Commodities Daily Report

Thursday| May 16, 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

Thursday| May 16, 2013

Agricultural Commodities
News in brief
Modification in tick size and lot size
As per exchange circular dated 15 May, 2013, the tick size and lot size of Coriander, Soybean, Refined Soy oil and turmeric contracts has been th modified and shall be applicable from 27 May 2013. Summary of the revision in Tick size is as per the following table:
th

Market Highlights (% change)

Last Prev. day

as on May 15, 2013

WoW MoM YoY

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

20213 6147 54.79 94.3 1397

2.49 2.52 -0.04 0.10 -1.98

1.11 1.28 1.29 -2.40 -5.25

10.11 10.39 0.43 6.30 2.64

23.79 24.36 1.84 0.34 -10.30

Commodity Coriander Soybean Refined Soyoil Turmeric

Symbol

Existing Modified Existing Modified tick size tick size lot size lot size Rs. 5 Rs. 2 50 Paise Rs. 5 10 MT 10 MT 10 MT 5 MT 1 MT 1 MT 1 MT 1 MT

.Source: Reuters

DHANIYA Re. 1 SYBEANIDR 50 Paise SYOREFIDR 5 Paise TMCFGRNZM Rs. 2

Turnover points to waning interest in pepper

Pepper prices continued to decline on Wednesday on bearish sentiments as the contract is nearing maturity. The market continued to be volatile but activities were limited. The net open interest showed a decline. But turnover showed a slight increase giving the impression that the people are losing interest, trade sources said. Buyers were quoting lower rates. Those who wanted to get out of the market were liquidating. Those looking for farther out positions were finding it difficult to get the rates after the maturity of the May contract (on 20th of this month), as the June/July/Aug contracts have not been listed on the exchange (Source:
Business Line)

The change in the lot size is for both the Trading lot size and the Delivery lot size. (Source: NCDEX)

Withdrawal of special margin on Turmeric Contracts

Trading and Clearing members are hereby informed that in terms of Byelaws, Rules and Regulations of the Exchange, Special Margin of 10% on the Long Side on all the running contracts in Turmeric (SYMBOL: TMCFGRNZM) have been withdrawn with effect from beginning of day Thursday, May 16, 2013. Members and their respective clients are requested to note the above (Source: NCDEX)

Wheat procurement likely to fall to 26-28 mt

Wheat procurement in the 2013-14 crop marketing year that started on April 1 is expected to culminate at 26-28 million tonnes (mt), a good 1012 mt less than last year and almost 60 per cent less than the initial estimate of 44 mt. Officials from the Food Corporation of India (FCI) say arrivals in Madhya Pradesh and Uttar Pradesh in the next 10 days hold the key to meet this estimate as supplies from Punjab and Haryana are virtually over. Punjab, Haryana, Uttar Pradesh and Madhya Pradesh are the major wheat-producing states in the country. Till date, FCI has procured around 24 mt of wheat from farmers, which is almost 17 per cent less than the corresponding period last year. According to officials, the sharp fall in procurement is mainly because of the overall low wheat production, heightened purchases by private traders and increased holding by farmers in anticipation of further rise in prices. (Source: Business
Standard)

Sugar millers plan to tap futures platform

After getting the freedom to sell sugar, millers are now keen to learn the futures game. Further, they also plan to strengthen their marketing teams and chase long-term deals with bulk consumers, such as beverage and confectionery makers. Till recently, sugar sale was controlled by the Government through the release order mechanism, under which it decided the quantity of sugar to be sold by mills during specific periods. Now, sugar industry bodies, the Indian Sugar Mills Association and the National Federation of Sugar Co-operative Factories, are exploring options to organise training for their members on the futures platform. There is a need for the co-operatives to participate in the futures market for better price discovery. We are planning to encourage mills to participate in the futures trade by organising some training in the days to come, said Vinay Kumar, Managing Director, NFCSF. (Source: Business Line)

Soyameal holds key to dip in poultry feed

If soyameal drops from the current levels, concentrate feed products may fall further, according to trade experts. Lower input cost pulled concentrate feed products down by Rs 20 for a 50-kg bag on Wednesday. Continuous falls in cost of production dragged concentrate feed prices, said Aditya Mishra, a commodity expert. The situation was anticipated in the market and it may rule around current levels before falling further in coming days, he said. After witnessing some recovery last weekend, soyameal remained unchanged and sold at Rs 36,140 a tonne. Bajra dropped by Rs 15 to Rs 1,470 a quintal, DCP was at 35 a kg, after witnessing a continuous fall, MBM improved by Rs 2 and quoted at Rs 40 a kg while maize dropped by Rs 30 and quoted at Rs 1,320 a quintal. Mustard de-oiled cake went up by Rs 100 and sold at Rs 14,700 a tonne, DRB sold at Rs 9,000 a tonne while rice bran oil ruled at 49 a kg, Rs 2 down from previous levels. (Source: Business Line)

Monsoon may hit Kerala on June 3

The South-West Monsoon is likely to hit the Kerala coast on June 3 this year, the Indian Meteorological Department (IMD) said on Wednesday. The onset forecast has an error margin of four days, IMD said in a statement. The normal onset of monsoon over the Kerala coast is around June 1. However, last year, monsoon rains had hit the Kerala coast four days after June 1 onset forecast. IMD said monsoon normally advances over the Andaman Sea around May 20, with a standard deviation of about one week. However, this year, under the influence of tropical cyclone Mahasen, currently located over the central Bay of Bengal, monsoon may advance over the Andaman Sea slightly earlier than the normal date. However, the onset over Andaman has little bearing on the date of onset over Kerala or on the seasonal monsoon rainfall over the country, it added. For the year ahead, IMD has predicted that monsoon is most likely to be normal. Quantitatively, the average rainfall is expected to be 98 per cent of the normal long period average (LPA) of 89 cm during the four-month season starting June 1 to September 30. (Source:
Business Line)

Brazil ethanol demand to cut global sugar surplus -Copersucar

Demand from Brazil's biofuels industry will cut the burgeoning global sugar surplus, helping cushion prices that fell below 17 cents per lb for the first time in almost three years, the chief of the world's biggest producer said on Wednesday. The Brazilian government mandated an increase in the amount of ethanol in fuel blends from 20 to 25 percent beginning on May 1. It has also reduced taxes to boost consumption beginning in May, & increased gasoline prices earlier this year.
(Source:Reuters)

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Commodities Daily Report

Thursday| May 16, 2013

Agricultural Commodities
Chana
Emergence of demand at lower levels is seen supporting an upside in the chana prices since last two sessions. However, higher supplies and record output expectations are capping sharp upward movement in the prices. Chana Spot as well as Futures settled 0.47% and 0.51% higher on Wednesday. Higher supplies of the new crop from the major producing states such as Madhya Pradesh, Rajasthan and Maharashtra was a major reason attributed to recent fall in chana prices. However, supplies are expected to slow down towards the end of the month. Also, stockists are building inventories at lower levels to meet the demand for the entire season. Thus, tracking seasonality pattern, chana prices may start recovering gradually from June onwards.

Market Highlights
Unit Rs/qtl Rs/qtl Last 3383 3362 Prev day 0.47 0.51

as on May 15, 2013 % change WoW MoM -0.49 -6.67 0.06 -8.14 YoY -20.79 -20.07

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 output of 8.2 mn tn in 2012-13. Erratic weather in M.P. lowered the yield.
rd

Source: Telequote

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

valid for May 16, 2013 Resistance 3440-3460

3380-3400

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 prices may open marginally lower, however, prices may recover and remained firm thereafter on account of robust buying by the stockiest at lower levels. Sharp upside may be capped on account of higher arrivals. Seasonal pattern in chana indicates that prices may generally bottom out in May when arrivals reach their peak, while they start recovering gradually June onwards with declining supply pressure. On the downside, we dont expect chana prices to go below Rs 3200 per qtl levels as this being the MSP levels farmers may hold back their stock. Considering the record output expectatations and seasonal patterns and demand side fundamentals, we expect chana prices to trade in the range of Rs 3200- Rs 3800 per qtl over the medium term (3 months).

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Commodities Daily Report

Thursday| May 16, 2013

Agricultural Commodities
Sugar
Sugar prices remained flat in the physical markets as higher supplies is seen offsetting summer season demand. However, futures settled 0.4% higher as sentiments are positive after government notified partial sugar decontrol. Prices recovered last week 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. 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 w.e.f beginning of trading day Monday, May 13, 2013. 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. 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 3063

as on May 15, 2013 % Change Prev. day WoW 0.07 0.81 MoM -0.15 YoY 2.85

Rs/qtl

3074

0.42

3.40

5.06

4.03

Source: Reuters

International Prices
Unit Sugar No 5- LiffeAug'13 Futures Sugar No 11-ICE July '13 Futures $/tonne $/tonne Last 477.6 376.67

as on May 15, 2013 % Change Prev day WoW -0.08 -0.41 -1.97 -2.98 MoM -8.10 -4.72 YoY -15.51 -16.91

.Source: Reuters

Technical Chart - Sugar

NCDEX June contract

Domestic Production and Exports

According to ISMA, Indias Sugar production between October April 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 higher 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: Telequote

Global Sugar Updates

Benchmark raw sugar on ICE broke below 17 cents a lb on Wednesday to lows unseen in nearly three years and settled 0.4% on expectation of a record sugar cane crop in Brazil. However, there are reports that Demand from Brazil's resurgent biofuels industry will cut burgeoning global sugar surplus, helping cushion prices that fell below 17 cents per lb for the first time in almost three years. 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. Sugar production in Brazil's main cane belt surged in April, outpacing last year's early harvest by 210 percent, as rains cleared in the middle of last month to allow crushing.

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

valid for May 16, 2013 Resistance 3076-3090

3027-3045

Outlook
Although higher supplies and weak international markets may cap sharp upside in the prices, overall sentiments for domestic sugar remain positive on account good demand from bulk manufacturers at such low levels. Also, government has notified cabinets decision to remove two key controls on sugar sector, which may keep sentiments upbeat.

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Commodities Daily Report

Thursday| May 16, 2013

Agricultural Commodities
Oilseeds
Soybean: soybean futures settled 0.4% lower on weak meal
exports prediction of a normal monsoon by IMD. Indias soy meal exports for the month of April 2013 were 99.451 tonnes, lower by 68.31 percent from 313,832 tonnes a year ago. According to the 3rd advance estimates, Soybean output is pegged at 14.14 mn tonnes. IMDs forecasts of normal monsoon have raised hopes of better output next season too.
Soybean Spot- NCDEX (Indore) Soybean- NCDEX May '13 Futures Ref Soy oil SpotNCDEX(Indore) Ref Soy oil- NCDEX May '13 Futures

Market Highlights
% Change Unit Rs/qtl Rs/qtl Rs/10 kgs Rs/10 kgs Last 4080 4083 725.5 723.4 Prev day -0.20 -0.58 -0.34 -0.32

as on May 15, 2013

WoW 1.02 1.42 0.19 1.15

MoM 1.42 2.38 0.35 0.42

YoY 20.50 23.67 0.03 -0.97

International Markets
CBOT Soybean near month contract remained flat while May contract expired on Wednesday. According to the weekly crop progress report, only 6% has been planting as against 43% last year and five year average of 24%. There are delays in planting in the Midwest. However, large South American crop coupled with forecasts for US weather to improve in the coming week have capped sharp gains. NOPA reported that the soybean crush fell to 120.11 million bushels in April, from 137.08 million in March. China is forecast to import a record 66 mn tn of soy in 2013/14, 11% higher than the estimates of current season, driven by robust domestic demand and low stocks.

Source: Reuters

as on May 15, 2013 International Prices Soybean- CBOTJuly'13 Futures Soybean Oil - CBOTJuly'13 Futures Unit USc/ Bushel USc/lbs Last 1413 49.35 Prev day -7.33 0.18 WoW -4.48 1.42 MoM 1.27 2.43
Source: Reuters

YoY -0.02 -4.12

Crude Palm Oil

as on May 15, 2013 % Change Prev day WoW 0.00 -0.02 0.75 1.90

Refined Soy Oil: Ref soy oil settled 0.32% lower tracking weak
bean prices. MCX CPO also settled 0.04% lower on account of weak KLCE palm oil futures. India's palm oil imports declined for a third straight month in April. But India, the world's largest importer of edible oils, is still on track to surpass last year's record purchases of 10 million tonnes of cooking oil as demand rises. Exports of Malaysian palm oil products from May 1 to 15 inched down 7.6 percent to 599,300 tonnes from 648,275 tonnes shipped during April 1 to 15. Stocks data from industry regulator the Malaysian Palm Oil Board showed inventory levels at the end of April down 11.3 percent to 1.93 million tonnes against the previous month's 2.17 mn tn.
Unit
CPO-Bursa Malaysia June '13 Contract CPO-MCX- May '13 Futures

Last 2280 467.5

MoM -0.87 1.87

YoY -28.66 -19.93

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 3500 3476 Prev day 0.04 -0.09 WoW 2.68 2.12

as on May 15, 2013 MoM -1.30 -1.72

Source: Reuters

YoY -9.55 -8.53

Rape/mustard Seed: Mustard Futures witnessed profit booking

and settled 0.09% lower on Wednesday. Prices had gained last week on account of lower level demand. Higher supplies of the new crop coupled with higher output expectations led to a sharp decline in the prices since April. 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%.

Technical Chart Soybean

NCDEX June contract

Outlook
Soybean prices are expected to trade with a positive bias on account of poor supplies in the domestic markets coupled with positive international markets. However, forecast of a normal monsoon coupled with weak meal export demand may cap sharp gains. 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.

Source: Telequote

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 16, 2013 Support 692-695 3850-3900 3480-3500 462-464 Resistance 699-702 3980-4005 3525-3550 469-472

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Commodities Daily Report

Thursday| May 16, 2013

Jeera Agricultural Commodities

Jeera remained under downside pressure yesterday extending previous days losses on account of profit taking. Jeera prices have gained on reports of improvement in overseas enquiries. Arrivals have also declined from their peak in mid April. Demand from stockists and exporters also emerged at lower levels. The spot settled 0.7% higher while the June Futures settled 0.6% lower on Wednesday. Over the last few months, prices have declined sharply on the back of higher production estimates. 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. Due to the ongoing geo-political tensions in Syria and Turkey, supply concerns from these two major exporting countries still exist. Expectations are that export orders may continue to 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 May '13 Futures Rs/qtl Rs/qtl Last 13569 13120 Prev day 0.70 -0.32

as on May 15, 2013 % Change WoW 1.55 2.42 MoM -1.32 -3.05 YoY -1.39 -2.09

Source: Reuters

Technical Chart Jeera

NCDEX June contract

Production, Arrivals and Exports

Arrivals in Unjha were reported at 13,000 lakh bags on Wednesday. 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 -0.59 0.10

as on May 15, 2013 % Change

Outlook
After correcting yesterday, Jeera Futures is expected to trade higher today. Improvement in overseas as well as domestic demand may support prices. However, higher output may cap sharp gains. Overall trend remain positive for the Jeera prices due to overseas demand as Syria & Turkey have stopped shipments which may keep prices firm.
Unit Turmeric SpotNCDEX (N'zmbad) Turmeric- NCDEX May '13 Futures Rs/qtl Rs/qtl Last 5942 5794

WoW -1.20 -2.72

MoM -15.39 -17.51

YoY 66.04 58.05

Turmeric
Turmeric June Futures remained under downside pressure yesterday and settled 0.69% lower on Wednesday on account of weak domestic as well as overseas demand coupled with huge carryover stocks. However, there are expectations of improvement in overseas demand in June ahead of Ramadan. Unseasonal rains in Andhra Pradesh have damaged about 9240 tonnes of turmeric earlier. Special Margin of 10% on the Long Side on all the running contracts in Turmeric have been withdrawn wef beginning of day Thursday, May 16, 2013.

Technical Chart Turmeric

NCDEX June contract

Production, Arrivals and Exports

Arrivals in Erode and Nizamabad mandi were reported at 4,000 and 5,000 bags respectively on Wednesday. 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 due to weak demand coupled huge carryover stocks. However, withdrawal of margins coupled with expectations of improvement in demand from exporters as well as stockists may support prices. 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 16, 2013

Support 13060-13120 5500-5600 Resistance 13250-13310 5850-6020

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Commodities Daily Report

Thursday| May 16, 2013

Agricultural Commodities
Kapas
NCDEX Kapas as well as MCX Cotton traded on a flat note yesterday and settled 0.24% higher and 0.17% lower respectively. Offloading of stocks by the CCI in the open markets have pressurized prices. Prices are also 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. However, some improvement in prices in the international markets has supported prices at lower levels. 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 1026 17910

as on May 15, 2013 % Change Prev. day WoW 0.24 -1.16 -0.17 -0.17 MoM YoY 14.13 0.69 -0.17 6.23

NCDEX Kapas Apr Futures MCX Cotton May Futures

Source: Reuters

International Prices
ICE Cotton Cot look A Index Unit USc/Lbs Last 86.45 94

as on May 15, 2013 % Change Prev day WoW -0.54 0.29 0.80 -0.63 MoM 2.51 0.97 YoY 9.21 7.49

Source: Reuters

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.

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 corrected by 0.54% on account of profit taking and a stronger Dollar. Concerns over delayed plantings in the US coupled with continued dry weather in Texas has supported prices at lower levels as it has renewed concerns over delayed supplies. China cotton imports declined 18.5% in April compared to March. 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. 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.

Source: Telequote

Technical Chart - Cotton

MCX May contract

Outlook
We expect Cotton prices to trade with a negative bias today 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. Positive prices in the international markets may also support prices at lower levels. Also, farmers may not liquidate their stocks at lower prices unless they are in need of cash. US cotton planting intentions were reported at a 4 year low. China will continue its stockpiling policy, may also support prices.

Source: Telequote

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

valid for May 16, 2013 Support 1005-1015 17780-17850 Resistance 1035-1050 17990-18070

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