Commodities Daily Report

Monday| May 13, 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| May 13, 2013

Agricultural Commodities
News in brief
Mahasen rebuilds in Bay even as Arabian Sea warms up
Bay of Bengal cyclone Mahasen has started to reorganise by Sunday afternoon, after undergoing a bout of weakening earlier in the day. Joint Typhoon Warning Centre of the US Navy said that the weakening was due to ingestion of dry air from hot surface of mainland India. Mahasen lay centred 800 km south-east of Chennai and 1,400 km south-southwest of Chittagong (Bangladesh).Cyclone Warning Centre of India Met Department expected it to initially move northwestwards and re-curve towards Bangladesh-Myanmar coast. Meanwhile, a US-based storm tracker persisted with the forecast for Arabian Sea too to get into action. This would happen after Mahasen makes a landfall and dies out. The storm might evolve over East-central Arabian Sea over the next 10 to-12day period. The storm may spin away north-north-west for a likely landfall over Yemen/Oman. But before doing that, it could trigger the onset of South-West monsoon over the Kerala coast. (Source: Business Line)

Market Highlights (% change)

Last Prev. day

as on May 10, 2013

WoW MoM YoY

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

20083 6095 54.81 96.04 1437

0.72 0.74 0.82 -0.36 -2.18

2.59 2.54 1.86 0.45 -1.88

8.85 9.75 0.00 3.60 -8.80

21.86 22.51 1.96 -0.80 -9.85

.Source: Reuters

Grain forecast gives a glimmer of hope

Pressure is mounting on world grain prices following predictions that the all important US winter wheat crop will be far smaller this season. On top of mounting concerns about the expanding drought in Australia, increasing prospects of a smaller grain crop, it paves the way for further price rises unless the situation improves. The US Department of Agriculture's projection for this years winter wheat production on Saturday forecast a 10 per cent drop because of a smaller area planted and lowers yields. A season marked by drought and late spring freezes are to blame for the decline. The USDA also estimated a fall in the world's wheat crop to only 655 million tn this year, down from 696 million tn last year. It also forecast a 22 million tonne wheat crop for Australia, down 26.48 per cent from last year. However, if good winter rains do not rescue this year's crop, it has plenty of room to fall further.
(Source: Factiva)

Cotton could bloom on Chinese demand

Since the start of this year, cotton prices have recovered their earlier losses on demand from the top consumer, China, and hopes of a drop in acreage in the worlds third-largest producer, United States. MCX Cotton futures have gained almost 19 per cent taking prices to their highest level in more than a year. Preceding the recent surge, cotton prices posted back to back losses for two years as cheaper synthetic alternatives battered the fibre demand and on a global glut. Easing demand and fragile prices of cotton has led to many US farmers shifting to more remunerative crops, leading to a lower acreage. According to the USDA forecast, the acreage in cotton would drop by 19 per cent to 4.1 million hectares this season. Escalating fears of delay in planting due to heavy rains in the major growing areas in the country and recent upbeat economic releases are likely to support prices. China, India and US are the major players in the cotton market and usually the demand-supply situation is the key factor behind the price fluctuations. China is the key market driver being the top consumer, producer and importer of the commodity. China produces 27 per cent of the total global production and consumes almost 40 per cent of the world offtake. (Source: Business Line)

Indiaa groundnut production estimated 22% less in 2012-13

Indias groundnut production in 2012-13 is expected to be around 22% nd less than last year, at 54.34 million tn, 2 lowest in a decade. Prices were moving up from August 2012, and the IPM caught this trend. However, the new restrictions on exports were set to cap any significant rise in prices. Along with the new rwgulation of registration, since Indian groundnut prices were ruling higher than the global, export demand was hit. Prices are therefore expected to decline as the markets stabilize to the new dynamics of this year. (Source: Business Standard)

Yellow spice loses colour on lower prices, weak demand

Absence of fresh orders and high carryover stocks are two of the several factors casting a shadow over the turmeric market in India, the largest producer, consumer & exporter of the yellow spice, accounting for nearly 60% of the world exports. In India, Andhra Pradesh, Tamil Nadu, Karnataka, Maharashtra & Kerala are the top growing states. The price of this commodity is to a great extent, influenced by exports in demand. Turmeric futures on NCDEX fell 2.6% due to weak exports & high carry forward stocks. The output of the commodity is expected to be lower this year due to reduced plantation area in leading producing states. Another noteworthy factor ehich could influence market is that while consumption of turmeric varies from 3.5 to 4 lakh tones, on an average the years crop is expected to be around 3.9-4.2 lakh tones and based on trade estimates, carry forward stocks this season are 3.5 to 3.8 lakh tones Given this, the expected crop plus the carry over stocks would be much higher that the average consumption.(Source: Financial Chronicle)

Sugar industry wants import duty to be increased to 30%

After achieving success in getting the sugar market decontrolled, sugar industry will now pursue the government to increase the import duty on sugar to 30% from current 10%. Sugar production in the country has reached 24.5 million tonne and the industry feels that the domestic market will be in a comfortable condition this sugar season (October 2012-September 2013) and the next as well. Assuming a domestic consumption of 22.5 million tonne this season, industry experts cite a surplus of 2 million tonne in the current season. The carry over stock of sugar from last season would be 34 lakh tonne as on 1st October 2013, if it's not exported by the mills."There is more than enough sugar in the country so there is no need for imports. Even if Maharashtra gives lower production in the next season (due to drought condition), the opening balance will be so good that there will be enough sugar in the next season also," Abinash Verma, director general, Indian Sugar Manufacturers Association,(ISMA). Sugar import in the country for the past two seasons has been nil. As the sugar prices are crashing in global market, Indian sugar mills are unable to export the surplus domestic stock. Meanwhile sugar traders are importing sugar, which turns out cheaper than domestic produce. (Source: The Economic Times)

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Commodities Daily Report

Monday| May 13, 2013

Agricultural Commodities
Chana
Chana June futures declined for the fourth consecutive week on account of higher supplies of the new crop coupled with higher output estimates and settled 3.59% lower w-o-w. However, demand from stockists at lower levels has cushioned sharp downside in the prices. Lower yield in MP due to unseasonal rainfall in February have also supported prices at lower levels. The supplies are expected to slow down towards the end of the month. Higher supplies of the new crop from the major producing states such as Madhya Pradesh, Rajasthan and Maharashtra is seen pressurizing prices in the physical markets. Concerns over the yield in Madhya Pradesh, the largest chana producing state, due to unfavorable weather conditions has been seen supporting prices at lower levels. Chana prices may find support at lower levels as stockists will build inventories at lower levels to meet the demand for the entire season.

Market Highlights
Unit Rs/qtl Rs/qtl Last 3375 3313 Prev day -0.65 -1.28

as on May 11, 2013 % change WoW MoM -1.46 -4.03 -3.21 -6.31 YoY -20.12 -18.72

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

Source: Reuters

Technical Chart - Chana

NCDEX June 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 third advance Estimates released on 3 May 2013, Total pulses output for 2012-13 season has been pegged at 18 mn tn, up 5.76% compared to previous year. The target for 2012-13 pulses crop output was set at 18.24 million tonne during the year. Out of the total pulses output, kharif output is estimated at 4.03% lower at 5.95 mn tn while rabi pulses output is pegged 9.25% higher at 12.05 mn tn compared with the final estimates of 2011-12. Chana output is pegged marginally lower to 8.49 mn tn compared with its second advance estimates of 8.57 million tonnes. However, chana output is expected to breach its 2010-11 record of 8.2 mn tn in 2012-13. Erratic weather in M.P. lowered 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).
rd

Source: Telequote

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

valid for May 13, 2013 Resistance 3425-3465

3335-3360

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 is expected to continue to trade lower today as higher supplies of the new crop are expected to mount pressure on the prices. However, value buying may emerge at lower levels. Improvement in demand from stockists may also 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| May 13, 2013

Agricultural Commodities
Sugar
Sugar futures traded on a positive note last week as sentiments turned optimistic after the government notified the cabinet committee on economic affairs (CCEA) decision to remove two key controls on sugar sector. Improving demand from bulk consumers and expected lower output next season in Maharashtra also supported an upside in the prices. However, huge supplies have capped sharp gains in the spot. The spot as well as the Futures settled 0.85% and 2.62% higher w-o-w. The Minimum Initial Margin has been revised to 5% of the value of the contract or VaR based margin whichever is higher and will be imposed on all running contracts and yet to be launched contracts wef beginning of trading day Monday, May 13, 2013. Sugar prices in the domestic markets have consolidated at lower levels over the past couple of weeks as higher supplies was offsetting summer season demand in the physical markets. The Government has cleared the partial decontrol of sugar on April 4, 2013, however, notified the same after almost a month. 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. India's sugar output is set to decline 10-15 per cent in the 2013-14 crushing season due to lower cane availability from drought-hit Maharashtra districts, where sowing could not be finished or crops were damaged due to lack of monsoon showers in 2012. (Source: Business Standard.

Market Highlights
Unit Sugar Spot- NCDEX (Kolhapur) Sugar M- NCDEX May '13 Futures Rs/qtl Last 3064

as on May 11, 2013 % Change Prev. day WoW 0.09 0.85 MoM -0.38 YoY 3.28

Rs/qtl

3048

1.06

4.42

3.67

4.67

Source: Reuters

International Prices
Unit Sugar No 5- LiffeMay'13 Futures Sugar No 11-ICE May '13 Futures $/tonne $/tonne Last 489.2 387.33

as on May 10, 2013 % Change Prev day WoW 0.62 -0.23 -2.39 -0.97 MoM -3.40 -1.64 YoY -11.98 -13.80

.Source: Reuters

Technical Chart - Sugar

NCDEX June contract

Domestic Production and Exports

According to ISMA, Indias Sugar production between OctoberApril stood at 24.52 mn tn, lower by 3% during the same period last year. Maharashtras production dipped 10% to 8 mn tn while production in Uttar Pradesh increased by 7% to 7.43 mn tn.
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. 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.

Source: Telequote

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

valid for May 13, 2013 Resistance 3080-3100

Global Sugar Updates

Liffe Sugar recovered from lower levels on account of short coverings and settled 0.62% higher while ICE sugar declined 0.23% on Friday on account of improvement in the pace of cane crush in Brazil supported by favorable weather. Cool, dry weather in Brazil has boosted cane crushing and will allow uninterrupted exports. Sugar prices in the international markets are trading at their lowest levels in since July 2010 on account of a global surplus situation for the third consecutive year. According to Unica, South-Central Brazil cane crush projected at 589.60 million tons for 2013/2014. Main center-south sugar cane crop will produce a record 35.5 mn tn of sugar in the 2013/14 season, higher by 4.1% compared to 34.1 mn tn last year. 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.

3000-3035

Outlook
Sugar prices are expected to gain on account of improvement in demand from the bulk manufacturers. Sentiments are expected to remain positive as government has notified cabinets decision to remove two key controls on sugar sector. However, weak international prices and higher supplies may cap sharp gains.

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Commodities Daily Report

Monday| May 13, 2013

Agricultural Commodities
Oilseeds
Soybean: after gaining over the preceding two weeks, soybean
prices corrected marginally from higher levels on account of weak meal export demand coupled with IMDs prediction of a normal monsoon. However, poor supplies in the domestic markets supported prices at lower levels. According to the 3rd advance estimates, Soybean output is pegged at 14.14 mn tonnes. The spot as well as the June Futures settled 0.07% and 0.41% lower w-o-w. Special Margin (in Cash) of 10% on the Long side has be imposed in Soyabean May 2013, June 2013 & July 2013 expiry contracts with effect from beginning of day Tuesday, April 30, 2013. 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 May '13 Futures Ref Soy oil SpotNCDEX(Indore) Ref Soy oil- NCDEX May '13 Futures Rs/qtl Rs/qtl Rs/10 kgs Rs/10 kgs Last 4024 4018 724.8 718.4 Prev day -0.69 -0.33 0.03 0.39

as on May 11, 2013

WoW -0.07 1.12 -1.60 -0.11

MoM -2.71 -1.42 -0.15 0.27

YoY 13.61 17.88 -1.78 -1.99

Source: Reuters

as on May 10, 2013 International Prices Soybean- CBOTMay'13 Futures Soybean Oil - CBOTMay'13 Futures Unit USc/ Bushel USc/lbs Last 1488 49.17 Prev day -0.20 0.20 WoW 2.29 0.02 MoM 6.86 -1.72
Source: Reuters

International Markets
Soybean declined 0.2% on Friday after the USDA monthly report forecast ending stocks in 2013-14 to double to 265 mn bushels against 125 mn bushels in 2012-13. Also 2013-14 US soybean production is projected at 3.39 billion bushels. However, delays in planting in the Midwest coupled with tight supplies of the old soy crop cushioned prices. Large South American crop coupled with forecasts for US weather to improve in the coming week have capped sharp gains. Sentiments remain weak on account of smooth supplies from Brazil coupled with demand fears amid bird flu in China. Chinas soybean imports were reported at 3.98 mn tonnes in April, lower by 18.4% in April last year, but marginally higher compared to 3.84 mn tonnes in March. The decline is attributed to delays in shipment from Brazil coupled with weak demand on the back of outbreak of the bird flu. Brazil's government lowered its forecast for the 2012/13 soybean crop from 82.1mn tn to 81.9 mn tn.

YoY 2.48 -7.49

Crude Palm Oil

as on May 11, 2013 % Change Prev day WoW 0.09 0.62 2.64 3.69

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

Last 2290 472.1

MoM -3.01 2.25

YoY -31.74 -21.11

MYR/Tonne Rs/10 kg

Source: Reuters

RM Seed
Unit RM Seed SpotNCDEX (Jaipur) RM Seed- NCDEX May '13 Futures Rs/100 kgs Rs/100 kgs Last 3432 3475 Prev day 0.21 1.64 WoW 0.77 1.73

as on May 11, 2013 MoM -3.68 -1.86

Source: Reuters

Refined Soy Oil: Ref soy oil as well as MCX CPO settled 0.43% and
3.69% higher last week tracking firm prices on the KLCE. Indian government increased the base import price on crude soybean oil by US $9/tn to US $1103. Besides, base import price on crude palm oil set at US $ 824 and reduced base import price on palmolein crude as well as refined to US $ 864/tn and US $861/tn. 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, set its crude palm oil export tax for May at 4.5%, unchanged from April. Exports of Malaysian palm oil products from April 1-25 increased 5.2% to 1,123,129 tn from 1,067,140 tn shipped during March 1- 25.

YoY -10.89 -7.92

Technical Chart Soybean

NCDEX June contract

Rape/mustard Seed: after declining for four weeks, Mustard June

Futures recovered from lower levels and settled 0.98% higher last week on account of short coverings. Higher supplies of the new crop coupled with higher output expectations have led to a sharp decline in the prices. 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%.

Source: Telequote

Outlook
Soybean prices may trade with a positive bias as poor supplies in the domestic markets may support prices. However, forecast of a normal monsoon coupled with weak meal export demand may pressurize prices. Soy oil as well as CPO may gain due to higher international prices as well as lower yield period. However, comfortable stock levels may cap sharp upside.

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

valid for May 13, 2013 Support 685-690 3820-3855 3465-3490 466-469 Resistance 700-706 3920-3950 3535-3560 474-477

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Commodities Daily Report

Monday| May 13, 2013

Jeera Agricultural Commodities

After trading lower for most part of the week and touching a contract low of Rs. 12717.50 last week, Jeera June futures recovered from lower levels on account of short coverings. Demand from stockists and exporters also emerged at lower levels. The spot settled 0.22% higher while the June Futures settled marginally lower by 0.15% w-o-w. Prices have declined sharply on account of weak demand from the domestic as well as international markets. Higher production estimates have also pressurized prices. Domestic as well as overseas demand is expected to improve in the coming days. 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 $2,425 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 May '13 Futures Rs/qtl Rs/qtl Last 13461 12943 Prev day 0.37 1.23

as on May 11, 2013 % Change WoW 0.22 0.45 MoM -1.95 -5.68 YoY 0.19 0.94

Source: Reuters

Technical Chart Jeera

NCDEX June contract

Production, Arrivals and Exports

Arrivals in Unjha were reported at 10,000 lakh bags on Saturday. 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 -2.38

as on May 11, 2013 % Change

Outlook
Jeera Futures is expected to trade higher today extending previous days gains. Improvement in overseas as well as domestic demand may support prices. However, higher output may pressurize prices at higher levels.. Overall trend remain positive for the Jeera prices as they are likely to stay firm as Syria & Turkey have stopped shipments.
Unit Turmeric SpotNCDEX (N'zmbad) Turmeric- NCDEX May '13 Futures Rs/qtl Rs/qtl Last 6060 5834

WoW -3.43 -7.60

MoM -7.52 -14.26

YoY 66.08 45.12

Turmeric
Turmeric Spot as well as June Futures declined sharply and settled 3.43% and 12.71% lower last week on account of higher supplies and huge carryover stocks. Domestic as well as overseas demand is also reported to be weak. However, there are expectations of improvement in overseas demand in June. Unseasonal rains in Andhra Pradesh have damaged about 9240 tonnes of turmeric earlier.

Technical Chart Turmeric

NCDEX June contract

Production, Arrivals and Exports

Arrivals in Erode and Nizamabad mandi were reported at 3,500 and 8,000 bags respectively on Friday. 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, expectations of improvement in export demand coupled as well as demand from stockists may support prices at lower levels. Crop damage and 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 May 13, 2013

Support 12760-12900 5640-5720 Resistance 13130-13220 5930-6070

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Commodities Daily Report

Monday| May 13, 2013

Agricultural Commodities
Kapas
NCDEX Kapas as well as MCX Cotton settled lower 0.1% and 0.6% on Saturday taking cues from the weak global markets which declined after USDA released its monthly crop report which revealed that excess supplies would continue in the next year too. Emergence of fresh demand at lower price levels cushioned sharp downside in the domestic markets. The Cotton Corporation of India (CCI) and the National Agricultural Cooperative Marketing Federation of India (NAFED) are expected to offload over 8 lakh cotton bales (a bale weighs 170 kg) in the domestic market this month and the asking price may be lower by Rs 1,000 per candy than the previous price. In April, the government had offered a price of Rs 39,500 per candy, which received lukewarm response from the textile industry. (Source:
Economic Times dated 6th May 2013)

Market Highlights
Unit Rs/20 kgs Rs/Bale Last 1035 18040

as on May 11, 2013 % Change Prev. day WoW -0.10 -0.62 -0.61 -0.77 MoM YoY 11.30 1.03 -0.77 7.89

NCDEX Kapas Apr Futures MCX Cotton May Futures

Source: Reuters

International Prices
ICE Cotton Cot look A Index Unit USc/Lbs Last 86.48 95.1

as on May 10, 2013 % Change Prev day WoW -1.64 3.16 0.11 3.48 MoM 2.17 3.20 YoY 9.51 6.20

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.

Source: Reuters

Technical Chart - Kapas

NCDEX April contract

Domestic Production and Consumption

CAB in its latest meet has projected cotton crop at 34 mn bales for 201213 season compared to the previous estimates of 33 mn bales. Mill consumption is expected to go up from 22.3 million bales last year to 23.5 million bales. Exports are estimated at 8.1 mn bales. While Import are estimated 2.5 mn bales.

Global Cotton Updates

ICE Cotton futures fell sharply on Friday and settled 1.64% after the USDA monthly crop report forecast a sharp rise in the in the cotton stockpiles by almost 10%. The U.S. Department of Agriculture has forecast global cotton stockpiles will rise almost 10 percent to a record high in 2013/14, pushing prices lower and reinforcing concerns about stagnating demand in China, the world's No. 1 textile market. U.S. plantings delays which prompted worry over upcoming supplies had boosted prices in the earlier part of the last week 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. 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 May contract

Source: Telequote

Outlook
We expect Cotton prices to trade on mixed note today. Prices may decline as offloading from the state reserves may ease supplies in the short term. Weak international markets may also pressurize prices. However, improving demand at lower levels may support prices. US cotton planting intentions were reported at a 4 year low. China will continue its stockpiling policy, may also support prices.

Technical Outlook
Contract Kapas NCDEX April 14 Fut Cotton MCX May Futures Unit Rs/20 kgs Rs/bale

valid for May 13, 2013 Support 1015-1025 17940-17990 Resistance 1045-1055 18100-18150

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