Commodities Daily Report

Wednesday| October 3, 2012

Agricultural Commodities

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

Research Team
Vedika Narvekar - Sr. Research Analyst [email protected] (022) 2921 2000 Extn. 6130 Anuj Choudhary - Research Associate [email protected] (022) 2921 2000 Extn. 6132

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Commodities Daily Report

Wednesday| October 3, 2012

Agricultural Commodities
News in brief
Rain outlook mixed for Oct-Dec
South-West monsoon has ended with an eight per cent deficit, making it below normal (between 90 per cent and 96 per cent). This is despite some of the heavily flooding rain recorded in many parts of the country as part of a late rally that began in August and sustained into September. The rains dried up earlier than expected over central India but instead chose to unconventionally pound north and north-west India. The rains did not return to central India, which was just two per cent away from becoming zero-deficit. In the end, it added two more percentage points to end the season with a deficit of four per cent. Flooding rain in the North-West salvaged a hopeless situation at the end of July to being able to record a spectacular recovery. The deficit here is seven per cent. Punjab (-45%), Haryana (-39%) and Delhi (-28%) are individual meteorological subdivisions in deficit in north-west India. According to European Centre for Medium-Range Weather Forecasts, the rain outlook for October-November-December is mixed for the country. There are deficiencies for central peninsula (Karnataka and Andhra Pradesh) and the east (Odisha). There are no big variations from the normal pattern for both Kerala and Tamil Nadu, though the southern belt (around Nagapattinam) might witness less than normal rain. (Source: Business Line)

Market Highlights (% change)

Last Prev. day

as on Oct 1, 2012
WoW MoM YoY

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

18824 5719 52.86 92.19 1771

0.33 0.27 -0.12 0.37 -0.37

0.81 0.87 -0.96 -0.75 -0.25

7.62 8.15 -5.02 -4.30 6.28

13.92 15.04 6.90 14.89 11.22

Source: Reuters

Spices board favours selling cardamom in open market

As the standoff by traders has disrupted the auctioning, Spices Board plans to approach Union government for amending the Cardamom Licensing and Marketing Rules, 1987, to enable the farmers sell their produce directly in the open market. Spices Board wants the government to amend the clauses in the act that restrains the farmer to sell his produce to anybody other than a licensed auctioneer or trader. The board will be suggesting two options one in which the farmer can either sell his produce to the auctioneers and traders or sell it in the open market. The other option is to do away with auctioning system, thus allowing free trade in the agri-market. The auctions have been suspended for a week now by auctioneers and traders who are opposing Spices Board decision to hike the incremental bidding price from 50 paise to Rs five. Following the suspension of the auction processes, more than 400 tonnes of cardamom has piled up with the farmers.
(Source: Financial Chronicles)

Guar price crashes on export drop fears

The spot price of guar has crashed in Rajasthan mandis on concern of high output and a drastic decline in import orders from America, the European Union and the Gulf countries, the three leading export destinations of guar derivatives from India. The Union agriculture ministry had estimated a 20 per cent increase in sowing area this kharif season, after revival of monsoon rainfall in the first week of August. The area under guar seed was forecast at 3.5 million hectares (ha) this sowing season, as compared to 2.91 mn ha last season. Purushottam Isaria, president of the All India Guar Gum Manufacturers Association, forecasts a 25 per cent rise in seed output this season. The estimate is 1.5-1.8 million tonnes, as compared to 1.2 mt in the previous season. However, this is significantly lower than earlier trade estimates of a 300 per cent increase in output. At the beginning of the kharif sowing season, traders said farmers would respond promptly to last seasons record high prices and bring as much area under the seed as possible. Farmers did eye guar at the beginning of the season but a lack of rain hampered sowing. Then, water logging on excessive rainfall hit germination in the sown crop, lowering overall output estimates. (Source: Business Standard)

Record soybean output seen despite late sowing

he deficiency in rainfall early this monsoon season and full recovery afterwards proved to be a boon for the soybean crop. Despite delayed sowing, the estimated increase in yield is expected to increase the overall productivity by eight per cent. A study conducted by the Indore-based Soybean Processors Association (Sopa) forecast total soybean production to be at an all-time high of 12.68 million tonnes (mt) this kharif harvesting season as compared with 11.65 mt the previous year. Sopa estimates average yield to increase to 1,185 kg per hectare (ha) for the season as compared to 1,127 kg per ha in the previous year. Overall sowing area is also estimated to increase to 10.7 million ha this year from 10.33 million ha in the previous year. Since the seasonal rainfall was revived after two months in the first week of August, sowing was delayed proportionately. Scattered rainfall in the beginning, however, benefited the crops germination. Barring smaller states in terms of soybean production, such as Rajasthan and Karnataka, the output in all producing states is set to increase on an improved climate favouring higher productivity. While Madhya Pradesh continues to remain on top with an estimated production of 6.2 mt, Maharashtra follows suit with four mt.
(Source: Business Standard)

Food prices may drop as kharif harvest begins

The 2012-13 kharif harvesting has begun across India. Paddy, cotton, sugar, bajra, soya bean and maize are being harvested and this is likely to put pressure on prices in the coming days. Paddy arrivals have begun at a slow pace across Punjab and Haryana where state and central procurement agencies target to procure 15.6 million tonne for the central pool in the kharif marketing season 2012-13. By October 10, supplies are expected to be at their peak, says Aseem Chabbra, deputy general manager, Food Corporation of India (FCI). "On the first day of procurement, arrivals were very less, roughly 1,000 to 2,000 tonne. The good thing is that the moisture content is less compared to the previous year," he added. The summer harvest is the main source for the government to bolster its rice reserves. With increased demand from ration shops and other social welfare programmes, FCI is expected to aggressively shop this year. Similarly, cotton arrivals in India, the world's second-largest producer, have started across key growing states of Gujarat, Maharashtra and Madhya Pradesh. With no major improvement in drought-like conditions after the September rainfall, the Maharashtra government has decided to advance sugar cane crushing operations.
(Source: Economic Times)

Indias rice export eased global food prices, says Pawar

India has exported about 8 million tonnes of rice in last one year, helping in reducing the global prices of the grain to affordable levels, agriculture minister Sharad Pawar said on Monday. Pawar expressed concerns over rising trends in global food prices. According to an official release, Pawar said the spike in prices in rapid succession badly hits developing countries where a large number of poor live. Referring to the initiative called Saarc Food Bank to service the needs of member-countries, Pawar said there is a need to strengthen such regional cooperation to respond to the developing global food crisis. It is our collective responsibility to reach out to those vulnerable populations whose access to food is compromised due to high food prices, he said at the conference organised by the UN's Food and Agriculture Organisation (FAO) to discuss steps to tackle high food prices in Asia Pacific.
(Source: Financial Express)

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Commodities Daily Report

Wednesday| October 3, 2012

Agricultural Commodities
Chana
Chana spot as well as futures extended the losses of the previous week and settled 2.2% and 0.8% respectively on expectations of higher imports and better prospects for Rabi sowing. CACP has recommended a hike in minimum support price (MSP) of gram by Rs.200 to Rs.3000 a quintal and Masoor by Rs.100 to Rs.2900 a quintal for upcoming 212-13 Rabi season to boost the production of pulses. According to the first advance estimates, 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. As per the NCDEX circular dated 20 September, existing Special Margin of 20% (in cash) on the Long side shall be reduced to 10% (in cash) on all the running contracts and yet to be launched contracts in Chana with effect from Monday, September 24, 2012. Prices declined last week on improved rains and reports of expected higher output in Australia, the largest supplier of chickpeas to India. In Australia, chana production rose by 70.5 percent to 8.27 lakh tonnes from 4.85 lakh tonnes in previous year. Ongoing recovery in monsoon and above average rains in the past few days is showing better prospects for Rabi pulses sowing in the coming days. Monsoon has recovered across India, especially in Rajasthan, one of the major chana growing states, and may prove beneficial for the chana sowing.
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Market Highlights
Unit Rs/qtl Rs/qtl Last 4303 4321 Prev day -2.20 -0.78

as on Oct 1, 2012 % change WoW MoM -2.88 -10.91 -1.44 -9.17 YoY 28.35 29.95

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

Source: Reuters

Technical Chart - Chana

NCDEX Nov contract

Source: Telequote

Technical Outlook

valid for Oct 3, 2012 Unit Rs./qtl Support 4040-4100 Resistance 4205-4250

Sowing progress and demand supply fundamentals

According to the Ministry of Agriculture 99.81 Lakh hectare area has been planted under Kharif pulses as on 21th September, 2012 compared to 108.28 lakh hectare (ha) same period last year. According to the Fourth advance estimates, Pulses output is pegged at 17.21 mn tn in 2011-12 compared with 18.24 mn tn produced in the year 2010-11. While Chana output in 2011-12 is estimated at 7.58 million tones, Tur is estimated at 2.65 million tones, Urad is estimated at 1.83 million tones, Moong is estimated at 1.71 million tones. As per the latest release, Ministry of Commerce & Industry revealed that 20.23 lakh tones of peas, 2.03 lakh tons of Chana, 4.32 lakh tons of Urad & Moong, 1.12 lakh tons of Masoor and 4.26 lakh tons of Tur has been imported by India during April11-March 12. 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)

Contract Chana Oct Futures

Outlook
Chana futures are expected to trade sideways with upward bias on emergence of fresh demand at lower levels. Estimated lower kharif pulses output may also support the upside in the prices during the intraday. In the medium term to long term, the trend remains positive on account of supply tightness. However, higher imports from Australia may cap the sharp upside in the prices.

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Commodities Daily Report

Wednesday| October 3, 2012

Agricultural Commodities
Sugar
Sugar prices declined further on release of higher quota for the next two months, which will increase sugar supplies in the markets to meet the festive demand. However, the spot prices found support at lower levels due to festive demand. The spot as well as the Futures settled 0.8% and 1.34% lower w-o-w. With the release of higher sugar quota for the next two months prices declined further during the intraday however, prices closed on a flat note on expectations of festive season demand. The Government has decided to make available a quantity of 40 lakh tons of non-levy quota, for the months of October, 2012 and November 2012. Indian mills have signed deals to buy up to 450,000 tonnes of Brazilian raw sugar for delivery from October to December as a gap between domestic and overseas prices widens, making room for the first imports in more than two years, five dealers told Reuters. Millers based in western and southern India and global trading firms bought sugar at around $500/ton a CIF basis, as the price in the domestic market has jumped more than 23% to $680/ tn in the past three months. ICE raw sugar and life white sugar futures recovered on Monday owing to short coverings of positions and settled higher by 1.8% and 2.18% higher.

Market Highlights
Unit Sugar Spot- NCDEX (Kolkata) Sugar M- NCDEX Oct '12 Futures Rs/qtl Last 3779

as on Oct 1, 2012 % Change Prev. day WoW -0.82 -1.60 MoM 0.10 YoY 20.92

Rs/qtl

3448

-1.40

-3.01

-1.00

24.61

Source: Reuters

International Prices
Unit Sugar No 5- LiffeOct'12 Futures Sugar No 11-ICE Oct '12 Futures $/tonne $/tonne Last 592.6 479.78

as on Oct 2, 2012 % Change Prev day WoW 1.80 2.18 3.91 10.32 MoM 4.63 9.15 YoY -8.61 #N/A

Source: Reuters

Technical Chart - Sugar

NCDEX Nov contract

Domestic Production and Exports

The area under sugarcane is estimated at 52.88 lakh ha for 2012-13 crop season, up from 50.99 lakh ha on same period a year ago. According to the first advance estimates by agriculture ministry, Sugarcane output is pegged at 335.3 mn tn, down by 6.2% compared to 357.6 mn tn last year. Despite of higher acreage, the producers body has estimated next years sugar output lower at 24 mn tn, down by 2mn tn compared to the current year. Sugar production in India the worlds second-biggest producer touched 26 million tonne since October 1, 2011. Industry body ISMA has estimated 6 mn tn stocks for the new season beginning October 01, 2012 compared to 5.5 mn tn year ago. India may export 2.5-3 mn tn sugar in 2012-13. With the opening stocks of 6 mn tn, domestic Sugar supplies are estimated at 30mn tn against the domestic consumption of around 22.523 mln tn for 2012-13. Thus, no curbs on exports are seen as of now.
Source: Telequote

Technical Outlook
Contract Sugar Oct NCDEX Futures Unit Rs./qtl

valid for Oct 3, 2012 Support 3305-3325 Resistance 3375-3398

Global Sugar Updates

Brazilian cane mills produced 3 mn tn of sugar in the first half of August thanks to dry weather. Unica in its latest report stated said that total sugar output since the start of the crushing season is still down 12 percent from the same period a year ago. 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)

Outlook
Sugar prices may decline in the coming weeks amid higher sugar quota for the next two months and reports of raw sugar import after almost 2 years. However, a delay in crushing in Maharashtra by a month and lower cane output estimates may restrict sharp fall in the short term.

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Commodities Daily Report

Wednesday| October 3, 2012

Agricultural Commodities
Oilseeds
Soybean: Soybean spot declined sharply by 5.8% on Monday due
to the ongoing harvest of the soy crop in India as well as the weak international markets. CBOT Futures recovered and settled 1.91% lower on Monday due to harvest pressure in the U.S. In Brazil planting has started 10 days earlier amid good rains. If rains continue in the coming weeks as forecast, Brazil could churn out 81 million tonnes of oilseed and replace the drought-stricken US as the world's top soybean producer, according to the USDA. Brazils grain Association expects the number 2 producers of soybean to produce record 81.3 mn tn in 2012-13. In the domestic markets, as on 20 September, 2012, Oilseeds have been sown in 174.39 lakh ha so far, compared with 178.16 lakh ha same period last year. Soybean area is higher at 106.9 lakh ha. According to first advance estimates, Soybean output is pegged at at 126.2 lk tn for 2012-13. However, drop in area under groundnut, sunflower & castor seed may lead to lower output of these oilseeds in 2012-13 which is estimated 9.6% lower at 187.8 lakh tn.
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Market Highlights
% Change Unit Soybean Spot- NCDEX (Indore) Soybean- NCDEX Oct '12 Futures Ref Soy oil SpotNCDEX(Indore) Ref Soy oil- NCDEX Oct'12 Futures Rs/qtl Rs/qtl Rs/10 kgs Rs/10 kgs Last 3086 3074 680.6 636.7 Prev day -5.86 -4.00 -5.46 -4.00

as on Oct 1, 2012

WoW -8.51 -10.17 -9.78 -8.63

MoM -32.46 -23.25 -15.21 -21.38

Source: Reuters

YoY 40.66 40.05 6.76 3.70

as on Oct 2, 2012 International Prices Soybean- CBOTNov'12 Futures Soybean Oil - CBOTOct '12 Futures Unit USc/ Bushel USc/lbs Last 1531 50.27 Prev day -1.91 -0.89 WoW -5.03 -5.31 MoM -11.39 -10.42 YoY 10.95 -12.27

Source: Reuters

Crude Palm Oil Refined Soy Oil: Ref soy oil and MCX CPO declined sharply owing
to higher stocks in Malaysia.
Unit Last 2083 424.2

as on Oct 1, 2012 % Change Prev day WoW -9.43 -5.10 -17.96 -8.99

MoM -28.54 -23.73

YoY -38.74 -9.46

Although, exports are high the overall stocks of Malaysian palm oil are higher on the back of seasonally higher yield. Exports of Malaysian palm oil products for Sept. 1-25 rose 8 percent to 1,170,720 tonnes from 1,084,343 tonnes shipped during Aug. 1-25. Indias edible oil imports should rise 5.4 percent to a record 10.31 million tonnes in 2012/13, with the entire increase met by palm oil. India imported 112,611 tn of refined palm oil in July, down 9.28 percent from June. Total vegetable oil imports in July were 870,328 tn, up from 783,315 tn in the previous month (Source: Sea of India).

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

MYR/Tonne Rs/10 kg

Source: Reuters

RM Seed
Unit RM Seed SpotNCDEX (Jaipur) RM Seed- NCDEX Oct '12 Futures Rs/100 kgs Rs/100 kgs Last 3920 3767 Prev day -2.91 -2.89

as on Oct 1, 2012 WoW -4.39 -5.21 MoM -9.26 -13.24

Source: Reuters

YoY 33.79 24.24

Rape/mustard Seed: Mustard spot as well as futures settled 2.9%

lower on Monday tracking weak oilseeds markets. Mustard output was lower in 2011-12. However, on the back of higher returns and improved rains, next years output is expected to be better. Sowing of rapeseed starts from October and northwestern Rajasthan is the top producing area in the country. As per NCDEX circular, existing Special Margin of 15% (in cash) on the Long side shall be reduced to 5% (in cash) on all the running contracts and yet to be launched contracts in Rapeseed Mustard Seed with effect from Monday, September 24, 2012. Outlook Edible oil complex is expected to trade on a negative note during intraday. Expectations of improved yield and higher supplies of domestic soybean may keep the downside intact in the short term.

Technical Chart Soybean

NCDEX Nov contract

Source: Telequote

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

valid for Oct 3, 2012 Support 608-613 2960-3005 3710-3755 408-413 Resistance 630-633 3110-3145 3855-3890 428-432

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Commodities Daily Report

Wednesday| October 3, 2012

Agricultural Commodities
Black Pepper
Pepper traded on a flat note on Monday. A supply crunch in the spot markets as farmers are unwilling to sell their stocks supported the prices. Reports that FMC asked NCDEX to find out if there were any erratic trades in Pepper kept the prices under check. Traders are buying pepper directly from the farmers. Exports demand for Indian pepper in the international markets is also said to be low. The Spot settled 0.25% lower while the Futures settled 0.09% higher 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 $8,4758,450/tonne(C&F) while Indonesia Austa is quoted at $6,750/tonne (FOB). Vietnam was offering 550GL at $6,900/tonne. As per circular dt. 29/06/2012 issued by NCDEX, Hassan will be available as an additional delivery centre for all the yet to be launched contracts. (not applicable to the currently available contracts-till Dec 2012 expiry).

Market Highlights
Unit Pepper SpotNCDEX (Kochi) Pepper- NCDEX Oct '12 Futures Rs/qtl Rs/qtl Last 42106 43435 % Change Prev day -0.25 0.09

as on Oct 1, 2012 WoW 0.55 0.64 MoM 2.34 2.68 YoY 18.46 22.20

Source: Reuters

Technical Chart Black Pepper

NCDEX Nov contract

Exports
According to Spices Board of India, exports of pepper in April 2012 fell by 47% and stood at 1,200 tonnes as compared to 2,266 tonnes in April 2011. India imported 1,848 tonnes of pepper till March 2012 and has become the third country to import such large quantity after UAE and Singapore. (Source: Agriwatch) According to Vietnam Ministry of Agriculture and Rural Development (MARD) exports of black pepper in 2012 are forecasted at around 1,25,000 tonnes. Exports of Pepper from Vietnam during January till June 2012 is estimated around 73000 mt 73,000 mt, higher by 4.3% in volume and 31.7% in value compared to corresponding year last year. Exports of Pepper from Brazil during January till May 2012 are estimated around 13369 mt. (Source: Peppertradeboard). Pepper imports by U.S. the largest consumer of the spice declined 14.8% in the first 2 months of the year (2012) to 8810 tn as compared to 10344 tn in the same period previous year. Imports of Pepper in the month of February declined by 16.8% to 3999 tn as compared to 4811 tn in the month of January 2012. Exports from Indonesia posted significant decrease of 42% as compared to previous year. Exports stood at 36,500 tonnes as compared to 62,599 tonnes in the last year. During May 2012 Brazil exported 1,705 tonnes of pepper as against 1600 tn in May 2011.

Source: Telequote

Technical Outlook
Contract Black Pepper NCDEX Oct Futures Unit Rs/qtl

valid for Oct 3, 2012 Support 42700-42900 Resistance 43400-43725

Production and Arrivals

The arrivals in the spot market were reported at 35 tonnes while offtakes were 36 tonnes on Monday. Global Pepper production in 2012 is expected to increase 7.2% to 3.20 lakh tonnes as compared to 2.98 lakh tonnes in 2011 with sharp rise of 24% in Indonesian pepper output and in Vietnam by 10%. According to latest report pepper output in Vietnam is estimated to be 1.35 lakh tonne as compared to 1.10 lakh tonne estimated early in the beginning of year (2012). Domestic consumption of Pepper in the world is expected to grow by 3.03% to 1.25 lakh tonnes while exports are likely to grow by 1.48% to 2.46 lakh tonnes in 2012. (Source: Pepper trade board) On the other hand production of pepper in India in 2011-12 is expected to decline further by 5% to 43 thousand tonnes as compared to 48 thousand tonnes in the last year. Production is lowest in a decade.

Outlook
Pepper is expected to trade sideways with a positive bias today due to low supplies in the domestic markets. Festive season buying may also support prices. However, reports that FMC has asked NCDEX to find out any irregularities in pepper trade may cap sharp gains.

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Commodities Daily Report

Wednesday| October 3, 2012

Agricultural Commodities
Jeera
Jeera prices traded on a flat note yesterday. Expectations of better export figures as well as low arrivals in the spot markets supported the prices while reports of higher carryover stocks as compared to last year restricted any sharp upside. Good rains in Gujarat, thereby expectations of better sowing prospects ahead of the rabi sowing have also pressurized the prices. The spot settled 0.13% lower while the Futures settled 0.07% 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 10 lakh bags of Jeera are reported across India. Supply concerns from Syria and Turkey still exists. Expectations are that export orders may still be diverted to India from the international markets due to lack of supplies from Syria on back of the ongoing civil war. Production in Syria and Turkey is being reported around 17,000 tonnes and around 4,000-5,000 tonnes, lesser than expectations. Jeera prices of Indian origin are being offered in the international market at $2,625-2,650 tn (c&f) while Syria and Turkey are not offering. Carryover stocks of Jeera in the domestic market is expected to be around 7-8 lakh bags as compared to 4-5 lakh bags in the last year.

Market Highlights
Unit Jeera SpotNCDEX(Unjha) Jeera- NCDEX Oct'12 Futures Rs/qtl Rs/qtl Last 14419 13638 Prev day -0.13 0.07

as on Oct 1, 2012 % Change WoW -0.22 0.52 MoM -4.42 -1.91 YoY -3.63 -6.72

Source: Reuters

Technical Chart Jeera

NCDEX Nov contract

Production, Arrivals and Exports

Unjha markets witnessed arrivals of 3,000 bags, while off-takes stood at 3,000 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 0.00 0.11

as on Oct 1, 2012 % Change

Outlook
Jeera futures may trade on a sideways note today. Prices may find support at lower levels on expectations of higher export figures. However, good rains in Gujarat and higher carryover stocks may cap any sharp gains. In the medium term (September-October 2012), prices are likely to witness a bounce back as there are limited stocks with Syria and Turkey.

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

Last 5513 5660

WoW -3.04 -0.74

MoM 0.75 -5.73

YoY -3.62 11.73

Turmeric
Turmeric Futures traded on a flat note yesterday. Reports that FMC asked NCDEX to find out if there are any erratic trades in Turmeric kept the prices under check. Higher stocks with the stockists also pressurized the prices. However, a reduction in the special cash margin on the long side supported the prices in the Futures at lower levels. Turmeric has been sown in 0.57 lakh hectares in A.P as on 26/9/2012. Sowing is also reported 30-35% lower during the sowing period. The Spot remained unchanged while the Futures settled 0.11% higher on Monday. Special Cash Margin of 40% on the Long side shall be reduced to 20% (cash) on all the running contracts and yet to be launched contracts in Turmeric w.e.f. beginning of day Wednesday, September 26, 2012.

Technical Chart Turmeric

NCDEX Nov contract

Source: Telequote

Production, Arrivals and Exports

Arrivals in Erode and Nizamabad mandi stood at 4,500 bags and 1,500 bags respectively on Friday. 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.

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

valid for Oct 3, 2012 Support 13550-13725 5520-5570 Resistance 14060-14280 5690-5750

Outlook
Turmeric prices are expected to trade sideways today. Reports that FMC has asked NCDEX to find out any irregularities in turmeric trades may pressurize prices. However, a reduction in the special cash margin, lower sowing figures and lower arrivals may support prices..

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Commodities Daily Report

Wednesday| October 3, 2012

Agricultural Commodities
Kapas
NCDEX Kapas futures on Monday hit a 3% upper limit and settled 1.95% higher ahead of emerging demand at lower levels. According to the first advance estimates, released by the ministry of agriculture, Indias 2012/13 cotton output is seen at 33.4 mln bales as compared to 352 lakh bales in 2011-12 seasons. ICE cotton Futures closed 0.85% higher on account of short coverings. Cotton harvesting has commenced in US, in all 10% is harvested as compared to 6% a week ago, versus 11% same period a year ago. Cotton crop condition is 43% in Good/Excellent state as compared to 43% a week ago, and 29% same period a year ago.

Market Highlights
Unit Rs/20 kgs Rs/Bale Last 915.5 16050

as on Oct 1, 2012 % Change Prev. day WoW 1.95 1.05 0.00 1.01 MoM -10.07 1.01 YoY -14.76

NCDEX Kapas Futures MCX Cotton Futures

Source: Reuters

International Prices
ICE Cotton Cot look A Index Unit Usc/Lbs Last 70.3 81.35

as on Oct 2, 2012 % Change Prev day WoW 0.85 1.12 0.00 0.00 MoM -8.08 0.00 YoY -31.58 -29.20

Domestic Production and Consumption

As on 21 September, 2012, Cotton is being planted on 114 lakh hectares, down, as compared to the last years 119.6 lakh hectares. However, the acreage so far is at par with its normal area of 111.8 lakh hectares. According to the latest updates by Cotton Advisory Board (CAB), Cotton production for 2011-12 seasons is revised upward to 357 lakh bales compared with 347 lakh bales estimated earlier. Also, on account of cheaper cotton available in the global markets, imports have more than double from 5 lakh bales to 12 lakh bales. On the demand front, exports increased to around 127 lakh bales from the earlier estimates of 115 lakh bales taking total cotton consumption to around 382 lakh bales. Thus, the ending stocks figure for 2011-12 season, that would end in September, has been revised upward to 28 lakh bales from the previous estimates of 25 lakh bales. In its September monthly demand supply report on Wednesday, the Agriculture Department (USDA) raised its estimate for the global cotton surplus by next July to a record of 76.5 million 480-pound bales, nearly a two-million bale increase from last month's estimate.
st

Source: Reuters

Technical Chart - Kapas

NCDEX April contract

Global Cotton Updates

Global cotton prices are mainly influenced by China, US and India. USDA estimated US Cotton planting for the season 2012-13 at 12.64 mln acres as compared to 14.74 mln acres last season (2011-12). Ending stocks were at 4.8 mln bales (480 pounds/bales) with Production of 17 mln bales and exports of 12.1 mln bales were pegged for the season 2012-13. China's 2012 cotton output is estimated at 6.97 million tns, down 4.2 percent from last year. China's cotton imports in August rose 48 percent on the year to 305,600 tns. Total imports in the first eight months of the year were 3.77 million tns, up 123% from the same period last year, according to the report by the China National Cotton Reserves Corp.

Source: Telequote

Technical Chart - Cotton

MCX Oct contract

Outlook
Kapas futures in intraday is expected to trade range bound as ongoing harvesting in the key states coupled with new cotton crop arrivals from the northern states might pressurize the prices. However, prices in spot market are nearing its MSP, which would restrict any major fall. Also Farm Minister has lowered the output estimates of cotton for the 2012-13 season, that will provide support to the prices in the short term. However, in the international front, cotton harvesting has begun globally which might cap a sharp upside in medium term.
Source: Telequote

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

valid for Oct 3, 2012 Support 892-906 888-902 15750-15900 Resistance 927-935 925-933 16150-16290

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