Commodities Daily Report

Thursday| August 30, 2012

Agricultural Commodities

Content
News & Market Highlights Chana Sugar Oilseed Complex Spices Complex Mentha Potato

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

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Commodities Daily Report

Thursday| August 30, 2012

Agricultural Commodities
News in brief
Better rains to support sowing of rabi crops
Rainfall is expected to be better next month as monsoon is unlikely to be influenced by El Nino weather pattern, helping rice and other kharif crops, Agriculture Secretary Ashish Bahuguna said. El Nino refers to abnormal warming of surface ocean waters in the Pacific that disrupts the weather pattern causing drought and floods in many regions of the world. I dont think the September rains will be impacted due to El Nino. Even if El Nino temperature do increase, I do not think, it will impact our monsoon. It may affect other parts of the world, Bahuguna said. So far, monsoon deficit is 13 per cent. However, the seasonal rains have revived because the Indian Ocean Dipole (IOD), known as Indian Nino, is now favourable, he said. (Source: Business Line)

Market Highlights (% change)

Last Prev. day

as on Aug 29, 2012

WoW MoM YoY

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

17491 5288 55.69 95.49 1660

-0.80 -0.88 0.04 -0.54 2.71

-2.00 -2.31 0.35 -1.82 1.37

5.11 4.85 0.36 6.82 2.77

7.40 8.16 21.09 12.13 -5.38

Source: Reuters

Withdrawal of Special Margin on Soyabean contracts

As per circular issued by NCDEX, Special Margin of 20% (in cash) on the Long side in Soyabean November 2012 contract and all other subsequent running and yet to be launched contracts will be withdrawn with effect from beginning of day Friday, August 31, 2012. Further, please note that the October 2012 contract shall continue to be subject to special margin of 20% (in cash) on the Long side. (Source: NCDEX)

PMs council wants sops on power for agri, canal water to go

The Prime Ministers Economic Advisory Council (PMEAC) has called for urgent reforms in agriculture and allied sectors to boost farm production. In particular, it has called for an end to subsidies for power in agriculture and canal water for irrigation. Expressing concern over the slow pace of reforms in agriculture in its Economic Outlook presented earlier this month, the council said that agriculture has benefitted more from reforms in other sectors. Two major reasons for the slow pace of reforms were the perception that given the large number of farmers being small or marginal, their capacity to absorb shocks was limited and the responsibility of reforms in agriculture being vested with the States as it is their subject. (Source: Business Line)

Preponement of expiry of Castor Seed contract expiring on September 20, 2012

As per circular issued by NCDEX, on account of closure of the physical markets at the basis centre, Deesa, the Castor Seed contract scheduled to expire on September 20, 2012 shall now expire on September 18, 2012. Though the expiry date on Market Watch screen would remain unchanged, the last trading day for the Castor Seed contract will now be September 18, 2012. (Source: NCDEX)

Govt asks private cos to build strong agri-linkages

In order to improve food value chain performance, the Agriculture Ministry on Wednesday asked private firms to help build strong linkages between farm production and markets. Entry of business houses in agriculture linkages is not clearly having visible impact on farmers because backward linkages are not complete. There is a lot of room to grow, Agriculture Secretary Ashish Bahuguna said. Stating that strong backward linkages will help both farmers and consumers, Bahuguna recommended private companies to roll out a model in states and demonstrate its efficacy. He also said that addressing one particular bottleneck in the food value chain will not serve the purpose, the entire linkages between farm to market need to be strengthened to see its visible impact on farmers and consumers. (Source: Business Line)

Vietnam buys 40,000 T Argentina soymeal - traders

Feed mills in Vietnam have bought 40,000 tonnes of soymeal from Argentina for around $685 a tonne including cost and freight, traders said. The trade follows recent Thai purchases of up to 1 million tonnes, as Asian buyers resume buying after high prices kept them away for more than two months. (Source: Economic Times)

US grain sector on high alert for aflatoxin in drought-hit corn

The grain industry, makers of milk products and crop insurers are on high alert for a naturally occurring toxin in corn that could present another challenge to farmers already hit by the worst drought in 56 years. Trace amounts of aflatoxin have shown up in some of the corn harvested in the United States, with top U.S. dairy company Dean Foods DF.N in talks with state officials in Indiana and Iowa about testing milk for the carcinogenic byproduct of mold. Any major outbreak has the potential to snarl the grain handling system in the Corn Belt and trigger a scramble -- and price spike -- for untainted corn which will already be in short supply this year due to the drought. "We've actually seen it this bad before, but this year it's just a lot more widespread," said Jeffrey Richter, manager of a Missouri Department of Agriculture grain inspection facility in St. Joseph, Missouri. His office was testing corn samples from Kansas, Nebraska and Iowa and finding some level of aflatoxin in most of them. Richter said most of his site's samples were sent by crop insurance adjusters who suspect a problem with the grain. Aflatoxin is the byproduct of a powdery, olive-green mold that has emerged in corn fields from Kansas through Indiana and is harmful or even fatal to livestock. The presence of the mold does not necessarily lead to aflatoxin. (Source: Reuters)

FAO predicts lower rice output in Kharif season

Indias milled rice production is expected to decline 6 per cent to 98.5 million tonnes in the current kharif (summer sowing) season due to late onset of monsoon rains leading to deficit in key northern and southern growing areas, United Nations body FAO said. The Food and Agriculture Organisation said in its latest report that the delay and fall in sowing in the current season was on account of insufficient rains and shortages in irrigation facilities. FAO tentatively forecast the 2012 aggregate rice production in India at 98.5 million tonnes (milled basis), which is 6 per cent lower than the good level of the previous year, FAO said in a statement. Production from the kharif season amounts to about 53 per cent of the total annual cereal output and about 88 per cent of the main staple, rice, it added. However, the crop output of this season will depend on the rainfall progress during the last month of monsoon, the UN body added. (Source: Business Line)

Russias Government Scheduled to Discuss Grain Crop on Aug 31

Russian Deputy Prime Minister Arkady Dvorkovich is scheduled to lead a meeting with some government members and agriculture industry experts and participants to discuss harvesting data and grain exports on Aug. 31, according to his press service. The meeting is to follow up on a similar gathering on Aug. 8, after which Dvorkovich said the grain market had no need for immediate interventions such as grain sales from state stockpiles or export curbs in the 2012 calendar year. (Source: Bloomberg)

FMC Likely To Launch New Contracts In Guar

Trading in guar complex futures had stopped in March 2012 following rise in prices amid lower output and good demand. FMC is likely to launch new contracts in guar after studying the size of the kharif guar crop. In order to provide fair practices in the market, the crop output should be sizeable enough to meet demand. Preliminary crop estimates are likely by third week of September October. (Source: Agriwatch)

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Commodities Daily Report

Thursday| August 30, 2012

Agricultural Commodities
Chana
NCDEX Chana September futures as well as spot settled higher by 0.84% and 1.19% on Wednesday on account of reemergence of fresh demand lower price levels. Although Monsoon has recovered in the month of August in Northwest and Central India that may prove beneficial for the chana sowing, the overall fundamentals still remain supportive for the prices on account of supply tightness. The Cabinet Committee on Economic Affairs approved the Minimum Support Prices (MSP) for Arhar (Tur) and Moong for 2012-13 season. The MSP for Arhar has been fixed at Rs.3850 per quintal and of Moong at Rs.4400 per quintal marking an increase of Rs.650 per quintal and Rs.900 per quintal respectively. Government released fourth advance estimates wherein it revised upward Chana output at 7.58 mn tn from 7.4 mn tonnes estimated in the third advance estimates and 8.22 mn tn in 2010-11.

Market Highlights
Unit Rs/qtl Rs/qtl Last 4794 4689 Prev day 1.19 0.84

as on Aug 29, 2012 % change WoW MoM -0.10 -3.52 -1.80 -0.66 YoY 31.34 31.46

Chana Spot - NCDEX (Delhi) Chana- NCDEX Sept '12 Futures

Source: Reuters

Technical Chart - Chana

NCDEX Sept contract

Sowing progress and demand supply fundamentals

According to the Ministry of Agriculture 88.3 Lakh hectare area has been th planted under Kharif pulses as on 24 August, 2012 compared to 99.78 lakh hectare (ha) same period last year. Sowing is reported lower mainly in Rajasthan. Rajasthan Agriculture Department states that, planted area under Kharif Pulses is down at 15.33 lakh hectares ha compared to 24.14 lakh ha same th period last year. (Dated 17 August, 2012). Sowing which was down by more than 55% has gained momentum after improvement in rainfall in the last one week and is now down by 35%. In Maharashtra, Kharif Pulses sowing is down by 7% at 18.63 lakh hectares. While in AP it is up by 5% at 6.98 lakh hectares. According to the Fourth advance estimates, Pulses output is pegged at 17.21 mn tn in 2011-12 compared with 18.24 mn tn produced in the year 2010-11. While Chana output in 2011-12 is estimated at 7.58 million tones, Tur is estimated at 2.65 million tones, Urad is estimated at 1.83 million tones, Moong is estimated at 1.71 million tones. As per the latest release, Ministry of Commerce & Industry revealed that 20.23 lakh tones of peas, 2.03 lakh tons of Chana, 4.32 lakh tons of Urad & Moong, 1.12 lakh tons of Masoor and 4.26 lakh tons of Tur has been imported by India during April11-March 12. 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) India's consumption of pulses is on the rise, while the growth in output in not consistent amid vagaries of weather, which may lead to increase in imports this year. However, rupee weakness may turn import costlier.
Source: Telequote

Technical Outlook
Contract Chana Sept Futures Unit Rs./qtl

valid for Aug 30, 2012 Support 4560-4608 Resistance 4688-4725

Outlook
Chana prices may extend the gains of the previous sessions on account of emergence of fresh demand at lower price levels In the medium term to long term, the trend remains positive as supplies may not be sufficient to meet the rising demand of the commodity. Also lower sowing of kharif pulses may support chana prices.

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Commodities Daily Report

Thursday| August 30, 2012

Agricultural Commodities
Sugar
Sugar spot settled 2.5% higher on Tuesday amid various factors that include emergence of festive season demand, Poor rains, and concerns over Sugar output in Maharashtra amid divergence of cane towards fodder etc. However, futures corrected tracking international markets as well as profit booking and thus settled 0.63% lower on Wednesday. With chances of El Nino weather pattern receding, the Agriculture Ministry hopes that rainfall in September would be better than earlier forecast. Apart from the 45 lakh tonnes quota released during the start of the quarter Jul-Sept, government released additional 2.66 lac tn to be sold off by 31st August. Sugar mills have been directed to sell at least 70% of July-September quota (45 lakh tonnes) by August. Another additional quota of 4 lac tn has also been released on 7th August, 2012 to be sold off by 31stAugust. The quota is sufficient to meet the festive season demand and thus helped contain prices. In the international markets Liffe Sugar as well as ICE sugar settled 0.55% and 1.84% lower respectively on Wednesday.

Market Highlights
Unit Sugar Spot- NCDEX (Kolkata) Sugar M- NCDEX Sept '12 Futures Rs/qtl Last 3722

as on Aug 29, 2012 % Change Prev. day WoW 2.52 1.31 MoM 0.99 YoY 24.47

Rs/qtl

3482

-0.63

2.14

-1.78

23.83

Source: Reuters

International Prices
Unit Sugar No 5- LiffeOct'12 Futures Sugar No 11-ICE Oct '12 Futures $/tonne $/tonne Last 556.8 439.11

as on Aug 29, 2012 % Change Prev day WoW -0.55 -1.84 1.62 -0.10 MoM -9.35 -12.26 YoY -27.01 #N/A

Domestic Production and Exports

The area under sugarcane is estimated at 52.88 lakh ha for 2012-13 crop season, up from 50.63 lakh ha on same period a year ago. Despite of higher acreage, the producers body has estimated next years output lower at 25mn tn, down by 1mn tn compared to the current year. Sugar production in India the worlds second-biggest producer touched 26 million tonne since October 1, 2011. Industry body ISMA has estimated 7 mn tn stocks for the new season beginning October 01, 2012 compared to 5.5 mn tn year ago. India may exports 2.5-3 mn tn sugar in 2012-13. India will likely produce 25 million tonne of sugar in 2012-13 factoring in dry spells in biggest producer Maharashtra as well as Karnataka. With the opening stocks of 7 mn tn, domestic Sugar supplies are estimated at 32mn tn against the domestic consumption of around 22.523 mln tn for 2012-13. Thus, no curbs on exports are seen as of now.

Source: Reuters

Technical Chart - Sugar

NCDEX Sept contract

Source: Telequote

Global Sugar Updates

Brazilian cane mills produced 3 mn tn of sugar in the first half of August thanks to dry weather. Unica in its latest report stated said that total sugar output since the start of the crushing season is still down 12 percent from the same period a year ago. Brazil exported 2.489 million tons of sugar, raw value, up from 1.692 million tons in June but lower from 3.06 million tons sugar exported last year same period. The global sugar surplus remains on target to fall in 2012/13 season, though declines will be less than previously suggested, while adverse weather in several producers may stop prices dropping far below recent levels. (Source: Reuters) According to the International Sugar Organization (ISO), the global sugar surplus is forecast to halve to around 3 mln tn in 2012/13 (OctoberSeptember) from a surplus of 6.5 million tonnes in 2011/12).

Technical Outlook
Contract Sugar Sept NCDEX Futures Unit Rs./qtl

valid for Aug 30, 2012 Support 3448-3480 Resistance 3543-3568

Outlook
Sugar prices are expected to trade sideways on account of mixed views over next years output. Although sufficient supplies may keep the upside capped, sharp downside will also be restricted amid emergence of fresh demand at lower levels amid festive season ahead.

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Commodities Daily Report

Thursday| August 30, 2012

Agricultural Commodities
Oilseeds Soybean: Soybean Spot declined by 0.7% on Wednesday owing
to good rains and higher However, futures witnessed short coverings and thus settle higher by 0.81% on Wednesday. CBOT Soybean settled higher by 1.77% on Tuesday due to increase in export demand from China. According to the newsletter, Pro farmer, Soybean production was seen at 2.60 bn bushels on a yield of 34.8 bushels/ acre, lower compared to the USDAs soybean output estimates of 2.692 billion bushels and yield at 36.1 bushels/ acre. Brazils grain Association expects the number 2 producers of soybean to produce record 81.3 mn tn in 2012-13. Planting in Brazil would commence from Sept. 15 & exports may soar to 37.5 mn tn, beating the 33.8-mn tn record in 2010/11 crop. According to weekly crop progress report, the condition of U.S soybeans declined to 30% during last week from 31% in good to excellent condition due to weather concerns in the US Midwest. th USDA released its monthly crop report on 10 August wherein its cut U.S. 2012/13 soybean production forecast to 2.692 billion bushels, from 3.05 billion in July. India's oil meal exports fell to 2.75 lakh tn in July from 2.82 lakh tn a year earlier led by a sharp drop in the overseas sales of rapeseed meal. Soy meal exports rose to 1.68 lakh tn in July, from 1.39 tn a year ago. In the domestic markets, as on 24 August Oilseeds have been sown in 164.29 lakh hectares so far, compared with 169.94 lakh hectares same period last year. Soybean area is higher at 106.4 lakh hectares. In 2011-12 season, soybean was sown under 102.9 lakh hectares area and recorded 12.28 million tonne output, down from 12.73 mn tn in 2010-11 season. Refined Soy Oil: NCDEX Soy Oil settled higher taking cues form the oilseeds complex. However, MCX CPO settled lower by 0.9% on Wednesday. As per Intertek Testing Services, Malaysian palm oil product exports during Aug 1-25 rose 5.7 percent to 1,084,343 compared to 1,026,153 tonnes shipped in July 1-25. India imported 112,611 tonnes of refined palm oil in July, down 9.28 percent from June. Total vegetable oil imports in July were 870,328 tonnes, up from 783,315 tonnes in the previous month (Source: Sea of India). Although, Malaysia's July palm oil stocks rose 17.6 percent to 1,998,870 tn from a revised 1,699,117 tn in June, the export demand is expected to regain momentum amid supply shortage of edible oil globally. Indonesia, the world's top palm oil producer, has lowered its earlier output forecast by 8 percent to 23.6 million tonnes this year.
th

Market Highlights
Unit Soybean Spot- NCDEX (Indore) Soybean- NCDEX Oct '12 Futures Ref Soy oil SpotNCDEX(Indore) Ref Soyoil- NCDEX Aug '12 Futures Rs/qtl Rs/qtl Rs/10 kgs Rs/10 kgs Last 4521 4033 788.4 798.3

as on Aug 29, 2012 % Change Prev day -0.77 0.81 -0.67 0.03 WoW -1.18 0.56 0.05 -0.55 MoM 1.44 -7.27 0.92 1.77 YoY 96.82 74.19 18.34 19.64

Source: Reuters

as on Aug 29, 2012 International Prices Soybean- CBOTSept'12 Futures Soybean Oil - CBOTSept '12 Futures Unit USc/ Bushel USc/lbs Last 1763 56.64 Prev day 1.77 1.63 WoW 0.87 0.84 MoM 6.91 9.81
Source: Reuters

YoY 27.82 -1.15

Crude Palm Oil

% Change Unit
CPO-Bursa Malaysia Sept '12 Contract CPO-MCX- Aug '12 Futures

as on Aug 29, 2012

Last 2915 555

Prev day -1.98 -0.91

WoW -3.09 -1.58

MoM 2.10 -2.63

YoY -14.26 10.34

MYR/Tonne Rs/10 kg

Source: Reuters

RM Seed
Unit RM Seed SpotNCDEX (Jaipur) RM Seed- NCDEX Sept '12 Futures Rs/100 kgs Rs/100 kgs Last 4310 4437 Prev day -0.92 0.18

as on Aug 29, 2012 WoW 3.85 0.84 MoM 1.83 0.61

Source: Reuters

YoY 47.10 #N/A

Technical Chart Soybean

NCDEX Oct contract

Rape/mustard Seed: Mustard seed prices settled range bound on

Wednesday while spot settled marginally lower on account of subdued demand. Mustard output was lower in 2011-12 season. However, with higher returns and improved rains, next years output is expected to be better. According to a circular issued by NCDEX, existing Special Cash Margin of 5% on the Long side shall be increased to 15% on all the running and yet to be launched contracts w.e.f beginning of 18/07/2012.

Source: Telequote

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

valid for Aug 30, 2012 Support 789-792 3925-3970 4370-4400 555.80-558 Resistance 802-806 4040-4080 4455-4475 566-568

Outlook
Oilseed may trade sideways. Higher international prices and good export demand for soy meal may support prices at lower levels. However, good rains in Madhya Pradesh and other parts of India may also lead to a downside movement in the prices in the coming days.

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Commodities Daily Report

Thursday| August 30, 2012

Agricultural Commodities
Black Pepper
Pepper Futures corrected yesterday due to profit booking after gaining over the last three sessions. The Spot markets remained closed due to Onam, a local festival, and will reopen on Thursday. Farmers are also unwilling to sell their stocks at lower levels. Lower demand for Indian pepper in the international markets due to huge price parity has also capped any sharp upside. Good supplies from Indonesia have also pressurized the prices. The Futures settled 1.27% lower on Wednesday. th According to the circular released on June 13 2012 the existing Special margin of 10% (cash) on the long side stands withdrawn on all running contracts and yet to be launched contracts in Pepper from beginning of day Friday June 15, 2012. Pepper prices in the international market are being quoted at $8,0008,400/tonne(C&F) while Indonesia Austa is quoted at $6300-6400/tonne (FOB). Vietnam was offering its produce at $6,000/tonne for 500 GL. Brazil was offering its pepper at $6,150/tonne for the B-Asta grade. As per circular dt. 29/06/2012 issued by NCDEX, Hassan will be available as an additional delivery centre for all the yet to be launched contracts. (not applicable to the currently available contracts-till Dec 2012 expiry).

Market Highlights
% Change Unit Pepper SpotNCDEX (Kochi) Pepper- NCDEX Sept '12 Futures Rs/qtl Rs/qtl Last 41088 41510 Prev day 0.00 -1.27

as on Aug 29, 2012 WoW 0.23 -0.65 MoM -3.80 -4.67 YoY 20.06 16.81

Source: Reuters

Technical Chart Black Pepper

NCDEX Sept contract

Exports
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 black pepper in 2012 are forecasted at around 1,25,000 tonnes. Exports of Pepper from Vietnam during January till June 2012 is estimated around 73000 mt 73,000 mt, higher by 4.3% in volume and 31.7% in value compared to corresponding year last year. Exports of Pepper from Brazil during January till May 2012 are estimated around 13369 mt. (Source: Peppertradeboard). Pepper imports by U.S. the largest consumer of the spice declined 14.8% in the first 2 months of the year (2012) to 8810 tn as compared to 10344 tn in the same period previous year. Imports of Pepper in the month of February declined by 16.8% to 3999 tn as compared to 4811 tn in the month of January 2012. 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. During May 2012 Brazil exported 1,705 tonnes of pepper as against 1600 tn in May 2011.

Source: Telequote

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

valid for Aug 30, 2012 Support 41550-41800 Resistance 42300-42570

Production and Arrivals

There arrivals in the spot market were reported at 20 tonnes while offtakes were 20 tonnes on Monday. Global Pepper production in 2012 is expected to increase 7.2% to 3.20 lakh tonnes as compared to 2.98 lakh tonnes in 2011 with sharp rise of 24% in Indonesian pepper output and in Vietnam by 10%. According to latest report pepper output in Vietnam is estimated to be 1.35 lakh tonne as compared to 1.10 lakh tonne estimated early in the beginning of year (2012). 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) On the other hand production of pepper in India in 2011-12 is expected to decline further by 5% to 43 thousand tonnes as compared to 48 thousand tonnes in the last year. Production is lowest in a decade.

Outlook
Pepper prices are expected to trade sideways today. Lack of supplies may support prices at lower levels. The spot markets will remain closed due to Onam. However, prices may correct due to lower demand at higher levels in the domestic as well as international markets.

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Commodities Daily Report

Thursday| August 30, 2012

Agricultural Commodities
Jeera
Jeera Futures corrected yesterday on reports of good rains in northern part of Gujarat, the main Jeera growing region. Good rains are expected improve moisture levels which may increase prospects of better yield next season. However, prices recovered from its days lows towards the end on expectations that export demand may re-emerge at lower levels. Supply concerns from Syria and Turkey still exists. The Spot as well as the Futures settled 0.19% and 1.07% lower on Wednesday. Expectations are that export orders may still be diverted to India from the international markets due to the ongoing civil war in Syria which is hampering supplies. There are reports that there has been an increase in demand from Bangladesh for Indian Jeera. Production in Syria and Turkey is being reported around 17,000 tonnes and around 4,000-5,000 tonnes, lesser than expectations. Jeera prices in the international market of Indian origin are being offered at $3,000 tn (c&f) while Syria and Turkey are not offering their produce. Carryover stocks of Jeera in the domestic market is expected to be around 7-8 lakh bags as compared to 4-5 lakh bags in the last year.

Market Highlights
Unit Jeera SpotNCDEX(Unjha) Jeera- NCDEX Sept '12 Futures Rs/qtl Rs/qtl Last 15562 14608 Prev day -0.19 -1.07

as on Aug 29, 2012 % Change WoW -2.78 -5.25 MoM -3.64 -7.68 YoY 1.05 #N/A

Source: Reuters

Technical Chart Jeera

NCDEX Sept contract

Production, Arrivals and Exports

Unjha markets witnessed arrivals of 4,000 bags, while off-takes stood at 4,000 bags on Wednesday. Production of Jeera in 2011-12 is expected to be around 40 lakh bags as compared to 29 lakh bags in 2010-11 (each bag weighs 55 kgs). (Source: spot market traders). According to Spices Board of India, exports of Jeera in April 2012 stood at 2,500 tonnes as compared to 2,369 tonnes in April 2011, an increase of 6%.

Source: Telequote

Market Highlights
Prev day 0.08 -3.31

as on Aug 29, 2012 % Change

Outlook
Jeera prices are expected to trade sideways. Good rains in Gujarat may pressurize the prices. However, revival of export demand at lower levels may support prices at lower levels. In the medium to long term (Aug-September 2012) prices are likely to witness a bounce back as there are limited stocks with Syria and Turkey and crop there is 30% short as compared to last year.
Turmeric SpotNCDEX (N'zmbad) Turmeric- NCDEX Sept '12 Futures

Unit Rs/qtl Rs/qtl

Last 5610 6020

WoW 3.16 3.29

MoM 6.30 8.74

YoY 9.04 34.20

Turmeric
Turmeric Futures opened up sharply hitting the 2% upper circuit but corrected hitting the 4% lower circuit due to profit booking after the gaining over the last three days. However, the spot remained positive as farmers and stockists are tracking monsoon progress and thus, not selling their stocks anticipating better prices in the coming days. Export demand is lower as orders from Pakistan have been met. Sowing is also reported 30-35% lower during the sowing period. th Turmeric has been sown in 0.49 lakh hectares in A.P as on 22 August 2012. The Spot as well as the Futures settled 2% and 4% higher respectively on Tuesday. The pre expiry margin on Turmeric has been increased to 5% for last 7 trading days increased on a daily basis on both buy and sell side from the existing 3% on daily basis for last 5 days.

Technical Chart Turmeric

NCDEX Sept contract

Source: Telequote

Production, Arrivals and Exports

Arrivals in Nizamabad mandi stood at 2,000 bags while the Erode mandi remained closed on Wednesday. Turmeric production for the year 2011-12 is projected at historical high of 90 lakh bags (1 bag= 70 kgs) compared to 69 lakh bags in 201011. Erode is expected to produce 55 lakh bags of turmeric a rise of 29% as compared to previous year. 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.

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

valid for Aug 30, 2012 Support 14400-14635 6070-6140 Resistance 14970-15180 6350-6440

Outlook
Turmeric prices are expected to continue to trade sideways taking cues from lower sowing figures as well as reports of export demand from Pakistan. Traders also expect fresh export orders in the coming days. However, improving weather conditions may cap sharp gains.

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Commodities Daily Report

Thursday| August 30, 2012

Agricultural Commodities
Mentha Oil
Mentha oil Futures traded on a flat note yesterday due to lack of fresh fundamentals. Demand is lower from Gutkha and Pan Masala due to ban in many states. However, expectations that stockists may buy at lower levels have supported prices at lower levels.. The spot settled 0.18% higher while the Futures settled 0.1% lower on Wednesday. Total Special Cash margin of 25% on the long side of Mentha Oil has been reduced to 10% in the May contract and 5% in June contract onwards from May 5, 2012. For detailed reference please refer to the Circular No: MCX/T&S/180/2012 dated 03/05/2012.

Market Highlights
Unit Mentha Oil- MCX Spot (Chandausi) Mentha Oil MCX Aug Futures Rs/qtl Rs/qtl Last 1518 1319 Prev day 0.18 -0.10

as on Aug 29, 2012 % Change WoW -0.14 -0.54 MoM 2.73 -4.86 YoY 14.97 -0.11

Source: Reuters

Production, Arrivals and Exports

According to spot market sources, the overall acreage is estimated to increase from 1.75 lakh ha to 2.1 lakh ha this year. The overall production of Mentha is expected to around 50,000 tonnes. Arrivals of the fresh crop are going on in the mandis and currently stand around 500 drums (each drum weighs 180 kgs). Exports of Mentha during April 2011 to January 2012 witnessed a decline of 6% to 12,850 tonnes as compared to 13,550 tonnes in the same period last year.

Technical Chart Mentha Oil

MCX Sep contract

Outlook
In the intraday trading session Mentha oil is expected to trade sideways in the intraday. Buying at lower levels may emerge from stockists anticipating good demand from pharmaceutical companies in the coming days. However, lower demand due to ban on Gutkha and Pan Masala may cap any sharp upside. In long to medium term (July-September) prices are likely to remain under pressure due to peak arrival period.

Source: Telequote

Market Highlights
Prev day -1.02 -0.61

as on Aug 29, 2012 % Change

Potato
In intraday potato futures extended further loses and closed down by 0.61% on Wednesday. Commodity market regulator FMC has banned launch of new Tarkeshwar potato contracts. Also From 01-08-2012 no fresh positions shall be allowed during the Staggered Delivery period in all running contracts of Potato in MCX and NCDEX. Only squaring off of existing positions will be allowed during the Staggered Delivery period.
Potato SpotNCDEX (Agra) Potato- NCDEX Sept '12 Futures

Unit Rs/qtl Rs/qtl

Last 1138 1096

WoW -1.48 -4.62

MoM -3.83 -10.10

YoY 176.78 262.05

Technical Chart Potato

NCDEX Sept contract

Production and Arrivals Scenario

Around 200-220 lakh MT potato had been stored in the country in different cold storages during the current season. Although 27-30% of the cold storage stocks are released so far from overall producing belts, they are much lower compared to normal 35-38% every year. According to NHRDF, The sowing of potato seed for Kharif production in Karnataka completed but the area sown is adversely affected due to less and delayed rains. The sowing in hills of Himachal Pradesh, Uttarakhand and Jammu and Kashmir are also completed. The seed sowing in Maharashtra for Kharif is continued, which is delayed due to delay arrival of monsoon, which is still scanty. The area for Kharif is expected to be less or may be same with delayed planting compared to last year, but it depends on further rains. With reports of crop damages in Karnataka, the supplies from this region to other states may also be affected as the overall output is expected to decline by 70-75%. In fact, the state may have to rely on the supplies from the north Indian markets.

Source: Telequote

Technical Outlook
Unit Mentha Oil Aug Futures Potato NCDEX Sept Futures Potato MCX Sept Futures Rs/kg Rs/qtl Rs/qtl

valid for Aug 30, 2012 Support 1324-1332 1084-1095 1142-1154 Resistance 1355-1368 1116-1127 1177-1188

Outlook
Potato futures in intraday are expected to trade sideways owing to continued subdued demand in the market. Also West Bengal government has decided to curb its decision to restrict inter-state transfer of potato after October that might provide resistance to the prices in short term. However, the upcoming festive season might provide support to the prices from falling sharply in Medium term.

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