Commodities Daily Report

Wednesday| October 10, 2012

Agricultural Commodities

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

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

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Commodities Daily Report

Wednesday| October 10, 2012

Agricultural Commodities
News in brief
Pawar pitches for long-term farm Exim policy
Agriculture Minister Sharad Pawar today pitched for a long-term exportimport policy as the countrys farm output had largely stabilized. Stating that the constant now-on, now-off policy on exports was showing the country in poor light, Pawar said the time has come to accept and introduce the long-term export-import policy for farm commodities. Indias current policy was largely influenced by the fluctuations in production and prices of agri-commodities. Speaking at the Economic Editors Conference, Pawar said stability in farm output had helped India emerge the second largest exporter of agri-commodities in the past one year. India has emerged a large exporter of rice and wheat after it lifted a ban on exports of the cereals. The Minister said that the country had ample stocks to meet domestic requirements. Pawar said his Ministry was looking to accelerate farm sector growth to four per cent in the 12 {+t} {+h} Plan. To a query on genetically modified (GM) crops, Pawar said the Government had adopted a cautious approach on the issue and allowed the technology to be commercialized only in cotton.
(Source: Business Line)

Market Highlights (% change)

Last Prev. day

as on Oct 9, 2012
WoW MoM YoY

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

18793 5705 52.68 92.39 1763

0.45 0.50 0.27 3.43 -0.59

-0.16 -0.25 0.59 -0.10 -0.98

8.55 9.16 -5.77 -3.11 4.27

18.46 19.54 6.64 22.10 9.18

Source: Reuters

Gur Stock Position in Cold Storages Till 8th October 2012

Around 157000 bags (40 kg each) of Gur has been stored in Muzaffar nagar cold storage till 10th Oct 2012, which are 50000 bags higher compared to same period in last year, stock position. Out of total gur stock position, there are around 60000 bags of Chaku variety gur stored in Cold storages. This week around 77000 bags (each 40 kg) lifted from the markets which was around 57000 bags lifted last year same period.
(Source: Agriwatch)

India can offer quality wheat to Iran: Sharad Pawar

India can supply Iran with high quality wheat if Tehran decides to finalise purchasing negotiations hampered for months by concerns over a fungal disease, Sharad Pawar said on Tuesday. Pawar's comments come as an Indian delegation is visiting Iran, aiming to clinch a deal to export 2-3 million tonnes of wheat at around $300 a tonne free on board (FOB). India is the world's second biggest wheat producer, and any purchase by Iran will help to meet payments for Iranian oil and fix an imbalance in trade in favour of Tehran. "Our effort is to export quality wheat from states like Madhya Pradesh and Rajasthan, which are free from karnal bunt," Pawar said at the annual Economic Editors Conference. Karnal bunt is a fungal disease that deteriorates the quality of wheat. "We have asked the Food Corporation of India to keep on offloading wheat stocks in the market to keep checks on prices," Pawar said. (Source: Economic Times)

Indian Sugar Imports Likely to Test 1 ml Ton Mark In 2012-13 MY

According to Agriwatch expectation, India is likely to import around 1 million tons of sugar imports in 2012-13 marketing year considering downward trend in international sugar arena. In addition to it, expected increase in sugar prices in the domestic markets and global surplus of sugar globally might increase the sugar import parity for Indian importers for the coming year. Also, lower cane availability to various mills situated near to coastal regions bound them to go for imports. It is noticeable that Industry demands to raise import duty from 10% to 25% keeping to curb further sugar imports as refiners which are situated near to coastal regions getting benefits from sugar imports at present. (Source: Agriwatch)

Vietnam Rice Exports Up 3% from Previous Year

Vietnams rice exports from the beginning of the year to September 2012 have reached about 5.85 million tons, which is high about 3% from 5.65 million tons exported during the same period in 2011. Now, Vietnam is about a million tonne lower of its target of around 6.5 to 7 million tons of total rice exports for the full year 2012. Vietnams rice exports started sluggishly this year partly due to high prices at around average of $505 per tonne which was about 14% higher than the average rice prices of around $432 per tonne during April to September 2012. (Source: Agriwatch)

N-E monsoon may set in any time after Oct 17

Rain or thundershowers have been forecast over extreme south peninsular India and along the east coast over the next week. This is expected to gradually grow in strength to precipitate northeast monsoon anytime after October 17 if model forecasts are any indication. Rain or thundershowers would also occur at one or two places over Rayalaseema and coastal Andhra Pradesh. North interior Karnataka, Konkan, Goa and south madhya Maharashtra too may witness occasional rain during next two days before drying up. This would likely help the retreating SouthWest monsoon to exit more areas in Central India and north peninsular India. Both maximum and minimum temperatures are expected to fall by another 2 deg Celsius over plains of north-west and Central India during the next three days. (Source: Business Line)

Curbs likely on diversion of fertile land

The Government is planning to initiate measures to curb diversion of productive agricultural land for non-agricultural purposes, according to Agriculture Minister Sharad Pawar. Pawar, who heads the Group of Ministers on land acquisition, said there was a broad thinking among the members on preventing conversion of agriculture land, except for public purpose. Rapid urbanisation, driven by rising population, is exerting pressure on diversion of productive agriculture land for housing and industrial purposes, triggering a wave of protests by the farming community across the country. Terming the diversion of agriculture land as a serious problem, Pawar said there was need to take steps to prevent its for non-agriculture purpose. As arable land shrinks, we have to focus on improving productivity through higher output and irrigation he said in reply to a query.. (Source: Business Line)

Spinning mills join hands to form firm for sourcing cheaper cotton
A little over 50 spinning mills have come together here to form Cotton Sourcing Company (COSCO) in an effort to streamline procurement of cotton in the Coimbatore region and safeguard them from price vagaries. The company is also forming a joint venture with Aries Logistics Ventures Ltd styled Transco for transportation of cotton. The prime reason for the formation of COSCO is that though Tamil Nadu accounts for nearly 40 per cent of cotton consumption, it produces much less. This has necessitated procurement of cotton from States such as Gujarat, incurring huge transportation costs and supply delays. According to M.S. Rajarathinam, CEO, COSCO, the company will aim at sourcing quality cotton at a cheaper price. Collective bargaining will also help it. Farmers will benefit from timely payment for the cotton procured within five working days as COSCO has tied up with bankers. (Source: Business Line)

Modification in contract specifications RMSeed Futures Contract

As per the NCDEX exchange and and with the approval of the Forward Markets Commission, has made modifications in the Rapeseed Mustard Seed contracts which will be applicable for all contracts expiring in April 2013 and thereafter. The changes are in the delivery centers, Bharatpur (Rajasthan) is added and Agra is removed from the list of the centers
(Source: NCDEX)

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Commodities Daily Report

Wednesday| October 10, 2012

Agricultural Commodities
Chana
After remaining firm during the early part of the session on Tuesday, Chana prices settled range bound due to profit booking. Sentiments have turned positive in the past one week on account of improved festive season demand at lower price levels. Prices had declined in the month September on improved rains and reports of expected higher output in Australia, the largest supplier of chickpeas to India. In Australia, chana production rose by 70.5 percent to 8.27 lakh tonnes from 4.85 lakh tonnes in previous year. CACP has recommended a hike in minimum support price (MSP) of gram by Rs.200 to Rs.3000 a quintal and Masoor by Rs.100 to Rs.2900 a quintal for upcoming 212-13 Rabi season to boost the production of pulses. As per the statement of Finance Minister P. Chidambaram, India has raised the subsidy on imported pulses to Rs. 20/kg from the earlier Rs. 10/kg, this move is expected to increase pulses imports. As per the NCDEX circular dated 1 October, Special Margin of 10% (in cash) on the Long Side on all the running contracts and yet to be launched contracts in Chana have been withdrawn with effect from beginning of day Thursday, October 04, 2012. Good rains in the month of August and September has raise prospects of Rabi pulses sowing in the coming days that would commence soon. Monsoon has recovered across India, especially in Rajasthan, one of the major chana growing states, and may prove beneficial for the chana sowing.
st

Market Highlights
Unit Rs/qtl Rs/qtl Last 4472 4594 Prev day 0.49 -0.02

as on Oct 9, 2012 % change WoW MoM 3.92 -3.91 6.32 -0.91 YoY 27.77 34.25

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

Source: Reuters

Technical Chart - Chana

NCDEX Nov contract

Source: Telequote

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

valid for Oct 10, 2012 Resistance 4460-4515

Sowing progress and demand supply fundamentals

According to the Ministry of Agriculture 99.81 Lakh hectare area has been planted under Kharif pulses as on 21th September, 2012 compared to 108.28 lakh hectare (ha) same period last year. According to the first advance estimates of 2012-13 season, kharif pulses output is estimated lower by 14.6% at 5.26 million tonnes compared with 6.16 mn tn last year. Kharif pulses harvesting would commence from next month. According to the Fourth advance estimates of 2011-12 season, Pulses output is pegged at 17.21 mn tn in 2011-12 compared with 18.24 mn tn produced in the year 2010-11. While Chana output in 2011-12 is estimated at 7.58 million tones, Tur is estimated at 2.65 million tones, Urad is estimated at 1.83 million tones, Moong is estimated at 1.71 million tones. Assocham estimates, 21 mn tn of pulses demand in 2012-13 and is likely to reach at 21.42 mn tn in 2013-14 and 21.91 MT in 2014-15. (Source: Agriwatch)

4315-4360

Outlook
Chana futures are expected to gain further ahead of festive season demand and tight supplies. However, reports of higher sowing of Rabi pulses this season might pressurize the prices in the medium term. Also, higher imports from Australia may cap the sharp upside in the prices.

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Commodities Daily Report

Wednesday| October 10, 2012

Agricultural Commodities
Sugar
Sugar prices traded in a range bound manner weak market sentiments amid higher quota may be offset by The Government has decided to make available a quantity of 40 lakh tons of non-levy quota, for the months of October and November 2012. Indian mills have signed deals to buy up to 450,000 tonnes of Brazilian raw sugar for delivery from October to December as a gap between domestic and overseas prices widens, making room for the first imports in more than two years, five dealers told Reuters. Millers based in western and southern India and global trading firms bought sugar at around $500/ton a CIF basis, as the price in the domestic market has jumped more than 23% to $680/ tn in the past three months. ICE raw sugar and Liffe white sugar futures traded on a positive note on Tuesday and settled 0.55% and 0.23% higher respectively.

Market Highlights
Unit Sugar Spot- NCDEX (Kolkata) Sugar M- NCDEX Oct '12 Futures Rs/qtl Last 3770

as on Oct 9, 2012 % Change Prev. day WoW 0.27 -0.23 MoM 3.29 YoY 21.42

Rs/qtl

3363

0.06

-2.47

-2.52

22.69

Source: Reuters

International Prices
Unit Sugar No 5- LiffeOct'12 Futures Sugar No 11-ICE Oct '12 Futures $/tonne $/tonne Last 598.3 477.11

as on Oct 9, 2012 % Change Prev day WoW 0.55 0.23 1.22 -0.51 MoM 7.55 10.78 YoY -10.63 #N/A

Domestic Production and Exports

The area under sugarcane is estimated at 52.88 lakh ha for 2012-13 crop season, up from 50.99 lakh ha on same period a year ago. According to the first advance estimates by agriculture ministry, Sugarcane output is pegged at 335.3 mn tn, down by 6.2% compared to 357.6 mn tn last year. Despite of higher acreage, the producers body has estimated next years sugar output lower at 24 mn tn, down by 2mn tn compared to the current year. Sugar production in India the worlds second-biggest producer touched 26 million tonne since October 1, 2011. Industry body ISMA has estimated 6 mn tn stocks for the new season beginning October 01, 2012 compared to 5.5 mn tn year ago. India may export 2.5-3 mn tn sugar in 2012-13. With the opening stocks of 6 mn tn, domestic Sugar supplies are estimated at 30mn tn against the domestic consumption of around 22.523 mln tn for 2012-13. Thus, no curbs on exports are seen as of now.

Source: Reuters

Technical Chart - Sugar

NCDEX Nov contract

Global Sugar Updates

Brazilian cane mills produced 3 mn tn of sugar in the first half of August thanks to dry weather. Unica in its latest report stated said that total sugar output since the start of the crushing season is still down 12 percent from the same period a year ago. The International Sugar Organization said it expected a global sugar surplus of 5.86 million tonnes in the season running from October 2012 to September 2013, up from the prior season's surplus of 5.19 million tonnes. The ISO said the stocks/consumption ratio could rise to around 40 percent in 2012/13, from 37.6 percent in 2011/12. (Source: Reuters)

Source: Telequote

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

valid for Oct 10, 2012 Support 3290-3308 Resistance 3343-3365

Outlook
Sugar prices may trade sideways as festive demand might support the upside in the prices, while higher Quota for the month of October and November may cap sharp gains.

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Commodities Daily Report

Wednesday| October 10, 2012

Agricultural Commodities
Oilseeds
Soybean: Soybean Futures after falling sharply recovered on
Tuesday owing to emerging demand of edible oil ahead of festive season. The Futures settled on a upper limit of 4% while the spot closed higher by 1.13%. As per NCDEX, Special Margin of 20% (in cash) on the Long Side on Soya bean October 2012 expiry contract will be withdrawn with effect from beginning of day Monday, October 08, 2012. Special margin on soy meal has also been withdrawn w.e.f October 12 2012. CBOT Soybean settled flat on Tuesday ahead of USDA monthly reports that are expected to show an increase in yield forecasts and a continuation of the recent record pace of harvest. US soybeans are 41 pct harvested v/s 22 pct week ago and 19 pct to 5-year average nd as on 2 October 2012. In Brazil planting has started 10 days earlier amid good rains. If rains continue in the coming weeks as forecast, Brazil could churn out 81 million tonnes of oilseed and replace the drought-stricken US as the world's top soybean producer, according to the USDA. Brazils grain Association expects the number 2 producers of soybean to produce record 81.3 mn tn in 2012-13. In the domestic markets, as on 20 September, 2012, Oilseeds have been sown in 174.39 lakh ha so far, compared with 178.16 lakh ha same period last year. Soybean area is higher at 106.9 lakh ha. According to first advance estimates, Soybean output is pegged at at 126.2 lk tn for 2012-13. However, drop in area under groundnut, sunflower & castor seed may lead to lower output of these oilseeds in 2012-13 which is estimated 9.6% lower at 187.8 lakh tn.
th

Market Highlights
Unit Soybean Spot- NCDEX (Indore) Soybean- NCDEX Oct '12 Futures Ref Soy oil SpotNCDEX(Indore) Ref Soy oil- NCDEX Oct'12 Futures Rs/qtl Rs/qtl Rs/10 kgs Rs/10 kgs Last 3133 3209 658.4 654.3 Prev day 1.13 4.00 0.34 2.96

as on Oct 9, 2012 % Change WoW 1.52 4.39 -3.25 2.76 MoM -30.33 -15.45 -17.49 -16.92
Source: Reuters

YoY 42.09 45.41 2.79 4.88

as on Oct 9, 2012 International Prices Soybean- CBOTNov'12 Futures Soybean Oil - CBOTOct '12 Futures Unit USc/ Bushel USc/lbs Last 1550 50.82 Prev day -0.06 0.67 WoW 1.27 1.09 MoM -12.44 -10.20 YoY 12.36 -11.31

Source: Reuters

Crude Palm Oil

as on Oct 9, 2012 % Change Prev day WoW 2.24 2.88 9.36 -1.34

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

Last 2278 418.5

MoM -19.79 -21.88

YoY -33.00 -12.06

MYR/Tonne Rs/10 kg

Refined Soy Oil: Ref soy oil and MCX CPO settled higher taking
cues from the international palm oil prices. There are reports that Malaysian may not expand further their palm plantation to support the falling prices. This would support the prices to remain firm. Although, exports are high the overall stocks of Malaysian palm oil are higher on the back of seasonally higher yield. Exports of Malaysian palm oil products for Sept. 1-25 rose 8 percent to 1,170,720 tonnes from 1,084,343 tonnes shipped during Aug. 1-25. Indias edible oil imports should rise 5.4 percent to a record 10.31 million tonnes in 2012/13, with the entire increase met by palm oil. India imported 112,611 tn of refined palm oil in July, down 9.28 percent from June. Total vegetable oil imports in July were 870,328 tn, up from 783,315 tn in the previous month (Source: Sea of India).

Source: Reuters

RM Seed
Unit RM Seed SpotNCDEX (Jaipur) RM Seed- NCDEX Oct '12 Futures Rs/100 kgs Rs/100 kgs Last 4150 4106 Prev day 0.00 3.37

as on Oct 9, 2012 WoW 5.87 9.00 MoM -1.19 0.76

Source: Reuters

YoY 40.68 33.35

Technical Chart Soybean

NCDEX Nov contract

Rape/mustard Seed: Mustard futures extended gains and traded

on a positive note due to low stocks in the domestic markets and settled 3.37 higher respectively. Mustard output was lower in 2011-12. However, on the back of higher returns and improved rains, next years output is expected to be better. Sowing of rapeseed starts from October and northwestern Rajasthan is the top producing area in the country. As per NCDEX circular, existing Special Margin of 15% (in cash) on the Long side shall be reduced to 5% (in cash) on all the running contracts and yet to be launched contracts in Rapeseed Mustard Seed with effect from Monday, September 24, 2012. Outlook Edible oil complex is expected to trade sideways with a upper bias taking cues from the firm Malaysian pal oil futures. Also withdrawal of special margin in October soybean contract might provide support to the prices. However due to good quantity new crop arrivals of soybean hitting the market, sharp upside might be capped for short term.

Source: Telequote

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

valid for Oct 10, 2012 Support 629-636 3130-3170 4075-4110 409-413.50 Resistance 648-654 3262-3295 4190-4230 424-429

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Commodities Daily Report

Wednesday| October 10, 2012

Agricultural Commodities
Black Pepper
Pepper futures traded on a bullish note yesterday due to low supplies in the domestic markets as well as festive demand. Farmers are also unwilling to sell their stocks at lower levels. However, expectations of improvement in weather conditions as well as better output in Indonesia pressurized prices in the spot. Traders are buying pepper directly from the farmers. Exports demand for Indian pepper in the international markets is said to be low due to huge price parity. The Spot settled 0.17% lower while Futures settled 0.91% higher on Tuesday. th According to the circular released on June 13 2012 the existing Special margin of 10% (cash) on the long side stands withdrawn on all running contracts and yet to be launched contracts in Pepper from beginning of day Friday June 15, 2012. Pepper prices in the international market are being quoted at $8,600/tonne(C&F) while Indonesia Austa is quoted at $6,750/tonne (FOB). Vietnam was offering 550GL at $6,900/tonne. As per circular dt. 29/06/2012 issued by NCDEX, Hassan will be available as an additional delivery centre for all the yet to be launched contracts. (not applicable to the currently available contracts-till Dec 2012 expiry).

Market Highlights
Unit Pepper SpotNCDEX (Kochi) Pepper- NCDEX Oct '12 Futures Rs/qtl Rs/qtl Last 42129 43685 % Change Prev day -0.17 0.91

as on Oct 9, 2012 WoW 0.06 0.58 MoM 2.19 4.48 YoY 22.31 28.96

Source: Reuters

Technical Chart Black Pepper

NCDEX Nov contract

Exports
According to Spices Board of India, exports of pepper in April 2012 fell by 47% and stood at 1,200 tonnes as compared to 2,266 tonnes in April 2011. India imported 1,848 tonnes of pepper till March 2012 and has become the third country to import such large quantity after UAE and Singapore. (Source: Agriwatch) According to Vietnam Ministry of Agriculture and Rural Development (MARD) exports of black pepper in 2012 are forecasted at around 1,25,000 tonnes. Exports of Pepper from Vietnam during January till June 2012 is estimated around 73000 mt 73,000 mt, higher by 4.3% in volume and 31.7% in value compared to corresponding year last year. Exports of Pepper from Brazil during January till May 2012 are estimated around 13369 mt. (Source: Peppertradeboard). Pepper imports by U.S. the largest consumer of the spice declined 14.8% in the first 2 months of the year (2012) to 8810 tn as compared to 10344 tn in the same period previous year. Imports of Pepper in the month of February declined by 16.8% to 3999 tn as compared to 4811 tn in the month of January 2012. Exports from Indonesia posted significant decrease of 42% as compared to previous year. Exports stood at 36,500 tonnes as compared to 62,599 tonnes in the last year. During May 2012 Brazil exported 1,705 tonnes of pepper as against 1600 tn in May 2011.

Source: Telequote

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

valid for Oct 10, 2012 Support 43150-43380 Resistance 43900-44250

Production and Arrivals

The arrivals in the spot market were reported at 33 tonnes while offtakes were 35 tonnes on Tuesday. Global Pepper production in 2012 is expected to increase 7.2% to 3.20 lakh tonnes as compared to 2.98 lakh tonnes in 2011 with sharp rise of 24% in Indonesian pepper output and in Vietnam by 10%. According to latest report pepper output in Vietnam is estimated to be 1.35 lakh tonne as compared to 1.10 lakh tonne estimated early in the beginning of year (2012). Domestic consumption of Pepper in the world is expected to grow by 3.03% to 1.25 lakh tonnes while exports are likely to grow by 1.48% to 2.46 lakh tonnes in 2012. (Source: Pepper trade board) On the other hand production of pepper in India in 2011-12 is expected to decline further by 5% to 43 thousand tonnes as compared to 48 thousand tonnes in the last year. Production is lowest in a decade.

Outlook
Pepper is expected to trade on a positive note in the intraday. Low supplies in the domestic markets as well as festive season demand are expected to support prices. However, reports that FMC has asked NCDEX to find out any irregularities in pepper trade may cap sharp upside.

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Commodities Daily Report

Wednesday| October 10, 2012

Agricultural Commodities
Jeera
Jeera prices traded on a bullish note yesterday on account of low arrivals in the domestic markets. Farmers are unwilling to sell at lower prices. Expectations of better export figures have also supported the prices at lower levels. However, reports of higher carryover stocks as compared to last year restricted sharp gains. Good rains in Gujarat, thereby expectations of better sowing prospects ahead of the rabi sowing have also pressurized the prices in the spot market. The spot as well as the Futures settled 0.87% and 1.62% higher on Tuesday. According to markets sources about 75% exports target has already been achieved due to a supply crunch in the global markets. Around 10 lakh bags of Jeera are reported across India. Supply concerns from Syria and Turkey still exists. Expectations are that export orders may still be diverted to India from the international markets due to lack of supplies from Syria on back of the ongoing civil war. Production in Syria and Turkey is being reported around 17,000 tonnes and around 4,000-5,000 tonnes, lesser than expectations. Jeera prices of Indian origin are being offered in the international market at $2,650 tn (c&f) while Syria and Turkey are not offering. Carryover stocks of Jeera in the domestic market is expected to be around 7-8 lakh bags as compared to 4-5 lakh bags in the last year.

Market Highlights
Unit Jeera SpotNCDEX(Unjha) Jeera- NCDEX Oct'12 Futures Rs/qtl Rs/qtl Last 14703 14245 Prev day 0.87 1.62

as on Oct 9, 2012 % Change WoW 1.97 4.45 MoM -0.98 2.56 YoY -1.73 -2.18

Source: Reuters

Technical Chart Jeera

NCDEX Nov contract

Production, Arrivals and Exports

Unjha markets witnessed arrivals of 4,000 bags, while off-takes stood at 4,000 bags on Tuesday. Production of Jeera in 2011-12 is expected to be around 40 lakh bags as compared to 29 lakh bags in 2010-11 (each bag weighs 55 kgs). (Source: spot market traders). According to Spices Board of India, exports of Jeera in April 2012 stood at 2,500 tonnes as compared to 2,369 tonnes in April 2011, an increase of 6%.
Source: Telequote

Market Highlights
Prev day -0.14 -1.53

as on Oct 9, 2012 % Change

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

Last 5278 5418

WoW -4.26 -4.28

MoM -5.54 -10.00

YoY -6.80 7.71

Outlook
Jeera futures are expected to trade upwards today. Prices may find support at lower levels on expectations of higher export figures. However, good rains in Gujarat and higher carryover stocks may cap any sharp gains. In the medium term (October-November 2012), prices are likely to witness a bounce back as there are limited stocks with Syria and Turkey.

Technical Chart Turmeric

NCDEX Nov contract

Turmeric
Turmeric Futures traded on a negative note yesterday after reports that FMC asked NCDEX to find out if there are any erratic trades in Turmeric kept the prices under check. Higher stocks with the stockists also pressurized the prices. However, a reduction in the special cash margin on the long side supported the prices at lower levels. Turmeric has been sown in 0.57 lakh hectares in A.P as on 03/10/2012. Sowing is also reported 30-35% lower during the sowing period. The Spot as well as the Futures settled 0.14% and 1.53% lower on Tuesday. Special Cash Margin of 40% on the Long side shall be reduced to 20% (cash) on all the running contracts and yet to be launched contracts in Turmeric w.e.f. beginning of day Wednesday, September 26, 2012.

Production, Arrivals and Exports

Arrivals in Erode and Nizamabad mandi stood at 4,000 bags and 1,000 bags respectively on Tuesday. Turmeric production for the year 2011-12 is projected at historical high of 90 lakh bags (1 bag= 70 kgs) compared to 69 lakh bags in 201011. Erode is expected to produce 55 lakh bags of turmeric a rise of 29% as compared to previous year. According to Spices Board of India, exports of Turmeric in April 2012 increased by 1% at 7,300 tn as compared to 7,230 tn in April 2011.

Source: Telequote

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

valid for Oct 10, 2012 Support 14200-14350 5350-5400 Resistance 14680-14820 5480-5520

Outlook
Turmeric prices are expected to trade downwards today on reports that FMC has asked NCDEX to find out any erratic trades in turmeric. However, a reduction in the special cash margin, lower sowing figures and lower arrivals may support prices.

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Commodities Daily Report

Wednesday| October 10, 2012

Agricultural Commodities
Kapas
NCDEX Kapas prices on Tuesday extended gains and settled 3.38% higher on account of emerging demand at lower levels. Also, farmers are not willing to sell their produce at low prices. MCX Cotton gained 1.61%. ICE cotton Futures closed almost flat by 0.09%. Cotton harvesting has commenced in US, in all 14% is harvested as compared to 10% a week ago, versus 15% same period a year ago. Cotton crop condition is 42% in Good/Excellent state as compared to 43% a week ago, and 29% same period a year ago.

Market Highlights
Unit Rs/20 kgs Rs/Bale Last 962.5 16400

as on Oct 9, 2012 % Change Prev. day WoW 3.38 5.13 1.61 2.18 MoM -4.89 2.18 YoY -14.85

NCDEX Kapas Futures MCX Cotton Futures

Source: Reuters

Domestic Production and Consumption

As on 28 September, 2012, Cotton is being planted on 114 lakh hectares, down, as compared to the last years 119.6 lakh hectares. However, the acreage so far is at par with its normal area of 111.8 lakh hectares. According to the First Advance Estimates, Cotton production for 2012-13 seasons is revised upward to 334 lakh bales compared with 352 lakh bales in 2011-12 season. Also, on account of cheaper cotton available in the global markets, imports have more than double from 5 lakh bales to 12 lakh bales. According to the latest CAB report as on 04 October 2012, exports have dipped sharply by 46% to 7 million bales in the 2012/13 marketing year that began on Oct. 1 compared to 12.7 million bales estimated for 201112 season. The ending stocks figure, has been revised further upward to 3.4 million bales as compared to 2.8 million bales estimated for August 2011-12 season
st

International Prices
ICE Cotton Cot look A Index Unit Usc/Lbs Last 70.49 81.35

as on Oct 9, 2012 % Change Prev day WoW 0.09 -0.07 0.00 0.00 MoM -6.91 0.00 YoY -29.87 -29.20

Source: Reuters

Technical Chart - Kapas

NCDEX April contract

Global Cotton Updates

Global cotton prices are mainly influenced by China, US and India. USDA estimated US Cotton planting for the season 2012-13 at 12.64 mln acres as compared to 14.74 mln acres last season (2011-12). Ending stocks were at 4.8 mln bales (480 pounds/bales) with Production of 17.65 mln bales and exports of 12.1 mln bales were pegged for the season 2012-13. In its September monthly demand supply report on Wednesday, the Agriculture Department (USDA) raised its estimate for the global cotton surplus by next July to a record of 76.5 million 480-pound bales, nearly a two-million bale increase from last month's estimate. China's 2012 cotton output is estimated at 6.97 million tns, down 4.2 percent from last year. China's cotton imports in August rose 48 percent on the year to 305,600 tns. Total imports in the first eight months of the year were 3.77 million tns, up 123% from the same period last year, according to the report by the China National Cotton Reserves Corp.

Source: Telequote

Technical Chart - Cotton

MCX Oct contract

Outlook
Kapas futures in intraday is expected trade on a positive note due to emergence of demand at lower levels. Besides, prices in spot market are nearing its MSP, which would restrict any major fall. Also, reports that farmers are holding back their produce due to lower prices, might provide strong support to the prices However, ongoing harvesting in the key states coupled with new cotton crop arrivals from the northern states might pressurize the prices. In the international front, cotton harvesting has begun globally which might cap a sharp upside in medium term.
Source: Telequote

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

valid for Oct 10, 2012 Support 942-953 937-948 16150-16280 Resistance 975-988 973-982 16620-16860

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