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Commodities Daily Report

Saturday| October 27, 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


Saturday| October 27, 2012

Agricultural Commodities
News in brief
Food ministry no to raw sugar import duty cut
The food ministry will drop a plan to recommend a 10% duty on raw sugar imports for now amid strong opposition from the industry, but it may still favour doubling the tax on refined sugar purchases from overseas, a senior government official said on Friday. The ministry may also convey its proposal on rasing the duty on refined sugar imports to the finance ministry for necessary action, instead of placing the proposal before the Cabinet Committee on Economic Affairs (CCEA), the official told FE. Both the proposals were aimed at promoting domestic refiners while discouraging inflows of cheaper white sugar. Currently, the government levies a 10% import duty on refined as well as raw sugar. However, senior industry executives have protested such moves, saying raw sugar imports in large volumes would hurt manufacturers in the long run as the country already has adequate supplies. Since sugar sales in the open market are tightly regulated, cheaper dumping of the sweetener from abroad may jeopardise the ability of cash-strapped sugar manufacturers to pay farmers for their cane supplies, they have argued.
(Source: Financial Express)

Market Highlights (% change)


Last Prev. day

as on Oct 25, 2012


WoW MoM YoY

Sensex* Nifty* INR/$* Nymex Crude Oil - $/bbl Comex Gold - $/oz
*Closing for 23rd October 2012.

18759 5705 53.56 86.28 1711

0.26 0.24 0.00 0.27 -0.06

0.79 0.80 -0.07 -6.32 -1.86

0.03 0.25 0.22 -6.15 -2.91

10.76 12.05 7.43 -1.28 4.64

Source: Reuters

Fertiliser industry pins hopes on pick-up in rabi offtake


Fertiliser makers such as Tata Chemicals and IFFCO see a pick-up in rabi offtake, as the late revival of monsoon is seen aiding winter crops. The industry had seen a slump in kharif demand, as delayed monsoon had hurt consumption mainly of complexes fertilsers such as DAP and NP/NPK (nitrogen, phosphorus, potassium). This led to a build-up in stocks of DAP and NPK, forcing the industry to freeze raw material imports. We expect rabi demand to be better than kharif, said R. Mukundan, Managing Director, Tata Chemicals Ltd. The placement of fertiliser stocks with dealers and traders for the rabi season is almost over and the demand is seen as good, he said. Urea sales were down 2.76 per cent during the April-Sept period, while DAP offtake was lower by 18 per cent. The NP/NPK sales were the worst affected, with the demand declining by almost 30 per cent. IFFCO Managing Director and CEO U.S. Awasthi recently said the rabi fertiliser demand would be on a par with last year. Last rabi season, urea sales stood at 153.89 lakh tonne, while DAP and NPK were 63 lakh tonne and 57.36 lakh tonne, respectively. (Source: Business Line)

Govt readies record cotton purchase plan as prices dip


The government is gearing up for a record cotton purchase in the marketing year through September 2013 to prevent distress sales by farmers, as prices are expected to crash from November due to a pick-up in harvesting as well as poor domestic and export demand. State-run Cotton Corporation of India (CCI) has drawn a preliminary roadmap to buy as much as 9 million bales from farmers at the state-fixed benchmark prices, entailing a cost of R16,470 crore, a senior government official told FE. CCI, the government's biggest cotton procuring arm, has also projected losses of R2,430 crore on such purchases, said the official. It may have to purchase more if the cotton federation in Maharshtra, still reeling under losses from such an operation in 2009-10, fails to procure any, he added. At present, credit to textile mills to purchase cotton is limited to three month's raw material requirement and is available only at the much higher prime lending rate. The loan for raw material purchases is also restricted to 75% to 80% of the cost of cotton requirement. (Source: Business standard)

High onion prices see farmers harvesting pre-mature crop


In a rush to avail of the price rise, onion farmers in major growing regions have started harvesting pre-matured kharif crops. This, however, may have more implication on the year ahead, compared to this year. Experts believe pre-matured harvesting would reduce shelf life, resulting in higher spoilage. This could lead to a shortage next season, they say. Meanwhile, with the onset of the festive season, demand has surged. The supply, however, has been squeezed to a quarter in major mandis, owing to markets being closed due to various festivals. And, supplies to mandis are restricted, despite the adequate availability of onion stocks in warehouses. Markets in West Bengal remained closed for four days on the occasion of Durga Puja. In other states, too, markets were closed, owing to the Durga Puja and Bakri-Id festivals. Therefore, truckers remained off roads throughout the week, leading to a drop in supplies to mandis. (Source: business Line)

Mumbaikars to soon get fruits, vegetables cheaper


If plans of the Maharashtra Government fructify early 2013, Mumbaikars would soon be able to buy fruits and vegetables way below market rates. The State Government has developed a scheme, in which private companies would soon be allowed to source vegetables and fruits from farmers and sell directly to consumers across the Mumbai metropolitan region, using mobile vans. The Maharashtra State Agricultural Marketing Board (MSAMB), the apex body of the State Government for promoting agriculture products in the State, is to enter into a memorandum of understanding with several companies for directly sourcing and selling fruits and vegetables. Speaking about the scheme, a senior MSAMB official told Business Line on the condition of anonymity, that for selling the agriculture produce, the companies are expected to target large residential colonies and other captive customers. The MSAMB aims to eliminate the middlemen by paying more to the farmers and selling cheaper to the consumers. For MSAMB, this is to be a non-profit venture, the official said. (Source: Business Line)

Ukraine raises wheat exports ahead of ban - RTRS


Ukraine's wheat exports rose to 1.4 million tonnes in the Oct. 1-25 period from 1.3 million in the whole of September, the Farm Ministry said, as traders say they have stepped up exports ahead of the government ban on wheat exports planned to start Nov. 15. The ministry gave no reason for the increase. Farm Minister Mykola Prysyazhnyuk told Reuters this week the former Soviet republic would ban wheat exports from midNovember in a bid to prevent an increase in domestic bread prices after Ukrainian wheat crop fell by a third. (Source: Reuters)

Rough seas, rain forecast in south for two weeks


The US forecasts indicate enhanced rainfall activity topped up by likely storms in both Arabian Sea and Bay of Bengal during two weeks ending November 6. Arabian Sea has already seen a tropical cyclone named Murjan, which originated in the southeast basin and moved away to hit Somali coast in Africa. Another likely cyclone is forecast to take shape in the same basin, which might travel north (unlike west as Murjan did) from central Arabian Sea. (Source: Business Line)

Shrinking Canada canola oil content pinches crushers, exporters


Supply worries about Canada's disappointingly small canola harvest this year are compounded by the oilseed's reduced oil content, crimping profits for crushers and leaving food companies to scramble for other vegetable oils. Expectations were high early in the crop year that a record-large canola crop in top grower Canada would compensate for some of the damage the drought did to U.S. soybeans. (Source: Reuters)

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Commodities Daily Report


Saturday| October 27, 2012

Agricultural Commodities
Chana
Chana Spot as well as November futures settled higher by 0.47% and 1.43% on Thursday on account of festive season demand. However, sharp upside was capped on higher sowing prospects and expectations of higher imports in the coming months. Chana sowing has started in Maharashtra, AP and Karnataka and is expected to commence soon in MP and Rajasthan too. In Maharashtra, 1.09 lakh ha area has been covered so far which is only 8.8% of the targeted 12.32 lakh ha by the state dept. In AP, chana acreage stood at 41000 hectares as on 17 October, 2012 compared with 98000 hectares during the same period last year. 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 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. Monsoon has recovered across India, especially in Rajasthan, one of the major chana growing states, and may prove beneficial for the chana sowing.
st th

Market Highlights
Unit Rs/qtl Rs/qtl Last 4609 4687 Prev day 0.47 1.43

as on Oct 25, 2012 % change WoW MoM -1.71 4.75 -3.64 6.77 YoY 30.31 35.70

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

Source: Reuters

Technical Chart - Chana

NCDEX Nov contract

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. Improved rains towards the end of monsoon season have raised prospects of sowing. 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)

Source: Telequote

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

valid for Oct 27 2012 Resistance 4730-4772

4608-4645

Outlook
Chana futures may remain firm in the current week on account 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. Although short term trend remain positive for chana, we expect prices to come under downside pressure in the month of November as supply pressure may ease amid shipments from Australia and Canada.

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Commodities Daily Report


Saturday| October 27, 2012

Agricultural Commodities
Sugar
Sugar November futures settled higher on Thursday on account of short coverings. Prices had declined considerable in the last one month on the back of higher quota. Further, food ministry 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, which lead to selling pressure. 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. Liffe white sugar settled 0.26% higher on short coverings while ICE raw sugar closed 0.92% lower on Friday due to good supplies from Brazil. Higher output and lower imports expectations for the 2012-13 season from China coupled with higher sugar surplus forecast for fourth straight year is keeping international prices under downside pressure.

Market Highlights
Unit Sugar Spot- NCDEX (Kolkata) Sugar M- NCDEX Nov '12 Futures Rs/qtl Last 3701

as on Oct 25, 2012 % Change Prev. day WoW -1.31 -2.61 MoM -3.37 YoY 15.66

Rs/qtl

3292

0.70

-3.63

-6.95

15.27

Source: Reuters

International Prices
Unit Sugar No 5- LiffeDec'12 Futures Sugar No 11-ICE Mar '13 Futures $/tonne $/tonne Last 545.2 430.00

as on Oct 26, 2012 % Change Prev day WoW 0.26 -0.92 -0.89 -3.54 MoM -4.40 -1.12 YoY -20.94 -24.91

Domestic Production and Exports


Crushing has started across Maharashtra and will commence soon in UP too. 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.

Source: Reuters

Technical Chart - Sugar

NCDEX Nov contract

Source: Telequote

Global Sugar Updates


Sugar output in Brazil jumped 57% during the first fortnight of October. th And thus output is now lower just by 3.7% as of 16 October at 26.7 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 since 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 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 Support

valid for Oct 27, 2012 Resistance 3310-3325

3260-3278

Outlook
Sugar prices may recover as demand is expected to emerge at lower levels. However higher quota is seen offsetting festive season demand which might cap the gains. Approval to unrestricted exports may benefit India only if the global sugar prices gain considerably. However, supply pressure from Brazil is keeping international sugar markets under downside pressure.

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Commodities Daily Report


Saturday| October 27, 2012

Agricultural Commodities
Oilseeds
Soybean: After witnessing some correction in the last two sessions,
soybean prices again recovered on Thursday and settled 3.6% higher on account of higher demand from solvent extractors. Also farmers are holding back their stocks in anticipation of better prices. New soybean arrivals at MP stood at 450000 bags, Maharashtra170000 bags and Rajasthan 100000 bags on Wednesday. Arrivals are expected to improve to 6-6.5 lakh bags in MP in the coming weeks. According to first advance estimates, Soybean output is pegged 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 marginally lower by 0.18% on supply pressure. However, farmers have slowed their sales expecting better prices for their crop. According to the latest crop progress report released by USDA, as on 23 Oct 2012, US soybean harvest is 80 per cent complete as compared to 71 per cent last week and 69 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. Argentina's 2012-13 soybean planting is Just 2% of the record 19.7 mn ha seen going to soybeans this season, down 4.2% from a year earlier as a series of recent heavy rains has slowed progress. Production is expected to reach 55-60 mn tn crossing record 52.7 mn tn in 2009-10. Brazil could also churn out 81 mn tn of oilseed and replace the drought-stricken US as the world's top soybean producer.
Soybean Spot- NCDEX (Indore) Soybean- NCDEX Nov '12 Futures Ref Soy oil SpotNCDEX(Indore) Ref Soy oil- NCDEX Nov '12 Futures

Market Highlights
Unit Rs/qtl Rs/qtl Rs/10 kgs Rs/10 kgs Last 3300 3357 708.8 700.8

as on Oct 25, 2012 % Change Prev day 1.35 3.61 0.86 2.62 WoW 4.33 6.08 5.27 4.27 MoM 0.67 5.82 -1.54 3.72 YoY 49.80 51.69 11.95 11.36

Source: Reuters

as on Oct 26, 2012 International Prices Soybean- CBOTNov'12 Futures Soybean Oil - CBOTDec'12 Futures Unit USc/ Bushel USc/lbs Last 1561 50.96 Prev day -0.18 -0.95 WoW 1.76 -1.20 MoM -0.75 -1.34
Source: Reuters

YoY 28.98 0.14

Crude Palm Oil

as on Oct 25, 2012 % Change Prev day WoW 1.30 2.47 4.34 3.72

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

Last 2500 435.2

MoM -1.54 -2.16

YoY -15.25 -13.69

MYR/Tonne Rs/10 kg

*Closing for 23rd October 2012.

Source: Reuters

Refined Soy Oil: Ref soy oil as well as MCX CPO traded on a
positive note on higher palm oil exports and good demand for edible oil in the domestic markets. Exports of Malaysian palm oil products for Oct. 1-25 rose 11 percent. 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. 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. 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. Rape/mustard Seed: Mustard Futures traded on a positive note due to low stocks coupled with festive season demand for its oil. Higher demand for mustard meal is also supporting prices. However, prospects of better sowing pressurized the prices. The Futures settled 1.95% higher on Thursday. 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 on a positive note in the coming week on account of good demand for edible oil in the domestic markets. However, in the short term prices will again come under downside pressure as arrivals are expected to improve in the coming weeks.

RM Seed
Unit RM Seed SpotNCDEX (Jaipur) RM Seed- NCDEX Nov '12 Futures Rs/100 kgs Rs/100 kgs Last 4070 4338 Prev day -1.69 1.95

as on Oct 25, 2012 WoW -4.80 3.41 MoM -1.93 12.56


Source: Reuters

YoY 35.89 39.67

Technical Chart Soybean

NCDEX Nov contract

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 25, 2012 Support 690-695 3280-3318 4260-4295 439-442 Resistance 708-714 3395-3440 4375-4408 450-454

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Commodities Daily Report


Saturday| October 27, 2012

Agricultural Commodities
Black Pepper
Pepper futures opened lower due to expectations of better output this season. However, the prices recovered from lower levels towards the end due to improving festive demand. Festive season demand has supported the prices in the spot. 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 as well as the Futures settled 0.01% and 0.35% lower on Thursday. 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 $8,850/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
Unit Pepper SpotNCDEX (Kochi) Pepper- NCDEX Nov '12 Futures Rs/qtl Rs/qtl Last 42682 44175 % Change Prev day -0.01 -0.35

as on Oct 25, 2012 WoW 0.95 2.57 MoM 1.41 1.89 YoY 23.80 28.40

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 27, 2012 Support 43600-43850 Resistance 44480-44700

Production and Arrivals


The arrivals in the spot market were reported at 14 tonnes while offtakes were 14 tonnes on Thursday. 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). Brazil is also expected to produce 22,000 tn this year. 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 is expected to continue to trade sideways with a positive bias 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 cap sharp gains.

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Commodities Daily Report


Saturday| October 27, 2012

Agricultural Commodities
Jeera
Jeera Futures corrected on Thursday as many exporters were avoiding buying at higher levels. However, export demand is expected to sustain due to a supply crunch in the global markets. Festive demand is also expected to be good in the coming days. Over the last couple of days, exporters have been buying actively due to escalated tensions between Syria and Turkey. Good rains in Gujarat have increased expectations of better sowing prospects ahead of the rabi sowing and have restricted sharp gains in the spot markets. The spot as well as the Futures settled 0.91% and 2.12% lower on Thursday. According to markets sources about 75% exports target has already been achieved due to a supply crunch in the global markets. Around 45 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 $2,900 tn (c&f) while Syria and Turkey are not offering. Carryover stocks of Jeera in the domestic market is expected to be around 4-5 lakh bags lower by around 3 lakh bags last year.

Market Highlights
Unit Jeera SpotNCDEX(Unjha) Jeera- NCDEX Nov '12 Futures Rs/qtl Rs/qtl Last 15040 14803 Prev day -0.91 -2.12

as on Oct 25, 2012 % Change WoW -0.57 -1.74 MoM 3.72 8.74 YoY 5.75 9.88

Source: Reuters

Technical Chart Jeera

NCDEX Nov contract

Production, Arrivals and Exports


Unjha markets witnessed arrivals of 5,000 bags, while off-takes stood at 5,000 bags on Thursday. 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 0.00 -1.15

as on Oct 25, 2012 % Change

Outlook
Jeera futures are expected to trade sideways. Prices may recover due to export buying. Festive buying may also lend support to the prices. However, exporters may stay away at higher prices. In the medium term (October-November 2012), prices are likely to stay firm as there are limited stocks with Syria and Turkey.
Turmeric SpotNCDEX (N'zmbad) Turmeric- NCDEX Nov '12 Futures

Unit Rs/qtl Rs/qtl

Last 5021 4966

WoW -0.02 -3.27

MoM -8.92 -11.92

YoY -10.30 -5.73

Turmeric
Turmeric Futures traded on a negative note on Thursday due to lack of fresh orders from the upcountry market and exporters. Stockists also have good carryover stocks with them. 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 markets remained closed due to festive and is expected to reopen on Monday. The Futures settled 1.15% lower on Thursday. Special Margin of 20% (in cash) on the Long Side in Turmeric November 2012 and December 2012 expiry contracts will be withdrawn with effect from beginning of day Saturday, Oct 20, 2012.

Technical Chart Turmeric

NCDEX Nov contract

Production, Arrivals and Exports


There were no arrivals in Erode and Nizamabad mandis as they remained closed on Thursday. 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 27, 2012 Support 14430-14670 4868-4916 Resistance 14960-15120 5008-5060

Outlook
Turmeric prices are expected to trade downwards today. Lack of fresh orders 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


Saturday| October 27, 2012

Agricultural Commodities
Kapas
NCDEX Kapas futures settled marginally up by 0.10% ar pace in procurement by CCI is supporting the prices.. ICE cotton futures closed lower by 0.43% on account of profit taking. Cotton harvesting has commenced in US, in all 38% is harvested as compared to 28% a week ago, versus 39% same period a year ago. Cotton crop condition is 42% in Good/Excellent state same as compares to last week, and 29% same period a year ago as on 23 Oct 2012.
NCDEX Kapas Futures MCX Cotton Futures

Market Highlights
Unit Rs/20 kgs Rs/Bale Last 1000 16410

as on Oct 25, 2012 % Change Prev. day WoW MoM 0.10 2.25 11.92 -1.03 -0.97 2.76 YoY -6.55

Source: Reuters

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
st

International Prices
ICE Cotton Cot look A Index Unit Usc/Lbs Last 72.42 81.35

as on Oct 26, 2012 % Change Prev day WoW -0.43 -5.86 0.00 0.00 MoM 4.17 0.00 YoY -29.20 #N/A

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 on account of improved demand. Also, Prices might take support as farmers are not willing to sell their produce at lower levels. In addition, supply worries due to poor quality of the fresh cotton crop delivery in the international market will give prices a further upward push. However, fresh arrivals from all over India and higher global cotton ending stocks might cap the sharp upside in medium term.
Source: Telequote

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

valid for Oct 27, 2012 Support 978-989 975-986 16000-16110 Resistance 1013-1027 1007-1020 16350-16480

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