Commodities Daily Report

Monday| June 10, 2013

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

Monday| June 10, 2013

Agricultural Commodities
News in brief
Monsoon reaches Chhattisgarh, Odisha early
The Southwest monsoon has arrived in Chhattisgarh and Odisha well ahead of schedule, bringing joy to farmers and authorities alike. The rains also hit Mumbai. In Chhattisgarh, the monsoon entered the Bastar region on Saturday and is likely to reach the state capital in the next one or two days. Usually, the monsoon arrives in the state between June 10 and 15. Instead, it arrived on June 8 this time. The state has an average rainfall of 1,373 mm. In Odisha, the met office confirmed the onset of the monsoon late Saturday evening in southern parts of the state, ahead of its scheduled arrival in the third week of June. The met department has predicted an increase in rainfall in the next two to three days. Light to moderate rain or thundershowers may occur at a few places over the districts of Odisha. The outlook for the next two days would be increase in rainfall, the local weather office said on its website. In both states, the ahead- of schedule arrival of the monsoon has elated farmers and authorities. In Chhattisgarh, the state government has set a target to produce 7 mt of paddy in the 2013 kharif season. Officials now say that with the monsoon arriving early, the target would be achieved easily. In Odisha, the agromet advisory service of the India Meteorological Department has already asked the farmers to begin sowing to take the advantage of the normal monsoon. Last week, the state agriculture and food production department had set a food grain production target of 10.1 Mt in the kharif season of 2013. (Source: Business Standard)

Market Highlights (% change)

Last Prev. day

as on June 7, 2013
WoW MoM YoY

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

19429 5881 57.07 96.03 1383

-0.46 -0.68 0.24 1.34 -2.31

-1.68 -1.75 0.86 4.41 -0.69

-2.81 -3.10 5.51 -0.61 -6.17

21.28 20.93 2.73 13.93 -14.38

.Source: Reuters

US wheat farmers losing dominance

US wheat farmers are enduring torrential spring rain after last year's drought, reducing their share of worldwide exports to a near-record low at a time when rising global supply is driving prices into a bear market. Shipments will fall to 17.6% of global exports in the 12 months through May 2014, compared with 20.3% in 2013 and the alltime low of 17.5% in 2010, the US department of agriculture estimates. The domestic crop is contracting for the fourth time in five years, and expanding harvests from Canada to Russia are curbing the dominance of US growers, who accounted for half of sales in 1974. (Source: Financial Chronicle)

Dry weather to hasten Brazil sugar output and exports

Dry weather forecast for Brazil's main cane belt over the next two weeks should accelerate the production of sugar and ethanol, as well as the loading of ships at the port of Santos, after a rainy start to June slowed crushing and exports. Widespread showers in late May and early June over the center-south cane belt set mills back by about five days in crushing of the record 590 million tonne crop, according to Antonio de Padua Rodrigues, the technical director of the industry association Unica. He added that the rain would help raise the quality and quantity of cane available for crushing later this year, but the days lost to rain would be hard to make up given the size of the crop. Mills may not be able to crush the entire crop and may be forced to leave some mature cane standing until next season if the spring rains return earlier than expected. At present, Brazil's center-south cane belt is moving into its dry season when production of sugar and ethanol should peak for the next several months. (Source: Reuters)

Monsoon to hold strong in central India, north-west for 10 more days

South-West monsoon is forecast to hold strong variously over West Coast, central and adjoining east India and north-west India for another 10-12 days. Parts of North-East India; south-east Peninsula could be sole exceptions, according to forecasts by the US agencies. South Gujarat; Mumbai-Konkan; Coastal Karnataka and adjoining North Kerala are expected to witness heavy to very heavy showers during this period. Also joining them would be Uttarakhand; Madhya Pradesh; Chhattisgarh; Odisha and adjoining north coastal Andhra Pradesh during June 8-14. This would be followed by rain blow-ups over east Rajasthan, Haryana and Delhi during June 15-21 as the monsoon enters north-west India ahead of the schedule. In this region, extreme west Rajasthan; north of Jammu and Kashmir; and parts of north eastern States might witness below just normal to below normal rainfall. (Source: Business Line)

Argentine farm groups will announce grains strike on Tuesday

Argentine grains farmers will announce on Tuesday a commercial strike of at least a week to protest against the center-left government's agricultural policies, the head of a leading farm organization said on Sunday. Argentina, among the top global exporters of soybeans, corn and wheat, also is the No. 1 supplier of soyoil and soymeal. Eduardo Buzzi, head of the Argentine Agrarian Federation, told local radio that his group and three others planned to announce a commercial strike on Tuesday meaning farmers will stop selling their grains. This comes at a time when growers are nearly finished harvesting soybeans and still have some 2012/13 corn to gather. "What's coming up is a protest that will start not long after Tuesday and will last at least a week," Buzzi said, adding the measure could also affect cattle sales. (Source: Reuters)

Bengal potato prices fall by Rs 50 on improved supplies

Potato prices in West Bengal dipped by nearly Rs 50/qtl in the last one month on the back of improved supplies. Wholesale price of the tuber (Jyoti variety) was ruling around Rs 800/qtl in the first week of June, down from Rs 850/qtl in mid-May. According to Patit Paban De, member, West Bengal Cold Storage Association, nearly 12 per cent of the potatoes kept in cold storages have found their way into the market so far. Close to 59 lakh tonnes of potatoes have been stored in the 425 odd cold storages in the State this year. Usually, close to 15 per cent of the stock from cold storages are released into the market around this time of the year. But, this year, the release has been lower as the process of unloading started a bit late, De told Business Line. (Source: Business Line)

Argentina says China approves more GM soy, corn for import

Argentina's agriculture minister said on Saturday that China has approved three new strains of genetically modified soybeans and one new variety of GM corn for import, which should boost trade between the two countries. Argentina's Norberto Yauhar made the announcement after meeting with his Chinese counterpart Agriculture Minister Han Changfu in Beijing, according to a statement published on Argentina's presidential website. The South American country is the world's No. 3 exporter of soybeans and corn and the top supplier of soyoil and soymeal. Nearly all Argentine soy is genetically modified, as is much of its corn. (Source: Reuters)

Sugar production may fall to 23.2 MT in 2013-14 marketing year

The countrys sugar production is projected to fall by 8% to 23.2 mt in 2013-14 marketing year starting October mainly due to lower output of sugarcane, according to USDA report. Sugar production of India, the worlds second largest producer and biggest consumer, is pegged at 25.2 mt in the 201213 marketing year, the USDA said in a report. India is set to become a net sugar importer in MY 2013/14 on relatively strong domestic prices, it added. The annual domestic consumption is about 22 mt. (Source: Business Line)

Sugar may gain as States need to buy for PDS

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Commodities Daily Report

Monday| June 10, 2013

Agricultural Commodities
Chana
Chana July futures which remained firm in the early part of the last week on account of lower level demand from the stockiest, declined towards the end as comfortable supplies and normal monsoon exerted downside pressure on the prices. July contract settled 0.19% lower w-o-w. Favorable progress and distribution of monsoon has raised hopes of kharif Pulses sowing which is also exerting downside pressure on the prices. Sowing of kharif pulses was adversely impacted last year due to deficient rains Also, timely arrival of monsoon this year has led to marginal improvement in water storage levels at major reservoirs.

Market Highlights
Unit Rs/qtl Rs/qtl Last 3260 3159 Prev day -1.22 -0.91

as on June 8, 2013 % change WoW MoM -1.64 -4.13 0.32 -5.98 YoY -22.54 -22.23

Chana Spot - NCDEX (Delhi) Chana- NCDEX June'13 Futures

Source: Reuters

Technical Chart - Chana

NCDEX July contract

Demand supply scenario

Higher returns earned in 2012, coupled with a hike in minimum support prices (MSP), have helped expand overall acreage in 2012-13 season. Chana sowing in 2012-13 was 5.65% higher at 95.17 lakh ha compared to previous year. According to third advance Estimates released on 3 May 2013, Total pulses output for 2012-13 season has been pegged at 18 mn tn, up 5.76% compared to previous year. The target for 2012-13 pulses crop output was set at 18.24 million tonne during the year. Out of the total pulses output, kharif output is estimated at 4.03% lower at 5.95 mn tn while rabi pulses output is pegged 9.25% higher at 12.05 mn tn compared with the final estimates of 2011-12. Chana output is pegged marginally lower to 8.49 mn tn compared with its second advance estimates of 8.57 million tonnes. However, chana output is expected to breach its 2010-11 record output of 8.2 mn tn in 2012-13. Erratic weather in M.P. lowered the yield.
rd

Source: Telequote

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

valid for June 10, 2013 Resistance 3260-3295

3140-3180

Trade Scenario
According to IBIS, imports of chana in the month of April declined to 0.04 lakh metric tonnes compared to 0.11 lakh metric tonnes during the previous month. 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. In Australia, total chickpea production in 201213 is estimated to have increased to a record 713000 tones as compared with 485000.

Outlook
Chana may trade on a mixed note today. Prices may gain on account of demand from the stockists at lower levels. However, higher supplies coupled and good monsoon may cap the gains and pressurize prices at higher levels. Seasonal pattern in chana indicates that prices generally bottom out in May when arrivals reach their peak, while they start recovering gradually June onwards with declining supply pressure. Thus, going forward downside seems to be limited as prices are near their MSP levels.

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Commodities Daily Report

Monday| June 10, 2013

Agricultural Commodities
Sugar
After remaining weak in the previous two weeks, Sugar July contract recovered last week and settled 2.19% higher w-o-w on account of good demand from the stockists coupled with concerns about cane output this season due to drought conditions in Maharashtra. Recent rains in the drought affected sugarcane areas in the Southern and Western part of the country coupled with higher supplies have capped the upside. According to the Ministry of Agriculture, Sugarcane has been planted in 42.09 lakh ha as compared to 46.78 lakh ha as drought affected Maharashtra and Karnataka have reported lower area. The government notified the cabinet committee on economic affairs (CCEA) decision to remove two key controls on sugar sector in the last month. The Minimum Initial Margin has been revised to 5% of the value of the contract or VaR based margin whichever is higher and will be imposed on all running contracts and yet to be launched contracts w.e.f beginning of trading day Monday, May 13, 2013.

Market Highlights
Unit Sugar Spot- NCDEX (Kolhapur) Sugar M- NCDEX June '13 Futures Rs/qtl Last 3062

as on June 8, 2013 % Change Prev. day WoW 0.09 0.36 MoM 0.78 YoY 5.54

Rs/qtl

3069

0.29

1.62

3.23

9.61

Source: Reuters

International Prices
Unit Sugar No 5- LiffeAug'13 Futures Sugar No 11-ICE July '13 Futures $/tonne $/tonne Last 481.4 365.11

as on June 7, 2013 % Change Prev day WoW -0.23 -0.30 1.11 0.00 MoM -2.55 -6.86 YoY -18.06 -19.74

.Source: Reuters

Domestic Production and Exports

According to ISMA, Indias Sugar production between October-April stood at 24.52 mn tn, lower by 3% during the same period last year. Maharashtras production dipped 10% to 8 mn tn while production in Uttar Pradesh increased by 7% to 7.43 mn tn. India is likely to produce 24.6 mn tn of sugar in 2012-13 year ending on Sept. 30, higher than the previous estimate of 24.3 mn tn, the Indian Sugar Mills Association (ISMA) said. With the opening stocks of 6.5 mn tn, domestic Sugar supplies are estimated at higher against the domestic consumption of around 22. 5 mln tn for 2012-13. Exports are not viable as international prices have also declined significantly.

Technical Chart - Sugar

NCDEX July contract

Global Sugar Updates

LIFFE sugar as well as while Raw sugar on the ICE settled 0.23% and 0.3% lower on Friday due to higher supplies from Brazil. Prices have declined on account of third back to back years of sugar surplus and trading at 34 month low. Unica reported Brazils sugar production at 3.76 mn tn, higher by 140% by mid-May. Raw Sugar open interest has climbed to a 5 year high. The ISO has forecast sugar surplus of atleast 3.5 mn tonnes for 2013-14 season. Reports that China may curb imports as their stocks have more than doubled last season have also added to the downside. However, there are reports that demand from Brazil's resurgent biofuels industry will cut burgeoning global sugar surplus, helping cushion prices that fell below 17 cents per lb for the first time in almost three years. According to Unica, South-Central Brazil cane crush projected at 589.60 million tons for 2013/2014. Main center-south sugar cane crop will produce a record 35.5 mn tn of sugar in the 2013/14 season, higher by 4.1% compared to 34.1 mn tn last year.
Source: Telequote

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

valid for June 10, 2013 Resistance 3150-3175

3090-3110

Outlook
Sugar futures will continue to trade with upward bias in this week on account of demand from stockists coupled with output concerns this season. However, international prices are hovering near three years low and further downside in the prices may cap upside in the domestic markets.

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Commodities Daily Report

Monday| June 10, 2013

Agricultural Commodities
Oilseeds
Soybean: Soybean July futures settled 3.17% higher w-o-w taking
cues from the firm international markets amidst delayed planting. However, sharp upside was capped on account of good progress of monsoon and thereby hopes of better sowing. The planting of kharif oilseeds such as groundnut, sesame and castor has started in states such as Andhra Pradesh, Karnataka and Tamil Nadu. Soybean sowing shall commence this week with good monsoon over Maharashtra since last two days. Indias soy meal exports for the month of May 2013 were 0.97 lakh tonnes, lower by 29.74 percent from 1.39 lakh tonnes a year ago. According to the 3rd advance estimates, Soybean output is pegged at 14.14 mn tonnes. IMDs forecasts of normal monsoon have raised hopes of better output next season too. International Markets CBOT Soybean settled 0.07% higher on account of tight supplies, planting delays as well as weather concerns. Soybean planting has been delayed due to heavy rains in the US Midwest and is reported at 57% as against 44% last week. However, it is much lower as against 93% last year and five year average of 74%. It is said to be the slowest in 17 years. However, large South American crop coupled with forecasts for US weather to improve in the coming week have capped sharp gains. Argentinas agriculture ministry has cut its 2012/13 forecast to 50.6 mn tn from its April forecast of 51.3 mn tn. China is forecast to import a record 66 mn tn of soy in 2013/14, 11% higher than the estimates of current season, driven by robust domestic demand and low stocks.
International Prices Soybean- CBOTJuly'13 Futures Soybean Oil - CBOTJuly'13 Futures Unit USc/ Bushel USc/lbs Last 1528 48.53

Market Highlights
% Change Unit Soybean Spot- NCDEX (Indore) Soybean- NCDEX June '13 Futures Ref Soy oil SpotNCDEX(Indore) Ref Soy oil- NCDEX June '13 Futures Rs/qtl Rs/qtl Rs/10 kgs Rs/10 kgs Last 3864 3765 704.9 702.6 Prev day 0.21 0.25 0.28 0.34

as on June 8, 2013

WoW 0.86 1.39 -1.87 -0.67

MoM -4.33 -6.50 -2.66 -1.75

YoY 11.71 10.02 -2.71 -2.26

Source: Reuters

as on June 7, 2013 Prev day 0.07 0.77 WoW 1.21 0.31 MoM 4.42 -1.14 YoY 7.02 -3.69

Source: Reuters

Crude Palm Oil

as on June 8, 2013 % Change Prev day WoW 1.17 0.43 2.42 3.08

Unit
CPO-Bursa Malaysia June '13 Contract CPO-MCX- June '13 Futures

Last 2417 495.2

MoM 8.00 7.93

YoY -18.18 -8.67

MYR/Tonne Rs/10 kg

Refined Soy Oil: Ref soy oil July contract as well as CPO settled
higher last week tracking positive international prices coupled with a weak Rupee. Palm stocks in Malaysia and Indonesia are expected to decline & demand is set to rebound ahead of Ramadan. Exports of Malaysian palm oil products in May declined 3.4 percent to 1,248,014 tonnes from 1,292,371 tonnes shipped during April. It is expected that output in Malaysia, the world's second largest producer, to slow this month and help to further ease stocks that have dipped below the psychological 2 million tonne mark to 1.93 million tonnes in April. India's palm oil imports declined for a third straight month in April. But India, the world's largest importer of edible oils, is still on track to surpass last year's record purchases of 10 million tonnes of cooking oil as demand rises.

Source: Reuters

RM Seed
Unit RM Seed SpotNCDEX (Jaipur) RM Seed- NCDEX June '13 Futures Rs/100 kgs Rs/100 kgs Last 3518 3504 Prev day 0.21 -0.14 WoW 0.49 1.01

as on June 8, 2013 MoM 3.20 2.94 YoY -8.28 -5.63

Source: Reuters

Technical Chart Soybean

NCDEX July contract

Rape/mustard Seed: Mustard July Futures settled 0.48% higher

on account of good buying at lower levels. Downside seems to be limited in Mustard seed as prices may start recovering with declining supplies. Huge supplies of the new crop coupled with higher output estimates had led to a sharp decline in the prices in the last month. Sowing of Mustard seed is up by 2.2% at 67.23 lakh ha. Agriculture ministry in its third advance estimates, pegged mustard output at 7.36 mn tn, up by 11.5%. Outlook Good progress of monsoon along with weak meal export demand may keep soybean under downside pressure. Mustard may remain firm on account of lower level buying and declining arrival pressure. Soy oil as well as CPO may continue to gain due to lower yield period. Higher international prices may also support prices.

Source: Telequote

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

valid for June 10, 2013 Support 684-688 3700-3740 3495-3520 486-491 Resistance 694-699 3810-3840 3580-3620 500-506

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Commodities Daily Report

Monday| June 10, 2013

Jeera Agricultural Commodities

Jeera prices traded on a positive note last week on account of fresh export enquiries and settled 0.94% higher w-o-w. However, good arrivals coupled with higher output have capped sharp upside in the prices. Currently, about 25-30% of total arrivals have been exported, mainly to Singapore, Europe and Dubai. Prices have declined sharply over the last few months on the back of higher production estimates. According to Gujarat State Agri Dept. sowing in Gujarat is reported at 3.352 lakh ha in 2013 compared with 3.719 lakh ha last year. Due to the ongoing geo-political tensions in Syria and Turkey, supply concerns from these two major exporting countries still exist. Export orders may still continue to be diverted to India 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 4,0005,000 tonnes, lesser than expectations. Jeera prices of Indian origin are being offered in the international market at $2,450 tn (FOB Mumbai) while Syria and Turkey are not offering. Carryover stocks of Jeera in the domestic market is expected to be around 8-9 lakh bags.

Market Highlights
Unit Jeera Spot- NCDEX (Unjha) Jeera- NCDEX June '13 Futures Rs/qtl Rs/qtl Last 13504 13133 Prev day 0.23 -0.23

as on June 8, 2013 % Change WoW 0.33 0.94 MoM 1.06 2.52 YoY 0.91 3.65

Source: Reuters

Technical Chart Jeera

NCDEX July contract

Production, Arrivals and Exports

Arrivals in Unjha were reported at 10,000 bags on Saturday. Production of Jeera in 2012-13 is expected around 40-42 lakh bags (55 kgs each), marginally higher than last year. Exports of Jeera between Apr 2012- Jan 2013 stood at 64,400 tn, an increase of up 86%. (Source: Factiva)

Outlook
Jeera is expected to trade on a positive note today on account of fresh export demand. However, higher output and good arrivals may cap the upside. Overall trend remain positive for the Jeera prices due to overseas demand as Syria & Turkey have stopped shipments which may keep prices firm.

Source: Telequote

Market Highlights
Prev day 0.00 -0.14

as on June 8, 2013 % Change

Unit Turmeric SpotNCDEX (N'zmbad) Turmeric- NCDEX June '13 Futures Rs/qtl Rs/qtl

Last 5667 5548

WoW -5.59 -3.65

MoM -5.78 -6.85

YoY 62.48 55.76

Turmeric
Turmeric July futures declined 3.73% last week as huge carryover stocks coupled with weak demand and good monsoon prospects continued to mount pressure on the prices. NCDEX issued a circular whereby the earlier circular regarding modification in the tick size and lot size has been kept in abeyance. The regulator also withdrew special margins on the long side. There are expectations of improvement in overseas demand in June ahead of Ramadan. Unseasonal rains in Andhra Pradesh have damaged about 9240 tonnes of turmeric earlier. Special Margin of 10% on the Long Side on all the running contracts in Turmeric have been withdrawn w.e.f Thursday, May 16, 2013.

Technical Chart Turmeric

NCDEX July contract

Production, Arrivals and Exports

Arrivals in Erode and Nizamabad mandi were reported at 4,000 bags and 4,000 bags on Friday. Exports of Turmeric between Apr 2012- Jan 2013 stood at 66,550 tn, a decline of 4%. (Source: Factiva) Expectations are that production may be lower by 40-50%. There are reports of some crop damage in Erode region. Turmeric production in 2012-13 is expected around 45 lakh bags. Production in Nizamabad is expected around 12 lakh bags. Production in 2011-12 is projected at historical high of 10.62 lakh tn. It is estimated that current years carryover stocks would be around 10 lakh bags. (1 bag= 75 kgs) Outlook Turmeric may trade on a mixed note today. Prices may witness downside pressure as higher stocks with farmers coupled with huge carryover stocks may pressurize prices. However, lower arrivals coupled with expectations of improvement in export demand may support prices at lower levels.
Source: Telequote

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

Valid for June 10, 2013

Support 13040-13200 5520-5580 Resistance 13540-13650 5690-5740

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Commodities Daily Report

Monday| June 10, 2013

Agricultural Commodities
Kapas
NCDEX Kapas corrected last week on account of profit booking as higher sowing figures and settled 1.51% lower last week. However, MCX Cotton gained 1.94% last week tracking positive international markets. Prices have risen over the past three weeks on account of good yarn demand coupled with lower arrivals. However, higher sowing of cotton this season has capped sharp upside. Active selling by the CCI in the open markets has also capped the upside in the prices. CCI has offered 38,100 bales earlier last week through e-auction of which 6,000 bales have been sold. Emergence of fresh demand at lower price levels is also supporting an upside in the prices. India's imports of cotton this year could reach 1.5 mn bales, missing earlier estimates of more than 2 mn as the govt may to start selling its stockpiles. Cotton supplies since the beginning of the year in October 2012 until February 10, 2013 were down at 183.4 lakh bales, down from 189.27 lakh bales a year earlier.

Market Highlights
Unit Rs/20 kgs Rs/Bale Last 1073 18960

as on June 8, 2013 % Change Prev. day WoW 0.05 -1.51 -0.21 1.94 MoM YoY 3.42 12.36 1.94 20.69

NCDEX Kapas Apr Futures MCX Cotton June Futures

Source: Reuters

International Prices
ICE Cotton Cot look A Index Unit USc/Lbs Last 84.86 93.2

as on June 7, 2013 % Change Prev day WoW -0.01 3.04 0.54 4.95 MoM -1.34 -1.69 YoY 13.01 12.76

Source: Reuters

Sowing Progress
Cotton planting has been reported at 11.86 lakh ha as against 10.4 lakh ha during the same period last year. Higher sowing is report from Punjab and Haryana while a decline has been reported in Rajasthan.

Technical Chart - Kapas

NCDEX April contract

Domestic Production and Consumption

CAB in its latest meet has projected cotton crop at 34 mn bales for 201213 season compared to the previous estimates of 33 mn bales. Mill consumption is expected to go up from 22.3 million bales last year to 23.5 million bales. Exports are estimated at 8.1 mn bales while imports are estimated 2.5 mn bales.

Global Cotton Updates

ICE Cotton futures corrected from higher levels on reports that China may review its import policy and settled 0.01% lower on Friday. An increase in the weekly export sales coupled with a weaker Dollar have supported prices. Tight supplies from US have also supported prices. Improved weather in the US has also eased concerns over delayed plantings. Cotton prices have closed in the negative in 8 of the last 10 days. Cotton Plantings were reported at 82% v/s 59% last week, but lower against 5 year avg of 83%. China cotton imports declined 18.5% in April compared to March. The USDA monthly crop report forecast a sharp rise in the in the cotton stockpiles by almost 10%. The U.S. Department of Agriculture has forecast global cotton stockpiles will rise almost 10 percent to a record high in 2013/14, pushing prices lower and reinforcing concerns about stagnating demand in China, the world's No. 1 textile market. According to the USDA report, planting intentions for the 2013-14 season are said to be at a 4 year low. Also, there are expectations of good export demand from China. Reports of India and China releasing stocks from the state reserve led to a decline in the prices.
Source: Telequote Source: Telequote

Technical Chart - Cotton

MCX June contract

Technical Outlook
Contract Kapas NCDEX April 14 Fut Cotton MCX June Futures Unit Rs/20 kgs Rs/bale

valid for June 10, 2013 Support 1050-1065 18500-18700 Resistance 1085-1100 19100-19350

Outlook
Cotton may trade on a positive note today as good yarn demand may boost prices. Positive international markets coupled with lower sowing in the US and expectatations that cotton may lose acreage to more remunerative crops like soybean and grains in India may also support an upside in the prices over the medium term. However, the governments selling of cotton stocks in the open market may cap sharp upside.

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