Commodities Daily Report

Wednesday| January 23, 2013

Agricultural Commodities

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

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

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Commodities Daily Report

Wednesday| January 23, 2013

Agricultural Commodities
News in brief
Govt to set up panels to resolve pepper futures imbroglio
The Centre will set up two expert panels to look into the problems of the futures market in pepper and cardamom and put in place an effective mechanism to ensure the quality of products traded, said K. V. Thomas, Union minister of state for consumer affairs, food and public distribution. Issues in the pepper market have aggravated in the recent past following actions by the Kochi office of the Food Safety and Standards Authority of India (FSSAI). The expert panels will look into the problem of production of pepper and cardamom, and also recommend solutions to address concerns of various stakeholders in the trading of these spices, said the minister. According to Biju Prabhakar, FSSAI Commissioner, the Spices Board has agreed to get the sample tested for Rs. 500 each, provided the samples are delivered to its office with an accumulative cost of Rs. 12 lakh. (Source: Business Standard)

Market Highlights (% change)

Last Prev. day

as on Jan 22, 2013

WoW MoM YoY

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

19982 6049 53.73 96.24 1693

-0.60 -0.56 -0.09 0.71 0.37

-0.03 -0.13 -1.61 3.17 0.56

3.77 3.29 -2.24 8.61 2.06

19.28 19.86 7.51 -3.35 0.88

.Source: Reuters

Cotton output estimate at 325 lakh bales for 2012-13

Countrys cotton production is estimated to be around 325 lakh bales in 201213 crop year, with Gujarat topping the list at 85 lakh bales, Indian Cotton Federation has said. Gujarat, the production of which was estimated after considering the effects of drought conditions there, was followed by Maharashtra with 80 lakh bales (a bale is 170 kgs), Andhra Pradesh accounting for 68 lakh bales and Punjab, Haryana and Rajasthan 57 lakh bales, according to A Ramani, Secretary, ICF (formerly South India Cotton Association). The total of 325 lakh bales for the year (Oct Sept) includes loose cotton as well, Ramani added. (Source: Business Line)

Easterly wave signals rain for South next week

A building easterly wave headed for Sri Lankan coast is expected to bring fringe showers to parts of south peninsula next week. The core of the wave will hit the East Lankan coast, but showers may extend to cover parts of southern Tamil Nadu and adjoining Kerala, according to forecasts. IMD has kept a lookout for rains for central and peninsular India from January 25. Some foreign weather models suggested the rains could break out even earlier along the Tamil Nadu coast. The IMD has warned that cold wave conditions may prevail over Madhya Pradesh, Chhattisgarh and Rajasthan on Wednesday. Outlook for the next two days said that rain or snow would occur at one or two places over Jammu and Kashmir. Rain or thundershower is likely over Arunachal Pradesh. Thundershowers have been forecast over east Madhya Pradesh, Vidarbha and Chhattisgarh on Wednesday & Thursday. (Source: Business Line)

To woo female investors, National Spot Exchange may look to engage women agents
The National Spot Exchange Ltd (NSEL) plans to launch another eight commodities on its e-trading platform this year. Besides, it will urge its brokers to appoint female agents to promote e-gold trading among women, a senior official said on Tuesday. The premier exchange is preparing to launch e-trading in non-perishable commodities such as castorseed, guarseed and black pepper in the next six months, Amit Mukherjee, Assistant Vice-President Business Development of NSEL, said here. (Source: Business Standard)

Farmers high on radar of poll-bound Karnataka, M.P.

With an eye on the upcoming Assembly elections, the BJP Governments in Madhya Pradesh and Karnataka have gone the whole hog in wooing the numerically strong farming community. The Karnataka Milk Federation has proposed to raise the procurement price of milk by up to Rs 3/litre. In Madhya Pradesh, high agriculture growth is likely to be one of the poll planks for the Shivraj Singh Chouhan led-BJP Government, which will face elections later this year. MP, which started announcing a bonus over the Centres minimum support price for wheat since 2007-08, has made its intentions clear of continuing the trend in the current year. Within our limited resources, we have already announced our intention to offer a bonus of Rs 100 a quintal for wheat and rice over the Centres MSP, said the State Agriculture Minister Ramakrishna Kusumariya.
(Source: Financial Express)

Govt May Hike Annual Agri Lending Target for Banks

The government may increase the annual target of the banks for lending to the agriculture sector by 22% in the upcoming union budget to Rs. 7 lakh crore, in view of the revised classification of priority sector loans issued by the Reserve Bank of India. Banks will be pushed to achieve their direct lending targets and focus on the new improved Kisan Credit Card scheme, said a finance ministry official, who did not wish to be named. The banks will be able to meet the new targets easily, the official said, since the revised classification includes companies of individual farmers and partnership firms directly engaged in agriculture and allied activities. By November-end, the banks had extended about Rs. 5.49 lakh crore to the sector against the target of Rs. 5.75 lakh crore for 2012-13.
(Source: Economic Times)

Oilseed exporters seek more time to register with Apeda

The Indian Oilseeds and Produce Export Promotion Council (IOPEPC) has sought more time for groundnut shelling units to comply with the new Directorate General of Foreign Trade (DGFT) notification making it compulsory for export units to register with Agricultural and Processed Food Products Export Development Authority (Apeda). There has been a lot of concern among the groundnut processors following the DGFT notification, according to IOPEPC. (Source: Financial Express)

Russia not ready to remove grain import duty -deputy PM

Russia is not ready to remove a grain import duty, Deputy Prime Minister Arkady Dvorkovich said on Tuesday, a move that would open Russia's market to foreign wheat to ease tight domestic supplies after last year's poor harvest. "No," said Dvorkovich when asked by Reuters whether he was prepared to support such a proposal. He did not elaborate. (Source:
Reuters)

Govt to invest more in space tech, meteorology to aid farming

The Government plans to invest more in leveraging space technology for meteorology and agriculture use over the next five years. The 12th Plan is going to invest more in space technology for meteorological and agricultural use to change the way in which the farmer can do farming and the Government can reach farmers, said Abhijit Sen, Planning Commission member. He called for better co-ordination between the Department of Space, Meteorological Department and Department of Agriculture in areas such as data collection among others. (Source: Business
Line)

EU seeks to revive talks on GMO crop cultivation

The European Union's health chief hopes to revive talks on draft legislation that would allow member governments to decide individually whether to grow or ban GM plants. The draft rules proposed by the European Commission in 2010 were meant to unblock EU decisionmaking on genetically modified crops, by allowing some countries to use the technology while letting others impose cultivation bans. But opposition from France, Germany and Britain has prevented agreement on the proposals, which must be approved by a majority of governments and the European Parliament before becoming law. (Source: Reuters)

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Commodities Daily Report

Wednesday| January 23, 2013

Agricultural Commodities
Chana
After gaining continuously from the last four consecutive sessions, Chana futures witnessed profit booking and thus settled 0.25% lower on Tuesday. Prices had gained in the past four sessions on reports of extreme cold and ground frost in north India which may hamper yield. Although chana prices witnessed 17% gains in 2012 on the back of lower availability, sentiments prices remained under downside pressure during the period December 2012 till mid January 2013 on account of continuous supplies of imported chana from Australia coupled with higher output expectations.

Market Highlights
Unit Rs/qtl Rs/qtl Last 3937 3567 Prev day -0.01 -0.25

as on Jan 22, 2013 % change WoW MoM -0.26 -4.16 -10.58 -11.73 YoY 21.12 10.57

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

Source: Reuters

Sowing progress
Total pulses acreage as on 18th Jan 2013 stood at 1142.33 lakh ha, down by 0.6% yoy. As on 11th Jan 2013, pulses acreage was up by 0.4%. Chana sowing is almost complete and acreage so far is at 91.9 lakh ha, up by 3.4% as on 18th Jan. Chana acreage is marginally higher by 3% this year in Rajasthan at 14.80 lakh ha, In Maharashtra, Chana acreage is up at 10.92 lakh ha as on 11th Jan 2013 vs normal area of 10.6 lakh ha and 2012 area of 7.04 lakh ha. While in AP it is up at 7.14 lakh ha as on 11th Jan 2013, up by 26%. (Source: State farm dept)

Technical Chart - Chana

NCDEX April contract

Demand supply fundamentals

Although Farm ministry has targeted 7.9 mn tn Chana output for 2012-13 season, higher compared to 7.58 mn tn in 2011-12, the final output would depend on the weather conditions in the major growing regions.
Source: Telequote

Technical Outlook
Chana fresh crop arrivals have started in Karnataka, Andhra Pradesh and in small quantities in Maharashtra too. However, arrival pressure will built up February onwards when harvesting commence in MP. 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. 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. 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).
Contract Chana Apr Futures Unit Rs./qtl Support

valid for Jan 23, 2013 Resistance 3600-3630

3520-3550

Trade Scenario
In Australia, total chickpea production in 201213 is estimated to have increased to a record of around 746000 tones as compared with 485000 tons 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.

Outlook
Chana Futures may open lower initially, however, may again bounce back on adverse report with respect to weather in North India. Although prices may remain firm in the near term, arrival pressure will cap sharp upside in the prices.

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Commodities Daily Report

Wednesday| January 23, 2013

Agricultural Commodities
Sugar
Despite of showing signs of recovery in the past few sessions, Sugar futures declined sharply on Tuesday taking cues from the weak international markets. The spot as well as futures settled marginally lower by 0.7% and 0.86% on Monday. There are reports that drought in parts of Maharashtra and Karnataka has hurt fresh sugarcane plantings, which may affect cane availability for sugar year 2013-14 starting October. Although this will have long term implications, outlook for short term remains bleak amid sufficient supplies. 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. Raw sugar futures on ICE as well as Liffe white sugar continued to slide downwards for the seventh consecutive session and settled 1.35% and 1.36% lower respectively on Tuesday on account of a supply glut situation on the back of a sugar surplus for the third consecutive year. Currently the prices are trading around 2 year lows.

Market Highlights
Unit Sugar Spot- NCDEX (Kolhapur) Sugar M- NCDEX Feb'13 Futures Rs/qtl Last 3264

as on Jan 22, 2013 % Change Prev. day WoW -0.07 0.34 MoM -0.60 YoY 12.90

Rs/qtl

3230

-0.86

0.06

-1.01

13.77

Source: Reuters

International Prices
Unit Sugar No 5- LiffeMar'13 Futures Sugar No 11-ICE Mar '13 Futures $/tonne $/tonne Last 483.2 402.67

as on Jan 22, 2013 % Change Prev day WoW -1.35 -1.36 -3.75 -2.69 MoM -7.24 -6.55 YoY -26.53 -27.20

Domestic Production and Exports

Mills in the country have produced 7.96 mln tn sugar in the first three months of the season, up nearly 2.5% 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. 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.

.Source: Reuters

Technical Chart - Sugar

NCDEX Feb contract

Source: Telequote

Global Sugar Updates

According to the Brazil Agriculture Ministry, The 2012/13 cane crush was at 531.35 million tonnes as of Dec. 31, up from 491.16 million tonnes crushed the previous year. The 2013/14 crush will likely surpass the current one. Brazil's main center-south cane crop will produce between 580 million and 590 million tonnes of sugar cane in 2013/14. Brazil will likely favor ethanol production over sugar from the 2013/14 cane crop. The 2012/13 sugar crop in Thailand, the world's second-biggest exporter, could drop below a forecast 9.4 million tonnes due to lower-thanexpected yield. The crushing season started on Nov. 15 and 1.9 million tonnes of sugar has been produced so far (Source: Reuters)

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

valid for Jan 23, 2013 Resistance 3235-3245

3205-3215

Outlook
Sugar prices may trade on a mixed note today. Prices may recover in the coming weeks as demand is seen emerging at lower levels. Reports of lower cane planting in some parts of Maharashtra and Karnataka may also bring some stability in the prices. Further, it is expected that government will take some measure to control prices, which are below the cost of production levels, from falling further so as to protect the interest of the millers.

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Commodities Daily Report

Wednesday| January 23, 2013

Agricultural Commodities
Oilseeds
Soybean: Soybean futures extended the gains of the previous
session on account of declining supplies in the domestic markets coupled with firmness in the international markets amid dry weather conditions in South America . Prices were also influenced by the edible oil prices which have risen sharply in the past one week. Arrivals in the domestic markets declined to 1.5 lakh bags, while demand is comparatively lower amid crushing disparity. Soy meal exports fell by 34% in December to 5.10 lakh tn, according to SOPA. The country had exported 7,78,382 tn in December 2011. During the first three months of the current oil year (Oct-Sep), exports declined by 27% to 10.78 lakh tn.

Market Highlights
Unit Soybean Spot- NCDEX (Indore) Soybean- NCDEX Feb '13 Futures Ref Soy oil SpotNCDEX(Indore) Ref Soy oil- NCDEX Feb '13 Futures Rs/qtl Rs/qtl Rs/10 kgs Rs/10 kgs Last 3291 3289 756.8 733.7

as on Jan 22, 2013 % Change Prev day 0.64 0.46 0.64 0.75 WoW 1.61 2.78 1.75 -0.56 MoM -0.66 1.84 5.99 5.71 YoY 34.66 30.18 8.01 4.28

Source: Reuters

International Markets
Soybean futures on the CBOT settled higher by 1.57% on Tuesday on reports of dry weather in Argentina and Brazil. Higher exports to a single destination in one day also led to a rise in the prices. By law, exporters must report promptly the sale of 100,000 tonnes or more of a commodity to the same destination in one day. Sales of smaller amounts are reported on a weekly basis. According to the USDA monthly crop report, Brazil will produce a record 82.5 mn tn of soybeans in 2012-13 due to hefty expansion in acreage and improving yield prospects. With the harvest just beginning in some areas, Brazil's planted area will likely increase by 9.2 percent to 27.34 mn ha.
International Prices Soybean- CBOTMar'13 Futures Soybean Oil - CBOTMar'13 Futures Unit USc/ Bushel USc/lbs Last 1452 52.43

as on Jan 22, 2013 Prev day 1.57 1.45 WoW 2.71 3.07 MoM 1.03 8.30
Source: Reuters

YoY 19.00 2.10

Crude Palm Oil

as on Jan 22, 2013 % Change Prev day WoW 1.77 0.27 3.52 2.47

Unit
CPO-Bursa Malaysia Feb '13 Contract CPO-MCX- Jan '13 Futures

Last 2412 443.5

MoM 10.09 8.91

YoY #N/A -15.07

Refined Soy Oil: Ref soy oil settled higher 0.75% on Tuesday as the
government increased import duty on CPO to 2.5% making the imports expensive. India's palm oil imports rose 27.4% on month at 783,091 tn in December, boosted mainly by poor domestic supply of alternatives and attractive overseas prices due to record stocks in key supplier Malaysia. To reduce imports and protect domestic industries, govt lifted duty on crude palm oil from 0 % to 2.5 % and also stated that the base import price on crude palm oil which is currently $447 per ton may be reviewed fortnightly. Increase in duty may reduce imports and support the upside in the prices. However, this may hurt exports from Malaysia which is already gripped with huge stocks of palm oil. Exports of Malaysian palm oil products for Jan. 1-20 fell 19.9 percent to 813,778 tonnes compared with 1,015,440 tonnes shipped during Dec. 1-20, cargo surveyor Societe Generale de Surveillance said on Monday. Rape/mustard Seed: Mustard seed Futures which gained sharply on reports of extreme cold in north India, witnessed profit booking and settled 0.26% lower on Tuesday. Rabi oilseeds sowing are now up by 2.23% at 8.54 mn ha as of Jan. 18. Arrivals are expected to commence in February and thus no major upside in the prices is seen if weather condition improve in the coming days. Rapeseed area stood at 6.7 mn ha as of Jan. 18, up by 2.8% from a year ago.

MYR/Tonne Rs/10 kg

Source: Reuters

RM Seed
Unit RM Seed SpotNCDEX (Jaipur) RM Seed- NCDEX Apr'13 Futures Rs/100 kgs Rs/100 kgs Last 4240 3495 Prev day 3.10 -0.26

as on Jan 22, 2013 WoW -1.40 -17.34 MoM -1.97 -16.29

Source: Reuters

YoY 21.27 1.01

Technical Chart Soybean

NCDEX Feb contract

Outlook
Soybean complex may gain further due to lower supplies in the domestic markets and good demand for its oil. Mustard seed prices are likely to improve on reports of ground frost in Rajasthan which may hamper the mustard crop yield. CPO may recover in the intraday taking cues from the BMD palm oil futures.

Source: Telequote

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

valid for Jan 23, 2013 Support 725-730 3235-3265 3440-3465 437-440 Resistance 738-742 3310-3335 3530-3560 446-450

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Commodities Daily Report

Wednesday| January 23, 2013

Agricultural Commodities
Black Pepper
Pepper Futures traded on a positive note yesterday on account of low stocks and thin supplies. Good winter demand also supported the prices. Prices have also increased due to arrivals of good quality pepper from Kerala. Earlier, prices had corrected as Food Safety and Standards Authority of India sealed the entire quantity of pepper stored in six warehouses in Kerala of about 8,000 tonnes. Harvesting of the fresh crop has commenced and is expected to gain momentum in the coming days. However, winter demand coupled with low stocks in the domestic markets has supported prices at lower levels. FMC is probing into complaints against movement in the pepper market which has pressurized prices. Exports demand for Indian pepper in the international markets is also weak due to price parity. The Spot settled marginally lower by 0.06% while the Futures settled 0.66% higher on Tuesday. Spices Board has announced plans to import high yielding Madagascar variety that was behind the record productivity in Vietnam. It could raise productivity of Indian pepper from 2,000 kg/ha to 7,000 kg/ha. Pepper prices in the international market are being quoted at $8,100/tn(C&F Europe). Vietnam, Malaysia and Indonesia Austa variety are quoted at $7,000/tn and Brazil black pepper is quoted at $6,600/tn.

Market Highlights
Unit Pepper SpotNCDEX (Kochi) Pepper- NCDEX Feb'13 Futures Rs/qtl Rs/qtl Last 38938 37345 % Change Prev day -0.06 0.66

as on Jan 22, 2013 WoW 0.76 1.06 MoM 2.28 6.94 YoY 21.74 14.73

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. 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 Jan 23, 2013 Support 36860-37130 Resistance 37560-37730

Production and Arrivals

The arrivals in the spot market were reported at 11 tonnes while off takes were reported at 10 tonnes on Tuesday. 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 on account of low stocks coupled with thin arrivals. Winter buying demand may also support prices. However, increasing supplies coupled with higher output expectations may cap sharp gains. FSSAIs sealing of huge quantity of pepper and FMCs probe into complaints against price movement may also pressurize the prices.

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Commodities Daily Report

Wednesday| January 23, 2013

Agricultural Commodities
Jeera
Jeera Futures traded on a flat note yesterday. Prices have corrected sharply tracking higher sowing figures. However, fresh enquiries restrained a major downside. Higher sowing as well as conducive weather in Gujarat, the main jeera growing region have pressurized prices. Sowing is complete. According to Gujarat State Agri Dept. sowing in Gujarat is reported at 3.244 lakh ha till Jan, 2013 compared with 3.64 lakh ha last year. In Rajasthan, sowing is expected to increase by 10-15%. The spot as well as the Futures settled 0.37% and 0.35% lower on Tuesday. 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 Spot- NCDEX (Unjha) Jeera- NCDEX Mar '13 Futures Rs/qtl Rs/qtl Last 14236 13643 Prev day -0.37 -0.35

as on Jan 22, 2013 % Change WoW -0.13 -1.34 MoM -5.30 -10.69 YoY -10.53 -15.20

Source: Reuters

Technical Chart Jeera

NCDEX March contract

Production, Arrivals and Exports

Arrivals in Unjha were reported at 3,000 tn on Tuesday. Production of Jeera in 2011-12 is expected around 40 lakh bags as against 29 lakh bags in 2010-11 (55 kgs each). 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 -1.54 -1.60

as on Jan 22, 2013 % Change

Outlook
Jeera prices may trade sideways with some downward bias today. Higher sowing figures coupled with conducive weather in Gujarat may pressurize prices. However, export demand at lower levels may support prices. Demand from domestic traders and millers at lower levels may also support prices. In the medium term, prices are likely to stay firm as Syria and Turkey have stopped shipments.
Unit Turmeric SpotNCDEX (N'zmbad) Turmeric- NCDEX Apr '13 Futures Rs/qtl Rs/qtl Last 5436 6150

WoW -4.51 -6.34

MoM 3.12 -2.29

YoY 10.27 34.16

Turmeric
Turmeric Futures traded on a negative note for the fourth consecutive day as huge carryover stocks have pressurized prices. However, some fresh export enquiries cushioned the fall in the spot prices. Good demand from upcountry market has supported the prices. Lower production estimates have also supported the prices. There are reports of some crop damage in Erode region. 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 1.54% and 1.6% lower on Tuesday.

Technical Chart Turmeric

NCDEX April contract

Production, Arrivals and Exports

Arrivals in Nizamabad and Erode mandi stood at 2,000 bags and 2,000 bags respectively on Tuesday. 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 may is expected to continue to trade downwards today. Higher carryover stocks and weak overseas demand may pressurize prices. However, demand from stockists and weather concerns may support prices. Lower output expectations may also support prices.
.

Source: Telequote

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

Valid for Jan 23, 2013

Support 13360-13540 6030-6070 Resistance 13860-14010 6230-6320

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Commodities Daily Report

Wednesday| January 23, 2013

Agricultural Commodities
Kapas
NCDEX Kapas as well as MCX Cotton settled 0.44% and 0.12% lower on Tuesday. However, demand is expected to pick up at lower levels to meet the cotton yarn export registrations. Registration for exports of cotton yarn has hit the highest in at least two years on burgeoning demand from Indias perennially importing countries i.e. Bangladesh and China. Although, Cotton advisory Board has pegged cotton output lower at 334 lakh bales, Cotton Association of India (CAI), expects output to be around 353 lakh bales in 2012-13. According to the data released by Cotton Corporation of India, Supplies until Jan 13 are down 6.3 percent to 12.5 mn bales of 170 kg each, down from 12.9 mn bales a year earlier. Arrivals were down by 10 percent as th on 16 Dec. ICE Cotton continued to trade higher and settled 1.76% higher on Tuesday. Prices have traded on a positive note hitting a fresh 8 month high last week on back of index buying. Hopes of demand from China led to a sharp increase over the week. Concerns about the quality of cotton to be released by China also supported the prices.

Market Highlights
Unit Rs/20 kgs Rs/Bale Last 903 16270

as on Jan 22, 2013 % Change Prev. day WoW MoM -0.44 -2.11 -11.12 -0.12 -0.25 -0.25 YoY #N/A -7.87

NCDEX Kapas Apr Futures MCX Cotton Futures

Source: Reuters

International Prices
ICE Cotton Cot look A Index Unit USc/Lbs Last 79.93 81.35

as on Jan 22, 2013 % Change Prev day WoW 1.76 4.88 0.00 0.00 MoM 5.24 0.00 YoY -18.59 -29.20

Source: Reuters

Technical Chart - Kapas

NCDEX April contract

Domestic Production and Consumption

According to Cotton Advisory Boards (CAB) estimates (4 Oct 2012) 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.
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Source: Telequote

Technical Chart - Cotton

MCX Jan contract

Global Cotton Updates

China, the world's biggest buyer of cotton, began selling a tiny fraction of its massive stockpile of the fibre on Monday, in a move to ease domestic supply shortages. Beijing has been building a strategic stockpile of cotton since 2011, paying above global prices to support its farmers, but the policy has hurt China's textile mills, which have been struggling with tight supplies, and high prices, at home. Many in the industry were expecting China to reward mills that buy state reserves with new import quotas enabling them to buy cheaper overseas supplies. But no such deal was announced. 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

Outlook
Cotton prices may trade on a mixed note today. Higher output expectations by Cotton Association of India have turned the sentiments negative for the cotton prices. However, downside may be limited as farmers may not sell their stocks at lower prices. Reports that the Government may purchase cotton from farmers to avoid distress sales may also support prices. Also, anticipated export demand from the neighboring countries may support prices.

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

valid for Jan 23, 2013 Support 890-896 16170-16220 Resistance 907-915 16340-16400

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