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Commodities Daily Report

Thursday| October 18, 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| October 18, 2012

Agricultural Commodities
News in brief
Government loses appetite, food subsidy bill close to R1L-cr mark
With mounting arrears and a huge increase in the cost of grain procurement by the Food Corporation of India (FCI), the demand for food subsidy on the Centre this year is set to be much higher than last year's payout of R72,730 crore and this year's budgeted amount of R74,551 crore. The corporation has already received R61,978 crore to make good the procurement cost , inclusive of an unpaid amount of R22,000 crore from last year. The demand has already touched R84,000 crore and half of the year is still ahead. In May, food minister KV Thomas told FE that the food subsidy bill for the current fiscal was expected to go beyond the R1,00,000-crore mark. Procurement and storage costs have gone up substantially during the last few years, Thomas said. The actual figure could be even higher. There would not be any delays in payment towards procurement and storage during the year as the government would release extra funds needed for carrying out our operations, FCI chairman Amar Singh said. With the government targeting to procure a record 40 million tonne of rice during 2012 2013, the country's food subsidy bill ks expected to rise further in the next six months.According to the latest data available with the FCI, grain stocks, consisting of rice and wheat, at the start of the month have declined to a manageable 66.5 million tonne from a peak of 82 mt in June. (Source: Financial Express)

Market Highlights (% change)


Last Prev. day

as on Oct 17, 2012


WoW MoM YoY

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

18611 5660 52.85 92.12 1752

0.18 0.22 0.08 0.03 0.39

-0.11 0.14 -0.30 0.95 -0.66

3.27 4.14 -4.50 -6.30 -0.99

10.23 11.47 7.59 9.37 5.05

Source: Reuters

FY13 food subsidy already 36% more than budgeted


The demand for food subsidy has swelled to over Rs 1,01,879 crore in the first six months of 2012-13, 36 per cent more than the Budget estimate of Rs 75,000 crore for the entire year, according to calculations by the Food Corporation of India (FCI). Of this requirement, the government has allocated around Rs 61,978 crore as food subsidy till date.The sharp rise in subsidy against nearly Rs 73,000 crore for the entire 2011-12 could jeopardise the governments plan to rein in the fiscal deficit at 5.1 per cent of GDP, as rice procurement for the 2012-2013 kharif season is yet to start in full swing.Moreover, fuel subsidy is also likely to be higher than projected at Rs 43,800 crore for 2012-13. At over Rs 1 lakh crore for just half a year, the demand for food subsidy is likely to be higher than the fuel subsidy bill for the year. The FCI said the subsidy bill got inflated because of a rise in the amount of procurement, an increase in acquisition costs due to a higher minimum support price, a rise in stockholding by the corporation and arrear food subsidy. (Source: Business
Standard)

Centre keeps tabs on sugar sales to curb price increase


To check rise in sugar prices during the festival season, the government on Wednesday said it is keeping a close watch on sugar sales by millers in the open market and warned against failure to sell the entire quota allocated to them for the October-November period. For OctoberNovember period, the ministry has allocated a total 400,000 tonnes of sugar (known as non-levy) to 380 odd millers for sale in the open market. In an official release, the food ministry said it would keep a close watch on sale and delivery of sugar meant for open market. Any action on the part of the sugar mills which is contrary to the spirit of the release order would be dealt with swiftly and strongly, it said. The warning comes in the backdrop of an impression created by some circles that sugar released by the government for sale in the open market for October and November would get extended suo motu. Sugar production in the country was 26 million tonnes in the 2011-12 marketing year (OctoberSeptember). (Source: Financial Express)

Sugar mills told to exhaust sale quota on time


Sugar prices on the Vashi wholesale market declined by Rs 10 a quintal on Wednesday as demand eased and the Governments assurance on regular and ample supply of non-levy sugar during October November. Sources said that the sentiment turned slightly weak in physical and futures markets on improved selling after the Governments instructions. Producers expect a steady rise in demand the next few days for Diwali. The Ministry of Consumer Affairs, Food & Public Distribution has asked sugar mills to ensure release of the entire quota for the festival season. According to a press release issued by the Ministry, an impression has been created in some circles that the non-levy quota of 40 lakh tonnes released for sale in the months of October and November would get extended. Such views were a misconception and any unutilised quota qould be convered into levy stock, it said.
(Source: Business Line)

Madhya Pradesh may see record soy production


Timely input supply, spread of the innovative ridge and furrow method of farming, a long spell of rain and availability of seeds have prompted the Madhya Pradesh government to project a new high in soy production this year, triggering fears of a price crash again. If the projection comes true, the country will have a record high of 13.2 million tonnes (mt). The state agriculture department had earlier projected a 6.5-mt crop. Now, they estimate seven mt. The earlier record was 6.4 mt, in 2009. MP is known as the countrys soy bowl and produces more than half of the countrys eight to nine mt average. However, the Soybean Processors Association of India (Sopa) is not ready to buy this estimate. Sopa has put the allIndia figure at 12.7 mt this year and 6.7 mt in MP. It is true the yield has gone up but seven mt (for MP) is a little (too) big, said Rajesh Agrawal, spoke-sperson for Sopa. This year, said Sopa, productivity was 1,076 kg a hectare in MP and 1,127 kg across India; in Rajasthan, it was a record 1,393 kg a ha. (Source: Business Line)

Monsanto suspends seed royalties in Brazil, fighting state court


Monsanto Co MON.N has temporarily stopped charging royalties on its Roundup Ready soybean seeds throughout Brazil as it seeks to overturn a state court ruling on the matter, the U.S. biotechnology company said on Wednesday. A local court had ordered Monsanto to drop the royalties in the agricultural state of Mato Grosso on Oct. 8. Judges sided with the state's powerful farming and ranching federation, which claims that Monsanto's patent on the seeds expired in 2010 and has not been renewed in Brazil. "Monsanto has voluntarily stopped charging for the use of the first generation of RR soybeans nationwide," the company said in a statement. Monsanto has previously defended its right to apply royalties to patented seeds in Brazil in federal court and says it is still entitled to charge royalties on the Roundup Ready seeds. (Source: Reuters)

More rains likely from next week


Global models suggested that northeast monsoon will get sufficient boost from upper atmosphere next week onwards.This would likely result in enhancement of rain activity over the Indian Ocean, of which Bay of Bengal is a part, from October 24 (Wednesday). (Source: Business LIne)

India in talks with Iran over wheat exports: FCI


India is negotiating with Iran for exporting 2 lakh tonnes of wheat in December and 10 lakh tonnes annually for the next three years, Food Corporation of India said today. (Source: Economic Times)

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Commodities Daily Report


Thursday| October 18, 2012

Agricultural Commodities
Chana
Chana futures settled down by 0.87% on Wednesday on account of profit taking. Prices had gained considerable since the beginning of October on festive season demand and lower supplies. Prices had declined in the month September on improved rains and reports of expected higher output in Australia, the largest supplier of chickpeas to India. In Australia, chana production rose by 70.5 percent to 8.27 lakh tonnes from 4.85 lakh tonnes in previous year. However, series of festivals ahead and thus emergence of demand at lower prices led prices to gain in the last 2-3 sessions. CACP has recommended a hike in minimum support price (MSP) of gram by Rs.200 to Rs.3000 a quintal and Masoor by Rs.100 to Rs.2900 a quintal for upcoming 212-13 Rabi season to boost the production of pulses. As per the statement of Finance Minister P. Chidambaram, India has raised the subsidy on imported pulses to Rs. 20/kg from the earlier Rs. 10/kg, this move is expected to increase pulses imports. As per the NCDEX circular dated 1 October, Special Margin of 10% (in cash) on the Long Side on all the running contracts and yet to be launched contracts in Chana have been withdrawn with effect from beginning of day Thursday, October 04, 2012. Good rains in the month of August and September has raise prospects of Rabi pulses sowing in the coming days that would commence soon. Monsoon has recovered across India, especially in Rajasthan, one of the major chana growing states, and may prove beneficial for the chana sowing.
st

Market Highlights
Unit Rs/qtl Rs/qtl Last 4758 4833 Prev day -0.87 -2.03

as on Oct 17, 2012 % change WoW MoM 5.98 3.44 3.67 5.41 YoY 35.70 39.32

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

Source: Reuters

Technical Chart - Chana

NCDEX Nov contract

Source: Telequote

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

valid for Oct 18, 2012 Resistance 4765-4805

Sowing progress and demand supply fundamentals


According to the Ministry of Agriculture 99.81 Lakh hectare area has been planted under Kharif pulses as on 21th September, 2012 compared to 108.28 lakh hectare (ha) same period last year. According to the first advance estimates of 2012-13 season, kharif pulses output is estimated lower by 14.6% at 5.26 million tonnes compared with 6.16 mn tn last year. Kharif pulses harvesting would commence from next month. According to the Fourth advance estimates of 2011-12 season, 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. 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)

4635-4680

Outlook
Chana futures are expected to open lower on account of profit booking and are expected to recover in the later sessions ahead of festive season demand and tight supplies. However, reports of higher sowing of Rabi pulses this season might pressurize the prices in the medium term. Also, higher imports from Australia may cap the sharp upside in the prices.

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Commodities Daily Report


Thursday| October 18, 2012

Agricultural Commodities
Sugar
Sugar November futures as well spot settled marginally up on festive season demand and approval to unrestricted exports by the food ministry for 2012-13 season capped the sharp downside. India, which is likely to produce a sugar surplus for its third year in a row, has decided to allow exports for another year, Food Minster K.V. Thomas said, reflecting confidence about domestic supplies in the world's top consumer of the sweetener. Mills and traders will have to wait for a formal order to export sugar in the new season that began on Oct. 1. The Government has decided to make available a quantity of 40 lakh tons of non-levy quota, for the months of October and November 2012. Millers based in western and southern India and global trading firms bought sugar at around $500/ton a CIF basis, as the price in the domestic market has jumped more than 23% to $680/ tn in the past three months. Liffe white sugar and ICE raw sugar closed 0.47% and 0.3% lower respectively due to good supplies from Brazil. Higher output and lower imports expectations for the 2012-13 season from China coupled with weak international markets is keeping prices under downside pressure.

Market Highlights
Unit Sugar Spot- NCDEX (Kolkata) Sugar M- NCDEX Oct '12 Futures Rs/qtl Last 3770

as on Oct 17, 2012 % Change Prev. day WoW 0.17 1.50 MoM -1.53 YoY 21.17

Rs/qtl

3439

-0.75

1.45

-3.18

23.75

Source: Reuters

International Prices
Unit Sugar No 5- LiffeOct'12 Futures Sugar No 11-ICE Oct '12 Futures $/tonne $/tonne Last 555.3 446.89

as on Oct 17, 2012 % Change Prev day WoW -0.47 -0.30 -2.30 -1.66 MoM -3.54 0.40 YoY -18.70 -24.96

Source: Reuters

Domestic Production and Exports


The area under sugarcane is estimated at 52.88 lakh ha for 2012-13 crop season, up from 50.99 lakh ha on same period a year ago. According to the first advance estimates by agriculture ministry, Sugarcane output is pegged at 335.3 mn tn, down by 6.2% compared to 357.6 mn tn last year. Despite of higher acreage, the producers body has estimated next years sugar output lower at 24 mn tn, down by 2mn 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 6 mn tn stocks for the new season beginning October 01, 2012 compared to 5.5 mn tn year ago. India may export 2.5-3 mn tn sugar in 2012-13. With the opening stocks of 6 mn tn, domestic Sugar supplies are estimated at 30mn 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 Nov contract

Source: Telequote

Global Sugar Updates


Sugarcane harvesting in Brazil was down 7.9% as on 1st October 2012 at 24 mn tn. Unica expects the main center-south cane to yield 32.7 mn tn sugar output in 2012-13, down 1.2 % from the 33.1 mn tn forecast in April. Favorable weather in the second half of September should allow harvest and exports to run on schedule despite a couple of days of rain last week that slowed crushing. Thus sharp upside in the international prices may be capped. The International Sugar Organization said 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 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 Oct 18, 2012 Support 3300-3320 Resistance 3365-3382

Outlook
Sugar prices may trade with positive bias on account of festive demand. Approval to unrestricted exports coupled with optimistic sentiments with respect to sugar decontrol is expected to keep the sentiments upbeat for sugar in the near term. However, sharp upside may be capped on account of higher quota.

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Commodities Daily Report


Thursday| October 18, 2012

Agricultural Commodities
Oilseeds
Soybean: Soybean futures further extended losses on account of
increasing arrival pressure in the domestic markets. Also, harvesting pressure in international market is supporting the downside. However, demand for edible oil ahead of ongoing festive season is restricting sharp fall. The Futures settled 0.7% lower and spot closed 1.11% lower. New soybean arrivals at MP stood at 350000 bags on Friday last week. Arrivals are expected to improve to 5.5-6 lakh bags in the peak harvesting period. According to first advance estimates, Soybean output is pegged at at 126.2 lk tn for 2012-13. However, drop in area under groundnut, sunflower & castor seed may lead to lower output of these oilseeds in 2012-13 which is estimated 9.6% lower at 187.8 lakh tn. CBOT Soybean settled higher by 1.04% due to bargain buying as the prices have reached a 3 month low due to harvest pressure. Also, the weekly export data to be released today is expected to increase due to buying demand from China. According to the latest crop progress report released by USDA, As on 16 Oct 2012, US soybean harvest is 71 per cent complete as compared to 58 per cent last week and 58 per cent compared to 5 year average. According to the USDA October monthly report, Global soybean production is projected at 264.3 million tons, up 6.2 million mostly due to an increase for the United States. Ending stocks are seen down from 169 million bushels in 2011-12 to 115 million bushels in 2012-13 season. Brazil could churn out 81 million tonnes of oilseed and replace the drought-stricken US as the world's top soybean producer, according to the USDA.

Market Highlights
% Change Unit Soybean Spot- NCDEX (Indore) Soybean- NCDEX Oct '12 Futures Ref Soy oil SpotNCDEX(Indore) Ref Soy oil- NCDEX Oct'12 Futures Rs/qtl Rs/qtl Rs/10 kgs Rs/10 kgs Last 3109 3104 665.2 665 Prev day -1.11 -0.70 -0.37 0.08

as on Oct 17, 2012

WoW -2.90 -3.62 -0.66 1.23

MoM -27.36 -12.99 -15.53 -15.88

YoY 41.25 39.95 5.50 6.69

Source: Reuters

as on Oct 17, 2012 International Prices Soybean- CBOTNov'12 Futures Soybean Oil - CBOTOct '12 Futures Unit USc/ Bushel USc/lbs Last 1509 51.03 Prev day 1.04 1.11 WoW -0.92 1.71 MoM -7.97 -7.07
Source: Reuters

YoY 20.67 -3.17

Crude Palm Oil

as on Oct 17, 2012 % Change Prev day WoW -0.17 -0.50 5.00 -0.74

Unit
CPO-Bursa Malaysia Oct '12 Contract CPO-MCX- Oct '12 Futures

Last 2393 414.9

MoM -11.86 -18.15

YoY -16.45 -13.56

MYR/Tonne Rs/10 kg

Refined Soy Oil: Ref soy oil settled lower taking cues from the
soybean market, while MCX CPO extended the losses and settled lower by 0.55% on reports that Malaysian government said that it might stop duty free export of palm oil from Jan 2013. Exports of Malaysian palm oil products for Oct. 1-15 rose 13.1% to 769,534 tn from 680,112 tn for the Sept. 1-15 period. Malaysia, the world's No.2 producer of palm oil, will scrap a tax free export quota for the crude grade from 2013 in a bid to reduce feedstock prices for refiners who have lost market share to top supplier Indonesia. According to latest data from SEA, total vegetable oil imports in September were 993,912 tn, up from 897,018 tn in the previous month. India imported 111,163 tn of refined palm oil in September. As per MPOBs latest report, Malaysia's September palm oil stocks rose 17 percent to record high 2.48 million tons compared to previous month. Moreover, crude palm oil output in September rose 20 percent from August to 2 million tons. Indias edible oil imports should rise 5.4 percent to a record 10.31 million tonnes in 2012/13, with the entire increase met by palm oil.

Source: Reuters

RM Seed
Unit RM Seed SpotNCDEX (Jaipur) RM Seed- NCDEX Oct '12 Futures Rs/100 kgs Rs/100 kgs Last 4225 4160 Prev day 3.43 -0.41

as on Oct 17, 2012 WoW -0.59 2.29 MoM 4.32 1.04


Source: Reuters

YoY 43.22 36.35

Technical Chart Soybean

NCDEX Nov contract

Rape/mustard Seed: Mustard futures settled marginally lower by


0.17% ahead of profit taking while spot closed 3.43% up owing to supply tightness. Mustard output was lower in 2011-12 and thus this has led to tight supplies in the domestic markets. However, on the back of higher returns and improved rains, next years output is expected to be better. Outlook Edible oil complex is expected to trade sideways with downward bias on account of harvesting pressure in both the domestic and international markets. Higher stocks of Malaysian CPO may also led to the downside in the prices. However, festive season demand form edible oil may restrict sharp fall in the coming weeks.

Source: Telequote

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

valid for Oct 18, 2012 Support 638-645 408-414 4165-4195 408-414 Resistance 658-664 424-428 4275-4315 424-428

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Commodities Daily Report


Thursday| October 18, 2012

Agricultural Commodities
Black Pepper
Pepper futures opened on a a negative note yesterday due to increasing arrivals but recovered towards due to festive demand. Arrivals of the new green pepper crop as well as expectations of improvement in the yield have pressurized the prices. However, farmers are unwilling to sell their stocks at lower levels. Traders are buying pepper directly from the farmers. Exports demand for Indian pepper in the international markets remains weak due to huge price parity. The Spot settled 0.48% lower while the Futures settled 0.26% 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 $8,400/tonne(C&F) while Indonesia Austa is quoted at $6,850/tonne (FOB). Vietnam was offering 550GL at $7,000/tonne. 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 Oct '12 Futures Rs/qtl Rs/qtl Last 42029 43030 Prev day -0.48 0.26

as on Oct 17, 2012 WoW -1.18 -1.99 MoM 1.03 1.40 YoY 23.93 31.65

Source: Reuters

Technical Chart Black Pepper

NCDEX Nov 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 September 2012 is estimated around 80,433 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 Oct 18, 2012 Support 42450-42600 Resistance 43050-43250

Production and Arrivals


The arrivals in the spot market were reported at 30 tonnes while offtakes were 15 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 may trade on a sideways note today. Festive season demand is expected to support prices at lower levels. However, low export demand as well as good supplies in the international market from other origins may pressurize prices.

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Commodities Daily Report


Thursday| October 18, 2012

Agricultural Commodities
Jeera
Jeera Futures opened lower but recovered sharply hitting the 3% upper circuit due to some regular export enquiries which supported the prices. Arrivals were also low. Over the last couple of days, exporters have been actively buying due to escalated tensions between Syria and Turkey. Also, festive demand in the domestic markets has supported the prices. However, reports of higher carryover stocks as compared to last year restricted sharp gains in the spot markets. Good rains in Gujarat, have increased expectations of better sowing prospects ahead of the rabi sowing. The spot settled lower by 0.62% while the Futures settled 0.61% higher on Wednesday. According to markets sources about 75% exports target has already been achieved due to a supply crunch in the global markets. Around 10 lakh bags of Jeera are reported across India. Supply concerns from Syria and Turkey still exists. Expectations are that export orders may still be diverted to India from the international markets due to lack of supplies from Syria on back of the ongoing civil war. Production in Syria and Turkey is being reported around 17,000 tonnes and around 4,000-5,000 tonnes, lesser than expectations. Jeera prices of Indian origin are being offered in the international market at $2,750 tn (c&f) while Syria and Turkey are not offering. 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 Oct'12 Futures Rs/qtl Rs/qtl Last 15026 15170 Prev day -0.62 0.61

as on Oct 17, 2012 % Change WoW 2.21 5.13 MoM 1.53 9.61 YoY 2.36 8.03

Source: Reuters

Technical Chart Jeera

NCDEX Nov 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 -1.59 -0.81

as on Oct 17, 2012 % Change

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

Last 5033 5174

WoW -4.45 -5.24

MoM -14.40 -14.54

YoY -11.44 3.60

Outlook
Jeera futures may trade upwards today. Reports of fresh export buying may support prices. Festive buying may also lend support to the prices. However, expectations of improved sowing may cap sharp gains. In the medium term (October-November 2012), prices are likely to witness a bounce back as there are limited stocks with Syria and Turkey.

Technical Chart Turmeric

NCDEX Nov contract

Turmeric
Turmeric Futures traded lower yesterday due to lack of demand from the stockists. Festive demand is also reported to be low. Turmeric has been sown in 0.58 lakh hectares in A.P as on 10/10/2012. Sowing is also reported 30-35% lower during the sowing period. The Spot as well as the Futures settled 1.59% and 0.81% lower on Wednesday. Special Cash Margin of 40% on the Long side shall be reduced to 20% (cash) on all the running contracts and yet to be launched contracts in Turmeric w.e.f. beginning of day Wednesday, September 26, 2012.

Production, Arrivals and Exports


Arrivals in Erode and Nizamabad mandi stood at 2,500 bags and 600 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 Oct 18, 2012 Support 15050-15250 5050-5120 Resistance 15600-15780 5260-5320

Outlook
Turmeric prices are expected to trade downwards today. Stockists are not buying actively, which may pressurize prices. However, a reduction in the special cash margin, lower sowing figures and lower arrivals may support prices.

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Commodities Daily Report


Thursday| October 18, 2012

Agricultural Commodities
Kapas
NCDEX Kapas futures extended the gains and closed up by 0.63% as emerging demand due to lower prices is attracting the investors. Also, prices might take cues from the firm international market. ICE cotton Futures closed up by 4.01% on concerns over good quality supplies of cotton. Rising micronaire levels in cotton delivered to the market has raised concerns over the quality. Cotton harvesting has commenced in US, in all 28% is harvested as compared to 21% a week ago, versus 34% same period a year ago. Cotton crop condition is 42% in Good/Excellent state same as compares to last week, and 30% same period a year ago as on 16 Oct 2012.

Market Highlights
Unit Rs/20 kgs Rs/Bale Last 955.5 16250

as on Oct 17, 2012 % Change Prev. day WoW 0.63 0.74 1.43 0.56 MoM -0.88 0.56 YoY -9.01

NCDEX Kapas Futures MCX Cotton Futures

Source: Reuters

International Prices
ICE Cotton Cot look A Index Unit Usc/Lbs Last 77.86 81.35

as on Oct 17, 2012 % Change Prev day WoW 4.01 10.11 0.00 0.00 MoM 4.47 0.00 YoY -19.62 -29.20

Domestic Production and Consumption


As on 28 September, 2012, Cotton is being planted on 114 lakh hectares, down, as compared to the last years 119.6 lakh hectares. However, the acreage so far is at par with its normal area of 111.8 lakh hectares. According to the First Advance Estimates, Cotton production for 2012-13 seasons is revised upward to 334 lakh bales compared with 352 lakh bales in 2011-12 season. Also, on account of cheaper cotton available in the global markets, imports have more than double from 5 lakh bales to 12 lakh bales. According to the latest CAB report as on 04 October 2012, exports have dipped sharply by 46% to 7 million bales in the 2012/13 marketing year that began on Oct. 1 compared to 12.7 million bales estimated for 201112 season. The ending stocks figure, has been revised further upward to 3.4 million bales as compared to 2.8 million bales estimated for August 2011-12 season
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Source: Reuters

Technical Chart - Kapas

NCDEX April contract

Global Cotton Updates


Global cotton prices are mainly influenced by China, US and India. USDA estimated US Cotton planting for the season 2012-13 at 12.64 mln acres as compared to 14.74 mln acres last season (2011-12). Ending stocks were at 4.8 mln bales (480 pounds/bales) with Production of 17.65 mln bales and exports of 12.1 mln bales were pegged for the season 2012-13. In its October monthly demand supply report on Thursday, the Agriculture Department (USDA) raised its cotton crop for 2012/13 cotton crop season to 17.29 mln bales (prev 17.11) along with upward revision in end stocks 5.60 mln 480 pounds/bales (prev 5.30). Exports were down to 11.60 mln 480 pounds/bales (prev 11.80). China's 2012/13 cotton crop is estimated at 31.50 mln bales up from previous estimates of 31.00 mln bales given in September, imports 11.00 mln bales down from previous estimates of 12.00 million bales, consumption was pegged at 36.00 mln bales (down from prev 38.00 million bales), end stocks 36.61 mln bales (up from prev 35.51 mln bales)
Source: Telequote

Technical Chart - Cotton

MCX Oct contract

Outlook
Kapas futures in intraday is expected to trade on a positive note as demand is seen emerging at lower level which is providing support to the prices. However, fresh arrivals from all over India might cap the sharp upside. However, Prices might also take support at lower levels as farmers are not willing to sell their produce at lower levels. Besides, prices in spot market are nearing its MSP, which would restrict any major fall. Nevertheless, prices sharp upside might be capped in medium term as lower demand from china and global cotton glut might put pressure on the prices.

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 Oct 18, 2012 Support 928-942 925-940 16000-16120 Resistance 968-985 965-980 16420-16580

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