Commodities Daily Report

Thursday| October 25, 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

Thursday| October 25, 2012

Agricultural Commodities
News in brief
Food prices may pinch during festive season: Assocham
Prices of food items like sugar and edible oil are expected to further increase during the festive season due to thin stocks and high demand, industry body Assocham today said. It said prices of eight essential commodities like spices, pulses, wheat, sugar, edible oil, tea, coffee and milk have risen by 18 per cent on an average from September 2011 to September 2012. "Aam Adami is likely to suffer more on account of further price increase in the upcoming festive season due to erratic rainfall and thin stocks coupled with high demand," the chamber said in its study. While prices of spices, pulses, wheat and sugar have become dearer by 30 per cent, 29 per cent, 19 per cent and 18 per cent, respectively, other essentials like edible oil, tea, coffee and milk saw upward moment in the range of 11 per cent, 10 per cent, 9 per cent and 7 per cent respectively, it said. The chamber also said the rise in essential commodity prices and per capita income was utterly disproportionate. Higher prices of sugar, edible oils, vegetables and pulses kept retail inflation near double digit at 9.73 per cent in September.
(Source: Economic Times)

Market Highlights (% change)

Last Prev. day

as on Oct 24, 2012

WoW MoM YoY

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

18710 5691 53.73 85.73 1701

-0.44 -0.45 0.31 -1.08 -0.46

0.71 0.77 1.70 -6.94 -2.91

1.97 2.47 -1.00 -6.74 -3.50

9.51 10.75 9.29 -6.07 2.97

Source: Reuters

Cardamom auction resumes

Cardamom auction resumed at the Spices Park in Puttady on Wednesday after nearly a month. Auctions were held in two sessions in the morning and afternoon. A total of 24 dealers including those from Tamil Nadu participated in the morning auction where 15 tonnes of cardamom were sold fetching an average price of Rs 678.50 a kg. Maximum price recorded was Rs 1,020 and a minimum Rs 473. (Source: Business Line)

Sugar mills call for hike in import duty

In a first, both the private and cooperative sugar mills unanimously oppose import of raw and white sugar during the current crushing season. However, they differ on the extent of the import duty. While the Indian Sugar Mills Association (Isma), a representative body of private mills, have appealed to the Centre to increase import duty from 10 per cent to 25 per cent, the Federation of Cooperative Sugar Factories in Maharashtra has asked the government not to scrap the 10 per cent import duty. The federation, an apex body of over 170 cooperative factories, also demanded that the mills that import raw sugar, which they later export as white sugar, should not be exempted from the levy sugar obligation (giving sugar at cheaper rates to the government for distribution in ration shops) or from paying excise duties. In a presentation to the Centre, Isma president Gautam Goel said that with the unviable international market for Indian sugar, the import will only add to the surplus sugar availability in the country. It will burden the finances of sugar mills, which will lead to cane payment arrears. The impact would be very obvious when sugarcane area for harvesting in 2013-14 will see a drop and sugar availability will suddenly become scarce. The country would be forced to become a net importer from 2013-14 sugar year itself, he said. (Source: Business standard)

Subsidy for imported pulses will distort market

The supply-demand gap of about 3 million tonnes of pulses on account of Indias production of 17 million tonnes, against consumption of 20 million tonnes per annum is showing signs of widening. The Ministries of Agriculture, and Consumer Affairs, Food and Public Distribution fear that escalating domestic prices of pulses can prompt higher food inflation due to lower output of kharif (summer) pulses. Hence, traditional interventionist measures were contemplated in early October, which, unfortunately, may again prove to be counter-productive. They may not help in providing relief to poor consumers. After terminating its scheme of import subsidy of pulses for PDS, operational between August 2008 and June 2012, the Government has revived its blueprint for import of one million tonnes of pulses to be distributed in 2012-13 by State governments through PDS channels. This announcement stands discounted in the future and spot exchanges. The new scheme is so tempting that many States may jump in. (Source: business Line)

China's January-September wheat imports at seven-year high

Wheat imports by China rose to a seven-year high in the year to September, but higher global prices due to bad weather in the United States and Australia are likely to cut purchases for the rest of the year. China is the world's biggest wheat producer, but a poor harvest, and higher domestic prices due to stockpiling in the beginning of the year, boosted wheat imports in the first nine-months of 2012 to 3.21 million tonnes, the highest since 2005, according to official data. China imported 1.25 million tonnes of wheat in 2011, and some analysts expected this year's imports to rise to as much as 2 million tonnes because of the drop in local production. Higher prices, however, are likely to reduce purchases. (Source: business Recorder)

Wheat eases after jumping on Ukraine export ban

U.S. wheat futures eased on Thursday, pulling back slightly after the grain jumped nearly 2 percent in the previous session on Ukraine's plan to halt exports next month due to weather damage. Ukraine's agriculture minister on Wednesday said the country would ban wheat exports from Nov. 15 after a weather-damaged harvest, a move that underpinned international prices. Egypt, the leading global wheat importer, warned that Ukraine risked damaging its credibility on international grain markets. Ukraine later said existing contracts can be fulfilled.
(Source: Reuters)

Iran relents on Indian wheat import

The row with Iran over the presence of rust in the Indian wheat seems to have settled for now. Iran has agreed to purchase wheat from India with 0.25 per cent tolerance to Karnal Bunt rust, as an interim measure. However, Indias proposal to enter into a long-term deal with Iran to export one to two million tonnes annually for at least three years is pending because Iran is insisting on a flat rate, while India wants the price to be linked to international index-based futures. (Source: Reuters)

Storm watch in Bay of Bengal withdrawn for now

Arabian Sea has thrown up a deep depression (a step lower than a tropical cyclone) but it has moved away to be of any consequence for the Indian coast. Weather watchers will now shift focus to Bay of Bengal basin, with a circulation having developed over South Andaman Sea as of Wednesday. India Meteorological Department (IMD) expected a lowpressure area to develop here over the next two days. IMD has lately withdrawn a watch for intensification of the system. There is no consensus among global on its behaviour as it enters the larger Bay of Bengal. A couple of models suggest some intensification, but not powerful enough to lash the Andhra Pradesh coast, as was expected.
(Source: Business Line)

FCI plans to rope in spot exchanges to sell wheat

The Food Corporation of India (FCI) is planning to engage spot exchanges to sell wheat. The move, heralding a breakthrough in the distribution of wheat to traders and flour millers, is round the corner
(Source: Business Standard)

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Commodities Daily Report

Thursday| October 25, 2012

Agricultural Commodities
Chana
Chana November declined further on Tuesday on prospects of better sowing and reports of higher shipments from Australia and Canada in the coming weeks. Chana sowing has started in some parts of Maharashtra, AP and Karnataka and is expected to commence soon in MP and Rajasthan too. In Maharashtra, 97000 ha area has been covered so far which is only 7.1% of the targeted 12.32 lakh ha by the state dept. In AP, chana acreage stood at 41000 hectares as on 17 October, 2012 compared with 98000 hectares during the same period last year. Prices have gained considerable since the beginning of October amid festive season buying and lower supplies caused by lower output in 2011-12 season. CACP has recommended a hike in minimum support price (MSP) of gram by Rs.200 to Rs.3000 a quintal and Masoor by Rs.100 to Rs.2900 a quintal for upcoming 212-13 Rabi season to boost the production of pulses. As per the NCDEX circular dated 1 October, Special Margin of 10% (in cash) on the Long Side on all the running contracts and yet to be launched contracts in Chana have been withdrawn with effect from beginning of day Thursday, October 04, 2012. Good rains in the month of August and September has raise prospects of Rabi pulses sowing in the coming days. Monsoon has recovered across India, especially in Rajasthan, one of the major chana growing states, and may prove beneficial for the chana sowing.
st th

Market Highlights
Unit Rs/qtl Rs/qtl Last 4588 4621 Prev day -0.04 -0.86

as on Oct 23, 2012 % change WoW MoM -4.43 3.54 -6.32 5.41 YoY 36.35 37.90

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

Source: Reuters

Technical Chart - Chana

NCDEX Nov contract

Source: Telequote

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

valid for Oct 25 2012 Resistance 4675-4720

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 first advance estimates of 2012-13 season, kharif pulses output is estimated lower by 14.6% at 5.26 million tonnes compared with 6.16 mn tn last year. Kharif pulses harvesting would commence from next month. According to the Fourth advance estimates of 2011-12 season, Pulses output is pegged at 17.21 mn tn in 2011-12 compared with 18.24 mn tn produced in the year 2010-11. While Chana output in 2011-12 is estimated at 7.58 million tones, Tur is estimated at 2.65 million tones, Urad is estimated at 1.83 million tones, Moong is estimated at 1.71 million tones. Assocham estimates, 21 mn tn of pulses demand in 2012-13 and is likely to reach at 21.42 mn tn in 2013-14 and 21.91 MT in 2014-15. (Source: Agriwatch)

4535-4575

Outlook
Chana futures may remain firm in the current week on account of festive season demand and tight supplies. However, reports of higher sowing of Rabi pulses this season might pressurize the prices in the medium term. Although short term trend remain positive for chana, we expect prices to come under downside pressure in the month of November as supply pressure may ease amid shipments from Australia and Canada.

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Commodities Daily Report

Thursday| October 25, 2012

Agricultural Commodities
Sugar
Sugar November futures settled lower on Tuesday on account of adequate supplies to meet the festive season demand. Further, food ministry is keeping a close watch on sugar sales by millers in the open market and warned against failure to sell the entire quota allocated to them for the October-November period, which lead to selling pressure. India, which is likely to produce a sugar surplus for its third year in a row, has decided to allow exports for another year, Food Minster K.V. Thomas said, reflecting confidence about domestic supplies in the world's top consumer of the sweetener. Mills and traders will have to wait for a formal order to export sugar in the new season that began on Oct. 1. 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. Liffe white sugar settled 0.4% higher due to short coverings, while ICE raw sugar closed 0.84% lower on Monday. Prices have corrected over the last couple of days due to good supplies from Brazil. Higher output and lower imports expectations for the 2012-13 season from China coupled with weak international markets is keeping prices under downside pressure.

Market Highlights
Unit Sugar Spot- NCDEX (Kolkata) Sugar M- NCDEX Nov '12 Futures Rs/qtl Last 3750

as on Oct 23, 2012 % Change Prev. day WoW 0.00 -0.36 MoM -2.34 YoY 20.97

Rs/qtl

3269

-0.67

-5.66

-8.05

18.66

Source: Reuters

International Prices
Unit Sugar No 5- LiffeDec'12 Futures Sugar No 11-ICE Mar '13 Futures $/tonne $/tonne Last 545.7 437.33

as on Oct 24, 2012 % Change Prev day WoW 0.68 0.15 0.87 -0.56 MoM -3.89 0.92 YoY -23.67 -26.73

Source: Reuters

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.

Technical Chart - Sugar

NCDEX Nov contract

Source: Telequote

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

valid for Oct 25, 2012 Resistance 3285-3302

Global Sugar Updates

Sugarcane harvesting in Brazil was down 7.9% as on 1st October 2012 at 24 mn tn. Unica expects the main center-south cane to yield 32.7 mn tn sugar output in 2012-13, down 1.2 % from the 33.1 mn tn forecast in April. Favorable weather in the second half of September should allow harvest and exports to run on schedule despite a couple of days of rain last week that slowed crushing. Thus sharp upside in the international prices may be capped. The International Sugar Organization said it expected a global sugar surplus of 5.86 million tonnes in the season running from October 2012 to September 2013, up from the prior season's surplus of 5.19 million tonnes. The ISO said the stocks/consumption ratio could rise to around 40 percent in 2012/13, from 37.6 percent in 2011/12. (Source: Reuters)

3238-3255

Outlook
Sugar prices may recover as reports that few sugar mills are supporting the import hike might provide support to the prices. However higher quota is seen offsetting festive season demand which might cap the gains. Approval to unrestricted exports may benefit India only if the global sugar prices gain considerably. However, supply pressure from Brazil is keeping international sugar markets under downside pressure.

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Commodities Daily Report

Thursday| October 25, 2012

Agricultural Commodities
Oilseeds
Soybean: Soybean corrected on Tuesday due to profit booking as
the prices traded on a positive note for 4 consecutive sessions. Reports of improved soy meal exports demand along with festive season demand for edible oil supported the prices. Also, farmers were not ready to sell their stocks at lower levels. The Spot as well as the Futures settled 0.43% and 2.45% lower on Tuesday. New soybean arrivals at MP stood at 450000 bags, Maharashtra170000 bags and Rajasthan 100000 bags on Wednesday. Arrivals are expected to improve to 6-6.5 lakh bags in MP in the coming weeks. According to first advance estimates, Soybean output is pegged at 126.2 lk tn for 2012-13. However, drop in area under groundnut, sunflower & castor seed may lead to lower output of these oilseeds in 2012-13 which is estimated 9.6% lower at 187.8 lakh tn. CBOT Soybean settled higher by 1.11% reports of higher export demand from China. Also, farmers have slowed their sales expecting better prices for their crop. According to the latest crop progress report released by USDA, as on 23 Oct 2012, US soybean harvest is 80 per cent complete as compared to 71 per cent last week and 69 per cent compared to 5 year average. According to the USDA October monthly report, Global soybean production is projected at 264.3 million tons, up 6.2 million mostly due to an increase for the United States. Ending stocks are seen down from 169 million bushels in 2011-12 to 115 million bushels in 2012-13 season. 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.

Market Highlights
Unit Soybean Spot- NCDEX (Indore) Soybean- NCDEX Nov '12 Futures Ref Soy oil SpotNCDEX(Indore) Ref Soy oil- NCDEX Nov '12 Futures Rs/qtl Rs/qtl Rs/10 kgs Rs/10 kgs Last 3256 3240 702.7 682.9

as on Oct 23, 2012 % Change Prev day -0.43 -2.45 0.93 -1.08 WoW 3.56 3.66 5.25 2.76 MoM -3.47 -5.30 -6.84 -2.01 YoY 47.93 46.87 10.09 10.89

Source: Reuters

as on Oct 24, 2012 International Prices Soybean- CBOTNov'12 Futures Soybean Oil - CBOTDec'12 Futures Unit USc/ Bushel USc/lbs Last 1571 51.84 Prev day 1.11 1.01 WoW 4.06 1.59 MoM -2.54 -2.35
Source: Reuters

YoY 28.15 0.66

Crude Palm Oil

as on Oct 24, 2012 % Change Prev day WoW 1.27 -2.39 3.13 1.85

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

Last 2468 424.7

MoM -1.75 -8.88

YoY -16.34 -9.62

MYR/Tonne Rs/10 kg

Refined Soy Oil: Ref soy oil as well as MCX CPO traded on a
negative note on Tuesday due to profit booking at higher levels. Festive season demand for the oil along with higher exports of Malaysian palm oil during 1-20 October has supported prices. Ref soy oil as well as CPO settled 1.08% and 2.39% lower on Tuesday. Exports of Malaysian palm oil products for Oct. 1-20 rose 14.1 percent to 1,058,844 tonnes from 928,110 tonnes shipped during Sept. 1-20. Malaysia, the world's No.2 producer of palm oil, will scrap a tax free export quota for the crude grade from 2013 in a bid to reduce feedstock prices for refiners who have lost market share to top supplier Indonesia. According to latest data from SEA, total vegetable oil imports in September were 993,912 tn, up from 897,018 tn in the previous month. India imported 111,163 tn of refined palm oil in September. As per MPOBs latest report, Malaysia's September palm oil stocks rose 17 percent to record high 2.48 million tons compared to previous month. Moreover, crude palm oil output in September rose 20 percent from August to 2 million tons. Rape/mustard Seed: Mustard Futures traded on a positive note due to low stocks coupled with festive season demand for its oil. However, prospects of better sowing pressurized the prices. However, prices corrected towards the end tracking weak edible oil pack. The spot as well as the Futures settled 1.43% and 0.33% lower on Tuesday. Mustard output was lower in 2011-12 and thus this has led to tight supplies in the domestic markets. However, on the back of higher returns and improved rains, next years output is expected to be better. Outlook Edible oil complex is expected to trade sideways today. Festive demand for oils may support prices while good arrivals may pressurize prices. Also, the prices may take cues from the strong international markets.

*Closing for 23 October 2012.

Source: Reuters

RM Seed
Unit RM Seed SpotNCDEX (Jaipur) RM Seed- NCDEX Nov '12 Futures Rs/100 kgs Rs/100 kgs Last 4140 4255 Prev day -1.43 -0.33

as on Oct 23, 2012 WoW 1.35 1.87 MoM 0.98 7.07

Source: Reuters

YoY 41.30 40.75

Technical Chart Soybean

NCDEX Nov contract

Source: Telequote

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

valid for Oct 25, 2012 Support 670-676 3180-3210 4175-4210 421-428 Resistance 692-698 3270-3308 4310-4365 437-442

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Commodities Daily Report

Thursday| October 25, 2012

Agricultural Commodities
Black Pepper
Pepper spot as well as the futures extended its previous days gains and traded on a positive note on Tuesday due to firm sentiments. Festive season demand has also supported the prices in the Futures. However, expectations of a better output in the coming season have capped a sharp upside. Farmers are unwilling to sell their stocks at lower levels. Traders are buying pepper directly from the farmers. Exports demand for Indian pepper in the international markets remains weak due to huge price parity. The Spot as well as the Futures settled 0.956% and 0.44% higher on Tuesday. th According to the circular released on June 13 2012 the existing Special margin of 10% (cash) on the long side stands withdrawn on all running contracts and yet to be launched contracts in Pepper from beginning of day Friday June 15, 2012. Pepper prices in the international market are being quoted at $8,850/tonne(C&F) while Indonesia Austa is quoted at $6,850/tonne (FOB). Vietnam was offering 550GL at $7,000/tonne. As per circular dt. 29/06/2012 issued by NCDEX, Hassan will be available as an additional delivery centre for all the yet to be launched contracts. (not applicable to the currently available contracts-till Dec 2012 expiry).

Market Highlights
% Change Unit Pepper SpotNCDEX (Kochi) Pepper- NCDEX Nov '12 Futures Rs/qtl Rs/qtl Last 42686 44330 Prev day 0.95 0.44

as on Oct 23, 2012 WoW 1.07 3.29 MoM 1.93 2.71 YoY 22.63 28.92

Source: Reuters

Technical Chart Black Pepper

NCDEX Nov contract

Exports
According to Spices Board of India, exports of pepper in April 2012 fell by 47% and stood at 1,200 tonnes as compared to 2,266 tonnes in April 2011. India imported 1,848 tonnes of pepper till March 2012 and has become the third country to import such large quantity after UAE and Singapore. (Source: Agriwatch) According to Vietnam Ministry of Agriculture and Rural Development (MARD) exports of black pepper in 2012 are forecasted at around 1,25,000 tonnes. Exports of Pepper from Vietnam during January till September 2012 is estimated around 80,433 mt, higher by 4.3% in volume and 31.7% in value compared to corresponding year last year. Exports of Pepper from Brazil during January till May 2012 are estimated around 13369 mt. (Source: Peppertradeboard). Pepper imports by U.S. the largest consumer of the spice declined 14.8% in the first 2 months of the year (2012) to 8810 tn as compared to 10344 tn in the same period previous year. Imports of Pepper in the month of February declined by 16.8% to 3999 tn as compared to 4811 tn in the month of January 2012. Exports from Indonesia posted significant decrease of 42% as compared to previous year. Exports stood at 36,500 tonnes as compared to 62,599 tonnes in the last year. During May 2012 Brazil exported 1,705 tonnes of pepper as against 1600 tn in May 2011.

Source: Telequote

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

valid for Oct 25, 2012 Support 43650-44000 Resistance 44680-44900

Production and Arrivals

The arrivals in the spot market were reported at 20 tonnes while offtakes were 20 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). Brazil is also expected to produce 22,000 tn this year. Domestic consumption of Pepper in the world is expected to grow by 3.03% to 1.25 lakh tonnes while exports are likely to grow by 1.48% to 2.46 lakh tonnes in 2012. (Source: Pepper trade board) On the other hand production of pepper in India in 2011-12 is expected to decline further by 5% to 43 thousand tonnes as compared to 48 thousand tonnes in the last year. Production is lowest in a decade.

Outlook
Pepper is expected to continue to remain firm and trade on a positive note today. Festive season demand is expected to support prices at lower levels. However, low export demand as well as good supplies in the international market from other origins may cap sharp gains.

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Commodities Daily Report

Thursday| October 25, 2012

Agricultural Commodities
Jeera
Jeera Futures traded on a positive note on Tuesday on back of good demand for exports. However, the prices corrected towards the end due to profit booking at higher levels. However, the spot prices remained in the positive due to good export as well as festive demand. Over the last couple of days, exporters have been buying actively due to escalated tensions between Syria and Turkey. Good rains in Gujarat have increased expectations of better sowing prospects ahead of the rabi sowing and have restricted sharp gains in the spot markets. The spot settled 0.68% higher while the Futures settled unchanged on Tuesday. According to markets sources about 75% exports target has already been achieved due to a supply crunch in the global markets. Around 45 lakh bags of Jeera are reported across India. Supply concerns from Syria and Turkey still exists. Expectations are that export orders may still be diverted to India from the international markets due to lack of supplies from Syria on back of the ongoing civil war. Production in Syria and Turkey is being reported around 17,000 tonnes and around 4,000-5,000 tonnes, lesser than expectations. Jeera prices of Indian origin are being offered in the international market at $2,900 tn (c&f) while Syria and Turkey are not offering. Carryover stocks of Jeera in the domestic market is expected to be around 4-5 lakh bags lower by around 3 lakh bags last year.

Market Highlights
Unit Jeera SpotNCDEX(Unjha) Jeera- NCDEX Nov '12 Futures Rs/qtl Rs/qtl Last 15177 15123 Prev day 0.68 0.00

as on Oct 23, 2012 % Change WoW 0.38 0.30 MoM 5.03 11.46 YoY 1.44 4.80

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 Tuesday. Production of Jeera in 2011-12 is expected to be around 40 lakh bags as compared to 29 lakh bags in 2010-11 (each bag weighs 55 kgs). (Source: spot market traders). According to Spices Board of India, exports of Jeera in April 2012 stood at 2,500 tonnes as compared to 2,369 tonnes in April 2011, an increase of 6%.

Source: Telequote

Market Highlights
Prev day 0.00 -1.61

as on Oct 23, 2012 % Change

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

Last 5021 5024

WoW -1.83 -3.68

MoM -11.69 -11.89

YoY -12.22 3.29

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

Technical Chart Turmeric

NCDEX Nov contract

Turmeric
Turmeric Futures traded on a bearish note on Tuesday due to lack of fresh orders from the upcountry market and exporters. Stockists also have good carryover stocks with them. Turmeric has been sown in 0.58 lakh hectares in A.P as on 10/10/2012. Sowing is also reported 30-35% lower during the sowing period. The Spot markets remained closed due to festive and is expected to reopen on today. The Futures settled 1.61% lower on Tuesday. Special Margin of 20% (in cash) on the Long Side in Turmeric November 2012 and December 2012 expiry contracts will be withdrawn with effect from beginning of day Saturday, Oct 20, 2012.

Production, Arrivals and Exports

There were no arrivals in Erode and Nizamabad mandis as they remained closed on Tuesday. Turmeric production for the year 2011-12 is projected at historical high of 90 lakh bags (1 bag= 70 kgs) compared to 69 lakh bags in 201011. Erode is expected to produce 55 lakh bags of turmeric a rise of 29% as compared to previous year. According to Spices Board of India, exports of Turmeric in April 2012 increased by 1% at 7,300 tn as compared to 7,230 tn in April 2011.

Source: Telequote

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

valid for Oct 25, 2012 Support 14850-14970 4890-4960 Resistance 15280-15450 5074-5140

Outlook
Turmeric prices are expected to trade downwards today. Lack of fresh orders may pressurize prices. However, a reduction in the special cash margin, lower sowing figures and lower arrivals may support prices.

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Commodities Daily Report

Thursday| October 25, 2012

Agricultural Commodities
Kapas
NCDEX Kapas futures settled lower by 1.48% on Tuesday on account o profit booking after witnessing upside rally for past few days. ICE cotton futures closed 2.15% lower on Wednesday on account of profit booking along with pace in harvesting which also weighed on the prices. Cotton harvesting has commenced in US, in all 38% is harvested as compared to 28% a week ago, versus 39% same period a year ago. Cotton crop condition is 42% in Good/Excellent state same as compares to last week, and 29% same period a year ago as on 23 Oct 2012.

Market Highlights
Unit Rs/20 kgs Rs/Bale Last 999 16580

as on Oct 23, 2012 % Change Prev. day WoW -1.48 -1.25 5.21 2.79 MoM 10.26 2.79 YoY -12.09

NCDEX Kapas Futures MCX Cotton Futures

Source: Reuters

International Prices
ICE Cotton Cot look A Index Unit Usc/Lbs Last 72.67 81.35

as on Oct 24, 2012 % Change Prev day WoW -2.15 -6.50 0.00 0.00 MoM 2.34 0.00 YoY -30.34 -29.20

Domestic Production and Consumption

As on 28 September, 2012, Cotton is being planted on 114 lakh hectares, down, as compared to the last years 119.6 lakh hectares. However, the acreage so far is at par with its normal area of 111.8 lakh hectares. According to the First Advance Estimates, Cotton production for 2012-13 seasons is revised upward to 334 lakh bales compared with 352 lakh bales in 2011-12 season. Also, on account of cheaper cotton available in the global markets, imports have more than double from 5 lakh bales to 12 lakh bales. According to the latest CAB report as on 04 October 2012, exports have dipped sharply by 46% to 7 million bales in the 2012/13 marketing year that began on Oct. 1 compared to 12.7 million bales estimated for 201112 season. The ending stocks figure, has been revised further upward to 3.4 million bales as compared to 2.8 million bales estimated for August 2011-12 season
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Source: Reuters

Technical Chart - Kapas

NCDEX April contract

Global Cotton Updates

Global cotton prices are mainly influenced by China, US and India. USDA estimated US Cotton planting for the season 2012-13 at 12.64 mln acres as compared to 14.74 mln acres last season (2011-12). Ending stocks were at 4.8 mln bales (480 pounds/bales) with Production of 17.65 mln bales and exports of 12.1 mln bales were pegged for the season 2012-13. In its October monthly demand supply report on Thursday, the Agriculture Department (USDA) raised its cotton crop for 2012/13 cotton crop season to 17.29 mln bales (prev 17.11) along with upward revision in end stocks 5.60 mln 480 pounds/bales (prev 5.30). Exports were down to 11.60 mln 480 pounds/bales (prev 11.80). China's 2012/13 cotton crop is estimated at 31.50 mln bales up from previous estimates of 31.00 mln bales given in September, imports 11.00 mln bales down from previous estimates of 12.00 million bales, consumption was pegged at 36.00 mln bales (down from prev 38.00 million bales), end stocks 36.61 mln bales (up from prev 35.51 mln bales)
Source: Telequote

Technical Chart - Cotton

MCX Oct contract

Source: Telequote

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

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

valid for Oct 25, 2012 Support 978-989 975-984 16110-16300 Resistance 1012-1027 1008-1022 16650-16780

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