Commodities Daily Report

Saturday| December 22, 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

Saturday| December 22, 2012

Agricultural Commodities
News in brief
Food grain output under threat as rice, wheat acreage trail Rabi
food grain production is under threat with areas under rice, wheat and pulses continuing to trail despite sowing gathering momentum. One possible reason could be deficient rainfall during the North-East monsoon. Data from the Agriculture Ministry show that wheat was planted on 253.17 lakh hectares (lha) against 257.15 lha last year. Wheat has so far been covered in over 88% of the normal area of 286.4 lha. Wheat production last year was a record 93.9 million tonnes last year. This season, the Agriculture Ministry has fixed a wheat output target of 86 million tonnes. Besides, the Centres decision not fixing a higher minimum support price for wheat is also acting as a dampener for growers. Last year, the MSP for wheat was fixed at Rs 1,285 a quintal and the Commission for Agriculture Costs and Prices had recommended keeping the MSP unchanged. However, it has said the Centre could offer a bonus of Rs 40 a quintal. The lower wheat acreage comes on the heels of the Government advising farmers to complete wheat sowing by November 30, as the late sowing could make the crop vulnerable to terminal heat damage during February-March. (Source: Business Line)

Market Highlights (% change)

Last Prev. day

as on Dec 21, 2012

WoW MoM YoY

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

19242 5848 55.07 88.66 1659

-1.09 -1.16 0.35 -1.63 0.86

-0.39 -0.54 1.14 2.23 -2.16

3.91 3.91 -0.07 2.20 -3.72

22.26 24.05 4.35 -8.80 2.69

.Source: Reuters

Wheat acreage marginally down

Area sown under wheat, the main winter crop, is marginally lower at 25.3 million hectare so far as compared with 25.7 million hectare in the same period last year, according to the Agriculture Ministry. The coverage of pulses remained lower at 12.82 million hectare so far, as against 12.93 million hectare in the year-ago period. Acreage under rice was also less at 1,71,000 hectare, as compared with 2,78,000 hectare. However, oilseeds were sown in slighter higher area of 7.95 million hectare as against 7.5 million hectare, while coarse cereals were also planted in more area at 5.48 million hectare as against 5.37 million hectare in the review period. Total area under all rabi crops remained slightly lower at 51.75 million hectare so far this rabi season, as against 51.88 million hectare in the year-ago period. (Source: PTI)

Textiles industry seeks easier imports of cotton yarn, fabric

The textiles industry asked the Commerce Ministry to ease the process of imports of cotton yarn and fabric to help boost exports, which have been hit hard by the global demand slowdown. Bangladesh, Vietnam and Cambodia have achieved phenomenal growth through easy import policy of yarn and fabrics and the move will boost textile exports at competitive prices and help reduce widening trade deficit. The current scheme of advance license in the foreign trade policy, although allows duty free import but it is a tedious route and is not used extensively by the exporters. India's textiles exports declined 6 per cent year-on-year to USD 14.1 billion during the April-September period because of slowdown in major markets like the US and EU. In the first six months of the 201213 fiscal, textiles exports stood at USD 14.18 billion. The country's textiles exports stood at USD 30.4 billion in 2011-12. The government is hopeful of achieving the textile export target of USD 40.5 billion for 201213. (Source: Economic Times)

India's MMTC gets highest bid at $322.5/T in wheat export tender

India's state-run MMTC Ltd MMTC.NS received the highest bid at $322.5 per tonne from global trading firm Peter Cremer for its wheat export tender. Last month, MMTC floated the tender to sell 110,000 tonnes of milling wheat for shipments between Jan. 1 and Feb. 10 from the west coast as part of the government's plan to cut stocks at its warehouses. The highest bid was for 50,000 tonnes of grain for shipment in January, the sources said. The bid in MMTC's tender was the highest in comparison to similar tenders floated by STC and PEC, which also closed on Friday. STC received the highest bid at $322 per tonne, while PEC's wheat export tender received the highest quote at $321 per tonne.

FMC to ban over- leveraging in futures market

In a major blow to the commodity futures markets, the Forward Markets Commission ( FMC) is planning to ban extra- leveraging of exposure by members to their clients. In usual practice, commodity exchanges offer exposure of up to 20 times of clients deposits. Members, in order to grab business, also allow leveraging of double the exchanges limit. This means, clients get exposure of up to 200 per cent of their deposits with a member. This, FMC said, has proven risky for all stakeholders. The regulator has also noticed risks evolving, with members who took positions on the clients behalf and sent debit note to clients to pay the difference. FMC has received over 100 such complaints seeking reasons for a debit note emerging out of extra- leveraging. We will soon issue instructions to commodity exchanges to immediately square off a clients position if the exposure surpasses his limit. FMC is set to prescribe a heavy penalty on violators. This will further reduce the turnover of commodity exchanges, from where complains of excessive regulation have come. Complaints are pouring in, some of them under the Right to Information Act, where the complainants have sought details of the clause under which a member can take position on a clients behalf, of course without his notice, and send debit note to him, said Ramesh Abhishek, chairman, FMC. (Source: Business Standard)

Brazil CS sugar output 2012/13 seen at 34.05 mln T Unica

Brazil's 2012/2013 center-south sugar output is expected to reach 34.05 million tonnes, Brazil's cane industry association Unica said at an event on Thursday, an estimate 4.1 percent higher than its 32.7 million tonne September forecast. The association raised its expectation for cane crushing to 532 million tonnes for this season, up 2.6 percent from its September forecast. (Source: Reuters)

Water level in reservoirs in South dips to decades low

With the North-East monsoon being 19 per cent deficient up to now, South India has been left with a water storage level that is lowest in a decade. According to the Central Water Commission, the storage level in 16 of the 30 major reservoirs is lower than 40 per cent of capacity. The overall storage level in the 82 major reservoirs of the country is also lower than last year. The situation has turned grim as the North-East monsoon has not brought enough rain. Deficient rainfall and lower storage levels are likely to affect soil moisture and irrigation which, in turn, may affect production of paddy, coarse cereals and pulses during the current rabi season. Area under these crops has been low up to December 21. This will mean a setback to food production as, in the last couple of years, the rabi season has been making up for losses during the kharif season. This year, too, rabi paddy was expected to help make up the lower kharif paddy output (85.59 million tonnes vs 91.53 million tonnes). (Source: The Hindu)

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Commodities Daily Report

Saturday| December 22, 2012

Agricultural Commodities
Chana
Chana January Futures settled 1 % lower on account of profit taking on Friday. Spot also settled marginally lower by 0.71%. Fresh demand at lower levels was seen supporting the upside in the chana prices during the current week. Total pulses acreage as on 21 December 2012 stood at 128.26 lakh hectares, down marginally by 0.9% yoy. As on 14th December, pulses acreage was up by 0.5 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 4120 4028 Prev day -0.71 -5.49

as on Dec 21, 2012 % change WoW MoM 1.25 -6.88 -2.14 -5.20 YoY 20.30 17.40

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

Source: Reuters

Technical Chart - Chana

NCDEX Jan contract

Source: Telequote

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)

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

valid for Dec 22, 2012 Resistance 4065-4110

3965-3990

Outlook
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

Saturday| December 22, 2012

Agricultural Commodities
Sugar
Sugar continued with its downward trend as higher supplies exerted pressure on the prices, while January futures settled marginally higher on account of short coverings on Friday. 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 settled higher on Friday on long liquidation. 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 Jan'13 Futures Rs/qtl Last 3288

as on Dec 21, 2012 % Change Prev. day WoW -0.67 -1.35 MoM -4.02 YoY 13.23

Rs/qtl

3265

2.13

1.71

-0.76

16.61

Source: Reuters

International Prices
Unit Sugar No 5- LiffeMar'13 Futures Sugar No 11-ICE Mar '13 Futures $/tonne $/tonne Last 518.3 427.78

as on Dec 21, 2012 % Change Prev day WoW 0.41 0.00 -0.48 -0.82 MoM 0.06 -1.99 YoY -13.49 -16.77

.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 22, 2012 Resistance 3272-3285

3240-3255

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

Saturday| December 22, 2012

Agricultural Commodities
Oilseeds
Soybean: Soybean January contract extended the losses of the
previous day and settled 0.3% lower on Friday taking cues from the weak international markets. 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 Jan '13 Futures Ref Soy oil SpotNCDEX(Indore) Ref Soy oil- NCDEX Jan '13 Futures Rs/qtl Rs/qtl Rs/10 kgs Rs/10 kgs Last 3314 3287 718.9 704.6

as on Dec 21, 2012 % Change Prev day -0.48 -0.30 -0.06 -2.42 WoW -0.15 -1.48 -0.58 -2.36 MoM 0.82 0.81 -3.32 -3.44 YoY 32.14 30.16 -1.37 -2.74

International Markets
CBOT soybean settled higher by 1.56% on Friday on account of short coverings. Brazil's vegetable oils association Above 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 21, 2012 International Prices Soybean- CBOTJan'13 Futures Soybean Oil - CBOTJan'13 Futures Unit USc/ Bushel USc/lbs Last 1431 48.71 Prev day 1.56 1.67 WoW -4.36 -1.85 MoM 1.27 0.81
Source: Reuters

YoY 23.10 -3.45

Crude Palm Oil

as on Dec 21, 2012 % Change Prev day WoW 3.73 1.42 8.71 -0.56

Unit
CPO-Bursa Malaysia Jan '13 Contract CPO-MCX- Dec '12 Futures

Last 2283 407.5

MoM -2.44 -5.95

YoY -26.24 -23.63

MYR/Tonne Rs/10 kg

Refined Soy Oil: Ref soy oil January contract as well as MCX CPO
settled higher on Friday on account of firm Malaysian palm oil markets. 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.

Source: Reuters

RM Seed
Unit RM Seed SpotNCDEX (Jaipur) RM Seed- NCDEX Jan'13 Futures Rs/100 kgs Rs/100 kgs Last 4255 4240 Prev day 0.12 2.91

as on Dec 21, 2012 WoW -0.47 4.33 MoM 1.31 3.31

Source: Reuters

YoY 19.27 13.89

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.

Outlook
Soybean complex may trade on a positive note during the opening session tracking firm international markets. Mustard seed prices may trade with negative bias on higher planting figures while, Palm oil may recover on expectations that the export duty cut may reduce Malaysian palm oil stocks.

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 22, 2012 Support 696-703 3220-3255 4175-4210 405-411 Resistance 710-714 3330-3375 4270-4300 420-425

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Commodities Daily Report

Saturday| December 22, 2012

Agricultural Commodities
Black Pepper
Pepper February Futures corrected sharply yesterday after reports that Food Safety and Standards Authority of India has sealed the entire quantity of pepper stored in six warehouses at Kochi of about 5,000 tonnes. 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 Futures settled 1.55% and 1.99% lower on Friday. 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 Feb'13 Futures Rs/qtl Rs/qtl Last 38117 34805 % Change Prev day -1.55 -11.37

as on Dec 21, 2012 WoW -1.44 -11.12 MoM -1.35 -8.09 YoY 21.34 16.39

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 22, 2012 Support 33730-34240 Resistance 35500-36100

Production and Arrivals

The arrivals in the spot market were reported at 9 tonnes while offtakes were reported at 11 tonnes on Friday. 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 trade sideways 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

Saturday| December 22, 2012

Agricultural Commodities
Jeera
Jeera Futures traded on a negative note yesterday on account of long liquidation. Improvement in the ongoing sowing also built pressure on the prices. Fresh export enquiries coupled with demand from stockists and masala millers have boosted the prices over the last couple of days. Spot market reopened yesterday after Gujarat 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 Futures settled 0.5% and 2.12% lower on Friday. 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 $2,850 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 Mar '13 Futures Rs/qtl Rs/qtl Last 15121 15585 Prev day -0.50 3.85

as on Dec 21, 2012 % Change WoW 0.94 6.24 MoM 0.81 8.64 YoY -3.69 2.72

Source: Reuters

Technical Chart Jeera

NCDEX March contract

Production, Arrivals and Exports

Arrivals in Unjha was reported at 6,000 tn on Friday. 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 -0.88 17.52

as on Dec 21, 2012 % Change

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

Last 5281 6346

WoW 2.11 20.14

MoM 4.68 26.52

YoY 1.52 36.77

Outlook
Jeera futures are expected to trade sideways. Good demand may support prices 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.

Turmeric
Turmeric Futures traded on a bearish note yesterday and hit the 4% lower circuit breaker on lack of fresh bulk orders. The orders from North India have also dried up There are reports of some crop damage in Erode region.. Buyers are looking for turmeric with higher curcumin level at 5% which is unavailable, thereby supporting prices in the spot markets. 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 as well as the Futures settled 0.88% and 3.76% lower on Friday.

Technical Chart Turmeric

NCDEX April contract

Source: Telequote

Production, Arrivals and Exports

Arrivals in Nizamabad and Erode mandi stood at 1,200 bags and 7,000 bags respectively on Friday. 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 negative note today due to lack of fresh bulk orders. Higher carryover stocks and weak overseas demand may also pressurize prices. However, demand from the stockists may support prices at lower levels. Also, traders expect upcountry demand to improve in the coming days.

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

Valid for Dec 22, 2012

Support 15350-15500 6150-6230 Resistance 15730-15900 6450-6566

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Commodities Daily Report

Saturday| December 22, 2012

Agricultural Commodities
Kapas
NCDEX Kapas futures and MCX Cotton settled marginally higher on account of lower arrivals and expected higher demand. 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 settled higher on bargain buying. Prices are expected to recover on account of good demand from china. 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 16590

as on Dec 21, 2012 % Change Prev. day WoW 0.00 -0.44 0.61 -0.30 MoM 6.99 -0.30 YoY #N/A -6.80

NCDEX Kapas Futures MCX Cotton Futures

Source: Reuters

International Prices
ICE Cotton Cot look A Index Unit Usc/Lbs Last 76.18 81.35

as on Dec 21, 2012 % Change Prev day WoW 0.46 0.44 0.00 0.00 MoM 5.25 0.00 YoY -15.99 -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 Jan 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 22, 2012 Support 1010-1020 16690-16780 Resistance 1033-1050 16950-17040

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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