Commodities Daily Report

Wednesday| December 12, 2012

Agricultural Commodities

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

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

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Commodities Daily Report

Wednesday| December 12, 2012

Agricultural Commodities
News in brief
Seed firms pin hope on better rabi sales
After an erratic monsoon in the kharif season, seed companies hope for better sales in the rabi season, on improved water availability after the late rains in key growing regions. They see the seed demand for commodities such as mustard and wheat grow due to good sowing. Trader sources say oilseed sowing is up one per cent over this time last year, as on December 6. That under mustard seed has risen by close to two per cent, to around six million hectares. The Associated Chambers of Commerce and Industry of India ( Assocham) says the seeds industry will grow at about 15 per cent yearly from the current Rs. 7,000 crore to Rs. 10,700 crore by 2015. Production levels of seeds are likely to grow from the current level of about 40 million quintal to 63 mn qtls by 2015, it said, based on an analysis titled The future of Indian seed industry.
(Source: Business Standard)

Market Highlights (% change)

Last Prev. day

as on Dec 11, 2012

WoW MoM YoY

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

19387 5899 54.27 85.79 1708

-0.12 -0.17 -0.17 0.27 -0.28

0.20 0.16 -0.88 -3.06 0.81

3.77 3.74 -0.60 -0.33 -1.28

21.15 22.88 2.19 -14.33 2.91

.Source: Reuters

China Imported 41.6 Lakh Tons of Soy in Nov. - Customs

China imported 41.6 lakh tons of soybean in the month of November, 3.2 percent compared to the previous month. Moreover, vegetable oils imports in November were 920,000 tons, up 2.2 percent from the previous month - General Administration of Customs of China. (Source:
Agriwatch)

High input cost to keep potato prices firm

With the new potato crop expected to be in market over the next two weeks, asharp rise in input cost is likely to keep the prices firm. Prices of potato seeds in West Bengal, which accounts for 30 per cent of the countrys potato production, have gone up by almost 50 per cent over the last year. The state imports more than 70 per cent of its total seed requirement from Punjab. In addition, the sharp rise in fertiliser prices has added to the cost of production. The cost of a 50- kg urea bag has gone up from Rs. 700- 800 last year, to Rs. 1,3001,400 this year, according to potato traders. As a result, the cost of farming of potato this year has been about Rs. 400 per quintal, against Rs. 260- 270 per quintal last year. At present, the wholesale price of potato is Rs. 1,000 per quintal, and Rs. 13- 14 per kg at the retail level, almost 50 per cent higher than the corresponding period last year. The prices might temporarily ease at the arrival of new crop to Rs. 10 per kg, but owing to high input costs, will rebound and lower levels will not sustain, say potato traders.
(Source: Business Standard)

India considers extra 2.5 mln T wheat exports - minister

India is considering a proposal to allow an extra 2.5 million tonnes of wheat for overseas sale, Food Minister K.V. Thomas said on Tuesday. India, the world's second biggest producer of the grain, has allowed 2 million tonnes of overseas sales so far this year from government warehouses as part of a strategy to cut huge stocks built due to successive bumper harvests.In reply to a query in the parliament, he said three state-run companies have so far tendered 1.73 million tonnes for overseas sale this year. (Source: Reuters)

Better grain export infrastructure an urgent need

Major agricultural exporters need to urgently upgrade their networks of road, rail and waterways to prepare to feed a world population forecast to grow by one-third by mid-century, the head of global agribusiness company Bunge Ltd said on Tuesday. Alberto Weisser, chief executive of Bunge, listed improved infrastructure and the removal of trade barriers as two concrete steps to assure adequate food availability. Experts say farm output must also double in order to feed a more populous and wealthier world. The global population is forecast to hit 9 billion people by 2050. (Source: Reuters)

Threat of El Nino peters out

El Nino, the warm water effect that disrupts weather pattern around the globe, is unlikely to develop into a major threat. The situation is likely to continue at least until the middle of next year, according to the US Climate Prediction Center. Current data on sea surface temperatures show that the Pacific Ocean is neutral to El Nino and La Nina. While El Nino leads to drought across the globe, the La Nina is a phenomenon that brings heavy rainfall. The Pacific Ocean is crucial to development of El Nino and La Nina as warming of its sea surface leads to higher atmosphere temperatures around the world. According to the Australian Bureau of Meteorology, the tropical Pacific is neutral with respect to the El Nio-Southern Oscillation. This means it indicates neither El Nio nor La Nia. Climate models indicate this situation is likely to remain through the Southern Hemisphere summer. (Source: Business Line)

Iowa farmland prices set record high in 2012, ignore drought

Red-hot demand for farmland in the top U.S. corn-growing state of Iowa drove prices to record highs in 2012, buoyed by demand from cash-rich farmers and ignoring the worst U.S. drought in the last 50 years. The average price of Iowa farmland was $8,296 an acre an all-time high a 23.7 percent rise from a year ago, according to the Iowa Land Value survey of 486 real-estate brokers and other market participants compiled by Iowa State University. That surpassed the previous record of $6,708 set in 2011. The gains also mark the third year in a row where values rose more than 15 percent. (Source: Reuters)

Spot rubber steady on demand from tyre makers

Spot rubber finished steady on Tuesday. The absence of active market participants and trendsetting factors either in the domestic or international scene kept the sentiments almost neutral during late trading hours. According to reports, Indian rubber futures are likely to edge higher this week on bargain hunting, driven by an upsurge in overseas markets and as the demand from tyre makers improved in spot markets. Sheet rubber finished unchanged at Rs 162.00 a kg according to traders. The grade improved to Rs 162.00 (Rs 161.50) both at Kottayam and Kochi as quoted by the Rubber Board. (Source: Business Line)

US, world wheat stocks swell, USDA says; prices slide

Global wheat stockpiles will end the marketing year higher than expected, while U.S. corn inventories remain extremely low as lower prices bolster demand from feeders, processors and exporters, the government said on Tuesday. In a monthly report on global crops that made few major changes to the supply outlook, the U.S. Agriculture Department (USDA) pointed to "the slow pace of sales" in raising its estimate of U.S. wheat ending stocks by 7 percent to 754 million bushels. Traders had expected 712 million bushels. The agency also raised its forecast for global wheat inventories to almost 177 million tonnes, from 174 million in November and well above market expectations, following estimates of larger crops from Australia, Canada and China. (Source: Reuters)

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Commodities Daily Report

Wednesday| December 12, 2012

Agricultural Commodities
Chana
Chana spot as demand is seen emerging at lower levels offsetting higher imports. Chana futures which declined during the early part of the session recovered and settled marginally higher by 0.02% on Tuesday as demand at lower levels is seen limiting the downside in the prices. Total pulses acreage as on 7 December 2012 recovered significantly and stood at 116.11 lakh hectares, down marginally by 0.9% yoy. As on 30th November pulses acreage was down by 6.4 percent to 102.49 lakh ha. Chana sowing picked pace mainly in Rajasthan, where it is up by 1% at 14.21 lakh hectares compared to last week when acreage was down by 19.2%. In Maharashtra Chana acreage is up by 46% at 8.64 lakh ha as on th th 7 Dec, 2012. While in AP it is up by 18.36% at 5.8 lakh ha as on 5 Dec. In Australia, total chickpea production in 201213 is estimated to have increased to a record of around 746000 tones as compared with 485000 tones in 2011-12. India imports Chana mainly from Australia and Canada and higher availability in these countries at comparatively cheaper rates is seen boosting imports of Chana to meet the domestic shortfall. Australian Chana is quoted at lower rates -USD 625-635 per MT. The Commission for Agriculture Costs and Prices (CACP) has suggested 10 per cent import duty on pulses to encourage domestic production. in the first six months of the new fiscal that is from April to September this year, imports were an estimated 12 lakh tonnes.
th

Market Highlights
Unit Rs/qtl Rs/qtl Last 4200 4158 Prev day 0.00 0.02

as on Dec 11, 2012 % change WoW MoM 1.25 -6.59 3.56 -10.08 YoY 30.91 34.43

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

Source: Reuters

Technical Chart - Chana

NCDEX Jan contract

Source: Telequote

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. 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 400 per qtl for 2012-13 season to Rs 3200. Higher returns and favorable soil condition will definitely boost acreage in the coming season. 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)

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

valid for Dec 12, 2012 Resistance 4030-4070

3925-3960

Outlook
Chana January contract remain firm in the early part of the session amid lower level demand. However, upside may be capped on higher sowing prospects. Ease in supplies amid higher shipments may keep prices under check.

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Commodities Daily Report

Wednesday| December 12, 2012

Agricultural Commodities
Sugar
Sugar spot declined further amid higher supplies in the domestic markets. However, January sugar futures contract extended the gains of Monday and settled higher on Tuesday on account of hike in cane price by the UP state government. The UP state government on Friday last week fixed the state advisory price (SAP) for early maturing variety of cane at Rs 290 per qtl against Rs 240 in the previous season, for common variety Rs 280 per qtl against Rs 245 and for late maturing variety, Rs 275 per qtl against Rs 240. The price is about 71 percent higher than the floor price fixed by the federal government at Rs 170/qtl. Government has allocated total 70 lac tons of non-levy sugar quota for Dec-March 2012-13 period which is higher from 59.5 lac tons last year. According to food ministry, Sugar production in the country is expected to decline to 23 million tonnes in 2012-13 due to delayed monsoon and drought situation in Maharashtra and Karnataka. Liffe white sugar as well as ICE sugar settled 0.43% and 0.64% higher on account of long liquidation by the market participants.

Market Highlights
Unit Sugar Spot- NCDEX (Kolhapur) Sugar M- NCDEX Dec '12 Futures Rs/qtl Last 3336

as on Dec 11, 2012 % Change Prev. day WoW -0.34 -2.19 MoM -3.30 YoY 8.70

Rs/qtl

3268

-0.21

-0.06

-3.60

9.01

Source: Reuters

International Prices
Unit Sugar No 5- LiffeMar'13 Futures Sugar No 11-ICE Mar '13 Futures $/tonne $/tonne Last 508.2 419.56

as on Dec 11, 2012 % Change Prev day WoW 0.43 0.64 -1.91 -2.88 MoM -4.02 -0.94 YoY -16.50 -19.45

.Source: Reuters

Domestic Production and Exports

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. 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.

Technical Chart - Sugar

NCDEX Jan contract

Global Sugar Updates

Consultancy Kingsman revised up its 2012/13 world sugar surplus estimate to 9.2 million tonnes raw value on Friday, citing increased supply from producers including Brazil and China. Kingsman pegged global 2012/13 sugar output at 180.1 million tonnes raw value, up from the previous estimate of 177.3 million tonnes, and up from 2011/12 output of 175.4 million tonnes. (Source: Reuters) Brazil exported 2.3 mn tn raw sugar in November, down from 3.17 mln tn in October. Sugar output in brazil which was lower compared to last year since the beginning of the crushing season in May, is now up marginally by 0.1% at 29.3 mn tn. Thailand, the world's second-largest exporter after Brazil, has slashed its output forecast in the year to October 2013 to 9.4 million tonnes from 10 million due to poor rain. About 1 mn tn of cane have been crushed in Thailand as the harvest progresses, producing up to 56,000 tn of sugar so far, a 28% increase from the same year-ago period.

Source: Telequote

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

valid for Dec 12, 2012 Resistance 3305-3320

3270-3280

Outlook
Sugar prices may trade on a positive note due to hike in the SAP. However, sharp gains may be capped as crushing in UP may start at full pace. Also, sufficient supplies along with subdued demand may cap sharp upside in the prices.

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Commodities Daily Report

Wednesday| December 12, 2012

Agricultural Commodities
Oilseeds
Soybean: Soybean extended the gains of the previous session and settled by 0.7% on account of robust demand for soybean to
meet soy meal export commitments. Also, firm international markets ahead of monthly demand supply report supported the positive market sentiments. Total soybean arrivals increased on Tuesday to 2.95 lakh bags compared with 2.80 lakh bags on Monday, while demand from solvent extractors also remained strong. According to first advance estimates, Soybean output is pegged at 126.2 lakh tn for 2012-13. Exports of soy meal rose to 517,103 tonnes in November from 397,659 tonnes a year ago. Overall oil meal exports in the first eight months of the year beginning April fell to 2.4 million tonnes from 3 million tonnes in the previous year.

Market Highlights
Unit Soybean Spot- NCDEX (Indore) Soybean- NCDEX Dec '12 Futures Ref Soy oil SpotNCDEX(Indore) Ref Soy oil- NCDEX Dec '12 Futures Rs/qtl Rs/qtl Rs/10 kgs Rs/10 kgs Last 3296 3291 728.2 721

as on Dec 11, 2012 % Change Prev day 1.04 0.67 0.01 0.22 WoW 4.20 6.04 0.05 1.59 MoM 0.70 1.94 5.51 7.68 YoY 44.94 45.63 13.55 12.44

Source: Reuters

International Markets
According to the USDA monthly crop report, U.S. soybean ending stocks are forecasted at 130 mn bsh, below its November estimate of 140 mn. Also, global soybean ending stocks were forecast to 59.93 mn tn from 60.02 mn in November. Production estimates for Brazil and Argentina were unchanged at 81 mn tn and 55 mn tn respectively. CBOT soybean settled marginally lower by 0.19% on Tuesday on account of profit taking at the end of the day. China, the world's largest soy buyer, imported 4.16 mn tn of soybeans in November, up 3.2% from October with crushing margins improving from a month ago . Imports for the first 11 months stood at 52.49 million tonnes, up 11.4 percent on the year. Growers advanced seedings by 11% points during the week 30 ended, covering 58% of the 19.4 mn ha expected to be sown this season. Although, the rate of planting picked up as the weather moderated after the Pampas was lashed by harsh August-October storms, it is still 8% below last years level.
th

as on Dec 11, 2012 International Prices Soybean- CBOTJan'13 Futures Soybean Oil - CBOTDec'12 Futures Unit USc/ Bushel USc/lbs Last 1472 49.87 Prev day -0.19 -1.89 WoW 1.13 0.26 MoM 1.38 4.40
Source: Reuters

YoY 31.60 1.80

Crude Palm Oil

as on Dec 11, 2012 % Change Prev day WoW -1.60 -1.26 -0.62 -1.78

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

Last 2087 408.5

MoM -8.86 -2.99

YoY -30.20 -19.48

MYR/Tonne Rs/10 kg

Source: Reuters

Refined Soy Oil: Ref soy oil settled higher by 0.2% while CPO
continued with its downward trend amid higher stocks. Malaysia's November palm oil stocks rose 2.3 percent to a record high of 2,562,900 tonnes from a revised 2,505,713 tonnes in October. Exports of Malaysian palm oil products for Dec 1-10 rose 0.4 percent to 516,841 tonnes from 514,798 tonnes shipped during Nov 1-10. Dorab Mistry, head of edible oils trading, Godrej is predicting CPO futures on BMD to trade in a range of 2300 and 2600 from now until February 2013. This will ensure high stock levels in both countries but particularly in Malaysia. Prices may plunge further if India imposes a 10% import duty on CPO and a 20% import duty on Refined Palm products. Palm oil output in the world's biggest producer Indonesia is expected to climb 7% next year to 27 mn tn.

RM Seed
Unit RM Seed SpotNCDEX (Jaipur) RM Seed- NCDEX Dec'12 Futures Rs/100 kgs Rs/100 kgs Last 4225 4095 Prev day -0.59 -0.61

as on Dec 11, 2012 WoW 0.00 1.49 MoM -1.17 -1.54

Source: Reuters

YoY 35.80 30.04

Technical Chart Soybean

NCDEX Jan contract

Rape/mustard Seed: RM seed futures remained under downside

pressure amid higher planting area. The agriculture ministry data showed higher mustard seed planting figures of mustard seed. Mustard has been planted over 60.5 lh so far, against 59.6 lh a year ago. MSP for Mustard seed is increased to Rs 3000/qtl. Indias rapeseed output is expected to rise by 5% to 6.5 mn tn from 6 mn tn last year.

Outlook
Soybean complex may trade range bound with downward bias as USDA has kept its Brazil Argentina crop forecast unchanged. However, prices recover towards the end as domestic demand remain robust of soybean. Mustard seed prices may trade with negative bias on higher planting figures while, Palm oil may trade with a downward tinge on account of higher stocks.

Source: Telequote

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

valid for Dec 12, 2012 Support 693-700 3270-3295 4090-4110 405-409 Resistance 715-720 3350-3380 4180-4210 416-420

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Commodities Daily Report

Wednesday| December 12, 2012

Agricultural Commodities
Black Pepper
Pepper February Futures traded on positive yesterday due to winter demand coupled with low stocks in the domestic markets. Prices have corrected sharply over the last one month over reports that FMC is probing into complaints against movement in the pepper market. Better output expectations in the domestic as well as the international markets have also pressurized prices over the last couple of weeks. Farmers are trying to liquidate their stocks ahead of the commencement of harvesting of the fresh crop. Exports demand for Indian pepper in the international markets is also weak due to price parity. The Spot settled as well as the February Futures settled 0.2% and 1.09% higher on Tuesday. Pepper prices in the international market are being quoted at $7,700/tn(C&F), while Vietnam was offering Austa at $7,000/tn, Brazil Austa at $6,700/tn, and Indonesia Austa at $6,500/tn (FOB).

Market Highlights
Unit Pepper SpotNCDEX (Kochi) Pepper- NCDEX Dec '12 Futures Rs/qtl Rs/qtl Last 38559 39010 % Change Prev day 0.20 0.45

as on Dec 11, 2012 WoW 0.93 0.62 MoM -6.35 -6.54 YoY 10.07 8.69

Source: Reuters

Technical Chart Black Pepper

NCDEX Feb contract

Exports and Imports

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 pepper during Jan-Oct 2012 stood at 102,340 mt, lower by 12% as compared to 1,15,780 mt in the same period last year. Total exports in 2012 are forecasted at around 1,10,000 tonnes. 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 26% during January-September 2012 period to 41,923 tn as compared to 52,489 tn in the same period previous year. 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 Feb Futures Unit Rs/qtl

valid for Dec 12, 2012 Support 33160-33770 Resistance 34840-35290

Production and Arrivals

The arrivals in the spot market were reported at 15 tonnes while offtakes were reported at 10 tonnes on Tuesday. As per IPC, Global pepper production in 2012 is projected at 3.27 lk tn, up compared with 3.18 lk tn in 2011. Production for 2013 is projected at 316832 tn. Indonesian pepper output is expected to rise by 24% and in Vietnam by 10%. According to previous estimates, pepper output in Vietnam is estimated to be 1 lakh tonne in 2012 as compared to 1.1 lakh tonne in 2011. 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) Pepper production in 2012-13 is expected around 60,000-63,000 tonnes. Currently, pepper is in the fruit formation stage in Kerala.

Outlook
Pepper is expected to trade on a positive note in the February contract today. Festive demand coupled with winter buying may support prices at lower levels. However, higher output expectations as well as reports that FMC is probing into complaints against price movement may cap sharp upside.

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Commodities Daily Report

Wednesday| December 12, 2012

Agricultural Commodities
Jeera
Jeera Futures traded in a rangebound manner yesterday. However, prices shot up towards the end of the day and hit the initial 2% upper circuit breaker on fresh export enquiries. However, sluggish domestic demand kept prices in the spot market under check. According to rd Gujarat State Agri Dept. sowing in Gujarat as on 3 Dec is reported at 2.219 lakh ha compared with 1.926 lakh ha in the same period last year. Higher stocks for delivery on the exchange warehouse have also pressurized prices. Exporters are buying due to tensions between Syria and Turkey as they are not offering. The spot as well as the March Futures settled 0.17% and 2% higher on Tuesday. According to markets sources about 75% exports target has already been achieved due to a supply crunch in the global markets. 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 6-7 lakh bags compared with 5-6 lakh bags last year.

Market Highlights
Unit Jeera SpotNCDEX(Unjha) Jeera- NCDEX Dec '12 Futures Rs/qtl Rs/qtl Last 14905 14560 Prev day 0.17 1.61

as on Dec 11, 2012 % Change WoW 0.24 3.17 MoM -1.06 0.64 YoY 5.93 7.78

Source: Reuters

Technical Chart Jeera

NCDEX March contract

Production, Arrivals and Exports

Unjha markets witnessed arrivals of 4,000 bags, while off-takes stood at 4,000 bags on Tuesday. Production of Jeera in 2011-12 is expected around 40 lakh bags as against 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 0.11 -1.82

as on Dec 11, 2012 % Change

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

Last 5160 5300

WoW 4.39 7.42

MoM 1.95 -1.71

YoY -6.95 14.87

Outlook
Jeera futures may trade on a positive note due to good export demand at lower levels. However, higher stocks for delivery on the exchange warehouses coupled with improvement in sowing in Gujarat may cap sharp gains. In the medium term (December-January), prices are likely to stay firm as there are limited stocks with Syria and Turkey.

Technical Chart Turmeric

NCDEX April contract

Turmeric
Turmeric April Futures continued to trade on a bullish note hitting a new contract high of Rs. 6426/qtl yesterday as traders expect demand from North India to improve in the coming days. There are reports that many farmers have shifted to other crops. Expectations are that production may be lower by 40%. Production is expected around 65 lakh bags. Improved weather conditions in Andhra Pradesh and Karnataka has led to the revision in the production estimates. It is estimated that next years carryover stocks would be around 10 lakh bags. There are reports that Turmeric Farmers Association of India have decided to fix their own MSP of Rs.10000/qtl. The Spot as well as the Futures settled 0.11% and 3.2% higher on Tuesday.

Source: Telequote

Production, Arrivals and Exports

Arrivals in Nizamabad and Erode mandi stood at 1,000 bags and 5,000 bags respectively on Tuesday. Turmeric production in 2012-13 is expected around 64-65 lakh bags. Production in 2011-12 is projected at historical high of 10.62 lakh tn. 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. Outlook Turmeric prices are expected to trade on a positive to bullish note today as farmers may be unwilling to sell at lower levels. However, higher production estimates, higher carryover stocks and weak upcountry demand might cap sharp gains.

Technical Outlook
Unit Jeera NCDEX March Futures Turmeric NCDEX April Futures Rs/qtl Rs/qtl

Valid for Dec 12, 2012

Support 15050-15200 6150-6250 Resistance 15650-15880 6520-6640

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Commodities Daily Report

Wednesday| December 12, 2012

Agricultural Commodities
Kapas
NCDEX Kapas Futures traded in a rangebound manner as the arrival data, which have shown some signs of improvement, capped gains on the upside. Kapas Futures settled marginally higher by 0.05%. According to the data released by Cotton Corporation of India, Supplies until Dec. 9 fell to 5.1 million bales of 170 kg each, down from 5.8 million rd bales a year earlier. Arrivals were down by 18.5 percent as on 3 December. However, it is still below expectations as many farmers, who are waiting for better returns, hold back their produce The government has procured 20.74 lakh quintals of cotton at the minimum support price (MSP) so far in the 2012-13. As per the DGFT notification dated 30 Nov 2012, the government has eased quantitative restrictions on exporters applying for permits to sell cotton in the overseas market and set the cap at 30,000 bales from 10,000 bales per exporter before. An exporter can apply for RC (registration certificate) for a maximum quantity of 30,000 bales (1 bale=170kg) or actual quantity exported in the previous cotton season, whichever is less. (DGFT) ICE Cotton futures shot up and settled 2.04% higher on Tuesday after the USDA monthly report cuts cotton stocks estimate to 79.64 million bales, from last month's forecast of 80.27 million.
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Market Highlights
Unit Rs/20 kgs Rs/Bale Last 988.5 16390

as on Dec 11, 2012 % Change Prev. day WoW 0.05 2.54 0.24 0.92 MoM 2.33 0.92 YoY #N/A -1.32

NCDEX Kapas Futures MCX Cotton Futures

Source: Reuters

International Prices
ICE Cotton Cot look A Index Unit Usc/Lbs Last 74.9 81.35

as on Dec 11, 2012 % Change Prev day WoW 2.04 4.16 0.00 0.00 MoM 7.65 0.00 YoY -14.21 -29.20

Source: Reuters

Technical Chart - Kapas

NCDEX April contract

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: Telequote

Technical Chart - Cotton

MCX Dec contract

Global Cotton Updates

US weekly export sales showed net upland sales in the week to Nov. 29 jumped 38% to 415,700 running bales from the prior week, the highest since mid-June and the biggest for the current marketing year that started on Aug. 1. USDA is expected to release its monthly report and demand estimates is expected to increase for U.S. fibers due to higher-than-expected export sales for the first four months of the 2012/13 season. Cotton harvesting is 84% completed in US, versus 85% same period a year ago. Cotton crop condition is 43% in Good/Excellent state compared to 29% same period a year ago as on 20th Nov 2012. Brazils 2012-13 cotton production forecast at 6.3 million bales, down 27 percent from 2011/12 production now estimated at 8.6 million bales. (USDA Attach report)

Source: Telequote

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

valid for Dec 12, 2012 Support 970-980 16450-16500 Resistance 992-1000 16560-16600

Outlook
Domestic cotton prices are expected to trade on a positive on account of lower arrivals in the domestic markets. Downside is expected to be limited in the domestic markets as farmers will not sell their stocks at very low prices. Also demand remains strong at such low prices.

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