Commodities Daily Report

Monday| March 18, 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 18, 2013

Agricultural Commodities
News in brief
Grain output may drop 3.5% in FY13
THE overall foodgrains production is expected to dip by 3.5% to 250.1 million tonnes (mt) in 2012-13 due to estimated fall in kharif production, following weak monsoon, economic think tank CMIE has said. The food grain production is estimated to fall by 3.5% to 250.1 mt in FY13. Irregular monsoon rainfall in 2012 had taken a toll on kharif cultivation and productivity. The decline in production is estimated in food grains, oilseeds, sugarcane and fibres, Centre for Monitoring Indian Economy (CMIE) said in its monthly report. Rabi cultivation has picked up pace and is reported to be marginally higher than last year, however, it has failed to compensate for kharif losses. The acreage of rabi crops grew by 0.2% to 630 lakh hectares, as of March 1, 2013. Except rice and wheat, cultivation of major rabi crops grew, compared to last year, CMIE said. Cultivation of wheat declined marginally by 0.1% to 298.4 lakh hectares as of March 1. Rice cultivation during rabi has declined by 11.5% to 28.9 lakh hectares so far. (Source: Financial Chronicle)

Market Highlights (% change)

Last Prev. day

as on March 15, 2013

WoW MoM YoY

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

19428 5873 54.03 93.45 1593

-0.73 -0.62 -0.29 0.45 0.12

-1.30 -1.23 -0.59 1.63 1.01

-0.92 -1.02 0.38 -3.67 -3.14

9.91 9.15 7.43 -11.09 -4.01

.Source: Reuters

Moong, its dal prices up on scattered demand

In limited deals, moong and its dal prices rose by Rs 50 per quintal on the wholesale pulses market obn Saturday on scattered demand from retailers. However, other pulses moved in a tight range and settled around previous levels. Traders said scattered demand from retailers mainly led to rise in moong and its dal prices. (Source: Business Line)

Spurt in ICEX, NMCE turnover after Jan

March has traditionally been a month of spurt in business for commodity exchanges. Despite a steady decline in the overall commodity futures business, two small commexes are heading for a big leap in their daily average turnover (DAT) this month. There has been a sharp increase in turnover this month, with unusual volumes in otherwise almost illiquid contracts, at the Reliance Group- controlled Indian Commodity Exchange ( ICEX) and the Ahmedabad based National Multi Commodity Exchange (NMCE). These two have only two per cent of the market. The DAT at the National Commodity & Derivatives Exchange has seen only steady growth in March, fairly in sync with the previous months. Those at the Multi Commodity Exchange and Ace Derivatives & Commodity Exchange have declined noticeably. The DAT at ICEX had almost doubled to Rs. 1,615 crore till Thursday from Rs. 716 crore in February and from Rs. 483 crore in January. Contracts showing little liquidity in the rest of the months invariably turned active towards the end of the financial year. This year, too, natural gas contracts generated a DAT of Rs. 211 crore in February and Rs. 634 crore this month, against a negligible turnover during the previous months. Similarly, the DAT of crude oil on the ICEX shot up to Rs. 225 crore in March against Rs. 156 crore in February and Rs. 119 crore in January. It was Rs. 128 crore in the corresponding month last year. (Source: Business Standard)

Poultry feed prices rise on dearer inputs

Prices of poultry feed increased this week following an uptrend in prices of key ingredients in the last few weeks. Higher input cost led feed prices upwards, said Subhash Sharma, Financial Head of Sarvottam Poultry Feed Supply Centre Pvt Ltd. The uptrend was anticipated as prices of key ingredients have increased rapidly over the last one month, he said. Prices of broiler products may increase in a couple of days. If the situation persists, feed prices may increase further in the near future, said Sharma. Soyameal prices went up by Rs 990 to Rs 33,600 a tonne.
(Source: Business Line)

Bengal potato prices gain as cold storages open doors

Potato prices in West Bengal have inched up by nearly nine per cent, with the tuber finding its way into the 400-odd cold storages across the State. Wholesale price of potatoes (Jyoti variety) is ruling at Rs 500 a quintal this week, compared with Rs 460 a quintal during a week ago period. According to Patit Paban De, member, West Bengal Cold Storage Association, a majority of cold storages in the State have opened their doors for storing the tuber. Nearly 55 per cent of the potatoes have already made their way into cold storages. Nearly two-fifth of the 400plus cold storages in the State had kept their doors shut for entry of potatoes till about ten days back, demanding a hike in rentals. The State had last raised the rentals for storage three years ago. This is even while storage costs, particularly for energy, witnessed a spike of almost 50 per cent, during the period. (Source: Business Line)

Cotton at 11- month high on China import speculation

Cotton futures jumped to the highest in 11 months on speculation that China, the worlds biggest consumer, will increase imports. The US Department of Agriculture (USDA) last week raised its estimate for Chinese consumption this year to 36 mn bales, up by 1.4% from a month earlier. The USDA also boosted its forecast for the Asian nations imports by 7.1%. The Chinese government may boost import quotas by April, Reuters reported. Talk continues of additional Chinese cotton- import quotas being issued, Sharon Johnson, a senior market specialist at Knight Futures in Roswell, Georgia, said in a report. (Source: Business Standard)

Tea prices gather steam on demand at Kochi auction

A good demand perked up prices of almost all varieties of tea at the Kochi auction. In Sale No.11 in the dust CTC grades, the demand was strong and the quantity on offer was 8,46,500 kg. The market for good liquoring teas was higher by margins of Rs 5-10 and more. Mediums were also higher by similar margins, while plainer varieties were dearer by Rs 2-4. The orthodox varieties registered a good demand and the quantity on offer was 5,000 kg. The market for Highgrowns was higher while for mediums it was dearer. Bulk of the offerings was absorbed by upcountry buyers and exporters. (Source: Business Line)

Govtmay discuss sugar decontrol today

The Union Cabinet is likely to pave the way for a partial decontrol of the Rs. 80,000- crore sugar sector. It is expected to discuss on Monday the much- awaited measure to abolish the levy- sugar mechanism, under which private millers are required to sell a specified amount of the sweetener to the government at concessional rates. However, additional excise might have to be imposed on sugar to offset the increased subsidy burden, if the move takes place. The officials added, also likely to be discussed at the Cabinet meeting was the food security Bill, which incorporates the amendments to the previous Bill, as suggested by the standing committee of Parliament on food. (Source: Business Standard)

U.S. February soybean crush falls below trade expectations

U.S. soybean processors crushed 136.322 million bushels of soybeans in February, the National Oilseed Processors Association (NOPA) said on Friday. The figure marked a larger-than-expected drop from January, when soy processors crushed 158.195 mn bushels, the second-largest monthly total in three years. Analysts' estimates ahead of the February crush ranged from 138.3 mn to 144.0 mn bushels, with an average estimate of 141.6 million. On the export front, NOPA reported February 2013 soymeal exports at 765,659 short tons, a drop from 1.118 mn in January. (Source: Reuters)

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Commodities Daily Report

Monday| March 18, 2013

Agricultural Commodities
Chana
Chana futures gained marginally last week due to demand from stockists at lower levels. However, the spot remained in the negative due to the arrival pressure in the domestic markets and higher output expectations. The Spot settled 2.29% lower while the April Futures settled 0.89% 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 3469 3409 Prev day 0.26 0.21

as on March 16, 2013 % change WoW MoM -2.29 -5.27 0.89 -2.40 YoY -7.06 -7.82

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 Rs./qtl Support

valid for Mar 18, 2013 Resistance 3425-3440

3375-3390

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 to trade on a positive note today on account of demand from stockists. However, increasing arrivals of new crop from MP coupled with higher imports may exert downside pressure on the domestic prices. 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 18, 2013

Agricultural Commodities
Sugar
Sugar futures declined last week due to sluggish demand from the bulk manufacturers coupled with higher supplies. However, a sharp declined was cushioned as traders are adopting wait and watch policy ahead of decontrol decision. Agriculture Minister Sharad Pawar said that the sugar output in 2013-14 may fall to around 24 mn tn against current years output of 24.5 mn tn. There are reports that some mills in Maharashtra have stopped crushing due to non availability of cane. The spot as well as the April Futures settled 1.01% and 1.81% lower w-o-w.
India, the world biggest sugar consumer, could consider easing curbs on the tightly controlled industry this week. Decontrolling the sugar sector would, involve abolition of regulated release mechanism, removal of levy sugar obligation from industry, freer export-import policy, removal of sugar from compulsory packing in jute bags only and a transparent policy linking cane price with sugar price. 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. 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 3118

as on March 16, 2013 % Change Prev. day WoW -0.17 -1.01 MoM -2.56 YoY 8.17

Rs/qtl

3024

0.80

-0.20

-1.27

11.83

Source: Reuters

International Prices
Unit Sugar No 5- LiffeMay'13 Futures Sugar No 11-ICE May '13 Futures $/tonne $/tonne Last 539.4 419.78

as on March 15, 2013 % Change Prev day WoW 0.41 0.27 0.78 0.37 MoM 8.31 3.62 YoY -19.25 -26.38

.Source: Reuters

Technical Chart - Sugar

NCDEX April contract

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.

Global Sugar Updates

Liffe white sugar as well as raw sugar futures on ICE traded in a rangebound manner and settled 0.41% and 0.27% higher respectively on Friday. A global surplus situation coupled with ample supplies pressurized prices. However, reports that more cane will be diverted towards ethanol due to better realization supported prices. 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 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-toconsumption 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 18, 2013 Resistance 3060-3080

3000-3020

Outlook
Sugar prices are expected to trade lower today due to higher supplies in the domestic markets. However, prices may recover as demand will now reemerge to meet the summer season requirement. Any decision by the government on decontrol may also guide the prices. Further, crushing will now start declining amid lower cane availability this season.

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Commodities Daily Report

Monday| March 18, 2013

Agricultural Commodities
Oilseeds
Soybean: Soybean April Futures declined last week tracking weak
international markets. However, sharp downside was cushioned on account of lower supplies in the domestic markets. The spot settled 1.1% higher while the April futures settled 1.79% lower w-o-w. Exports of Soybean meal during February, 2013 was 5,77,589 tones as compared to 3,70,524 tonnes in February, 2012 showing an increase by 55.88% over the last year. On a financial year basis, the export during April 2012 to February 2013 is 31,13,651 tonnes as compared to 34,52,791 tonnes in the same period of previous year showing a decrease of 9.82%. 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 3593 3657 684.5 690.1 Prev day 0.00 2.32 0.19 -0.15

as on March 16, 2013

WoW 1.10 2.47 -0.14 -0.01

MoM 7.13 9.92 -7.16 -6.16

YoY 26.69 30.75 -6.59 -5.69

Source: Reuters

as on March 15, 2013 International Prices Soybean- CBOTMay'13 Futures Soybean Oil - CBOTMay'13 Futures Unit USc/ Bushel USc/lbs Last 1426 49.91 Prev day -2.14 1.67 WoW -5.47 -0.50 MoM 0.37 -2.33 YoY 4.16 -10.04

International Markets
Soybean Futures on CBOT declined by 5.47% last week on account of advancement of the South American crop. This led to slowing demand for old US soybean. No fresh sale of the old crop was reported. There are reports that farmers in Argentina are holding back their crop anticipating higher prices. The USDA monthly crop report has kept the Brazil output unchanged at 83.5 mn tn while, it reduced Argentinas crop forecast from 53 mn tn to 51.5 mn tn. 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.

Source: Reuters

Crude Palm Oil

as on March 1, 2013 % Change Prev day WoW 0.00 -0.42 -3.53 -0.92

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

Last 2348 454

MoM -3.97 1.20

YoY -31.35 -19.93

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 3512 3453 Prev day -0.38 -0.69 WoW -1.70 -0.35

as on March 16, 2013 MoM -9.96 -0.14

Source: Reuters

Refined Soy Oil: Ref soy oil and CPO declined 1.08% and 0.92%
respectively last week due to good supplies. BMD also declined by 3.53% last week due to lower exports to India. 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 declined 17 percent from a month ago in February due to higher taxes. 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%.

YoY -2.96 -7.25

Technical Chart Soybean

NCDEX April contract

Rape/mustard Seed: Mustard Futures declined 0.35% w-o-w due

to arrivals pressure of the new crop coupled with higher output expectations. Arrivals have commenced in Rajasthan and have pressurized prices. 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.

Outlook
Soybean may trade on a mixed note. Weak international markets may pressurize prices while low supplies may support prices. Mustard seed may gain due to buying at lower levels while, higher output expectations may cap a sharp upside. Soy oil and CPO may continue to decline further 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 18, 2013 Support 671-673 3450-3465 3425-3440 450-452 Resistance 680-683 3495-3505 3475-3495 456-458

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Commodities Daily Report

Monday| March 18, 2013

Agricultural Commodities h
Black Pepper
Pepper Futures traded on a positive note last week as low stocks in the warehouses coupled with thin supplies and delayed harvesting on back of to lack of skilled laborers supported the prices. However, prices declined towards the end of the week on account of profit booking. The slow pace of arrivals failed to pressurize the price. 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 1.86% and 4.48% higher 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 $7,200/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 37179 37295 % Change Prev day 0.25 -0.09

as on March 16, 2013 WoW 1.86 4.38 MoM -8.74 -6.05 YoY -8.18 -9.82

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 18, 2013 Support 35320-35540 Resistance 36090-36420

Production and Arrivals

The arrivals in the spot market were reported at 27 tonnes while off takes were reported at 25 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 higher today as 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. However, improvement in arrivals may pressurize prices at higher levels.

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Commodities Daily Report

Monday| March 18, 2013

Agricultural Commodities
Jeera
Jeera Futures traded on a positive note last week due to fresh export demand. However, the spot declined due to arrivals pressure of the new crop. The arrivals of new crop are averaging around 25,000 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. According to the Rajasthan State Budget 2013-14, it has exempted jeera from VAT. In Rajasthan, sowing is expected to increase by 10-15%. The spot settled 0.36% lower while the April Futures settled 1.25% 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 $2,650 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 13450 13360 Prev day 0.00 0.89

as on March 16, 2013 % Change WoW -0.36 1.71 MoM -3.38 -1.38 YoY 0.24 4.17

Source: Reuters

Technical Chart Jeera

NCDEX April contract

Production, Arrivals and Exports

Arrivals in Unjha were reported at 32,000 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 -2.45

as on March 16, 2013 % Change

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

Last 6546 6760

WoW 13.26 2.15

MoM 19.65 6.46

YoY 63.89 58.76

Outlook
Jeera Futures is expected to trade on a positive note today. Fresh export as well as domestic demand may support prices while increasing arrivals may cap sharp upside. In the medium term, prices are likely to stay firm as Syria and Turkey have stopped shipments.

Turmeric
Turmeric Futures gained sharply last week due to fresh export demand 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. However, the Futures corrected from higher levels after NCDEX imposed special margin of 10% on the long side from 14/03/2013. The Spot settled as well as the Futures settled 13.26% and 2.15% 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 16,000 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 mixed note today. Fresh export / domestic demand coupled with crop damage and lower output concerns may support prices. Demand from stockists may also support prices. However, higher carryover stocks coupled with higher margin on the long side may pressurize prices.

Source: Telequote

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

Valid for Mar 18, 2013

Support 13220-13290 6570-6660 Resistance 13470-13580 6850-6980

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Commodities Daily Report

Monday| March 18, 2013

Agricultural Commodities
Kapas
NCDEX Kapas as well as MCX Cotton traded on a positive note lat week tracking bullish international markets and settled 0.66% and 1.17% higher respectively w-o-w. There is some buying interest seen from China which has raised expectations of export demand. Traders have demanded the government agencies (Cotton Corp of India) to release the stocks procured by them. The government has decided to continue with the 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 985 18960

as on March 16, 2013 % Change Prev. day WoW -1.70 0.66 -0.73 1.17 MoM 7.59 1.17 YoY #N/A 11.99

NCDEX Kapas Apr Futures MCX Cotton Mar Futures

Source: Reuters

International Prices
ICE Cotton Cot look A Index Unit USc/Lbs Last 92.5 81.35

as on March 15, 2013 % Change Prev day WoW 1.80 6.67 0.00 0.00 MoM 14.45 0.00 YoY 3.84 -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 on a bullish note last week and traded above 90 cents for the first time since April 2012 and settled 6.67% higher w-o-w due to positive exports sales data. Prices are trading near year high levels. USDA, in its monthly crop report cut global cotton stock estimates on higher demand which cushioned a sharp downside in the prices. 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. 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.
Source: Telequote

Source: Telequote

Technical Chart - Cotton

MCX March contract

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

valid for Mar 18, 2013 Support 965-975 18760-18860 Resistance 1000-1014 19120-19290

Outlook
Cotton prices are expected to recover from lower levels and trade on a positive note today. Expectations of good exports 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.

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