Commodities Daily Report

Friday| December 21, 2012

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

Friday| December 21, 2012

Agricultural Commodities
News in brief
Wheat MSP might be increased to Rs 1400/Qtl
Government favors hiking Wheat MSP as per latest update, the Union Cabinet is considering proposals to hike Minimum support price of wheat and export quota to ease pressure of bulging food grain stock. The agriculture ministry has proposed wheat MSP Rs1400/Q for 2013 as compared to Rs 1285/Q for 2012. If MSP is increased the sown area might increase as farmer will be getting more remuneration for their crop. (Source: Agriwatch)

Market Highlights (% change)

Last Prev. day

as on Dec 20, 2012

WoW MoM YoY

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

19454 5916 54.88 89.95 1649

-0.11 -0.22 0.35 0.49 -1.05

1.17 1.11 0.66 4.73 -2.75

5.38 5.37 -0.44 2.94 -4.57

23.02 24.98 4.39 -9.63 2.49

.Source: Reuters

Cotton yarn prices spurt on seasonal demand

Cotton yarn prices jumped 14 per cent in two weeks on a sudden spurt in demand from both the domestic as well as international markets. The benchmark variety of cotton yarn for 30 s combed, shot up to Rs. 200 a kg today, from Rs. 175 a kg about a fortnight ago in the spot Ludhiana market. In Mumbais popular yarn market, the commodity was traded at Rs. 195 a kg versus Rs. 170 a kg about two weeks ago. Export of cotton yarn has been on a rise due to bulk demand coming in from Indias inherent buyer, China. Also, seasonal domestic demand has started picking up. Rising demand has supported the textile raw material price to move northward, said Bharat Malkan, a Mumbaibased cotton yarn trader. (Source: Business Standard)

Brazil 12/13 coffee harvest ends at record 50.8 mln bags -gov't
Brazil's now-finished 2012/13 coffee harvest produced a record 50.8 million 60-kg bags of coffee, the government said on Thursday, raising its final figure for the crop from the 50.5 million bags it estimated in September. The harvest was a larger on-year crop in a biennial cycle that pushes output up and then down from one year to the next. The 2013/14 harvest now developing will come in a lower-output off-year. The first official estimate for that crop is due on Jan. 10. (Source: Reuters)

Next Brazil cane crop seen swelling to 580 mln T Unica

After raising Brazils current center-south sugar output forecast 4 percent on Thursday from Septembers view, sugar industry association Unica said next years crop would yield 8 percent more cane to reach a record 580 million tonnes. Unica's technical director Antonio de Padua Rodrigues said such a massive crop next year would likely pressure sugar prices SBc1, which were already below the break-even point for the average mill in the center-south. The region, which accounts for 90 percent of Brazil's cane, is rapidly recovering after its first decline in output in 11 years. (Source: Reuters)

Lower price for cotton set to cut into cottonseed demand

Lacklustre demand for cotton is likely to cast its shadow on the demand for cottonseed next kharif season. Industry experts foresee a certain downward trend in the seed sales next year if the present situation continues in the cotton sales season. The industry is forecasting a flattish uptake from farmers next year, if the cotton prices improve to Rs 5,000 a quintal. Unlike in the past, the seed industry is saddled with huge inventories this time. The carry-over stock is put at two crore packets (of 450 gm each) as against the likely demand of four crore packets next year. The estimated production for this seed production season is pegged at 3.5 crore-4 crore. Andhra Pradesh, a major contributor to the seed production, has witnessed some strain in the rabi season (the seed production season for major crops) because of the Nilam cyclone in the sowing season. The drought-like conditions and lack of power too contributed to the farmers woes. (Source: Business Line)

Argentina cuts wheat crop forecast, soy unchanged

Argentina's Agriculture Ministry on Thursday cut its estimate for 2012/13 wheat production by 5 percent to 10.5 million tonnes, which is still higher than leading private forecasts but reflects damage caused by wet weather. Argentina is a major world supplier of wheat, soy and corn. Its vast Pampas farm belt has been hit by unusually heavy rains this season that have swamped fields, damaging crop yields and delaying plantings. The government had previously estimated wheat output at 11.1 million tonnes. (Source: Reuters)

Ace offers sops for cotton delivery

In a bid to boost cotton delivery, Ace Derivatives and Commodity Exchange has offered to waive off testing and assaying charges for participants who deposit their goods in the exchange-accredited warehouses and deliver the same on its platform. Further, Ace will also forego labour charges for loading and unloading of goods subject to maximum of Rs 4,000 for a lot of 100 bales and one month warehouse rent. The concessions will be applicable for cotton goods deposited in the exchange accredited warehouses from December 21 and remain in force till further notification, said Ace in a press release. The special concession scheme is to encourage hedgers participation and promote delivery in cotton contracts, it said. (Source: Business Line)

U.S. drought has tight hold, snow not seen as big help
A snow storm moving through the Plains states into the U.S. Midwest brought much-needed moisture to drought-hit states, but drought has such a tight grip on the central U.S. that more moisture will be needed, according to weather experts. "The snow is good, but in most instances it was less than one inch of liquid and if the soils are frozen, there will be little infiltration," said Brian Fuchs, climatologist with the National Drought Mitigation Center at the University of Nebraska-Lincoln. "Welcomed, yes. A big changer to the overall drought, not really," Fuchs said. A report issued Thursday by a consortium of federal and state climatology experts said that as of Dec 18, large swaths of the nation's midsection remained blanketed in extreme and exceptional levels of drought, the worst levels on the measurement scale. (Source: Reuters)

AP sees cotton crop of 70 lakh bales this year

Andhra Pradesh Agriculture Minister K. Lakshminarayana said on Thursday that cotton production in the State could touch the 70-lakh bale mark this year against 65 lakh bales last year. He said the CCI had so far procured 2,40,118 quintals, with Piduguralla recording the highest quantity of 99,199 quintals. He assured farmers that they would be paid the minimum support price at the CCI centres and they should not resort to distress sale. He said the CCI would buy the cotton, even if the quality was damaged in the November rains, and there was no need for any panic. (Source: Business Line)

China makes largest cancellation of US soy in 14 years

China has scrapped purchases of 540,000 tonnes of U.S. soybeans, the U.S. Department of Agriculture said on Thursday, marking the largest such cancellation by the world's top importer of the oilseed in at least 14 years. It was also the second cancellation this week. On Tuesday, the USDA said China had cancelled purchases of 300,000 tonnes, and traders said that another 120,000 tonnes that were scrapped by buyers the USDA did not specify were likely for China too. Traders said the cancellations were due to a likely bumper crop in Brazil (Source: Reuters)

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Commodities Daily Report

Friday| December 21, 2012

Agricultural Commodities
Chana
Chana January Futures settled extended the gains on Thursday on account of bargain buying. Spot also settled marginally higher as buying was seen emerging at lower levels. Chana prices have declined considerably during the past few weeks on account of higher sowing coupled with rising imports. However, fresh demand at lower levels is supporting chana prices during the current week. Total pulses acreage as on 14 December 2012 stood at 121.22 lakh hectares, up marginally by 0.5% yoy. As on 7th December, pulses acreage was down by 0.9 percent. Chana sowing picked pace mainly in Rajasthan, where it is up by 4% at 14.54 lakh hectares compared to last week when acreage was up by 1%. th In Maharashtra Chana acreage is up by 43% at 9.28 lakh ha as on 14 th Dec, 2012. While in AP it is up by 22% at 6.25 lakh ha as on 5 Dec. In Australia, total chickpea production in 201213 is estimated to have increased to a record of around 746000 tones as compared with 485000 tones in 2011-12. India imports Chana mainly from Australia and Canada and higher availability in these countries at comparatively cheaper rates is seen boosting imports of Chana to meet the domestic shortfall. Australian Chana is quoted at lower rates -USD 625-635 per MT. The Commission for Agriculture Costs and Prices (CACP) has suggested 10 per cent import duty on pulses to encourage domestic production. in the first six months of the new fiscal that is from April to September this year, imports were an estimated 12 lakh tonnes.
th

Market Highlights
Unit Rs/qtl Rs/qtl Last 4150 4260 Prev day 1.64 2.48

as on Dec 20, 2012 % change WoW MoM 0.95 -6.81 3.75 -0.19 YoY 23.26 28.82

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

Source: Reuters

Technical Chart - Chana

NCDEX Jan contract

Source: Telequote

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

valid for Dec 21, 2012 Resistance 4095-4140

Sowing progress and demand supply fundamentals

Chana fresh crop arrival started in Karnataka & Andhra Pradesh and about 200 bags new chana arrivals reported on a daily basis. Furthermore, the new crop was traded at Rs.4100-4200 per quintal. Farm ministry has targeted 7.9 mn tn chana output for 2012-13 season, higher compared to 7.58 mn tn in 2011-12. According to the Ministry of Agriculture 99.81 Lakh hectare area has been planted under Kharif pulses in 2012-13 compared to 108.28 lakh hectare (ha) in the previous 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. 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)

3985-4025

Outlook
Lower level demand may support the upside in the chana prices during the intraday. However, sufficient supplies amid higher shipments and expectations of better output next season may exert downside pressure on chana price in the short term. Harvesting of new crop have commenced in AP and Karnataka. In Maharashtra arrivals would commence in January and gradually increase February onwards once the arrivals from MP begin.

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Commodities Daily Report

Friday| December 21, 2012

Agricultural Commodities
Sugar
Sugar spot as well as futures continued with its downward trend as higher supplies exerted pressure on the prices. The government extended the deadline for sale of unsold Oct-Nov nonlevy sugar quota till Dec 31. The initial deadline for sale of around 200,000 tn of the Oct-Nov quota was Dec 10. Government has allocated total 70 lac tons of non-levy sugar quota for Dec-March 2012-13 period which is higher from 59.5 lac tons last year. With lower sales realization and higher sugarcane payment to farmers, ISMA has already requested government to increase the import duties on raw sugar from current level to the normal rate of 60%, so as to avoid cane price arrears during the season The government is likely to take a decision on sugar exports in January after assessing the final cane crop and the estimated sugar output. Liffe white sugar as well as ICE sugar settled 0.31% and 0.1% lower on Thursday on global supply surplus. According to Unica, Brazil's 2012/2013 center-south sugar output is expected to reach 34.05 million tonnes, an estimate 4.1% higher than its 32.7 million tonnes September forecast.

Market Highlights
Unit Sugar Spot- NCDEX (Kolhapur) Sugar M- NCDEX Dec '12 Futures Rs/qtl Last 3310

as on Dec 20, 2012 % Change Prev. day WoW 0.12 -0.76 MoM -4.37 YoY 12.02

Rs/qtl

3152

-0.69

-2.02

-4.28

9.67

Source: Reuters

International Prices
Unit Sugar No 5- LiffeMar'13 Futures Sugar No 11-ICE Mar '13 Futures $/tonne $/tonne Last 516.2 427.78

as on Dec 20, 2012 % Change Prev day WoW -0.31 0.10 3.28 3.83 MoM -1.47 -3.27 YoY -15.21 -17.88

.Source: Reuters

Domestic Production and Exports

Mills in the country have produced 4.91 mln tn sugar in the current sugar season till Dec 15, up nearly 2% from 4.82 mln tn produced a year ago. In Maharashtra, the largest sugar producer in the country, 155 mills are operational and have produced 1.88 mln tn sugar till Dec 15, compared with 1.83 mln produced a year ago by 165 mills. In Uttar Pradesh, the second largest sugar producer in the country, total output as on Dec 15 was 1.03 mln tn, about 20% lower on year, as some mills in the eastern part of the state are still to commence cane crushing. 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. The producers body has estimated sugar output lower at 24 mn tn, down by 2mn tn compared to the current year. Industry body ISMA has estimated 6.5 mn tn stocks for the new season beginning October 01, 2012 compared to 5.5 mn tn year ago. India may export 1.5 mn tn sugar in 2012-13. With the opening stocks of 6.5 mn tn, domestic Sugar supplies are estimated at 30.5 mn tn against the domestic consumption of around 22. 5mln tn for 2012-13.

Technical Chart - Sugar

NCDEX Jan contract

Source: Telequote

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

valid for Dec 21, 2012 Resistance 3270-3280

3230-3245

Global Sugar Updates

According to the Brazil Agriculture Ministry, 2012-13 sugar output will reach 37.66 mn tn by the end of the season, less than the 39 mn tn forecast in August. Consultancy Kingsman revised up its 2012/13 world sugar surplus estimate to 9.2 million tonnes raw value on Friday, citing increased supply from producers including Brazil and China. Kingsman pegged global 2012/13 sugar output at 180.1 million tonnes raw value, up from the previous estimate of 177.3 million tonnes, and up from 2011/12 output of 175.4 million tonnes. (Source: Reuters) Thailand, the world's second-largest exporter after Brazil, has slashed its output forecast in the year to October 2013 to 9.4 million tonnes from 10 million due to poor rain.

Outlook
Sugar prices may trade range bound with downward bias on account of sufficient supplies in both the domestic as well as global markets.

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Commodities Daily Report

Friday| December 21, 2012

Agricultural Commodities
Oilseeds
Soybean: Soybean January contract extended the losses of the
previous day and settled 2% lower on Thursday. Total soybean arrivals declined sharply to 1.9 lakh bags on Wednesday compared with 3.1 lakh bags on Saturday last week, while demand from solvent extractors remained strong. According to first advance estimates, Soybean output is pegged at 126.2 lakh tn for 2012-13. Exports of soy meal rose to 517,103 tonnes in November from 397,659 tonnes a year ago. Overall oil meal exports in the first eight months of the year beginning April fell to 2.4 million tonnes from 3 million tonnes in the previous year.

Market Highlights
Unit Soybean Spot- NCDEX (Indore) Soybean- NCDEX Dec '12 Futures Ref Soy oil SpotNCDEX(Indore) Ref Soy oil- NCDEX Dec '12 Futures Rs/qtl Rs/qtl Rs/10 kgs Rs/10 kgs Last 3330 3280 719.3 722

as on Dec 20, 2012 % Change Prev day -0.54 -1.87 -0.16 -0.15 WoW 1.34 -0.18 0.05 1.34 MoM 1.65 0.85 0.33 2.36 YoY 38.52 35.87 6.13 6.11

International Markets
CBOT soybean corrected sharply over the last three days and settled 2.09% lower on Thursday on cancellation of export orders from China. Also, Brazil's vegetable oils association Abiove raised its soy crop forecast slightly to a record 81.6 mn tn from 81.3 mn tn in November. According to NOPA, the November U.S. soybean crush stood at 157.3 mn bushels, the largest monthly total in nearly three years, due to strong demand for soy meal. As per the USDA monthly crop report, U.S. soybean end stocks are forecasted at 130 mn bsh, below its November estimate of 140 mn. Also, global soybean end stocks were forecast to 59.93 mn tn from 60.02 mn in November. Output estimates for Argentina was unchanged at 55 mn tn. China, the world's largest soy buyer, imported 4.16 mn tn of soybeans in November, up 3.2% from October with crushing margins improving from a month ago. Imports for the first 11 months stood at 52.49 mn tn, up 11.4% on the year.

Source: Reuters

as on Dec 20, 2012 International Prices Soybean- CBOTJan'13 Futures Soybean Oil - CBOTJan'12 Futures Unit USc/ Bushel USc/lbs Last 1407 48.1 Prev day -2.09 -0.64 WoW -4.71 -1.07 MoM -0.41 -0.46
Source: Reuters

YoY 21.06 -4.66

Crude Palm Oil

as on Dec 20, 2012 % Change Prev day WoW 0.46 -0.82 7.79 -0.50

Unit
CPO-Bursa Malaysia Jan '12 Contract CPO-MCX- Dec '12 Futures

Last 2201 401.1

MoM -7.09 -7.81

YoY -28.89 -21.87

MYR/Tonne Rs/10 kg

Refined Soy Oil: Ref soy oil January contract settled range bound
while MCX CPO traded on a negative note on Thursday. A cut in export duty on Malaysian palm oil will boost exports and reduce palm oil stock piles. Malaysia, the world's No.2 palm oil producer, will set its crude palm oil export tax for January at zero percent, a government circular showed on Monday. (Source: Reuters). However, Indian importers will buy cheaper edible oil from overseas. India's cooking oil imports fell by a third in November from the previous month largely due to a drop in purchases of palm oil. Exports of Malaysian palm oil products for Dec. 1-20 fell 1.9 percent to 1,004,159 tn from 1,023,517 tn for the Nov. 1-20 period. Malaysia's November palm oil stocks rose 2.3 percent to a record high of 2,562,900 tonnes from a revised 2,505,713 tonnes in October. Dorab Mistry, head of edible oils trading, Godrej is predicting CPO futures on BMD to trade in a range of 2300 and 2600 from now until February 2013. This will ensure high stock levels in both countries but particularly in Malaysia. Palm oil output in the world's biggest producer Indonesia is expected to climb 7% next year to 27 mn tn.

Source: Reuters

RM Seed
Unit RM Seed SpotNCDEX (Jaipur) RM Seed- NCDEX Dec'12 Futures Rs/100 kgs Rs/100 kgs Last 4250 4110 Prev day 0.59 -0.92

as on Dec 20, 2012 WoW 0.59 1.83 MoM 1.37 -1.08

Source: Reuters

YoY 27.53 19.41

Technical Chart Soybean

NCDEX Jan contract

Rape/mustard Seed: After witnessing sharp gains in the previous

session, mustard seed prices settled lower on Thursday. The agriculture ministry data showed higher mustard seed planting figures. Mustard has been planted over 63.6 LH so far, 3.3% higher compared with a year ago. MSP for Mustard seed is increased to Rs 3000/qtl. Indias rapeseed output is expected to rise by 5% to 6.5 mn tn from 6 mn tn last year.

Source: Telequote

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

valid for Dec 21, 2012 Support 690-696 3225-3270 690-696 401-406 Resistance 708-715 3355-3400 708-715 413.5-418.5

Outlook
Soybean complex may trade on a negative note during the intraday tracking weaker international markets. Mustard seed prices may trade with negative bias on higher planting figures while, Palm oil may trade lower tracking weaker international markets.

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Commodities Daily Report

Friday| December 21, 2012

Agricultural Commodities
Black Pepper
Pepper February Futures corrected from higher levels yesterday on account of profit booking at higher levels. Winter demand coupled with low stocks in the domestic markets has supported prices over the last fortnight. However, higher output expectations capped sharp upside. FMC is probing into complaints against movement in the pepper market which has capped a sharp upside. Better output expectations in the domestic as well as the international markets have also pressurized prices over the last couple of weeks. Farmers are trying to liquidate their stocks ahead of the commencement of harvesting of the fresh crop. Exports demand for Indian pepper in the international markets is also weak due to price parity. The Spot settled as well as the February Futures settled 0.29% and 0.73% lower on Thursday. Pepper prices in the international market are being quoted at $7,800/tn(C&F), while Vietnam was offering Austa at $7,000/tn, Brazil Austa at $6,700/tn, and Indonesia Austa at $6,500/tn (FOB).

Market Highlights
Unit Pepper SpotNCDEX (Kochi) Pepper- NCDEX Dec '12 Futures Rs/qtl Rs/qtl Last 38716 39100 % Change Prev day -0.29 -0.53

as on Dec 20, 2012 WoW 0.01 -0.26 MoM -0.11 3.96 YoY 7.91 10.00

Source: Reuters

Technical Chart Black Pepper

NCDEX Feb contract

Exports and Imports

According to Spices Board of India, exports of pepper in April 2012 fell by 47% and stood at 1,200 tonnes as compared to 2,266 tonnes in April 2011. India imported 1,848 tonnes of pepper till March 2012 and has become the third country to import such large quantity after UAE and Singapore. (Source: Agriwatch) According to Vietnam Ministry of Agriculture and Rural Development (MARD) exports of pepper during Jan-Oct 2012 stood at 102,340 mt, lower by 12% as compared to 1,15,780 mt in the same period last year. Total exports in 2012 are forecasted at around 1,10,000 tonnes. Exports of Pepper from Brazil during January till May 2012 are estimated around 13369 mt. Pepper imports by U.S. the largest consumer of the spice declined 26% during January-September 2012 period to 41,923 tn as compared to 52,489 tn in the same period previous year. Exports from Indonesia posted significant decrease of 42% as compared to previous year. Exports stood at 36,500 tonnes as compared to 62,599 tonnes in the last year. Brazil exported 25,900 tn pepper during Jan-Nov 2012, around 20% lower compared with 32,650 tn in the same period last year. Exports from Malaysia 8,300 tn pepper during Jan-Oct 2012, lower by 30% last year while exports in October. stood at 1,077 mt in.

Source: Telequote

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

valid for Dec 21, 2012 Support 35090-35330 Resistance 35790-36000

Production and Arrivals

The arrivals in the spot market were reported at 3 tonnes while offtakes were reported at 2 tonnes on Thursday. As per IPC, Global pepper production in 2012 is projected at 3.27 lk tn, up compared with 3.18 lk tn in 2011. Production for 2013 is projected at 316832 tn. Indonesian pepper output is expected to rise by 24% and in Vietnam by 10%. According to previous estimates, pepper output in Vietnam is estimated to be 1 lakh tonne in 2012 as compared to 1.1 lakh tonne in 2011. Brazil is also expected to produce 22,000 tn this year. Domestic consumption of Pepper in the world is expected to grow by 3.03% to 1.25 lakh tonnes while exports are likely to grow by 1.48% to 2.46 lakh tonnes in 2012. (Source: Pepper trade board) Pepper production in 2012-13 is expected around 60,000-63,000 tonnes. Currently, pepper is in the fruit formation stage in Kerala.

Outlook
Pepper is expected to continue to trade on a positive note today. Festive demand coupled with winter buying may support prices at lower levels. However, higher output expectations as well as reports that FMC is probing into complaints against price movement may cap sharp upside.

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Commodities Daily Report

Friday| December 21, 2012

Agricultural Commodities
Jeera
Jeera March Futures traded on a positive note yesterday. Fresh export enquiries coupled with demand from stockists and masala millers supported prices while the ongoing sowing capped sharp upside. Spot market remained closed due to Gujarat State Assembly elections. According to Gujarat State Agri Dept. sowing in Gujarat is reported at 2.383 lakh ha compared with 2.319 lakh ha last year. About 75% sowing is completed in Gujarat. In Rajasthan, sowing is expected to increase by 10-15%. Higher stocks for delivery on the exchange warehouse were pressurizing prices during the last one month. The spot as well as the March Futures settled 0.33% and 0.71% higher on Thursday. According to markets sources about 75% exports target has already been achieved due to a supply crunch in the global markets. Supply concerns from Syria and Turkey still exists. Expectations are that export orders may still be diverted to India from the international markets due to lack of supplies from Syria on back of the ongoing civil war. Production in Syria and Turkey is being reported around 17,000 tonnes and around 4,000-5,000 tonnes, lesser than expectations. Jeera prices of Indian origin are being offered in the international market at $2,775 tn (c&f) while Syria and Turkey are not offering. Carryover stocks of Jeera in the domestic market is expected to be around 5-6 lakh bags.

Market Highlights
Unit Jeera SpotNCDEX(Unjha) Jeera- NCDEX Dec '12 Futures Rs/qtl Rs/qtl Last 15197 14925 Prev day 0.33 0.20

as on Dec 20, 2012 % Change WoW 1.29 2.81 MoM 0.64 1.12 YoY 4.91 3.38

Source: Reuters

Technical Chart Jeera

NCDEX March contract

Production, Arrivals and Exports

Unjha markets remained closed due to elections. Production of Jeera in 2011-12 is expected around 40 lakh bags as against 29 lakh bags in 2010-11 (55 kgs each). (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 -0.72 -0.33

as on Dec 20, 2012 % Change

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

Last 5328 5400

WoW 2.83 3.89

MoM 5.30 6.30

YoY -0.67 16.73

Outlook
Jeera futures are expected to trade on positive note due to good local/ export demand at lower levels. However, higher stocks for delivery on the exchange warehouses coupled with improvement in sowing in Gujarat may pressurize prices. In the medium term (Dec-Jan), prices are likely to stay firm as there are limited stocks with Syria and Turkey.

Technical Chart Turmeric

NCDEX April contract

Turmeric
Turmeric April Futures traded on a mixed note yesterday. Also, good quality arrivals kept the prices firm. Reports of some crop damage in Erode region supported prices. However, lack of bulk export enquiries capped gains. The orders from North India have also dried up. Buyers are looking for turmeric with higher curcumin level at 5% which is unavailable, thereby supporting prices. Expectations are that production may be lower by 40-50%. Production is expected around 55 lakh bags. It is estimated that next years carryover stocks would be around 10 lakh bags. There are reports that Turmeric Farmers Association of India have decided to fix their own MSP of Rs.10000/qtl. The Spot settled 0.72% lower while the April Futures settled marginally higher by 0.06% on Thursday.

Source: Telequote

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

Valid for Dec 21, 2012

Support 15550-15750 6450-6520 Resistance 16020-16155 6660-6730

Production, Arrivals and Exports

Arrivals in Nizamabad and Erode mandi stood at 1,500 bags and 8,000 bags respectively on Thursday. Turmeric production in 2012-13 is expected around 64-65 lakh bags. Production in 2011-12 is projected at historical high of 10.62 lakh tn. According to Spices Board of India, exports of Turmeric in April 2012 increased by 1% at 7,300 tn as compared to 7,230 tn in April 2011. Outlook Turmeric prices are expected to trade on a positive to note today on good demand from the stockists. Also, traders expect upcountry demand to improve in the coming days. However, improved production estimates, higher carryover stocks and weak overseas demand might cap sharp gains.

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Commodities Daily Report

Friday| December 21, 2012

Agricultural Commodities
Kapas
NCDEX Kapas futures MCX Cotton settled lower due to profit booking on Thursday. According to the data released by Cotton Corporation of India, Supplies until Dec. 16 fell to 6.2 million bales of 170 kg each, down from 6.9 th million bales a year earlier. Arrivals were down by 12.5 percent as on 9 December. However, it is still below expectations as many farmers, who are waiting for better returns, hold back their produce. The USDA monthly report cuts cotton stocks estimate to 79.64 million bales, from last month's forecast of 80.27 million. The government has procured 20.74 lakh quintals of cotton at the minimum support price (MSP) so far in the 2012-13. As per the DGFT notification dated 30 Nov 2012, the government has eased quantitative restrictions on exporters applying for permits to sell cotton in the overseas market and set the cap at 30,000 bales from 10,000 bales per exporter before. An exporter can apply for RC (registration certificate) for a maximum quantity of 30,000 bales (1 bale=170kg) or actual quantity exported in the previous cotton season, whichever is less. (DGFT) ICE Cotton futures traded on a negative note yesterday and settled 0.08% higher on Thursday tracking broader commodity markets. ICE has reduced Cotton No. 2 maintenance margin requirements by 14.3 percent to $1,500 per contract from $1,750 w.e.f Friday, 14/12/2012
th

Market Highlights
Unit Rs/20 kgs Rs/Bale Last 1026 16490

as on Dec 20, 2012 % Change Prev. day WoW -0.39 -0.39 -0.12 -1.38 MoM 5.23 -1.38 YoY #N/A 0.73

NCDEX Kapas Futures MCX Cotton Futures

Source: Reuters

International Prices
ICE Cotton Cot look A Index Unit Usc/Lbs Last 75.83 81.35

as on Dec 20, 2012 % Change Prev day WoW -0.08 1.70 0.00 0.00 MoM 4.59 0.00 YoY -13.08 -29.20

Source: Reuters

Technical Chart - Kapas

NCDEX April contract

Domestic Production and Consumption

According to Cotton Advisory Boards (CAB) latest estimates for 2012-13 season that commenced in October, domestic cotton production is pegged 334 lakh bales, down 5.6% from the previous years estimates of 353 lakh bales. Lower opening stocks coupled with estimated lower output will result in lower supplies this season at 374 lakh bales, a decline of 8.7% compared with last years 410.77 lakh bales. On the consumption front, domestic consumption is estimated higher at 270 lakh bales on the back of higher mill consumption. However, after witnessing record exports in 2011-12 season, Indian exports could witness significant fall this season on the back of lower availability along with unattractive domestic cotton prices. CAB estimates cotton exports at 70 lakh bales this season, compared with 128.8 lakh bales last year.
Source: Telequote

Technical Chart - Cotton

MCX Dec contract

Global Cotton Updates

Net Upland sales of 283,900 running bales for the 2012/2013 marketing year were down 32 percent from the previous week and 24 percent th from the prior 4-week average. (dated 13 Dec 2012). Cotton harvesting is 84% completed in US, versus 85% same period a year ago. Cotton crop condition is 43% in Good/Excellent state compared to 29% same period a year ago as on 20th Nov 2012. Brazils 2012-13 cotton production forecast at 6.3 million bales, down 27 percent from 2011/12 production now estimated at 8.6 million bales. (USDA Attach report)

Source: Telequote

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

valid for Dec 21, 2012 Support 1010-1020 16620-16680 Resistance 1035-1045 16820-16890

Outlook
Domestic cotton prices are expected to trade sideways with a positive bias on account of lower arrivals in the domestic markets. Downside is expected to be limited in the domestic markets as farmers will not sell their stocks at very low prices. Also demand remains strong at such low prices.

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