Commodities Daily Report

Monday| April 22, 2013

Agricultural Commodities

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

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

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Commodities Daily Report

Monday| April 22, 2013

Agricultural Commodities
News in brief
Wheat exports feasible as global prices firming up: FCI
Amid demands from traders to cut floor price of government wheat for exports, Food Corporation of India (FCI) today said global price of the grain is firming up and it is still feasible to undertake shipments. Last month, the Centre had allowed export of additional 5 million tonnes (MT) wheat (of 2011-12 crop) from its godowns via private trade to ease storage burden. The export allocation was to be done via bidding process with floor price set at USD 274 per tonne (Rs 14,840) plus 12.5 per cent of local taxes. "Traders are demanding reduction in the floor price. But currently, our wheat is sold at USD 304-306 per tonne, while Australia and the US wheat at USD 260 and 270 a tonne. Why our wheat is purchased above Rs 300 level? It is still feasible," FCI Chairman and Managing Director Amar Singh told PTI. He noted that the global wheat prices fell sharply in the last one month but have started firming up now. "If international prices remain firm above USD 300 a tonne, it is feasible to export," he said. (Source: Economic Times)

Market Highlights (% change)

Last Prev. day

as on April 18, 2013

WoW MoM YoY

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

19016 5783 54.03 87.73 1392

1.52 1.66 -0.28 1.21 0.71

2.56 3.38 -0.51 -6.18 -11.01

-2.12 -1.52 0.00 -6.12 -12.59

9.34 9.12 4.45 -14.55 -15.06

.Source: Reuters

India's crops seen safe from widespread drought in 2013

India and its south Asian neighbours are set to avoid widespread drought for a fourth straight year, thanks to a normal monsoon in 2013, a global weather forum said on Friday, raising the prospect of bumper grain supplies to squeeze world food prices. The June to September monsoon is vital for 55 percent of India's farmland, which has no irrigation facilities. For one of the world's largest agricultural producers, the rains can make the difference between being an exporter or importer of staples such as rice and sugar. "This year's monsoon, as a whole, is most likely to be within the normal range," said D.S. Pai, lead forecaster of the Indian weather office, releasing the consensus forecast of the South Asian Climate Outlook Forum, a group of weather experts. (Source: Reuters)

Thailand to offer loans to rubber exporters to push prices

Thailand, the worlds biggest rubber producer and exporter, is planning to offer loans to exporters to buy the commodity in a bid to shore up falling prices, a senior government official said. Rubber is a politically sensitive commodity in Thailand, where it provides a livelihood for around 1.3 million smallholders, mostly poor farmers who form a significant vote- bank for the government. The move would help absorb rising rubber supply from the market at a time farmers are due to resume tapping trees for the commodity after a one- month break during the dry season in April. "This will help prevent prices from falling when supply is rising," the official, who is a member of the National Rubber Committee (NRC), said, asking not to be identified. He said the NRC will meet soon to formulate a plan. "The measure is likely to be submitted to the cabinet for approval and be implemented by May," the official added. The government has discontinued a$ 1.6 billion rubber- buying scheme as of end- March, and the comments by the official mean the scheme could be making a comeback, albeit in a different form. (Source:
Business Standard)

Grain handlers wary of toxin lingering in '12 U.S. corn harvest

Problems with the toxic residue of a mold that attacked the 2012 drought-hit U.S. corn crop may worsen this summer and autumn as Midwest farmers blend off tainted supplies held in storage, grain experts say. The substance, aflatoxin, is a chronic problem in dry, hot southern states like Texas where stressed crops are vulnerable to the mold. But in 2012, the worst U.S. drought in more than half a century extended the aflatoxin threat moved northward into the heart of the Midwest, resulting in the biggest outbreak since the 1980s. (Source: Reuters)

Egypt sees wheat crop close to 10 mln tonnes

Egypt's wheat crop will be close to 10 million tonnes this season, agriculture minister Salah Abdel Momen said on Sunday as the harvest gets underway, more than the supply minister's 9.5 million tonne forecast. Abdel Momen was speaking to the state news agency. Typically the world's biggest importer of wheat, Egypt is hoping a bumper crop this year will let it cut back on imports as the state grapples with an economic crisis that has depleted its reserves of foreign currency. Bassem Ouda, the minister of supplies, had forecast a harvest of 9.5 million tonnes. About half of the crop ends up in government flour mills. The latest U.S. Department of Agriculture report on Egypt forecast production will increase 2.3 percent to 8.7 million tonnes this year due to an expanded area under cultivation. But it said diesel fuel shortages could disrupt the harvest. (Source: Reuters)

Natural rubber output may rise marginally

Natural rubber production in the country in 2012-13 is provisionally estimated at 9.12 lakh tonnes, with a slight increase of 0.9 per cent compared with the 4.8 per cent increase in 2011-12, said Ms Sheela Thomas, Chairman, Rubber Board, while recently delivering the presidential address at the 171st meeting of the Rubber Board in Guwahati. Last fiscal, monthly rubber production was lower in April and May 2012 and January-March 2013, owing to adverse weather conditions. Consumption in 2012-13 is provisionally estimated at 9.71 lakh tonnes, an increase of 0.8 per cent compared with 1.8 per cent in 2011-12. (Source: Business Line)

Seed firms in AP move court on pricing issue

The issue of pricing of cottonseed refuses to die. Cottonseed firms in Andhra Pradesh have filed a petition against the Governments arbitrary decision to fix the price of cottonseed, including the trait value. If this trend continues, the Seedsmen Association argued, the Bt cottonseed firms will become extinct. It asked the court to direct the Government to re-fix the maximum sale price of Bt cottonseeds for 2013-14, considering the trait value that is actually being paid by the seed firms. The Seedsmen Association has argued that the companies are bound by the contractual obligations to a certain fee to the technology provider. The association represents about 400 seed companies and dealers. Andhra Pradesh has been insisting on fixing prices of both Bollgard-I and Bollgard-II based seeds since 2008. It also brought in a Cotton Seeds Act and prepared a draft Seed Bill to further reassert its right on fixing the seed price. (Source: Business Line)

Rains wash away U.S. drought, shifting farm economy's prospects

Torrential downpours across a broad swath of the U.S. Midwest this week are easing the worst drought in more than 50 years, flooding streams, snarling river transportation, stalling corn plantings - and changing the outlook for the American farm economy in 2013. The Army Corps of Engineers is closing locks along a 150-mile stretch of the Mississippi River from roughly Davenport in Iowa to Hannibal, Missouri. Barge traffic was backing up Thursday, as water levels were too high for barges to take on grain. The Mississippi and other major rivers are expected to begin cresting Sunday - and likely will run over levies in some areas. That is a sharp reversal from as recently as January, when low water levels disrupted the main water thoroughfares that bring grain from the nation's breadbasket to the world's markets. (Source: Reuters)

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Commodities Daily Report

Monday| April 22, 2013

Agricultural Commodities
Chana
Chana traded on a negative note last week on account of arrival pressure of the new crop and settled 2.31%. However, the spot remained in the positive and settled 2.1% higher on account of demand from stockists coupled with reports of lower yield in MP due to unseasonal rains. Chana prices have recovered significantly in the past couple of weeks as stockiest have started building inventories to meet the demand for the entire season. Concerns over the yield in Madhya Pradesh, the largest chana producing state, due to unfavorable weather conditions was also supporting an upside in eh prices. However, higher supplies of the new crop from the major producing states such as Madhya Pradesh, Rajasthan and Maharashtra is seen capping sharp gains in the physical markets. Chana Spot prices settled marginally lower by 0.05% on Tuesday.

Market Highlights
Unit Rs/qtl Rs/qtl Last 3574 3595 Prev day -1.00 -0.50

as on April 20, 2013 % change WoW MoM 2.10 3.58 -0.83 4.69 YoY -0.29 -0.69

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

Source: Reuters

Technical Chart - Chana

NCDEX May contract

Demand supply scenario

Higher returns earned in 2012, coupled with a hike in minimum support prices (MSP), have helped expand overall acreage in 2012-13 season. The Centre has hiked the MSP by 14 per cent to Rs 3,200 a quintal for chana and as part of its strategy to encourage farmers to grow more pulses to reduce import dependence. Chana sowing in the current season is 5.65% higher at 95.17 lakh ha compared to previous year. Acreage is up in Rajasthan, Maharashtra, MP and AP at 15.7 lakh ha, 12.53 lakh ha, 32.99 lakh ha and 7.33 lakh ha respectively. According to second advance Estimates released on 8 Feb 2013, Total pulses output for 2012-13 season has been pegged at 17.58 mn tn, down 3.3% compared to previous year. The target for 2012-13 pulses crop output was set at 18.24 million tonne during the year. However, drought conditions have hampered kharif pulses output, which has been only partially offset by Rabi pulses output, especially chana. Out of the total pulses output, kharif output is estimated at 23% lower at 5.48 mn tn while rabi pulses output is pegged 8.72% higher at 12.09 mn tn compared with the final estimates of 2011-12. There has been a sharp increase in the chana output estimates on the back of higher acreage and good yield. Chana output is expected to breach its 2010-11 record of 8.2 mn tn and is estimated at 8.57 mn tn for 2012-13. In its first advance estimates chana output was pegged at 7.9 mn tn. However, erratic weather in M.P. may lower the yield. Assocham estimates, 21 mn tn of pulses demand in 2012-13 and is likely to reach at 21.42 mn tn in 2013-14 and 21.91 MT in 2014-15. (Source: Agriwatch).
th

Source: Telequote

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

valid for Apr 22, 2013 Resistance 3640-3680

3545-3570

Trade Scenario
According to IBIS, imports of chana in the month of February declined to 0.46 lakh metric tonnes compared to 2.31 lakh metric tonnes during the previous month. India imports Chana mainly from Australia and Canada and higher availability in these countries at comparatively cheaper rates is seen boosting imports of Chana to meet the domestic shortfall. In Australia, total chickpea production in 201213 is estimated to have increased to a record 713000 tones as compared with 485000.

Outlook
Chana may trade sideways with a negative bias today. Increasing arrivals of the new crop are expected to pressurize prices. However, demand from stockists may support prices at lower levels. Overall output in the current season is comparatively higher and thus no major upside is expected over a medium term.

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Commodities Daily Report

Monday| April 22, 2013

Agricultural Commodities
Sugar
Sugar prices in the domestic markets are seen consolidating at lower levels as higher supplies is seen offsetting the summer demand. The spot as well as the futures settled 1.09% and 0.58% lower w-o-w. The Government has cleared the partial decontrol of sugar. According to this, the government will now have to buy sugar from the mills at open market prices. Also the release mechanism will be done away with, after September 2013. States will decide on the FRP of cane. Indian sugar mills produced 23 million tonnes of the sweetener between Oct. 1 and March 31, about 2 percent less than a year earlier. The Central Government has decided to make available quantity of 104 lakh tons of sugar, as non-levy quota for open market sale, for the 6 months of April, 2013 to September, 2013.

Market Highlights
Unit Sugar Spot- NCDEX (Kolhapur) Sugar M- NCDEX Apr '13 Futures Rs/qtl Last 3040

as on April 20, 2013 % Change Prev. day WoW -0.46 -1.09 MoM -2.12 YoY 4.03

Rs/qtl

2939

0.72

0.27

-0.54

5.08

Source: Reuters

International Prices
Unit Sugar No 5- LiffeMay'13 Futures Sugar No 11-ICE May '13 Futures $/tonne $/tonne Last 508.8 399.33

as on April 19, 2013 % Change Prev day WoW 1.21 1.58 -2.10 1.01 MoM -3.53 -1.75 YoY -11.73 -17.98

Domestic Production and Exports

India is likely to produce 24.6 mn tn of sugar in 2012-13 year ending on Sept. 30, higher than the previous estimate of 24.3 mn tn, the Indian Sugar Mills Association (ISMA) said last week. With the opening stocks of 6.5 mn tn, domestic Sugar supplies are estimated at 30.8 mn tn against the domestic consumption of around 22. 5 mln tn for 2012-13. Exports are not viable as international prices have also declined significantly.

.Source: Reuters

Technical Chart - Sugar

NCDEX May contract

Agriculture Minister Sharad Pawar said that the sugar output in 2013-14 may fall to around 24 mn tn against current years output of 24.5 mn tn. A severe drought in top sugar producing Maharashtra state has been affecting new plantation and is likely to affect on sugar production in the year starting from Oct. 1, 2013.

Global Sugar Updates

Liffe sugar as well as ICE Raw Sugar futures traded on a positive note yesterday and settled 1.21% and 1.58% higher on account of harvest delays which will limit supplies in Brazil, the worlds top producer. Heavy rain in the cane belt of top world sugar producer Brazil has slowed early progress of an expected record cane harvest. Brazil's sugar production will jump to a record level in the 2013/14 season just now starting, with a surge in cane output from an expanded planted area, favorable weather and efforts to renew old and less productive cane plants. Expectations of abundant supplies from the 2013-14 harvest in the other leading producers, such as Thailand, Mexico and the United States have kept prices under pressure. Sugar prices are trading around 2 year lows.
Source: Telequote

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

valid for Apr 22, 2013 Resistance 2950-2965

2900-2920

Outlook
Sugar may trade on a mixed note in the intraday. Prices may consolidate at lower levels over the next few days. Supplies will continue to remain high as millers will release stocks to clear cane arrears. This will offset summer season demand and recovery in the international markets.

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Commodities Daily Report

Monday| April 22, 2013

Agricultural Commodities
Oilseeds
Soybean: Soybean corrected from higher levels last week on
account of profit booking coupled with long liquidation. Weak meal export demand also pressurized prices. However, poor arrivals in the domestic markets supported prices at lower levels. The spot as well as the Futures settled 2.54% and 3.36% lower w-o-w. Indian soy meal suppliers are renegotiating deals with Iranian buyers for April and May shipments as demand for Indian soy meal has slowed significantly due to the higher prices, and buyers are seeking alternative South American supplies. Indias soy meal exports in April are likely to fall to 200,000 tonnes, down 36 percent from a year ago, unless buying from Iran improves. Exports of Soybean meal during March, 2013 was 3,20,265 tonnes as compared to 4,61,892 tonnes in March, 2012 lower by 30.66% y-o-y.

Market Highlights
% Change Unit Soybean Spot- NCDEX (Indore) Soybean- NCDEX Apr '13 Futures Ref Soy oil SpotNCDEX(Indore) Ref Soy oil- NCDEX Apr '13 Futures Rs/qtl Rs/qtl Rs/10 kgs Rs/10 kgs Last 3998 3820 726.4 705.7 Prev day -0.92 -4.12 0.23 -2.36

as on April 20, 2013

WoW -2.54 -6.25 0.26 -2.23

MoM 10.53 5.41 5.89 2.87

YoY 22.56 18.29 -3.65 -6.14

Source: Reuters

as on April 19, 2013 International Prices Soybean- CBOTMay'13 Futures Soybean Oil - CBOTMay'13 Futures Unit USc/ Bushel USc/lbs Last 1428 49.16 Prev day -0.16 -1.01 WoW 1.08 -0.14 MoM 1.53 -0.65 YoY 0.88 -10.89

International Markets
Soybean gained by 1.08% over the week but corrected from higher levels yesterday on account of profit taking and settled 0.16% lower. Prices have gained over yield concerns in Argentina. However, sentiments still remain weak on account of smooth supplies from Brazil coupled with demand fears amid bird flu in China. Surge in soybean imports by China, the biggest buyer, may decline this year as feed consumption drops following a bird-flu outbreak. National Oilseed Processors Association data released earlier this week showed the U.S. soybean crush rose marginally to 137.08 million bushels in March, in line with forecasts for a slight gain from 136.3 million bushels in February. Soy oil stocks edged lower to 2.765 billion lbs, versus 2.79 billion lbs in February. Brazil's government lowered its forecast for the 2012/13 soybean crop from 82.1mn tn to 81.9 mn tn.

Source: Reuters

Crude Palm Oil

as on April 20, 2013 % Change Prev day WoW -0.44 -0.24 -0.95 -0.73

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

Last 2283 461.3

MoM -5.89 2.08

YoY -34.68 -25.38

MYR/Tonne Rs/10 kg

Refined Soy Oil: Ref soy oil as well as MCX CPO declined by 0.41%
and 0.73% last week on account of weak domestic oilseed complex. Indian government increased the base import price on crude soybean oil by US $1 per tons to US $1094. Besides, base import price on crude palm oil sets at US $ 827 and reduced base import price on palmolein crude as well as refined to US $ 864 per tons and US $867 per tons. Imports of all vegetable oils, including non-edible oils, fell 7.5 per cent to 896,714 tn in March, pulled down by the drop in palm oil imports. Palm oil imports dropped 12% to 708,262 tn in March. Malaysia, the world's No.2 palm oil producer, will set its crude palm oil export tax for May at 4.5 percent, unchanged from April. Exports of Malaysian palm oil products from April 1 to 15 inched down 4% to 648,275 tonnes from 675,210 tonnes shipped during March 1 to 15.

Source: Reuters

RM Seed
Unit RM Seed SpotNCDEX (Jaipur) RM Seed- NCDEX Apr'13 Futures Rs/100 kgs Rs/100 kgs Last 3529 3495 Prev day -0.53 0.09 WoW -0.34 -2.56

as on April 20, 2013 MoM 3.41 2.16

Source: Reuters

YoY -8.48 -9.39

Technical Chart Soybean

NCDEX May contract

Rape/mustard Seed: Mustard Futures declined 3.32% w-o-w on

account of higher arrivals. Reports of unseasonal rains in the north have supported prices at lower levels. Sowing of Mustard seed is up by 2.2% at 67.23 lakh ha. Agriculture ministry in its third advance estimates, pegged mustard output at 7.36 mn tn, up by 11.5%.

Outlook
Soybean prices may trade with a negative bias today as weak meal export demand coupled with bird flu in China and supplies from South American region may pressurize prices. However, poor supplies in the domestic markets may support prices at lower levels. Soy oil and CPO may trade sideways with a negative bias tracking weak Palm oil prices in the international markets coupled with comfortable stock levels.

Source: Telequote

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

valid for Apr 22, 2013 Support 700-703.50 3750-3790 3420-3445 458-460 Resistance 708-710.50 3875-3925 3515-3560 464-466

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Commodities Daily Report

Monday| April 22, 2013

Agricultural Commodities h
Black Pepper
Pepper Futures with a negative bias last week on account of higher supplies of the Karnataka crop coupled with weak exports demand. However, lower supplies as well as good demand for the Kerala crop supported prices at lower levels. Interstate traders, especially from Tamil Nadu are actively buying the Kerala crop. Karnataka crop is trading at lower levels due inferior quality. Exports demand for Indian pepper in the international markets is weak due to price parity. Food Safety and Standards Authority of India sealed the entire quantity of pepper stored in six warehouses in Kerala of about 8,000 tonnes. The Spot as well as the Futures settled 0.91% and 0.7% lower w-o-w. According to a circular issued by NCDEX on 09/02/2013, launch of June 2013 expiry contract in Pepper which is scheduled on February 11, 2013, has been postponed till further notice. The revised launch date will be announced in due course. Spices Board has announced plans to import high yielding Madagascar variety that was behind the record productivity in Vietnam. It could raise productivity of Indian pepper from 2,000 kg/ha to 7,000 kg/ha. Pepper prices in the international market are being quoted at $6,900/tn (C&F, New York). Vietnams Asta is quoted at $6,925-6,975/tn, Indonesia GM-1 is quoted at $6,900/tn and Brazil Asta is quoted at $6,600/tn.

Market Highlights
Unit Pepper SpotNCDEX (Kochi) Pepper- NCDEX Apr '13 Futures Rs/qtl Rs/qtl Last 36107 35500 % Change Prev day 0.15 -2.39

as on April 20, 2013 WoW -0.91 -1.39 MoM -1.23 -1.39 YoY -5.13 -6.27

Source: Reuters

Technical Chart Black Pepper

NCDEX May contract

Exports and Imports

Indias Apr-Jan 2012-13 pepper exports were reported at 11,550 tn, down 48% (Source: Factiva) while imports reported at 15,000 tonnes making India a net importer. (Source: Agriwatch) According to the latest IPC reports, Vietnam exported around 39,000 st tonnes of pepper in the 1 quarter of 2013. Pepper imports by U.S. the largest consumer of the spice declined 9% in 2012 period to 62,458 tn as compared to 68,489 tn in 2011. Exports from Indonesia posted significant decrease of 42% as compared to previous year. Exports stood at 36,500 tonnes as compared to 62,599 tonnes in the last year. Brazil exported 25,900 tn pepper during Jan-Nov 2012, around 20% lower compared with 32,650 tn in the same period last year. Exports from Malaysia 8,300 tn pepper during Jan-Oct 2012, lower by 30% last year while exports in October stood at 1,077 mt in.
Source: Telequote

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

valid for Apr 22, 2013 Support 34800-35200 Resistance 35800-36100

Production and Arrivals

The arrivals in the spot market were reported at 37 tonnes while off takes were reported at 35 tonnes on Saturday. As per IPC, Global pepper production in 2012 is projected at 3.27 lk tn, up compared with 3.18 lk tn in 2011. Production for 2013 is projected at 316832 tn. Indonesian pepper output is expected to rise by 24% and in Vietnam by 10%. According to estimates, pepper output in Vietnam is estimated to be 1.05 lakh tonne in 2012 as compared to 1.1 lakh tonne in 2011. Brazil is also expected to produce 22,000 tn this year. Domestic consumption of Pepper in the world is expected to grow by 3.03% to 1.25 lakh tonnes while exports are likely to grow by 1.48% to 2.46 lakh tonnes in 2012. (Source: Pepper trade board) Pepper production in 2012-13 is expected around 60,000-63,000 tonnes. Harvesting of pepper in some regions in Kerala is already complete.

Outlook
Pepper Futures is expected to trade on a mixed note with a positive bias today. Good interstate demand for the Kerala pepper coupled with low supplies may support the prices. Lack of stocks for delivery due to lock up of pepper in the NCDEX accredited warehouses may also support prices. However, higher arrivals of the Karnataka crop coupled with weak overseas demand may pressurize prices at higher levels.

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Commodities Daily Report

Monday| April 22, 2013

Agricultural Commodities
Jeera
Jeera May futures declined last week on account of higher supplies of the new crop in the domestic markets. however, good overseas demand supported prices at lower levels in the spot markets. the spot as well as the futures settled 1.75% and 5.18% lower w-o-w. Higher exports data coupled with fresh export enquiries as well as a pickup in the domestic demand had supported an upside in the prices earlier this month. Arrivals of the new crop are averaging around 35,000 bags/ day. New crop from Rajasthan has also hit the markets. Higher sowing as well as conducive weather in Gujarat, the main jeera growing region has increased output expectations. According to Gujarat State Agri Dept. sowing in Gujarat is reported at 3.352 lakh ha in 2013 compared with 3.719 lakh ha last year. According to the Rajasthan State Budget 2013-14, it has exempted jeera from VAT. 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 $2,450 tn (FOB Mumbai) while Syria and Turkey are not offering. Carryover stocks of Jeera in the domestic market is expected to be around 8-9 lakh bags.

Market Highlights
Unit Jeera Spot- NCDEX (Unjha) Jeera- NCDEX Apr '13 Futures Rs/qtl Rs/qtl Last 13500 13093 Prev day 0.00 -1.00

as on April 20, 2013 % Change WoW -1.75 -5.08 MoM 1.17 1.10 YoY 6.60 7.32

Source: Reuters

Technical Chart Jeera

NCDEX May contract

Production, Arrivals and Exports

Arrivals in Unjha were reported at 25,000 lakh bags on Thursday. Production of Jeera in 2012-13 is expected around 38-40 lakh bags (55 kgs each), same as last year. Exports of Jeera between Apr 2012- Jan 2013 stood at 64,400 tn, an increase of up 86%. (Source: Factiva)
Source: Telequote

Market Highlights
Prev day 0.00 -1.97

as on April 20, 2013 % Change

Outlook
Jeera Futures may trade with a negative bias. Higher arrivals of the new crop may pressurize prices. However, good overseas as well as domestic demand may support prices a lower levels. Overall trend remain positive for the Jeera prices as they are likely to stay firm as Syria & Turkey have stopped shipments.
Turmeric SpotNCDEX (N'zmbad) Turmeric- NCDEX Apr '13 Futures

Unit Rs/qtl Rs/qtl

Last 6779 6572

WoW -0.41 -5.03

MoM 5.89 -0.70

YoY 104.14 89.94

Turmeric
Turmeric futures declined sharply from higher levels on account of higher arrivals of the new crop. However, good domestic as well as overseas demand coupled with lower output supported prices in the spot. Unseasonal rains in Andhra Pradesh have damaged about 9240 tonnes of turmeric. The spot as well as the futures settled 0.41% and 6.81% lower w-o-w.

Technical Chart Turmeric

NCDEX May contract

Production, Arrivals and Exports

Arrivals in Erode stood at 8,000 bags while Nizamabad remained closed on Thursday. Expectations are that production may be lower by 40-50%. There are reports of some crop damage in Erode region. Turmeric production in 2012-13 is expected around 45 lakh bags. Production in Nizamabad is expected around 12 lakh bags. Production in 2011-12 is projected at historical high of 10.62 lakh tn. It is estimated that next years carryover stocks would be around 10 lakh bags. According to Spices Board of India, exports of Turmeric in April 2012 increased by 1% at 7,300 tn as compared to 7,230 tn in April 2011. Outlook Turmeric is expected to trade with a negative bias today. Weak exports data coupled with higher supplies of the fresh crop and huge carryover stocks may pressurize prices at higher levels. However, fresh export demand coupled with demand from stockists may support prices at lower levels and prevent sharp downside. Crop damage and lower output concerns may also support prices at lower levels.

Source: Telequote

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

Valid for Apr 22, 2013

Support 12800-12920 6360-6460 Resistance 13300-13520 6640-6750

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Commodities Daily Report

Monday| April 22, 2013

Agricultural Commodities
Kapas
NCDEX Kapas as well as MCX Cotton declined sharply by 10.92% and 7.24% last week as mills are avoiding buying as they expected CCI to offload stocks. Weak global market sentiments have also added downside pressure. However, lower supplies in the domestic markets prevented a sharp decline in the prices. Lower availability coupled with expectations of export demand from China in the coming days have also supported the prices at lower levels. The state-run Cotton Corporation of India (CCI) has said that it would offload stocks in the open market to augment supplies. Cotton Corp of India has also sought permission to export 1 mn bales. Lower supplies in the domestic markets and rising cotton prices have caused concerns for textile industry, which is demanding government to direct CCI and NAFED to offload the cotton stock to domestic mills. India's imports of cotton this year could reach 1.5 mn bales, missing earlier estimates of more than 2 mn as the govt may to start selling its stockpiles. Cotton supplies since the beginning of the year in October 2012 until February 10, 2013 were down at 183.4 lakh bales, down from 189.27 lakh bales a year earlier.

Market Highlights
Unit Rs/20 kgs Rs/Bale Last 832 17540

as on April 20, 2013 % Change Prev. day WoW -3.98 -10.92 -2.34 -7.24 MoM YoY -15.10 -16.17 -7.24 4.28

NCDEX Kapas Apr Futures MCX Cotton Mar Futures

Source: Reuters

International Prices
ICE Cotton Cot look A Index Unit USc/Lbs Last 83.48 91.75

as on April 19, 2013 % Change Prev day WoW 0.00 -2.45 -1.02 -0.49 MoM -8.09 -7.18 YoY -7.29 -8.52

Source: Reuters

Technical Chart - Kapas

NCDEX April contract

Domestic Production and Consumption

The Cotton Association of India CAI has estimated the cotton crop for the season 2012-13 at 35.1 million bales as against 37.3 million bales in 2011- 12. However, higher exports and domestic consumption can be met through revised higher opening stocks of 40 lakh bales and higher imports. After witnessing record exports in 2011-12 season, Indian exports could witness significant fall this season on the back of lower availability along with unattractive domestic cotton prices. CAB estimates cotton exports at 80 lakh bales this season, compared with 128.8 lakh bales last year.

Global Cotton Updates

ICE cotton traded on a flat note yesterday and settled unchanged. Prices declined earlier this week as investors continued to liquidate and mills held off purchasing into the falling market. According to China Cotton Association, China will continue with its stockpiling policy this year which will boost imports. Exports were higher compared to previous week but lower compared to four week average. According to the USDA report, planting intentions for the 2013-14 season are said to be at a 4 year low. Also, there are expectations of good export demand from China. Reports of India and China releasing stocks from the state reserve led to a decline in the prices. China, the worlds largest consumer, is expected to sell about 3 mn tn of cotton this year from state reserves of around 10 mn tn. USDA has initially forecasted US Cotton acreage for 2013-14 season, at smallest in 20 yrs, however, with recent surge in prices, farmers may decide to plant more cotton. The planting intention data is schedule to be released on 28th march 2013.
Source: Telequote

Technical Chart - Cotton

MCX April contract

Source: Telequote

Outlook
We expect Cotton prices to decline today. Weak global market sentiments coupled with lack of buying by mills in the domestic markets may pressurize prices. However, decline in supplies from farmers due to lower prices may support prices at lower levels. China will continue its stockpiling policy, may also support prices. US cotton planting intentions were reported at a 4 year low.

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

valid for Apr 22, 2013 Support 810-823 17200-17370 Resistance 850-865 17800-18050

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