Commodities Daily Report

Tuesday| November 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 Analyst anuj.choudhary@angelbroking.com (022) 2921 2000 Extn. 6132

Vaishali Sheth - Research Associate vaishalij.sheth@angelbroking.com (022) 2921 2000 Extn. 6133
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Commodities Daily Report

Tuesday| November 6, 2012

Agricultural Commodities
News in brief
Cyclone Nilam damages standing crops in coastal AP
Standing crops on roughly half a million hectares may have been badly damaged due to torrential rains in the wake of Nilam cyclone, according to preliminary estimates by officials. However, a more accurate assessment will be possible only after the waters recede completely. The crop loss has been very heavy in three districts East Godavari, West Godavari and Krishna. Till now, 25 casualties have been reported. According to East Godavari District Collector Neetu Prasad, standing paddy crop on almost 1.5 lakh hectares and cotton crop on 11,000 hectares has been damaged. Paddy crop in the Godavari delta as well as the uplands was damaged but the damage is more in the delta, according to sources. Farmers in the Konaseema area of East Godavari district are particularly despondent, as it is a crippling blow to them after the crop holiday which they observed last year. In West Godavari district, the damage to the paddy crop and horticultural crops is of a similar magnitude and in Krishna district, crops on l lakh hectares have been ruined, according to the District Collector. In Visakhapatnam district, standing crops on 25,000 hectares have been damaged. Source: Business Line)

Market Highlights (% change)

Last Prev. day

as on Nov 5, 2012
WoW MoM YoY

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

18763 5704 54.6 85.65 1682

0.04 0.11 1.45 0.93 0.48

0.68 0.68 0.94 0.13 -1.49

-0.57 -0.47 4.51 -2.83 -5.35

7.33 8.49 10.80 -7.09 -1.68

Source: Reuters

Brazil Sugar exports reached to all time high in October 2012

Brazil exported 3.998 million tons of sugar, raw value, in October up from 2687 million tons in September and up from 2.553 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 15.59 million tons of sugar this year till October which was 17.17 million tons, raw value, last year same period. (Source: Agriwatch)

Cabinet to decide on more wheat under open market sale next week
The Cabinet will take a decision on releasing more wheat under the open market sale scheme next week, even as flour mills in Kerala are seeking a higher allocation for this month. According to sources in the know, the Cabinet could decide on the release of as much as 70 lakh tonnes for December and January. This is part of the Governments plan to cut its inventories with the Food Corporation of India and other State agencies that has bulged. Currently, the Centre has stocks of over 40 million tonnes of wheat. Meanwhile, the Kerala Roller Flour Millers Association has asked the Food and Consumers Affairs Ministry to release more wheat for the State since the allocation under the open market scheme in October and November totally was 7,150 tonnes. The State needs 35,000 tonnes this month to meet the demand for Diwali, said P.K. Ahammed, Kerala Roller Flour Millers Association President. In a memorandum submitted to K.V. Thomas, Union Minister of State for Food, he said that even the quality of wheat offered was bad since it was from 2010-11 and 2011-12 crops. However, he stressed the need for immediate release of wheat required to meet Diwali as also Christmas demand. (Source: Business Line)

Informa Economics reduces US Corn yield for 2012 by 4.6 bushels to 122.4 bushels per acre.
Informa Economics has reduced its US corn crop yield for 2012 by 4.6 bushels to 122.4 bushels per acre compared to previous estimate. Moreover, US corn production seen at 10.738 billion bushels which is above from the latest USDA estimates, which last month put the U.S. corn crop at 10.706 billion bushels, based on a yield of 122.0 bushels per acre. (Source: Agriwatch)

Ukraine harvests 42 mln T grain from 94 pct area

Ukrainian farms have harvested 42.0 million tonnes of grain from 94 % of the planted area as of November 5, the Agriculture Ministry said on Monday. The ministry said the grain yield averaged 3.03 tonnes per hectare against 3.58 tonnes per hectare at the same date a year earlier. Ukraine harvested 56.7 million tonnes of grain in 2011. It said farms had already finished the wheat harvest, threshing 15.5 million tonnes of the commodity. Ukraine, which consumes 12 million tonnes of wheat per season, harvested 22.3 million tonnes of the commodity in 2011. The ministry also said farms had harvested 15.7 million tonnes of maize from 3.6 million hectares, or 81 % of the planted area. The maize harvest totalled 22.7 million tonnes in 2011. The ministry said farms had almost completed winter grain sowing, having covered 8.0 million hectares, or 98 % of the originally forecast area as of November 5. It said farms had sown 6.6 million hectares of winter wheat, 303,000 hectares of winter rye and 1.1 million hectares of winter barley. (Source: Reuters)

Rain set to continue in AP, Odisha, Bengal

A weather warning said that heavy rainfall would occur over coastal Andhra Pradesh, coastal Odisha and Gangetic West Bengal on Tuesday. An IMD outlook said that thundershowers may continue to lash coastal Andhra Pradesh, Odisha, and Gangetic West Bengal during the next two days. The tapering rain regime heading further to the east may also benefit Nagaland, Manipur, Mizoram and Tripura during this period. An incoming western disturbance from across the northwest border would bring rain or snow over Jammu and Kashmir and Himachal Pradesh during next two days. (Source: Business Line)

US wheat ratings fall to record low due to dry weather

U.S. wheat ratings fell to 39 percent good to excellent, the lowest ever for early November, as the health of the crop deteriorated due to dry conditions in the southern U.S. Plains. The U.S. Agriculture Department's weekly crop progress and conditions report released on Monday afternoon also said the U.S. corn harvest was 95 percent completed and the soybean harvest 93 percent completed as of Nov. 4. Analysts, on average, had expected good-to-excellent ratings for wheat to be 39 percent, the corn harvest 95 percent completed and the soybean harvest 92 percent completed, according to a Reuters survey. "Moisture is still needed throughout the State to establish the 2013 wheat crop," according to a report from the Kansas field office of the USDA's National Agricultural Statistics Sevice (NASS).In Kansas, the biggest U.S. wheat producing state, the winter wheat crop was rated 37 percent good to excellent. A year ago the Kansas crop was 45 percent good to excellent.
(Source: Reuters)

Spices Board offers new trading platform

In a bid to develop alternate direct marketing system to bypass the oft disturbed cardamom auctions, the Spices Board is offering new trading platforms for farmers. Cardamom growers in Kerala, Tamil Nadu and Karnataka are being provided an opportunity in the forthcoming India International Trade Fair in New Delhi for marketing their produce in the potential North Indian market. The Spices Board will make available facilities for showcasing and entering into marketing tie ups with prominent merchants and dealers of cardamom in the major markets of Delhi and the States of Uttar Pradesh, Madhya Pradesh, Punjab, Haryana and Rajasthan. (Source: Business Line)

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Commodities Daily Report

Tuesday| November 6, 2012

Agricultural Commodities
Chana
After correcting sharply during the last week, chana futures settled higher by 0.69% on account of short coverings. Spot prices also settled marginally higher by 0.31% on the back of Good demand at lower levels. Except for Wheat, minimum support price of all other rabi crops has been increased by CCEA for 2012-13 season. MSP of Chana/Gram is raised by Rs 200 per qtl for 2012-13 season to Rs 3000. Higher returns and favorable soil condition will definitely boost acreage in the coming season. Although overall pulses sowing is lagging by 31% to 1.87 mn ha till 2nd Nov, chana sowing is up Maharashtra and AP. In Maharashtra, chana sowing is completed on 2.9 lakh hectares as on 2nd November, which is 24% of the targeted 12.32 lakh ha, and up by 67% compared to last year. In AP chana sowing is up by 15.9 to 1.96 lakh ha. 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.
st

Market Highlights
Unit Rs/qtl Rs/qtl Last 4480 4537 Prev day 0.31 0.69

as on Nov 5, 2012 % change WoW MoM -4.76 -0.23 -4.52 -2.68 YoY 31.85 34.67

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

Source: Reuters

Technical Chart - Chana

NCDEX Dec contract

Sowing progress and demand supply fundamentals

Improved rains towards the end of monsoon season coupled with hike in MSP have raised prospects of Chana sowing in the 2012-13 season. Also, farm ministry has targeted 7.9 mn tn chana output for 2012-13 season, higher compared to 7.58 mn tn in 2011-12. According to the Ministry of Agriculture 99.81 Lakh hectare area has been planted under Kharif pulses in 2012-13 compared to 108.28 lakh hectare (ha) in the previous 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. 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 Dec Futures Unit Rs./qtl Support

valid for Nov 6, 2012 Resistance 4380-4427

4258-4295

Outlook
Chana futures may extend the gains of the previous session on account of lower level buying. Although, short term trend remain positive for chana, we expect prices to come under downside pressure in the second half of November as supply pressure may ease amid shipments from Australia and Canada. Going forward, prices may also take cues from sowing progress of Rabi pulses.

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Commodities Daily Report

Tuesday| November 6, 2012

Agricultural Commodities
Sugar
Sugar gained sharply during the early part of the session on Monday, however, settled lower as higher stocks to meet the festive season demand is capping the upside in the prices. December futures settled 0.38% lower on Monday while, spot gained by 0.8%. Despite festival season, prices are under check this season as government has released higher quota of 40 lakh tonnes for October and November, compared to 34.6 lakh tonnes during 2011. The Food Ministry is working on a cabinet note to raise import duty on white sugar to 20% to avoid flooding of the sweetener in the domestic market and check prices. However, the decision will be taken only after three months taking into account the progress made in crushing. Liffe white sugar settled marginally higher by 0.09% while ICE raw sugar closed 0.62% lower on Monday due to supply pressure 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 3760

as on Nov 5, 2012 % Change Prev. day WoW 0.82 1.45 MoM 1.23 YoY 13.32

Rs/qtl

3387

-0.38

0.00

-0.09

14.04

Source: Reuters

International Prices
Unit Sugar No 5- LiffeDec'12 Futures Sugar No 11-ICE Mar '13 Futures $/tonne $/tonne Last 537.6 429.56

as on Nov 5, 2012 % Change Prev day WoW 0.09 -0.62 -1.30 -1.18 MoM -10.10 -10.51 YoY -21.61 -25.40

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 Dec contract

Source: Telequote

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

valid for Nov 6, 2012 Resistance 3337-3353

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. Brazil exported 3.998 million tons of sugar, raw value, in October up from 2687 million tons in September. Brazil has exported only 15.59 million tons of sugar this year till October which was 17.17 million tons, raw value, last year same period. 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)

3285-3300

Outlook
Sugar prices may remain under downside pressure as supplies are sufficient to meet the festive season demand. Also weak international markets are making exports unviable. Thus, supply pressure would keep the downside intact in the short to medium term.

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Commodities Daily Report

Tuesday| November 6, 2012

Agricultural Commodities
Oilseeds
Soybean: Soybean futures opened lower on account of weak
international markets. However, prices recovered on good demand for soy meal and thus settled higher by 0.49%. Spot prices however, remained weak due to rising supplies. Soybean arrivals at MP that stood at 500000 bags on Monday, while in Maharashtra and Rajasthan it stood at 1.5 an 1 lakh bags respectively. Solvent plants may be aggressive buyers in the coming days to keep up with their commitments for DOC exports. Soy meal exports during October are down as most export commitments were done for forward trade like Nov-Dec amid uncertainty over supplies in October. According to first advance estimates, Soybean output is pegged at 126.2 lk tn for 2012-13.

Market Highlights
Unit Soybean Spot- NCDEX (Indore) Soybean- NCDEX Nov '12 Futures Ref Soy oil SpotNCDEX(Indore) Ref Soy oil- NCDEX Nov '12 Futures Rs/qtl Rs/qtl Rs/10 kgs Rs/10 kgs Last 3268 3292 692 674.6

as on Nov 5, 2012 % Change Prev day -0.49 0.49 -0.90 1.35 WoW -0.55 -0.57 -3.17 -3.58 MoM 2.06 2.22 3.34 2.69 YoY 46.74 46.22 8.93 5.09

Source: Reuters

as on Nov 5, 2012 International Prices Soybean- CBOTNov'12 Futures Soybean Oil - CBOTDec'12 Futures Unit USc/ Bushel USc/lbs Last 1504 48.32 Prev day -1.49 -1.91 WoW -1.51 -3.71 MoM -3.05 -4.81
Source: Reuters

International Markets
CBOT Soybean settled lower by 1.49% on Monday on account of supply pressure as well as improving weather in South America. According to the latest crop progress report released by USDA, as on 4th Nov 2012, US soybean harvest is 93% complete as compared to 87% last week and 86% compared to 5 year average. Planting of Soybean in Argentina has been delayed due to excessive moisture this season. Area and production for marketing year 201213 are maintained at 19.7 million hectares and 55 million tonnes, respectively. Brazil could also churn out 81 mn tn of oilseed and replace the drought-stricken US as the world's top soybean producer. 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.

YoY 24.06 -6.84

Crude Palm Oil

as on Nov 5, 2012 % Change Prev day WoW -2.95 0.28 -5.15 0.26

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

Last 2300 429.7

MoM 5.36 2.80

YoY -22.95 -15.86

MYR/Tonne Rs/10 kg

Source: Reuters

RM Seed
Unit RM Seed SpotNCDEX (Jaipur) RM Seed- NCDEX Nov '12 Futures Rs/100 kgs Rs/100 kgs Last 4238 4121 Prev day -0.29 0.76

as on Nov 5, 2012 WoW -2.59 -3.76 MoM -0.29 1.33

Source: Reuters

Refined Soy Oil: Ref soy oil as well as CPO settled higher by 1.35%
and 0.28% respectively on account festive season demand. Worries over high Palm oil stocks in Malaysia as well as reduction in Indonesias export tax led to a correction on the BMD. This could further dent demand for Malaysian palm oil and exert pressure on the BMD palm oil futures. Exports of Malaysian palm oil products for Oct. 1-25 rose 11 percent. 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.

YoY 36.47 29.02

Technical Chart Soybean

NCDEX Dec contract

Rape/mustard Seed: After witnessing correction last week, Rm

seed futures settled 0.7% higher on Monday. Mustard sowing as on th 25 Oct was reported at 8.37 lakh ha as compared to 20.15 lakh ha in the same period last year. However, on the back of higher returns and improved rains, next years output is expected to be better. Prospects of better sowing shall keep sentiments weak in the medium term. Outlook Edible oil complex may extend the gains of the previous session on Tuesday. However, prices may decline towards the end due to arrival pressure in the domestic markets coupled with weak international markets. Export duty cut on CPO by Indonesia will make available cheaper palm oil for overseas buyers and refiners and could dent demand for Malaysian palm oil and weigh on prices.

Source: Telequote

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

valid for Nov 6, 2012 Support 655-661 3255-3295 4100-4148 417-423 Resistance 675-681 3365-3398 4235-4270 434-440

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Commodities Daily Report

Tuesday| November 6, 2012

Agricultural Commodities
Black Pepper
Pepper futures traded lower yesterday last week on expectations of a higher output this season. Farmers are also trying to liquidate their stocks ahead of the commencement of arrivals of the fresh crop. Weak exports demand for Indian pepper in the international markets remains weak due to huge price parity. However, festive as well as winter demand may support prices at lower levels. The Spot as well as the Futures settled 0.02% and 0.23% lower on Monday. 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 $8,700/tn(C&F) while Vietnam was offering 550GL at $7,000/tn, Brazil Austa at $6,700/tn, and Indonesia Austa at $6,850/tn (FOB). 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 41930 42535 % Change Prev day -0.02 -0.23

as on Nov 5, 2012 WoW -1.72 -3.07 MoM -1.41 -3.12 YoY 20.91 21.10

Source: Reuters

Technical Chart Black Pepper

NCDEX Dec 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 Dec Futures Unit Rs/qtl

valid for Nov 6, 2012 Support 41800-42050 Resistance 42550-42800

Production and Arrivals

The arrivals in the spot market were reported at 10 tonnes while offtakes were 8 tonnes on Monday. As per IPC, 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 trade lower today. Liquidation pressure from farmers as well as low export demand may pressurize prices. Good supplies in the international market from other origins may also keep prices under check. However, festive season demand is expected to support prices at lower levels.

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Commodities Daily Report

Tuesday| November 6, 2012

Agricultural Commodities
Jeera
Jeera Futures bounced back sharply from lower levels on reports of some export enquiries. However, the sowing of the crop has started and is expected to gain momentum in the coming days, thus pressuring prices. Sowing in Gujarat is currently lower by 15-20%. Expectations of good export demand at lower levels supported prices in the spot. Festive demand is also expected to improve. Exporters are been buying due to tensions between Syria and Turkey. The spot as well as the Futures (Dec) settled 0.59% and 2.19% higher on Monday. 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 $2,825 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 14956 14413 Prev day 0.59 1.69

as on Nov 5, 2012 % Change WoW -0.48 -0.60 MoM 1.73 -0.12 YoY 3.95 3.55

Source: Reuters

Technical Chart Jeera

NCDEX Dec contract

Production, Arrivals and Exports

Unjha markets witnessed arrivals of 7,000 bags, while off-takes stood at 7,500 bags on Monday. 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 0.70 0.78

as on Nov 5, 2012 % Change

Outlook
Jeera futures are expected to trade sideways. Prices may recover if the export demand increases. Festive buying may also lend support to the prices. However, sowing figures may cap sharp gains. 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 4985 5194

WoW 1.19 1.09

MoM -5.37 -4.87

YoY -11.59 9.90

Turmeric
Turmeric Futures traded on a bullish note yesterday on expectations of revival of domestic demand in the coming days. Also, fresh export enquiry as well as orders boosted the prices. Stockists have good carryover stocks with them, capping sharp gains in the spot. 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 December Futures settled 0.78% and 2.01% higher on Monday. 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 Dec contract

Production, Arrivals and Exports

Arrivals in Erode and Nizamabad mandi stood at 6,000 bags and 700 bags respectively on Monday. 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 Dec Futures Turmeric NCDEX Dec Futures Rs/qtl Rs/qtl

valid for Nov 6, 2012 Support 14780-14920 5076-5126 Resistance 15215-15410 5252-5310

Outlook
Turmeric prices are expected to trade upwards today. Revival of domestic as well as export orders are expected to support prices. However, large stocks may pressurize prices.

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Commodities Daily Report

Tuesday| November 6, 2012

Agricultural Commodities
Kapas
NCDEX Kapas futures declined during the early part of the session on Monday on account of commencement of harvesting in the domestic markets. However, prices settled higher by 0.73% as slow pace of harvesting led to short coverings= in the markets. As on 28th October 2012, 8.69 lakh bales of Cotton has arrived so far, down by 33% compared to last year 12.96 lakh bales during the same period. ICE cotton futures settled marginally up by 0.07% on account of short coverings. Cotton harvesting has commenced in US, in all 50% is harvested as compared to 38% a week ago, versus 56% same period a year ago. Cotton crop condition is 43% in Good/Excellent state compared to 42% st last week and 29% same period a year ago as on 1 Nov 2012.

Market Highlights
Unit Rs/20 kgs Rs/Bale Last 967 16050

as on Nov 5, 2012 % Change Prev. day WoW 0.73 -2.77 0.31 -2.19 MoM 2.65 -2.19 YoY -6.58

NCDEX Kapas Futures MCX Cotton Futures

Source: Reuters

International Prices
ICE Cotton Cot look A Index Unit Usc/Lbs Last 70.4 81.35

as on Nov 5, 2012 % Change Prev day WoW 0.07 -0.73 0.00 0.00 MoM 0.00 0.00 YoY -27.88 -29.20

Domestic Production and Consumption

According to Cotton Advisory Boards (CAB) latest estimates for 2012-13 season that commenced in October, domestic cotton production is pegged 334 lakh bales, down 5.6% from the previous years estimates of 353 lakh bales. Lower opening stocks coupled with estimated lower output will result in lower supplies this season at 374 lakh bales, a decline of 8.7% compared with last years 410.77 lakh bales. On the consumption front, domestic consumption is estimated higher at 270 lakh bales on the back of higher mill consumption. However, after witnessing record exports in 2011-12 season, Indian exports could witness significant fall this season on the back of lower availability along with unattractive domestic cotton prices. CAB estimates cotton exports at 70 lakh bales this season, compared with 128.8 lakh bales last year.

Source: Reuters

Technical Chart - Kapas

NCDEX April contract

Global Cotton Updates

Source: Telequote

Worries over possible supply squeeze have pushed cotton futures towards 80 cents per pound during mid October. However, in the past one week, ICE cotton futures plunged back to its 71 cents levels on account of rising certified cotton stocks. Stocks rose by a 16% since midOctober, and then jumped by 20% within two days. Harvesting is on in US and 50 percent of harvesting is completed till date. Higher global ending stocks are seen capping the upside in the cotton prices this year too. However, downside is also limited as prices are again nearing its 12 year average price of 65 cents per pound. Markets will now take cues from the Chinese demand for cotton and trade policies of India with respect to cotton exports. In its October monthly demand supply report, 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).

Technical Chart - Cotton

MCX Nov contract

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 Nov 6, 2012 Support 942-956 940-952 15770-15920 Resistance 978-991 976-989 16180-16290

Outlook
Weak international markets may pressurize cotton prices during the initial part of the week. However, no major downside is expected in the domestic markets as farmers will not sell their stocks at very low prices. Also, CCI procurement at MSP levels may support prices from falling sharply.

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