Commodities Daily Report

Thursday| September 6, 2012

Agricultural Commodities

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

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| September 6, 2012

Agricultural Commodities
News in brief
Revival of monsoon to limit damage to sugarcane
The revival of monsoon over the past week would help restrict any further damage to standing sugarcane crop in Maharashtra and Karnataka. The rain deficit in the early monsoon period had impacted the sugarcane crop in these two States, forcing the industry and the State authorities to trim sugar output forecast for 2012-13 season. Maharashtra had, in fact, reduced its sugar production forecast by 31 per cent to 6.2 million tonnes (mt) from 9 mt last year. The dry spells had also forced farmers to divert cane to fodder in several parts of these States, where cane area has shrunk by over one lakh hectares. The crop condition could have further deteriorated impacting the yields, had the dry spell continued. However, with the pick-up in rains, we believe there will be no further damage as water availability has improved, said Abinash Verma, Director-General, Indian Sugar Mills Association (ISMA). The crop is currently in the stage of sucrose formation and the recent rains could help stop cane diversion to fodder, Verma said.
(Source: Business Line)

Market Highlights (% change)

Last Prev. day

as on Sept 5, 2012
WoW MoM YoY

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

17313 5226 55.91 95.36 1691

-0.73 -0.92 0.53 0.06 -0.12

-1.01 -1.17 0.39 -0.14 1.87

0.52 -0.04 0.12 9.45 6.51

2.92 3.68 21.24 10.86 -9.58

Source: Reuters

Brazil Sugar Export Figure Reached 8.95 Million Tons Till August End
Brazil exported 2.459 million tons of sugar, raw value, in August down marginally from 2489 million tons in July but lower from 3.3 million tons sugar exported last year same period. It is noticeable that Brazil is likely to increase export in the coming months keeping in view higher sugar production compared to last year. In addition to it, Brazil has exported only 8.95 million tons of sugar this year till August which was 11.78 million tons last year same period. (Source: Agriwatch)

Gujarat plans competitive textile policy

After the recent announcement of textile policy for debt restructuring, apparently going in favor of Tamil Nadu and Maharashtras , Gujarat government has decided to take necessary steps towards forming a new policy to attract great investments, that would surely benefit the states textile mills to become the main hub for the spinning sector. Interestingly, many members of spinners` associations from Tamil Nadu have proposed to shift their business to Gujarat in case the government comes with any incentive policy. Also, many cotton traders in Gujarat are willing to set up their own spinning and cotton weaving enterprises. Recently, Maharashtra announced a new textile policy aiming to attract an investment of up to Rs 40,000 crores and giving jobs to 11 lakh people by 2017. Gujarat government keeping in mind that Maharashtra has offered 10 per cent capital subsidy and interest subsidy on long-term loan linked to the Centre`s Technology Upgradation Scheme, plans to have a more competitive policy that would also see global centres on public-private-partnership (PPP). (Source: The Financial Express)

China Increases MSP for Paddy by 9% to 17%

China, the major rice producerhas increased the minimum purchase price for mid and late season indica paddy rice to 1.25 Yuan per 500 grams (about $395 per ton) and 1.4 Yuan per 500 grams (about $440 per ton) for japonica paddy rice. The minimum purchase price for indica paddy rice has been raised by about 17%, while that for japonica paddy rice has been increased by about 9% from last year. The National Development and Reform Commission (NDRC) announced the hike in light of recent increase in rice prices which have increased about 3% year-on-year in July, and about 4% since January this year, according to the National Bureau of Statistics (NBS). In June this year, the second largest producer of rice, India, had announced about 16% hike in the Minimum Support Price of paddy rice for the 2012-13 crop. (Source: Agriwatch)

Argentine corn output seen on track for record - RTRS

Corn output in Argentina, the world's second-biggest exporter, could rise by more than 24 percent from the last drought-hit harvest to a record high, the agriculture secretary told Reuters on Wednesday. Growers in the South American country have recently started planting 2012/13 crops and industry analysts say forecasts for favorable weather point to a bumper harvest that could boost global supplies threatened by drought in the United States. (Source: Reuters)

Agri ministry pushes for Rs 5,000-cr scheme for post-harvest logistics

The Union ministry of agriculture has planned to ask for a Rs 5,000-crore budget during the 12th five-year Plan (2012-17) for a scheme to allow private companies to collaborate with farmers to produce, harvest, process, transport and market various agro products. Officials said the aim was to ensure availability of farm produce across the country at affordable prices. Titled the Public-Private Partnership for Integrated Agricultural Devel-opment, or PPP-IAD, it hopes to create an efficient supply chain for cereals, perishables and other high-value produce. The hope is cover a million farmers during the Plan. Funds are to be leveraged through the flagship Rashtriya Krishi Vikas Yojana. A project will involve mobilising farmers into producer groups and registering as a joint stock producer company or a co-operative or self-help group. In the process, these companies could coordinate with the Indian Council of Agricultural Research for improved varieties of seeds/seedlings and for sorting credit issues with the National Bank for Agriculture and Rural Development. The Small Farmers Agri- Business Consortium will provide professional support services to such producer firms.
(Source: Business Standard)

Additional charges on wheat will drive up flour prices

At a time when rising wheat prices are already forcing flour makers to increase prices, the Union Food Ministrys decision to impose statutory and freight charges on the wheat sold in the open market by the Food Corporation of India (FCI) will put additional pressure on millers. The branded and non-branded flour makers across India confirmed the ministrys decision would drive up wheat flour prices. Wheat prices in the open market have gone up nearly 35 per cent in last two months on FCIs open market sale policy changes and export demand. With the hike in statutory and freight charges, FCIs wheat prices will certainly go up and hence, revised reserve prices for the open market sale will increase. For the southern mills, prices will be even higher. The statutory charges, according to sources, would be imposed in four wheat producing states-Punjab, Haryana, Uttar Pradesh and Madhya Pradesh. The millers in all other states would buy wheat inclusive of freight charges. The flour millers in north lamented that they would be at a disadvantage. According to R K Garg, president of the Confederation of Roller Flour Millers of Northern Zone: "Despite being located in the wheat basket of the country, we will not get any cost advantage". The millers in southern states rue there should be a level-playing field for wheat.
(Source: Business Standard)

Indonesia Sets Sept. CPO Export Tax at 13.5% - Trade Ministry

Indonesia changed its export tax structure and export taxes on palm products cut from 15 percent to 13.5 percent which could make shipments cheaper than those from rival Malaysia. Moreover Indonesia also lowers its export tax for RBD palm olein to 6 percent in September, versus 7 percent in August. (Source: Agriwatch)

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Commodities Daily Report

Thursday| September 6, 2012

Agricultural Commodities
Chana
Chana futures rebounded sharply on thin supplies in spot markets and improved demand ahead of festival season. Chana Spot as well as futures settled 0.9% and 1.82% higher on Wednesday. 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 amid festive season demand. 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 4830 4757 Prev day 0.96 1.82

as on Sept 5, 2012 % change WoW MoM 0.76 -1.43 1.45 0.83 YoY 33.24 29.94

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

Source: Reuters

Technical Chart - Chana

NCDEX Oct contract

Sowing progress and demand supply fundamentals

According to the Ministry of Agriculture 97.7 Lakh hectare area has been st planted under Kharif pulses as on 31 August, 2012 compared to 104.18 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 19.42 lakh hectares ha compared to 25.55 lakh ha same st period last year. (Dated 31 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 24%. In Maharashtra, Kharif Pulses sowing is down by 6% at 18.77 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 Oct Futures Unit Rs./qtl

valid for Sept 6, 2012 Support 4792-4835 Resistance 4905-4945

Outlook
Increasing demand ahead of series of festival coupled with lower supplies may keep chana prices firm in the intraday. However, improved rains have raised prospects for next years sowing and thus may cap sharp gains in the prices. 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| September 6, 2012

Agricultural Commodities
Sugar
Sugar spot settled 1.24% higher on expectations of good demand amid series of festival ahead. Concerns over next years output is also supporting the upside in the domestic sugar prices. However, sugar futures witnessed correction and thus settled 0.7% lower on Wednesday. Rainfall has improved significantly in Maharashtra in last few days, although it can't erase damage caused by poor rains between June to August. According to IMD there are indications that El Nino would affect the monsoon in September. However, some climate models, however, have begun to predict temperature patterns in the Indian Ocean turning favorable for the monsoon, which may negate the effect of El Nino. If the same hold true, then this may help increase cane yield. The Indian government has provided an additional 10 days to sugar mills to sell around 200,000 tonnes of unsold non-levy sugar stocks of August. In the international markets Liffe as well as ICE sugar futures decline as Steady harvesting in the centre-south of Brazil, the world's main growing region, has weighed on sugar prices with more supplies expected from northern hemisphere harvests in coming months. Liffe Sugar as well as ICE sugar settled 0.93% and 1.71% lower on Wednesday.

Market Highlights
Unit Sugar Spot- NCDEX (Kolkata) Sugar M- NCDEX Sept '12 Futures Rs/qtl Last 3775

as on Sept 5, 2012 % Change Prev. day WoW 1.24 1.43 MoM -3.84 YoY 27.97

Rs/qtl

3483

-1.14

0.03

-0.88

27.63

Source: Reuters

International Prices
Unit Sugar No 5- LiffeOct'12 Futures Sugar No 11-ICE Oct '12 Futures $/tonne $/tonne Last 552.2 422.44

as on Sept 5, 2012 % Change Prev day WoW -0.93 -1.71 -1.23 -3.75 MoM -9.42 -13.59 YoY -27.63 #N/A

Source: Reuters

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.

Technical Chart - Sugar

NCDEX Oct 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 2.06 mn tn raw sugar in August 2012, down from 2.08 mn tn exported in July. The International Sugar Organization said on Friday it expected a global sugar surplus of 5.86 million tonnes in the season running from October 2012 to September 2013, up from the prior season's surplus of 5.19 million tonnes. The wider surplus reflects expectations for a record global crop of 177.39 million tonnes, raw value, up 2.25 percent from the prior season as production in top grower Brazil rises. The ISO said the stocks/consumption ratio could rise to around 40 percent in 2012/13, from 37.6 percent in 2011/12. (Source: Reuters)

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

valid for Sept 6, 2012 Support 3570-3590 Resistance 3640-3680

Outlook
Sugar prices are expected to remain firm during the intraday on improved festive season demand and concerns over next years output. In the medium term, although sufficient supplies may keep the upside capped, sharp downside will also be restricted on the back of emergence of fresh demand at lower levels amid series of festivals ahead.

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Commodities Daily Report

Thursday| September 6, 2012

Agricultural Commodities
Oilseeds Soybean:
Despite of record high international soybean prices, domestic soybean remained weak on Wednesday on account of higher acreage and good rains in the soybean belts of India and thereby expectations of higher output in the season beginning October 2012. NCDEX October futures settled lower by 0.34% on Tuesday. However, many parts of soybean growing areas got significantly higher rainfall on Monday and more heavy rains this week can hurt yields. CBOT Soybean corrected yesterday after hitting a new high of 1789 cents per bushel in the November contract on Tuesday due to profit booking at higher levels. The upcoming harvest has build downside pressure. CBOT Soybean settled 1.30% lower on Wednesday. Soybean exports from Brazil declined from 4.13 mn tn in July to 2.4 mn tn in the month of August. (Source: Reuters) 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. 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. st In the domestic markets, as on 31 August Oilseeds have been sown in 167.15 lakh hectares so far, compared with 174 lakh hectares same period last year. Soybean area is higher at 106.9 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.
th

Market Highlights
% Change 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 4569 4005 802.7 809.9 Prev day 0.29 -0.16 0.58 0.32

as on Sept 5, 2012

WoW 1.06 -0.69 1.81 1.45

MoM -0.33 -13.56 3.76 4.81

YoY 107.68 81.32 22.21 27.35

Source: Reuters

as on Sept 5, 2012 International Prices Soybean- CBOTSept'12 Futures Soybean Oil - CBOTSept '12 Futures Unit USc/ Bushel USc/lbs Last 1748 57.36 Prev day -1.30 -0.36 WoW -0.86 1.27 MoM 1.29 9.11
Source: Reuters

YoY 26.71 0.10

Crude Palm Oil

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

as on Sept 5, 2012

Last 2888 556.2

Prev day -1.77 -0.91

WoW -2.89 0.23

MoM -1.16 1.09

YoY -15.06 14.59

MYR/Tonne Rs/10 kg

Refined Soy Oil: NCDEX Soy Oil remained steady to firm on

improvement in edible oil demand. While MCX CPO witnessed profit booking on Wednesday on higher palm oil stocks in August. Malaysia's August palm oil stocks likely climbed to their highest in nine months as still-high production offset a strong rise in exports. Stocks in the world's second largest palm oil producer most probably climbed 4.5 percent to 2.09 million tonnes, the highest since November and crossing the two-million-tonne mark for the first time since February. Palm oil exports from Indonesia increased by 20 percent to 1.5 million tonnes in July compared to the previous month. Palm oil output is expected to be 23-25 million tonnes, and around 18 million tonnes is likely to be exported. India imported 112,611 tn of refined palm oil in July, down 9.28 percent from June. Total vegetable oil imports in July were 870,328 tn, up from 783,315 tn in the previous month (Source: Sea of India).

Source: Reuters

RM Seed
Unit RM Seed SpotNCDEX (Jaipur) RM Seed- NCDEX Sept '12 Futures Rs/100 kgs Rs/100 kgs Last 4320 4342 Prev day -0.12 -0.57

as on Sept 5, 2012 WoW 0.23 -2.14 MoM 2.86 1.45

Source: Reuters

YoY 47.95 49.26

Technical Chart Soybean

NCDEX Oct contract

Rape/mustard Seed: Mustard seed futures settled lower on

Wednesday on account of profit booking. Mustard output was lower in 2011-12 season. However, with on the back of higher returns and improved rains, next years output is expected to be better. Rainfall deficit in Rajasthan has come down sharply due to rainfall in last 4-5 days. It will ensure higher area under rapeseed as its prices are trading near record high level. Sowing of rapeseed starts from October and north-western Rajasthan is the top producing area in the country.

Source: Telequote

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

valid for Sept 6, 2012 Support 796-802 3935-3970 4330-4368 546-551 Resistance 810-813 4025-4060 4435-4463 559-563

Outlook
Oilseed complex is expected to trade sideways as weak domestic fundamentals for soybean for the next season may offset the record higher international soybean prices caused by tightness in global oilseed supply.

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Commodities Daily Report

Thursday| September 6, 2012

Agricultural Commodities
Black Pepper
Pepper Futures traded on a bullish note yesterday due to improvement in demand ahead of the upcoming festive season. Arrivals were also reported as the prices stabilized and improved from lower levels. However lower demand for Indian pepper in the international markets due to huge price parity may cap sharp gains. Low stocks in the domestic markets have supported prices at lower levels. The Spot as well as the Futures settled 0.86% and 4.27% higher 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 $7,975/tonne(C&F) while Indonesia Austa is quoted at $63006400/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 41144 42300 Prev day 0.86 2.47

as on Sept 5, 2012 WoW 0.14 1.90 MoM -3.41 -3.82 YoY 18.63 18.37

Source: Reuters

Technical Chart Black Pepper

NCDEX Oct 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 Oct Futures Unit Rs/qtl

valid for Sept 6, 2012 Support 42920-43350 Resistance 43925-44250

Production and Arrivals

The arrivals in the spot market were reported at 16 tonnes while offtakes were 12 tonnes on Wednesday. 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 upwards today due to improving demand. Lack of supplies may support prices at lower levels. 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| September 6, 2012

Agricultural Commodities
Jeera
Jeera Futures corrected further yesterday on account of good rains in Gujarat. Good rains are expected to improve moisture levels which may increase prospects of better yield next season. Exporters are also avoiding buying at higher levels, and waiting for the prices to correct. 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 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. The Spot as well as the Futures settled 1.93% and 2.54% lower on Wednesday. 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 $28,000-2,850 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 15086 13903 Prev day -1.93 -2.54

as on Sept 5, 2012 % Change WoW -3.06 -4.83 MoM -7.42 -11.81 YoY -2.70 -9.45

Source: Reuters

Technical Chart Jeera

NCDEX Oct contract

Production, Arrivals and Exports

Unjha markets witnessed arrivals of 3,500 bags, while off-takes stood at 3,500 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

Outlook
Jeera prices are expected to trade sideways to down due to good rains in Gujarat. Also, the arrivals are steady. Prices may recover due to expectation of revival in export demand. 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.

Market Highlights
Prev day 1.22 -0.73

as on Sept 5, 2012 % Change

Unit Turmeric SpotNCDEX (N'zmbad) Turmeric- NCDEX Sept '12 Futures Rs/qtl Rs/qtl

Last 5472 6004

WoW -2.47 -0.27

MoM -0.16 6.95

YoY 6.94 36.08

Turmeric
Turmeric Spot traded on a positive note yesterday due to lower sowing figures. However the Futures corrected on improving rains in the Southern Peninsula. Arrivals have also increased in Erode. The demand from north India is also very less. Rainfall in Nizamabad is 27% lower than the normal as on 29/8/2012. Turmeric has been sown in th 0.54 lakh hectares in A.P as on 5 September 2012. Sowing is also reported 30-35% lower during the sowing period. The Spot settled 1.22% higher while the Futures settled 0.73% lower on Wednesday. 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 Oct contract

Production, Arrivals and Exports

Arrivals in Erode and Nizamabad mandi stood at 5,000 bags and 1,200 bags respectively 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.

Source: Telequote

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

valid for Sept 6, 2012 Support 14000-14150 5900-5960 Resistance 14540-14650 6090-6140

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. In the medium term (Aug to September) prices may take cues from the sowing figures.

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Commodities Daily Report

Thursday| September 6, 2012

Agricultural Commodities
Kapas
NCDEX Kapas April futures and MCX Cotton futures extended further losses and settled 2.63% and 0.85% lower respectively on Wednesday owing to good rains in the past couple of days in the key cotton growing state, Gujarat which might provide relief to the standing cotton crop. Cotton prices declined sharply in the last two weeks as cotton advisory board in its latest meeting has made and upward revision in the end stocks estimates. Further improved rains in August and higher imports of cheaper global cotton also supported the weak market sentiments. According to the latest report by IMD, India received 12% below normal rains during June 01- August 31. The month of August witnessed 99.7% th rainfall as on 29 August. However, reports of good rains in the past few days in Gujarat, the top producer of Cotton has provided some relief. ICE cotton Futures corrected further and closed 0.19% down as the crop damage due to the tropical storm Isaac were negligible in Alabama and Mississippi -- two important states in the U.S. cotton belt.

Market Highlights
Unit Rs/20 kgs Rs/Bale Last 1018 17530

as on Sept 5, 2012 % Change Prev. day WoW -2.72 -7.75 -0.85 -0.28 MoM -11.82 -3.42 YoY -

NCDEX Kapas Futures MCX Cotton Futures

Source: Reuters

International Prices
ICE Cotton Cotlook A Index Unit Usc/Lbs Last 74.89 81.35

as on Sept 5, 2012 % Change Prev day WoW -0.19 -1.65 0.00 0.00 MoM 2.28 0.00 YoY -33.40 -29.20

Domestic Production and Consumption

In India Cotton harvesting commences by mid September from the North Indian irrigated states like Punjab, Haryana and Rajasthan. While, in rain fed areas its starts in October. st As on 31 August, 2012, Cotton is being planted on 112.83 lakh hectares; lower by 4.3% compared to the last years 118.37 lakh hectares. However, the acreage so far is at par with its normal area of 111.8 lakh hectares. Area covered under cotton in Gujarat is 23.42 Lh ha as compared to 29.56 Lh ha last year, in Maharashtra 41.27 Lh ha compared to 40.95 Lh ha and in Andhra Pradesh 21.17 lh ha compared to 17.75 Lh ha same th period last year as on August 30 2012. (Source: business Line) According to the latest updates by Cotton Advisory Board (CAB), Cotton production for 2011-12 seasons is revised upward to 357 lakh bales compared with 347 lakh bales estimated earlier. Also, on account of cheaper cotton available in the global markets, imports have more than double from 5 lakh bales to 12 lakh bales. On the demand front, exports increased to around 127 lakh bales from the earlier estimates of 115 lakh bales taking total cotton consumption to around 382 lakh bales. Thus, the ending stocks figure for 2011-12 season, that would end in September, has been revised upward to 28 lakh bales from the previous estimates of 25 lakh bales. However, 28 lakh bales is the lowest since 2004-05 caused by robust exports.

Source: Reuters

Technical Chart - Kapas

NCDEX April contract

Source: Telequote

Technical Chart - Cotton

MCX Oct contract

Global Cotton Updates

Global cotton prices are mainly influenced by China, US and India. China is the largest producer, consumer, and importer of Cotton, While India is the second largest producer, consumer and exporter of Cotton. US is third largest producer and a largest exporter of Cotton in the world. The global cotton market surplus will total more than 3 million tonnes in 2012-13 (August- July) from growing output and falling demand in China, the world's largest textile market China's 2012 cotton output is estimated at 6.97 million tonnes, down 4.2 percent from last year. China has issued fresh import quota to textile mills to procure cotton from international markets, which are 40 percent cheaper than domestic stock. This is additional to 1 million tonne issued in May this year.

Source: Telequote

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

valid for Sept 6, 2012 Support 995-1005 996-1007 17200-17360 Resistance 1028-1039 1028-1036 17630-17750

Outlook
In intraday cotton prices might open down initially and may recover in the later sessions taking cues from the international market. However, no major downside is expected as international markets may start recovering from the current levels on potential harm to US cotton crop amid a tropical storm.

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