable as international prices have also declined significantly.

Technical Chart - Sugar

NCDEX April contract

Global Sugar Updates

Liffe white sugar traded on a positive note yesterday and settled 0.28% higher on account of active short coverings and reports that more cane will be diverted towards ethanol due to better realisation. However, Raw Sugar futures on ICE declined from higher levels and settled marginally lower by 0.11% on account of profit taking. A global surplus situation coupled with ample supplies has led the prices to a sharp decline. Currently the prices are trading around their 2 year lows. Prices also declined as ISO forecasted higher global sugar surplus. Brazil exported 1.21 mt of raw sugar in February, vs 1.73 mt in January. The ISO last week had forecasted a global sugar surplus of 8.526 mn tn in 2012/13, up from 6.479 mn tn in 2011-12. It forecast that the sugar stocks-to-consumption ratio would rise to 40.56 percent in 2012/13 from 38.21 percent in 2011/12. Sugar traders are the most bullish since October on speculation that the slump in prices to the lowest in 2 1/2 years will spur Brazilian millers to make more biofuel and less of the raw sweetener from cane. Brazil plans to reduce taxes on ethanol to boost production and use of the biofuel. If brazil cuts tax the ethanol parity to sugar may rise and thus the share of cane directed to sugar production in the 2013-14 season may be 44 -45%, down from 49.6 % in the current period.

Source: Telequote

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

valid for Mar 11, 2013 Resistance 3115-3125

3065-3080

Outlook
Sugar prices are expected to continue to trade on a positive note. Advanced closure of mills in Maharashtra may support prices. Reports that the government may go ahead with the decontrol may also support prices. Yield concerns over next years output may also support prices. Also, demand from the bulk manufacturers ahead of the summers may support prices levels. However, huge supplies in the domestic markets may cap the upside.

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Commodities Daily Report

Monday| March 11, 2013

Agricultural Commodities
Oilseeds
Soybean: Soybean April traded on a bullish note last week on
account of poor supplies in the domestic markets. Delay in shipments from Latin America and tight supplies in the US also supported the prices. The spot as well as the April futures settled 4.62% and 8.4% higher w-o-w. Oil meal exports declined 6.2% in February compared to last month, industry body Solvent Extractors Association of India said. Exports declined as importers are waiting the arrivals of the new crop from Latin America. Also, farmers are holding back their crop. The country exported 25.36 lakh tn soybean meal in first 10 months compared to 30.82 lakh tn in the same period last year which showing a decline of 17.72%. According to the second advance estimates, 2012-13 oilseed output is pegged at 29.4 mn tn, down by 1.1%, while soybean output is pegged higher at 12.9 mn tn, up 3.2%.

Market Highlights
% Change Unit Soybean Spot- NCDEX (Indore) Soybean- NCDEX Mar '13 Futures Ref Soy oil SpotNCDEX(Indore) Ref Soy oil- NCDEX Mar '13 Futures Rs/qtl Rs/qtl Rs/10 kgs Rs/10 kgs Last 3554 3569 685.4 690.2 Prev day 0.59 1.77 -0.01 0.53

as on March 9, 2013

WoW 4.62 7.78 0.21 1.89

MoM 6.89 8.10 -6.65 -4.70

YoY 26.16 26.09 -5.38 -4.70

Source: Reuters

as on March 8, 2013 International Prices Soybean- CBOTMar'13 Futures Soybean Oil - CBOTMar'13 Futures Unit USc/ Bushel USc/lbs Last 1509 50.16 Prev day 0.33 -0.48 WoW 3.00 1.39 MoM 0.87 -5.32
Source: Reuters

International Markets
Soybean Futures on CBOT gained marginally by 0.33% on Friday after the USDA monthly crop report kept the Brazil output unchanged at 83.5 mn tn. However, it reduced Argentinas crop forecast from 53 mn tn to 51.5 mn tn. Thursday on account of strong export demand and tight supplies of the old crop. German oilseeds analyst Oil World cut its forecast of the 2013 soybean harvest in Argentina by 2 mn tn to 50 mn tn from its Jan estimates because of dry weather, but has raised its forecast of Brazil's soybean crop by 0.5 mn tn. Argentina soybean acreage is estimated at 19.35 mn ha. U.S. farmers will harvest record soybean crops in 2013, ending three years of falling production and rebuilding nearly depleted stockpiles. U.S. soybean processors say they have been pleasantly surprised by the high oil content of the latest U.S. soybean harvest, a factor that has contributed to strong profit margins and should pad year-end soy oil inventories.

YoY 13.21 -5.39

Crude Palm Oil

% Change Prev day WoW 0.50 0.24 3.57 0.44

as on March 9, 2013

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

Last 2434 458.2

MoM -2.48 1.44

YoY -26.02 -18.80

MYR/Tonne Rs/10 kg

Source: Reuters

RM Seed
Unit RM Seed SpotNCDEX (Jaipur) RM Seed- NCDEX Apr'13 Futures Rs/100 kgs Rs/100 kgs Last 3530 3450 Prev day -0.51 1.26 WoW -2.47 2.16

as on March 9, 2013 MoM -9.50 0.67

Source: Reuters

Refined Soy Oil: Ref soy oil as well as CPO gained by 1.34% and
0.44% respectively tracking positive edible oil pack. Lead speakers in the Palm Oil Conference have forecasted lower prices due to rising supplies. Higher global production estimates of palm oil by oil world have pressurized prices at higher levels. Global palm oil output is estimated at 55.3 mn tn in 2012-13, up by 3.4 mn tn. India's vegetable oil imports soared 27 percent from a month ago to an all-time high in January on purchases of cheap palm oil. To curb imports, the tariff value of crude palm oil, the edible oil India imports most, has been raised from $ 815 a tonne to $ 848 a tonne, a rise of 4.04%. Rape/mustard Seed: Mustard Futures gained by 2.16% w-o-w on account of value buying at lower levels. However, spot remained in the negative on account of higher output expectations. Arrivals have commenced in Rajasthan and thus prices may decline further. Mustard seed sowing is now up by 2.2% at 67.23 lakh ha. Agriculture ministry in its third advance estimates, pegged mustard output at 7.36 mn tn, up by 11.5%. MSP of mustard seed is fixed at Rs 3000 per qtl.

YoY 0.34 -6.28

Technical Chart Soybean

NCDEX April contract

Outlook
Soybean may trade higher due to lower supplies in the domestic. Mustard seed may trade higher on account of value buying at lower levels. However, arrivals of the new crop may pressurize prices at higher levels. CPO may continue to decline on account of forecast of higher supplies. However prices may find support on expectations that output may fall due to seasonally lower yield.

Source: Telequote

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

valid for Mar 11, 2013 Support 672-678 3430-3485 3410-3440 454-456 Resistance 686-690 3580-3610 3485-3505 461-464

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Commodities Daily Report

Monday| March 11, 2013

Agricultural Commodities h
Black Pepper
Pepper Futures declined last week on account of increasing arrivals of the new crop from Karnataka. Prices have gained earlier due to low stocks, thin supplies and delayed harvesting on back of to lack of skilled laborers. Harvesting of the fresh crop is going in and is expected to gain momentum in the coming days. Food Safety and Standards Authority of India sealed the entire quantity of pepper stored in six warehouses in Kerala of about 8,000 tonnes. Exports demand for Indian pepper in the international markets is also weak due to price parity. The Spot as well as the April Futures settled 5.35% and 2.34% lower w-o-w. According to a circular issued by NCDEX on 09/02/2013, launch of June 2013 expiry contract in Pepper which is scheduled on February 11, 2013, has been postponed till further notice. The revised launch date will be announced in due course. 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 $6,900/tn. Vietnams Asta is quoted at $6,925-6,975/tn, Indonesia GM-1 is quoted at $6,900/tn and Brazil Asta is quoted at $6,600/tn.

Market Highlights
Unit Pepper SpotNCDEX (Kochi) Pepper- NCDEX Mar'13 Futures Rs/qtl Rs/qtl Last 36500 35730 % Change Prev day -0.74 0.27 WoW -5.35 -2.28

as on March 9, 2013 MoM -9.55 -7.75 YoY -10.75 -14.33

Source: Reuters

Technical Chart Black Pepper

NCDEX April contract

Exports and Imports

Indias pepper exports in 2012 have been reported at just 12,000 tonnes while imports reported at 15,000 tonnes making India a net importer. (Source: Agriwatch) According to Vietnam Ministry of Agriculture and Rural Development (MARD) exports of pepper in 2012 stood at 116,962 mt, Vietnam shipped 12000 mt of pepper in January 2013. Pepper imports by U.S. the largest consumer of the spice declined 9% in 2012 period to 62,458 tn as compared to 68,489 tn in 2011. 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 Apr Futures Unit Rs/qtl

valid for Mar 11, 2013 Support 33640-33930 Resistance 34440-34650

Production and Arrivals

The arrivals in the spot market were reported at 17 tonnes while off takes were reported at 15 tonnes on Saturday. As per IPC, Global pepper production in 2012 is projected at 3.27 lk tn, up compared with 3.18 lk tn in 2011. Production for 2013 is projected at 316832 tn. Indonesian pepper output is expected to rise by 24% and in Vietnam by 10%. According to estimates, pepper output in Vietnam is estimated to be 1.05 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 is expected to trade lower today as improvement in arrivals may pressurize prices further. However, low stocks coupled with good demand from the upcountry markets may support prices at lower levels. Reports that farmers are holding back stocks may also support prices at lower levels.

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Commodities Daily Report

Monday| March 11, 2013

Agricultural Commodities
Jeera
Jeera Futures traded on a positive note last week due to fresh export demand. Prices have declined sharply as increasing arrivals of the new crop have pressurized prices. Demand of the new crop is low due to high moisture content. The arrivals of new crop are averaging around 20,000 bags/ day and are expected to improve in the coming days. Higher sowing as well as conducive weather in Gujarat, the main jeera growing region has increased output expectations. According to Gujarat State Agri Dept. sowing in Gujarat is reported at 3.352 lakh ha in 2013 compared with 3.719 lakh ha last year. In Rajasthan, sowing is expected to increase by 10-15%. The spot as well as the April Futures settled 2.75% and 1.4% higher w-o-w. According to markets sources the 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 $2,600 tn (c&f Europe) 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 13499 13135 Prev day 0.52 -0.40

as on March 9, 2013 % Change WoW 2.75 1.80 MoM -2.64 0.27 YoY -0.27 -3.70

Source: Reuters

Technical Chart Jeera

NCDEX April contract

Production, Arrivals and Exports

Arrivals in Unjha were reported at 27,000 tn on Saturday. Production of Jeera in 2012-13 is expected around 38-40 lakh bags (55 kgs each), same as last year. 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 -0.93

as on March 9, 2013 % Change

Unit Turmeric SpotNCDEX (N'zmbad) Turmeric- NCDEX Apr '13 Futures Rs/qtl Rs/qtl

Last 5779 6618

WoW 6.88 9.75

MoM 8.15 6.50

YoY 33.11 42.69

Outlook
Jeera Futures trade is expected to gain today on account of fresh export as well as domestic demand. However, increasing arrivals may pressurize prices at higher levels. In the medium term, prices are likely to stay firm as Syria and Turkey have stopped shipments.

Turmeric
Turmeric Futures witnessed sharp gains last week on reports of fresh export enquiries coupled with output concerns. Traders have received fresh orders from Bihar, Maharashtra, Delhi, Kolkata and some other places. Unseasonal rains in Andhra Pradesh have damaged about 9240 tonnes. Prices have decline due to higher supplies of the new crop coupled with higher carryover stocks. The Spot as well as the Futures settled 6.88% and 9.75% higher w-o-w.

Technical Chart Turmeric

NCDEX April contract

Production, Arrivals and Exports

Arrivals in Erode and Nizamabad mandi stood at 6,000 bags and 10,000 bags respectively on Friday. Expectations are that production may be lower by 40-50%. There are reports of some crop damage in Erode region. Turmeric production in 2012-13 is expected around 50 lakh bags. Production in Nizamabad is expected around 12 lakh bags. Production in 2011-12 is projected at historical high of 10.62 lakh tn. It is estimated that next years carryover stocks would be around 10 lakh bags. 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 is expected to trade on a positive note today on reports of fresh export enquiries. Reports of crop damage coupled with lower output concerns and demand from stockists may also support prices. Demand for the new crop is low due to high moisture content. However, higher carryover stocks and weak overseas demand may cap sharp upside.

Source: Telequote

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

Valid for Mar 11, 2013

Support 13020-13110 6450-6530 Resistance 13340-13470 6750-6870

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Commodities Daily Report

Monday| March 11, 2013

Agricultural Commodities
Kapas
NCDEX Kapas as well as MCX Cotton gained by 0.31% and 2.13% respectively w-o-w. There is some buying interest seen from China which has raised expectations of export demand. However, removal of duties from cotton led to a decline in the prices over the last few days. A sharp downside was capped as government decided to continue with current cotton exports policy. Traders expect exports to cross governments estimates of 8 mn bales. Finance Minister announced various incentives and policies in the Union Budget to support the ailing textile industry. Cotton supplies since the beginning of the year in October 2012 until February 10, 2013 were down at 183.4 lakh bales, down from 189.27 lakh bales a year earlier.

Market Highlights
Unit Rs/20 kgs Rs/Bale Last 978.5 18740

as on March 9, 2013 % Change Prev. day WoW MoM 0.88 0.31 10.38 0.54 2.13 2.13 YoY #N/A 11.02

NCDEX Kapas Apr Futures MCX Cotton Mar Futures

Source: Reuters

International Prices
ICE Cotton Cot look A Index Unit USc/Lbs Last 86.88 81.35

as on March 8, 2013 % Change Prev day WoW 0.44 3.82 0.00 0.00 MoM 6.31 0.00 YoY -2.16 -29.20

Domestic Production and Consumption

According to Cotton Advisory Boards (CAB) estimates (23 Jan 2013) for 2012-13 season that commenced in October, domestic cotton production is pegged 330 lakh bales, down from the previous years estimates of 353 lakh bales. However, higher exports and domestic consumption can be met through revised higher opening stocks of 40 lakh bales and higher imports. 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 80 lakh bales this season, compared with 128.8 lakh bales last year.
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Source: Reuters

Technical Chart - Kapas

NCDEX April contract

Global Cotton Updates

Cotton traded higher and settled 0.44% on Friday hitting a 10 month high as USDA cuts global cotton stock estimates on higher demand. Buying by mills has also lifted the prices. Expectations of good demand from China supported prices at lower levels. U.S. growers will harvest the smallest cotton crop in four years and notch the smallest exports in 12 years as world demand for the fiber drops, especially in China.
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Source: Telequote

At its annual Outlook Forum, USDA projected a crop of 14 million bales from planted acreage of 10 million acres. Plantings would be the smallest in four years and down 19 percent from last year. The crop, projected to be down 18 percent from 2012, would be the smallest since 2009. China is planning to issue more cotton import quotas to exportdependent textile mills that are struggling to protect margins as domestic prices soar due to a state stockpiling plan. However, according to USDA, the world's largest cotton grower and user, will import the smallest amount of cotton, 8 million bales, in five years in 2013/14 as it copes with huge domestic reserves.

Technical Chart - Cotton

MCX March contract

Outlook
Cotton prices may trade on a mixed note. Prices may decline as the government removed of duties from cotton. However, prices may find support at lower levels on expectations of good export demand. Various policy announcements to support the textile industry may support prices. Also the prices may take cues from firmness in the international markets. Expectations that China may release higher import quota which might boost imports also supported an upside in the cotton prices. Also, expected lower US cotton acreage and output in 2013-14 may also support prices at lower levels.

Source: Telequote

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

valid for Mar 11, 2013 Support 945-960 18400-18570 Resistance 990-1000 18910-19100

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