Commodities Daily Report

Friday| November 9, 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 Analyst [email protected] (022) 2921 2000 Extn. 6132

Vaishali Sheth - Research Associate [email protected] (022) 2921 2000 Extn. 6133
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Commodities Daily Report

Friday| November 9, 2012

Agricultural Commodities
News in brief
Remove curbs to attract investments, say sugar millers
Removal of controls on sugar sector, as suggested by the C. Rangarajan Committee, would trigger fresh investments and boost capacity, millers said on Thursday. The two major industry bodies Indian Sugar Mills Association (ISMA) and the National Federation of Co-operative Sugar Factories Ltd (NFCSF) urged the Government to abolish the regulated release mechanism and remove the system of levy with immediate effect, as recommended by the Rangarajan Committee. The removal of levy obligation will benefit the industry worth Rs 3,000 crore annually, said Gautam Goel, President, ISMA. The sugar industry has missed the liberalisation bus, while all other industries that have been liberalised have grown. It is high time the Government removed the archaic controls that the industry is burdened with, Goel said, adding that such a move would bring in fresh investments and boost capacity. Besides removing Government controls, the Rangarajan Committee suggested doing away with the cane reservation area and link the price of cane to the revenue realised by the mills from sugar sale and first-stage by-product. It had also suggested removal of the minimum distance between two sugar mills and exempt the industry from the compulsory packaging order under the Jute Packaging and Marking Act, 1987. Farmers in North India had urged the Prime Minister to scrap the Rangarajan panel recommendation on abolition of State advised pricing.
(Source: Business Line)

Market Highlights (% change)

Last Prev. day

as on Nov 8, 2012
WoW MoM YoY

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

18846 5739 54.37 85.09 1725

-0.30 -0.37 0.30 0.77 0.71

1.53 1.66 1.31 -2.30 0.66

0.73 1.11 3.46 -4.75 -2.71

7.31 8.60 10.95 -9.73 -1.70

Source: Reuters

Rice procurement tops 10 million tonnes

The Government has procured over 10 million tonnes (mt) of rice in the ongoing kharif marketing season 2012-13. Till November 8, the procured quantity of rice stood at 10.07 mt against 9.4 mt in the corresponding period last year, according to the Food Ministry data. The highest procurement has been made in Punjab at 7.6 mt, followed by Haryana at 2.41 mt and Andhra Pradesh at 33,483 tonnes. Procurement in Chandigarh stood at 11,256 tonnes, a Food Ministry statement said. Rice stocks in the Central Pool as on November 1, stood at 28.95 mt, four times the buffer and strategic reserves of 7.7 mt as of October 1. Similarly the wheat stocks in the Central Pool stood at 40.57 mt, about thrice the buffer and strategic reserve at this point in time. The total foodgrain stocks in the Central pool stood at 69.52 mt as on November 1.
(Source: Business Lineh)

Indias agricultural exports see 121% jump on guargum, rice diet

The country's agricultural and processed food exports saw a huge jump of 121% during first two quarters of the current fiscal to R63,000 crore in comparison to Rs 28,500 crore during same period last year. The jump is mainly attributed to the surge in shipment of Guargum (488%) and nonBasmati rice (993%) in the first half of 2012-13. According to the latest data released by the Agricultural and Processed Food Products Export Development Authority (APEDA), Guargum exports stood at Rs 21,536 crore, which is around 45% of the total agricultural exports. The rise in Guargum exports this fiscal was more than 488% in comparison to the same period last year. If the growth in export trend continues, we will cross the R1-lakh crore export mark by the end of the current fiscal, Asit Tripathy, chairman, APEDA told FE. Another key commodity that pushed up agricultural exports was non-Basmati rice. The total exports of nonBasmati rice during the April September period this year was around R6285 crore, a jump of more than 993% from the previous year.
(Source: Financial Express)

Sugar glut forecast to continue with strong Indian harvest

Strong supplies of sugar are projected to continue as the globe's second biggest producer of the sweetener is forecast to harvest 6 percent more than projected by the nation's leadership, according to Bloomberg. Prolonging the globe's longest glut in more than 10 years, India noted its harvest will climb to 25.53 million metric tons for the season that started October 1, according to farmers who till land that produces well more than 90 percent of the nation's sweetener. "If the actual crop is going to be more than expected it's detrimental for the world market," senior economist Sergey Gudoshnikov with the International Sugar Organization in London told the news source. "For the time being the world sugar market is still in surplus." (Source: Bloomberg)

Spices Board Allow Farmers to Sell Cardamom Directly to Licensed Dealers or through Auction
Cardamom auction distraction from September 25 on the issue of raising the bidding rates, the auctions resumed in October last week with a revised bidding rate of Rs 2. The decision to revamp the marketing system will boost the exports. The exporters can buy good quality cardamom from the farms directly while the grower stands to get a better rate. As per Spices Board officials, selling through auctions was compulsory till now and the farmers can now sell independently if they get more money. However as per Cardamom Growers Association, growers agree that the payment is easier through auctions. The price realisation is punctual through the auctions, which is the reason most farmers prefer the auction route.
(Source: Business Standard)

Uncertainty over pricing upsets farmers in UP

The sugar cycle in Uttar Pradesh, the country's second-largest sugar producing state, has officially started from November 1 and so has the politics that goes along with it. While on the one hand the state government is struggling to fix the right support price or state advised price (SAP) for the crop, farmers are unhappy as most of the mills are waiting for a fix on the price before they start operating the factories. Since the private sugar factories have still not started operations, they are not buying out our cane stock. We want to get our fields vacated so that we can start sowing wheat. It can delay in harvesting cane which will directly hamper our wheat crop. In order to avoid that situation, many farmers are indulging in distress selling. said Yogesh Dahiya, a farmer from Saharanpur. (Source: Business Line)

FAO slashes grain f'casts, world food prices stay high - RTRS
Global supply of key cereal staples including wheat is to tighten sharply in the 2012/13 crop season as wheat and maize output feels the pinch of the worst U.S. drought in more than half a century, data from the United Nations food agency showed. Wheat production, which has also suffered heavily in the droughts in eastern Europe and central Asia, was seen falling 5.5 percent to 661 million tonnes, the agency said. World cereals production is expected to fall 2.7 percent to 2.284 billion tonnes in the 2012/13 season, it said, trimming slightly its previous output forecast of 2.286 billion tonnes. (Source: Reuters)

More rain forecast in South till month-end

Heavy rainfall has been forecast at one or two places over Kerala and Lakshadweep on Friday. An India Meteorological Department (IMD) outlook said that rains would continue at least until Sunday before reducing in intensity. Meanwhile, global forecasts are of the view that the seas around peninsular tip would witness weather activity through the rest of the month. (Source: Business Line)

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Commodities Daily Report

Friday| November 9, 2012

Agricultural Commodities
Chana
Chana Dec futures opened higher initially, however settled lower as demand is seen to wane off at higher levels. Also, higher shipments in the coming weeks may ease supplies in the domestic markets, thus capping the upside in the prices. Except for Wheat, minimum support price of all other Rabi crops has been increased by CCEA for 2012-13 season. MSP of Chana/Gram is raised by Rs 200 per qtl for 2012-13 season to Rs 3000. Higher returns and favorable soil condition will definitely boost acreage in the coming season. Although overall pulses sowing is lagging by 31% to 1.87 mn ha till 2nd Nov, chana sowing is up Maharashtra and AP. Acreage is down mainly in Rajasthan. In Maharashtra, chana sowing is completed on 2.9 lakh hectares as on 2nd November, which is 24% of the targeted 12.32 lakh ha, and up by 67% compared to last year. In AP chana sowing is up by 15.9 to 1.96 lakh ha as on. In Rajasthan, sowing is down 66% at 2.78 lakh hectares as on th 10 October 2012. (State Farm Departments) As per the NCDEX circular dated 1 October, Special Margin of 10% (in cash) on the Long Side on all the running contracts and yet to be launched contracts in Chana have been withdrawn with effect from beginning of day Thursday, October 04, 2012.
st

Market Highlights
Unit Rs/qtl Rs/qtl Last 4607 4630 Prev day -0.92 0.28

as on Nov 8, 2012 % change WoW MoM 0.16 -1.97 -0.06 -5.45 YoY 41.57 46.52

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

Source: Reuters

Technical Chart - Chana

NCDEX Dec contract

Sowing progress and demand supply fundamentals

Source: Telequote

Improved rains towards the end of monsoon season coupled with hike in MSP have raised prospects of Chana sowing in the 2012-13 season. Also, farm ministry has targeted 7.9 mn tn chana output for 2012-13 season, higher compared to 7.58 mn tn in 2011-12. According to the Ministry of Agriculture 99.81 Lakh hectare area has been planted under Kharif pulses in 2012-13 compared to 108.28 lakh hectare (ha) in the previous year. According to the first advance estimates of 2012-13 season, kharif pulses output is estimated lower by 14.6% at 5.26 million tonnes compared with 6.16 mn tn last year. Kharif pulses harvesting would commence from next month. Assocham estimates, 21 mn tn of pulses demand in 2012-13 and is likely to reach at 21.42 mn tn in 2013-14 and 21.91 MT in 2014-15. (Source: Agriwatch)

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

valid for Nov 9, 2012 Resistance 4368-4410

4250-4290

Outlook
Chana futures in intraday might decline on account of weakening demand. In the short to medium term we expect prices to stay under downside pressure as supply pressure may ease amid shipments from Australia and Canada. Going forward, prices may also take cues from sowing progress of Rabi pulses.

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Commodities Daily Report

Friday| November 9, 2012

Agricultural Commodities
Sugar
Sugar prices settled lower as supply pressure amid higher stocks to meet the festive season demand is capping the upside in the prices. November futures settled 0.50% lower on Thursday. Decision over cane pricing in Maharashtra and UP has delayed crushing this season too. Despite festival season, prices are under check this season as government has released higher quota of 40 lakh tonnes for October and November, compared to 34.6 lakh tonnes during 2011. Liffe white sugar extended losses and settled lower by 0.96% while ICE raw sugar closed 0.58% lower on Thursday due to ongoing supply pressure from Brazil. Higher output and lower imports expectations for the 2012-13 season from China coupled with higher sugar surplus forecast for fourth straight year is keeping international prices under downside pressure.

Market Highlights
Unit Sugar Spot- NCDEX (Kolkata) Sugar M- NCDEX Nov '12 Futures Rs/qtl Last 3760

as on Nov 8, 2012 % Change Prev. day WoW 0.00 1.25 MoM 0.27 YoY 13.25

Rs/qtl

3370

-0.50

-0.71

-0.88

11.26

Source: Reuters

International Prices
Unit Sugar No 5- LiffeDec'12 Futures Sugar No 11-ICE Mar '13 Futures $/tonne $/tonne Last 525.9 418.67

as on Nov 8, 2012 % Change Prev day WoW -0.96 -0.58 -2.09 -3.14 MoM -12.10 -12.25 YoY -19.35 -24.64

Domestic Production and Exports

Although some of the mills have started operations in Maharashtra, but still crushing has not gained momentum as farmers are seeking higher cane prices. In UP too crushing normally starts in the first week of November, but this year also crushing is delayed due to disputes over cane pricing. According to the first advance estimates by agriculture ministry, Sugarcane output is pegged at 335.3 mn tn, down by 6.2% compared to 357.6 mn tn last year. Despite of higher acreage, the producers body has estimated next years sugar output lower at 24 mn tn, down by 2mn tn compared to the current year. Sugar production in India the worlds second-biggest producer touched 26 million tonne since October 1, 2011. Industry body ISMA has estimated 6 mn tn stocks for the new season beginning October 01, 2012 compared to 5.5 mn tn year ago. India may export 2.5-3 mn tn sugar in 2012-13. With the opening stocks of 6 mn tn, domestic Sugar supplies are estimated at 30mn tn against the domestic consumption of around 22.523 mln tn for 2012-13. Thus, no curbs on exports are seen as of now.

Source: Reuters

Technical Chart - Sugar

NCDEX Dec contract

Source: Telequote

Global Sugar Updates

Sugar output in Brazil jumped 57% during the first fortnight of October. th And thus output is now lower just by 3.7% as of 16 October at 26.7 mn tn. Unica expects the main center-south cane to yield 32.7 mn tn sugar output in 2012-13, down 1.2 % from the 33.1 mn tn forecast in April. Brazil exported 3.998 million tons of sugar, raw value, in October up from 2687 million tons in September. Brazil has exported only 15.59 million tons of sugar this year till October which was 17.17 million tons, raw value, last year same period. The International Sugar Organization said it expected a global sugar surplus of 5.86 million tonnes in the season running from October 2012 to September 2013, up from the prior season's surplus of 5.19 million tonnes. The ISO said the stocks/consumption ratio could rise to around 40 percent in 2012/13, from 37.6 percent in 2011/12. (Source: Reuters)

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

valid for Nov 9, 2012 Resistance 3325-3338

3268-3285

Outlook
Sugar prices may open on a negative note on Thursday as supplies are sufficient to meet the festive season demand. However, delayed crushing may support prices at lower levels and thus sharp fall may be restricted.

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Commodities Daily Report

Friday| November 9, 2012

Agricultural Commodities
Oilseeds
Soybean: Soybean futures settled marginally up by 0.17% as supply
pressure is capping the upside in the prices. Soy meal exports during October are down 49,840 tn in October, the seventh consecutive month of fall in the current fiscal year, from 223,594 tn a year ago. This is because, most export commitments were done for forward trade like Nov-Dec amid uncertainty over supplies in October. Soybean arrivals at MP stood at 4,00,000 bags on Wednesday, while in Maharashtra and Rajasthan it stood at 1 lakh bag and 80000 bag respectively. Solvent plants are aggressive buyers in the coming days to keep up with their commitments for DOC exports. According to first advance estimates, Soybean output is pegged at 126.2 lk tn for 2012-13.

Market Highlights
Unit Soybean Spot- NCDEX (Indore) Soybean- NCDEX Nov '12 Futures Ref Soy oil SpotNCDEX(Indore) Ref Soy oil- NCDEX Nov '12 Futures Rs/qtl Rs/qtl Rs/10 kgs Rs/10 kgs Last 3362 3315 696.6 680.2

as on Nov 8, 2012 % Change Prev day 0.45 0.02 -0.16 0.41 WoW 0.21 -1.62 -1.41 -1.95 MoM 5.36 4.57 3.55 2.26 YoY 50.83 47.38 9.87 6.42

Source: Reuters

as on Nov 8, 2012 International Prices Soybean- CBOTNov'12 Futures Soybean Oil - CBOTDec'12 Futures Unit USc/ Bushel USc/lbs Last 1499 48.77 Prev day -0.63 0.31 WoW -3.80 -3.29 MoM -1.58 -2.79
Source: Reuters

International Markets
CBOT Soybean extended losses and settled lower by 0.63% on Thursday on account of weak export sales data. According to the latest crop progress report released by USDA, as on 4th Nov 2012, US soybean harvest is 93% complete as compared to 87% last week and 86% compared to 5 year average. Planting of Soybean in Argentina has been delayed due to excessive moisture this season. Area and production for marketing year 201213 are maintained at 19.7 million hectares and 55 million tonnes, respectively. th Brazil's government on 8 Nov 2012 edged up its forecast for a record 2012/13 soybean crop to between 80.1 and 83 million tonnes, despite concerns after dry October weather and planting delays According to the USDA October monthly report, Global soybean production is projected at 264.3 million tons, up 6.2 million mostly due to an increase for the United States. Ending stocks are seen down from 169 million bushels in 2011-12 to 115 million bushels in 2012-13 season.

YoY 27.51 -4.35

Crude Palm Oil

as on Nov 8, 2012 % Change Prev day WoW -1.44 -0.49 -6.11 -2.08

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

Last 2257 427.6

MoM 1.30 2.91

YoY -26.36 -16.19

MYR/Tonne Rs/10 kg

Source: Reuters

RM Seed
Unit RM Seed SpotNCDEX (Jaipur) RM Seed- NCDEX Nov '12 Futures Rs/100 kgs Rs/100 kgs Last 4313 4173 Prev day 0.00 1.19

as on Nov 8, 2012 WoW 1.47 -0.76 MoM 2.07 1.83

Source: Reuters

Refined Soy Oil: Ref soy oil settled higher as demand for the
edible oil is providing support to the prices while MCX CPO settled marginally lower due to ongoing pressure of higher stocks that are weighing on the prices. Also, reduction in Indonesias export tax led to a correction on the BMD. This could further dent demand for Malaysian palm oil and exert pressure on the BMD palm oil futures. Exports of Malaysian palm oil products for Oct. 1-25 rose 11 percent. According to latest data from SEA, total vegetable oil imports in September were 993,912 tn, up from 897,018 tn in the previous month. As per MPOBs latest report, Malaysia's September palm oil stocks rose 17 percent to record high 2.48 million tons compared to previous month. Rape/mustard Seed: Rm seed futures after falling consistently last week settled higher by 1.26% on Thursday due to reports of th lower sowing. Mustard sowing as on 25 Oct was reported at 8.37 lakh ha as compared to 20.15 lakh ha in the same period last year. MSP for Mustard seed is increased by 20% from Rs 2500/Quintal to Rs 3000/Quintal for 2012-13 Season. Higher returns and Prospects of better sowing shall keep sentiments weak in the medium term. Outlook Edible oil complex might trade sideways with downward bias on account of arrival pressure in the domestic markets. Also prices might take cues from the latest USDA monthly demand supply report being released today. However, good demand for soy meal might provide support to the prices at lower levels..

YoY 39.00 31.47

Technical Chart Soybean

NCDEX Dec contract

Source: Telequote

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

valid for Nov 9, 2012 Support 653-659 3268-3305 4130-4180 416.50-421 Resistance 670-676 3375-3410 4272-4310 429-433

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Commodities Daily Report

Friday| November 9, 2012

Agricultural Commodities
Black Pepper
Pepper futures traded downwards yesterday on reports of better output in the domestic as well as the international markets this season. Farmers are also trying to liquidate their stocks ahead of the commencement of arrivals of the fresh crop. Exports demand for Indian pepper in the international markets remains weak due to huge price parity. However, festive as well as winter demand has supported prices in the spot. The Spot as well as the December Futures settled 0.6% and 1.97% lower on Thursday. Pepper prices in the international market are being quoted at $8,400/tn(C&F) while Vietnam was offering Austa at $7,000/tn, Brazil Austa at $6,700/tn, and Indonesia Austa at $6,500/tn (FOB).

Market Highlights
Unit Pepper SpotNCDEX (Kochi) Pepper- NCDEX Nov '12 Futures Rs/qtl Rs/qtl Last 41680 42300 % Change Prev day -0.60 -0.72

as on Nov 8, 2012 WoW -0.82 -1.18 MoM -1.98 -3.11 YoY 20.40 20.46

Source: Reuters

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.

Technical Chart Black Pepper

NCDEX Dec contract

Source: Telequote

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

valid for Nov 9, 2012 Support 40850-41200 Resistance 41820-42050

Production and Arrivals

The arrivals in the spot market were reported at 14 tonnes while offtakes were 10 tonnes on Thursday. As per IPC, Global pepper production in 2012 is projected at 3.36 lk tn, up by 12.7% compared with 2.98 lk tn in 2011. Indonesian pepper output Is expected to rise by 24% and in Vietnam by 10%. According to previous estimates, report pepper output in Vietnam is estimated to be 1.35 lakh tonne as compared to 1.10 lakh tonne estimated early in the beginning of year (2012). Brazil is also expected to produce 22,000 tn this year. Domestic consumption of Pepper in the world is expected to grow by 3.03% to 1.25 lakh tonnes while exports are likely to grow by 1.48% to 2.46 lakh tonnes in 2012. (Source: Pepper trade board) On the other hand production of pepper in India in 2011-12 is expected to decline further by 5% to 43 thousand tonnes as compared to 48 thousand tonnes in the last year. Production is lowest in a decade.

Outlook
Pepper is expected to trade downwards today. Liquidation pressure from farmers as well as low export demand may pressurize prices. Good supplies in the international market from other origins may also keep prices under check. However, festive season demand is expected to support prices at lower levels.

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Commodities Daily Report

Friday| November 9, 2012

Agricultural Commodities
Jeera
Jeera Futures traded sideways with a positive bias yesterday on reports of export enquires. However, spot traded lower since farmers are selling their stocks as they need cash during the festive season. The sowing of the crop has started and is expected to gain momentum in the coming days, thus pressuring prices. Sowing in Gujarat is currently lower by 15-20%. Festive demand is also expected to improve. Exporters have been buying due to tensions between Syria and Turkey. The spot settled marginally lower by 0.12% while the December Futures settled 0.61% higher on Thursday. According to markets sources about 75% exports target has already been achieved due to a supply crunch in the global markets. Supply concerns from Syria and Turkey still exists. Expectations are that export orders may still be diverted to India from the international markets due to lack of supplies from Syria on back of the ongoing civil war. Production in Syria and Turkey is being reported around 17,000 tonnes and around 4,000-5,000 tonnes, lesser than expectations. Jeera prices of Indian origin are being offered in the international market at $2,825 tn (c&f) while Syria and Turkey are not offering. Carryover stocks of Jeera in the domestic market is expected to be around 4-5 lakh bags lower by around 3 lakh bags last year.

Market Highlights
Unit Jeera SpotNCDEX(Unjha) Jeera- NCDEX Nov '12 Futures Rs/qtl Rs/qtl Last 15003 14380 Prev day -0.12 0.61

as on Nov 8, 2012 % Change WoW 0.40 2.17 MoM 1.49 -2.72 YoY 4.10 4.54

Source: Reuters

Technical Chart Jeera

NCDEX Dec contract

Production, Arrivals and Exports

Unjha markets witnessed arrivals of 6,000 bags, while off-takes stood at 6,000 bags on Thursday. 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 -1.21 -0.22

as on Nov 8, 2012 % Change

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

Last 5072 5412

WoW 2.22 5.83

MoM -2.08 -0.18

YoY -7.91 16.79

Outlook
Jeera futures are expected to trade sideways today. Prices may witness downside pressure as farmers are liquidating their stocks for want of cash. Prices may recover on fresh export demand. Festive buying may also lend support to the prices. In the medium term (November-December 2012), prices are likely to stay firm as there are limited stocks with Syria and Turkey.

Technical Chart Turmeric

NCDEX Dec contract

Turmeric
Turmeric Futures corrected yesterday after rising sharply over the last couple of days on increasing arrivals higher levels. Steady demand coupled with fresh upcountry orders supported the prices. Stockists have good carryover stocks with them, capping sharp gains in the spot. Turmeric has been sown in 0.58 lakh hectares in A.P as on 10/10/2012. Sowing is also reported 30-35% lower during the sowing period. The Spot as well as the December Futures settled 1.21% and 3.59% lower on Thursday.

Production, Arrivals and Exports

Arrivals in Erode and Nizamabad mandi stood at 12,000 bags and 1,000 bags respectively on Thursday. Turmeric production for the year 2011-12 is projected at historical high of 90 lakh bags (1 bag= 70 kgs) compared to 69 lakh bags in 201011. Erode is expected to produce 55 lakh bags of turmeric a rise of 29% as compared to previous year. According to Spices Board of India, exports of Turmeric in April 2012 increased by 1% at 7,300 tn as compared to 7,230 tn in April 2011.
Source: Telequote

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

Valid for Nov 9, 2012

Support 14620-14780 5030-5100 Resistance 15100-15225 5210-5280

Outlook
Turmeric prices are expected to continue to trade sideways today. Good demand from North India is expected to support prices. However, large stocks may pressurize prices.

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Commodities Daily Report

Friday| November 9, 2012

Agricultural Commodities
Kapas
NCDEX Kapas futures settled higher by 0.87% on account of short coverings. Also, weak international market is capping the upside in the prices. As on 4th November 2012, 13.02 lakh bales of Cotton has arrived so far, down by 29% compared to last year 18.57 lakh bales during the same period. U.S. cotton futures trading on ICE Futures settled lower by 0.82% as ongoing pace in harvesting is weighing on the prices. Cotton harvesting has commenced in US, in all 64% is harvested as compared to 50% a week ago, versus 68% same period a year ago. Cotton crop condition is 43% in Good/Excellent state compared to 29% th same period a year ago as on 6 Nov 2012.

Market Highlights
Unit Rs/20 kgs Rs/Bale Last 981.5 16190

as on Nov 8, 2012 % Change Prev. day WoW 1.50 0.51 0.87 0.56 MoM 5.25 0.56 YoY -2.65

NCDEX Kapas Futures MCX Cotton Futures

Source: Reuters

International Prices
ICE Cotton Cot look A Index Unit Usc/Lbs Last 69.26 81.35

as on Nov 8, 2012 % Change Prev day WoW -0.82 -1.55 0.00 0.00 MoM -1.74 0.00 YoY -30.21 -29.20

Domestic Production and Consumption

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

Source: Reuters

Technical Chart - Kapas

NCDEX April contract

Global Cotton Updates

Last year around this time, the Chinese government introduced a cotton procurement mechanism t hat stopped not only the plunge in Chinese prices but also temporarily prevented falling prices on ICE. The same thing is effectively happening this year. China has this procurement price in place that is contributing to the price of cotton that the rest of the world has to pay. Harvesting is on in US and 50 percent of harvesting is completed till date. Higher global ending stocks are seen capping the upside in the cotton prices this year too. However, downside is also limited as prices are again nearing its 12 year average price of 65 cents per pound. Markets will now take cues from the Chinese demand for cotton and trade policies of India with respect to cotton exports. In its October monthly demand supply report, the Agriculture Department (USDA) raised its cotton crop for 2012/13 cotton crop season to 17.29 mln bales (Prev 17.11) along with upward revision in end stocks 5.60 mln 480 pounds/bales (Prev 5.30). Exports were down to 11.60 mln 480 pounds/bales (Prev 11.80).
Source: Telequote

Technical Chart - Cotton

MCX Nov contract

Source: Telequote

Outlook
Cotton prices may trade sideways and might take cues from upcoming USDA global demand supply monthly report releasing today. Although harvesting pressure may built mid November onwards, but still no major downside is expected in the domestic markets as farmers will not sell their stocks at very low prices. Also, CCI procurement at MSP levels may support prices from falling sharply.

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

valid for Nov 9, 2012 Support 948-962 945-959 15920-16050 Resistance 985-994 982-990 16280-16360

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