Commodities Daily Report

Saturday| January 12, 2013

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

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Commodities Daily Report

Saturday| January 12, 2013

Agricultural Commodities
News in brief
Higher support price boosts sowing in chana; area under wheat up
Rabi acreage under pulses has increased, as farmers in Madhya Pradesh and Maharashtra have planted more area under gram or chana. The acreage under chana is up 5% at 91.68 lh against 86.99 lh in corresponding period last year. The rise in chana prices, coupled with a hike in MSP, has helped expand the acreage under the crop by about 4.7 lh. Even States such as Karnataka, Andhra Pradesh and Chhattisgarh have seen an increase in the area under chana, while Rajasthan and Uttar Pradesh have seen a drop. However, urad acreage has dropped by about a fifth to 6.6 lh (8.3 lh). The decline in urad acreage is mainly on account of lower planting in Tamil Nadu and Andhra Pradesh. The acreage under moong has seen a marginal increase at 4.57 lh on higher planting in Odisha. The acreage under oilseeds is higher by 2.54 lh at 84.16 lh, mainly led by higher planting of rapeseed/mustard and groundnut. Rapeseed acreage touched almost 67 lh on higher planting in Rajasthan and Uttar Pradesh. The crop condition is reported normal, despite the prevailing cold wave in the northern States. (Source: Business Line)

Market Highlights (% change)

Last Prev. day

as on Jan 11, 2013

WoW MoM YoY

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

19664 5951 54.88 93.56 1660

0.00 -0.29 0.83 -0.28 -1.03

-0.61 -1.08 -0.12 0.50 0.72

2.26 1.71 0.66 8.93 -2.10

22.61 23.18 6.51 -5.59 0.77

.Source: Reuters

Double breakthrough in cotton research

Two developments on the campus of Central Institute for Cotton Research, Nagpur, could potentially revolutionise cotton production in the country - a soon-to-come variety with the weightiest boll in the world, and a germplasm (genetic resource) for a possible variety or hybrid with the strongest fibre. The big boll was accidentally developed by head of crop improvement P K Chakrabarty. The strong-fibre achievement by principal scientist Vinita Gotmare was the result of a sustained effort in that direction. Chakrabartys boll weighs 7.9 gm, which is probably the highest the world has ever known. Gotmares fibres strength is 29 grams/tex, which is the highest in India and surely one of the highest in the world, CICR director Keshav Kranthi told The Indian Express. The maximum boll weight anywhere in the world, according to Kranthi, hasnt exceeded 6 gm and the top fibre strength in India is 25 g/tex and around the same in most parts of the world. (Source:
Financial Express)

Registration for cotton yarn exports at two- year high

Registration for exporting cotton yarn is at a high of at least two years, owing to the burgeoning demand from Bangladesh and China. Data compiled by the Directorate General of Foreign Trade under the Ministry of Commerce and Industry showed in November 2012, registration for exporting cotton yarn stood at 100 mn kg, 32% higher than in the yearago period and five per cent more than in the previous month. Of late, China has turned out to be a major buyer. While orders have also started flowing in from Pakistan, Turkey and Brazil, in addition to many new small markets, Indian traders have also become aggressive to execute past orders, said Barat Malkan, , a Mumbai- based cotton yarn trader. With demand in the global market set to revive, the flow of export orders was likely to continue, he said. (Source: Business Standard)

India should adopt open policy on food grain exports: IFPRI

India should adopt an 'open' policy for food grains exports so that small farmers are benefited from prevailing higher global food prices, Shenggen Fan, Director General, International Food Policy Research Institute (IFPRI) on Friday said. India must also reduce rising food subsidy by 'better' targeting of Public Distribution System, Fan observed. At present the PDS is not well targeted which is leading to pilferage of food grains. By reducing food subsidy, more financial resources could be allocated for research and development in agriculture, Fan told FE. India being the biggest the rice exporter must have an open export policy for increasing farm income realistion , Fan commented. India has emerged as the world's biggest rice exporter in 2012 surpassing Thailand with shipment of around 10 million tonnes after a four year old ban on rice exports were lifted in 2011. (Source: Indian Express)

Saving on a level field

Farmers of Punjab, a state reeling under over-exploitation of groundwater for paddy, have started to warm up the technology of levelling their fields, a process that saves around 30 per cent on water required during irrigation. Punjab is believed to have more laser levellers than any other state has, the count rising year by year, though much of the states farmland remains to be covered. From one machine in 2005, the number rose to eight in 2006, 150 in 2007, 900 in 2008, 2,000 in 2009 and around 5,000 currently, owned both privately and by state cooperative societies that provide these to farmers for custom hiring. The Central Ground Water Board this year prohibited 18 of Punjabs 137 from drilling new bores for drawing underground water; 92 of the blocks are listed as dark zones due to over-exploitation. (Source: Financial Express)

North-East monsoon withdraws from peninsula

The India Meteorological Department (IMD) has declared withdrawal of North-East monsoon over peninsular India. The traditional North-East monsoon country falls in Tamil Nadu, Kerala and adjoining Andhra Pradesh and Karnataka. Among those which posted huge rain deficits until December 21, 2012, are Lakshadweep (-50 per cent); Kerala (-35 per cent); and South Interior Karnataka (-23 per cent). Andhra Pradesh was the surprise gainer with excess rain in Telangana (+22 per cent) and coastal Andhra Pradesh (+33 per cent) while Rayalaseema fell under the normal category (-2 per cent). North interior Karnataka, normally prone to drought conditions, managed to fare much better by slotting itself into normal category (-4 per cent). (Source: Business Line)

India wastes 21 million tonnes of wheat every year: report

India stands out for its glaring lack of infrastructure and food storage facilities, in a new study that says 21mn tn of wheat -- equivalent to the entire production of Australia -- goes waste in the country. The report by the IME on global food wastage found that as much as 50% of all food produced around the world never reaches a human mouth. "Considerably greater levels of tonnage loss exist in larger developing nations, such as India for example, where about 21 mn tn of wheat annually perishes due to inadequate storage and distribution, equivalent to the entire production of Australia," said the 'Global Food Waste Not Want Not' report. "In neighbouring Pakistan, losses amount to about 16% of production, or 3.2 mn tn annually, where inadequate storage infrastructure leads to widespread rodent infestation problems," it said. Overall, wastage rates in vegetables and fruit are even higher than for grains. (Source: Financial Express)

Lower stocks, dearer imports boost masoor

Masoor has been witnessing an uptrend in Indore mandis for the past two weeks on decline in domestic stocks and costlier imports. Added to this, an expected fall in crop output this year due to decrease in sowing area has also added to bullish trend in masoor. Masoor prices have increased by Rs 200 a quintal during the last few sessions. Local mandis remained closed today on account of Amavasya. (Source: Business Line)

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Commodities Daily Report

Saturday| January 12, 2013

Agricultural Commodities
Chana
Chana February contract settled 0.03% higher on short coverings, while spot declined 0.97% on account of continuous rise in imports coupled with higher output expectations. Although chana prices witnessed 17% gains in 2012 on the back of lower availability, sentiments have turned negative in the month of December on account of continuous supplies of imported chana from Australia coupled with higher output expectations. As a result, prices in the month of December 2012 declined 8.8%.

Market Highlights
Unit Rs/qtl Rs/qtl Last 4000 4073 Prev day -0.97 -0.32

as on Jan 11, 2013 % change WoW MoM -0.55 -3.61 3.45 -1.19 YoY 16.56 18.06

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

Source: Reuters

Sowing progress
Total pulses acreage as on 4th Jan 2013 stood at 136.05 lakh ha, down by 0.44% yoy. As on 28th Dec, pulses acreage was down by 1.2%. Chana sowing is almost complete and acreage so far stood at 89.4 lakh ha, up by 3.5% as on 4th Jan. Chana acreage is marginally higher by 3% this year in Rajasthan at 14.80 th lakh ha, In Maharashtra Chana acreage is up at 10.8 lakh ha as on 4 Jan 2013 vs normal area of 10.6 lakh ha and 2012 area of 6.8 lakh ha. While in AP it is up at 6.99 lakh ha as on 19th Dec, up by 20%. (Source: State farm dept)

Technical Chart - Chana

NCDEX April contract

Demand supply fundamentals

Chana fresh crop arrival has started in Karnataka & Andhra Pradesh and would commence soon in Maharashtra too. However, arrival pressure will built up February onwards when harvesting commence in MP. 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 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. The Commission for Agriculture Costs and Prices (CACP) has suggested 10 per cent import duty on pulses to encourage domestic production. in the first six months of the new fiscal that is from April to September this year, imports were an estimated 12 lakh tonnes. 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).
Source: Telequote

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

valid for Jan 12, 2013 Resistance 3570-3600

3460-3500

Trade Scenario
USDA revealed that Myanmar beans and pulses export is up by 56 per cent to 110498 MT as compared with same period in last year. Out of the total export, 73 percent (80721 MT) was exported to India followed by Singapore (11316 MT). (Source: Agriwatch dated Dec 27) In Australia, total chickpea production in 201213 is estimated to have increased to a record of around 746000 tones as compared with 485000 tons in 2011-12. India imports Chana mainly from Australia and Canada and higher availability in these countries at comparatively cheaper rates is seen boosting imports of Chana to meet the domestic shortfall.

Outlook
Chana April contract may open higher on short coverings, however, prices may again come under downside pressure due to higher shipments of imported chana and expectations of better output next season. Any adverse report with respect to weather may bring a rebound in the prices and thus a close watch on weather is crucial at this point of time.

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Commodities Daily Report

Saturday| January 12, 2013

Agricultural Commodities
Sugar
Sugar February contract settled marginally lower by 0.21% as higher domestic production figures in the first quarter of the current marketing season is exerting downside pressure on the sugar prices. However, there are reports that drought in parts of Maharashtra and Karnataka has hurt fresh sugarcane plantings, which may affect cane availability for sugar year 2013-14 starting October. Although this will have long term implications, outlook for short term remains bleak amid sufficient supplies. Government has allocated total 70 lac tons of non-levy sugar quota for Dec-March 2012-13 period which is higher from 59.5 lac tons last year. Raw sugar futures on ICE as well as Liffe white sugar settled 0.45% and 1.11% higher on Friday as dealers expected that index fund buying could help extend gains with the index's re-balancing this week. Prices had corrected earlier due to supply glut in the global markets. According to Unica, Brazil's 2012-2013 center-south sugar output is expected to reach 34.05 million tonnes, an estimate 4.1% higher than its 32.7 million tonnes September forecast.

Market Highlights
Unit Sugar Spot- NCDEX (Kolhapur) Sugar M- NCDEX Jan'13 Futures Rs/qtl Last 3243

as on Jan 11, 2013 % Change Prev. day WoW -0.22 -0.22 MoM -2.79 YoY 11.25

Rs/qtl

3201

-0.03

-0.59

-1.81

14.04

Source: Reuters

International Prices
Unit Sugar No 5- LiffeMar'13 Futures Sugar No 11-ICE Mar '13 Futures $/tonne $/tonne Last 514.8 426.00

as on Jan 11, 2013 % Change Prev day WoW 0.45 1.11 0.86 1.70 MoM -0.14 -0.21 YoY -17.25 -19.59

.Source: Reuters

Domestic Production and Exports

Mills in the country have produced 7.96 mln tn sugar in the first three months of the season, up nearly 2.5% a year ago. In Maharashtra, the largest sugar producer in the country, 155 mills are operational and have produced 1.88 mln tn sugar till Dec 15, compared with 1.83 mln produced a year ago by 165 mills. In Uttar Pradesh, the second largest sugar producer in the country, total output as on Dec 15 was 1.03 mln tn, about 20% lower on year, as some mills in the eastern part of the state are still to commence cane crushing. The producers body has estimated sugar output lower at 24 mn tn, down by 2mn tn compared to the current year. Industry body ISMA has estimated 6.5 mn tn stocks for the new season beginning October 01, 2012 compared to 5.5 mn tn year ago. India may export 1.5 mn tn sugar in 2012-13. With the opening stocks of 6.5 mn tn, domestic Sugar supplies are estimated at 30.5 mn tn against the domestic consumption of around 22. 5mln tn for 2012-13.

Technical Chart - Sugar

NCDEX Feb contract

Source: Telequote

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

valid for Jan 12, 2013 Resistance 3260-3270

Global Sugar Updates

According to the Brazil Agriculture Ministry, The 2012/13 cane crush was at 531.35 million tonnes as of Dec. 31, up from 491.16 million tonnes crushed the previous year. The 2013/14 crush will likely surpass the current one. Brazil's main center-south cane crop will produce between 580 million and 590 million tonnes of sugar cane in 2013/14. Brazil will likely favor ethanol production over sugar from the 2013/14 cane crop. The 2012/13 sugar crop in Thailand, the world's second-biggest exporter, could drop below a forecast 9.4 million tonnes due to lower-thanexpected yield. The crushing season started on Nov. 15 and 1.9 million tonnes of sugar has been produced so far (Source: Reuters)

3235-3245

Outlook
Sugar prices are expected to recover in the coming weeks as demand is seen emerging at lower levels. Reports of lower cane planting in some parts of Maharashtra and Karnataka may also bring some stability in the prices. Further, it is expected that government will take some measure to control prices, which are below the cost of production levels, from falling further so as to protect the interest of the millers.

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Commodities Daily Report

Saturday| January 12, 2013

Agricultural Commodities
Oilseeds
Soybean: soybean futures settled lower by 1.5% ahead of USDA report, which was expected to revise upward the production estimates of Brazil and Argentina.
Arrivals in the domestic markets declined to 1.8-2 lakh bags, while demand is comparatively lower amid subdued overseas demand for soy meal. According to first advance estimates, Soybean output is pegged at 126.2 lakh tn for 2012-13. Soy meal exports fell by 34% in December to 5.10 lakh tn, according to SOPA. The country had exported 7,78,382 tn in December 2011. During the first three months of the current oil year (Oct-Sep), exports declined by 27% to 10.78 lakh tn as against 14.69 lakh tn in the yearago period. (Source: Business line)

Market Highlights
Unit Soybean Spot- NCDEX (Indore) Soybean- NCDEX Jan '13 Futures Ref Soy oil SpotNCDEX(Indore) Ref Soy oil- NCDEX Jan '13 Futures Rs/qtl Rs/qtl Rs/10 kgs Rs/10 kgs Last 3185 3086 732.6 725.5

as on Jan 11, 2013 % Change Prev day -1.21 -1.67 -0.33 0.10 WoW -2.99 -3.80 2.61 2.68 MoM -3.34 -5.73 1.12 1.70 YoY 27.81 21.83 1.24 0.12

Source: Reuters

International Markets
Soybean futures on the CBOT traded on a negative note in the March contract and settled 0.47% lower on Friday due as the USDA monthly report raised US soy harvest by 1.5% from last month to 3.015mn bushels and inventories by 3.8% to 135 mn bushels. Argentina soy planting advanced quickly in the last week to cover more than 90% of the targeted 19.7 mn ha, marking progress of 5.9% points during the week and outpacing last season's planting by 5.2 points. The next harvest will come in March and is projected by the govt at 55 mn tn or higher, depending on the weather. According to the USDA monthly crop report, Brazil will produce a record 82.5 mn tn of soybeans in 2012-13 due to hefty expansion in acreage and improving yield prospects. With the harvest just beginning in some areas, Brazil's planted area will likely increase by 9.2 percent to 27.34 mn ha.
International Prices Soybean- CBOTJan'13 Futures Soybean Oil - CBOTJan'13 Futures Unit USc/ Bushel USc/lbs Last 1425 48.88

as on Jan 11, 2013 Prev day 0.51 -1.03 WoW 2.57 -1.09 MoM -3.39 -3.84
Source: Reuters

YoY 20.90 -4.44

Crude Palm Oil

as on Jan 11, 2013 % Change Prev day WoW -0.26 -0.67 -4.22 -3.42

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

Last 2269 431.9

MoM 6.98 7.71

YoY -29.25 -19.54

MYR/Tonne Rs/10 kg

Refined Soy Oil: Ref soy oil prices remained positive on Friday on
account of lower supplies in the domestic markets. While CPO futures declined sharply as export figures released for first 10 days of January showed a sharp fall in exports. With the new tax structure, markets expected exports to improve. Also, MPOB data released on Thursday revealed further increase in stock piles by 2.4% in December, while exports declined 0.7% in December. Palm oil Stockpiles used in food and biofuel were 2.53 mn tn in December compared to an all-time high of 2.56 mn tn a month earlier, according to the Bloomberg survey. Output probably fell 7.9% to 1.74 mn tn, while exports dropped 3.6% to 1.6 mn tn in December, the survey showed.

Source: Reuters

RM Seed
Unit RM Seed SpotNCDEX (Jaipur) RM Seed- NCDEX Jan'13 Futures Rs/100 kgs Rs/100 kgs Last 4225 4206 Prev day -0.59 -0.57

as on Jan 11, 2013 WoW -0.12 0.12 MoM 0.00 3.83

Source: Reuters

YoY 18.31 12.46

Technical Chart Soybean

NCDEX Feb contract

Rape/mustard Seed: Mustard seed April Futures made fresh lows

and settled 0.57% lower on expectations of higher output in 201213. Rabi oilseeds sowing which was up by 1.3% as on Dec 28, is now up by 1.99% at 8.1 mn ha as of Jan. 4. Arrivals are expected to commence in February and thus no major upside in the prices is seen. Indian farmers have cultivated rapeseed on 6.62 mn ha as of Jan. 4, compared with 6.44 million hectares during the same period last year. Rapeseed output is expected to rise by 5% to 6.5 mn tn from 6 mn tn last year.

Source: Telequote

Outlook
Soybean complex may remain under pressure tracking weak international prices. Mustard seed prices may decline further on likely higher output and expectations of arrivals to commence soon. CPO may trade lower due to higher ending stocks with Malaysia.

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

valid for Jan 12, 2013 Support 690-694 3070-3100 3425-3450 425-428 Resistance 702-706 3160-3200 3500-3530 434-439

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Commodities Daily Report

Saturday| January 12, 2013

Agricultural Commodities
Black Pepper
Pepper Futures traded on a positive note yesterday but corrected from higher levels towards the end. Prices have gained due strong demand from Tamil Nadu ahead of Pongal. Good winter demand also supported the prices. Prices have also increased over the last few days due to arrivals of good quality pepper from Kerala. Earlier, prices had corrected as Food Safety and Standards Authority of India sealed the entire quantity of pepper stored in six warehouses in Kerala of about 5,000 tonnes. Harvesting of the fresh crop has commenced and is expected to gain momentum in the coming days. However, winter demand coupled with low stocks in the domestic markets has supported prices at lower levels. FMC is probing into complaints against movement in the pepper market which has pressurized prices. Exports demand for Indian pepper in the international markets is also weak due to price parity. The Spot as well as the Futures settled 0.52% and 0.07% higher on Friday. Spices Board has announced plans to import high yielding Madagascar variety that was behind the record productivity in Vietnam. It could raise productivity of Indian pepper from 2,000 kg/ha to 7,000 kg/ha. Pepper prices in the international market are being quoted at $7,400/tn(C&F Europe), while Vietnam was offering Austa at $7,000/tn, Brazil Austa at $6,000-6,500/tn, and Indonesia Austa at $6,500/tn (FOB).

Market Highlights
Unit Pepper SpotNCDEX (Kochi) Pepper- NCDEX Feb'13 Futures Rs/qtl Rs/qtl Last 38563 35825 % Change Prev day 0.52 0.07

as on Jan 11, 2013 WoW 2.20 1.44 MoM -0.67 -8.84 YoY 23.14 18.96

Source: Reuters

Technical Chart Black Pepper

NCDEX Feb contract

Exports and Imports

According to Spices Board of India, exports of pepper in April 2012 fell by 47% and stood at 1,200 tonnes as compared to 2,266 tonnes in April 2011. India imported 1,848 tonnes of pepper till March 2012 and has become the third country to import such large quantity after UAE and Singapore. (Source: Agriwatch) According to Vietnam Ministry of Agriculture and Rural Development (MARD) exports of pepper during Jan-Oct 2012 stood at 102,340 mt, lower by 12% as compared to 1,15,780 mt in the same period last year. Total exports in 2012 are forecasted at around 1,10,000 tonnes. Pepper imports by U.S. the largest consumer of the spice declined 26% during January-September 2012 period to 41,923 tn as compared to 52,489 tn in the same period previous year. Exports from Indonesia posted significant decrease of 42% as compared to previous year. Exports stood at 36,500 tonnes as compared to 62,599 tonnes in the last year. Brazil exported 25,900 tn pepper during Jan-Nov 2012, around 20% lower compared with 32,650 tn in the same period last year. Exports from Malaysia 8,300 tn pepper during Jan-Oct 2012, lower by 30% last year while exports in October stood at 1,077 mt in.

Source: Telequote

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

valid for Jan 12, 2013 Support 35120-35430 Resistance 36240-36750

Production and Arrivals

The arrivals in the spot market were reported at 21 tonnes while off takes were reported at 20 tonnes on Friday. As per IPC, Global pepper production in 2012 is projected at 3.27 lk tn, up compared with 3.18 lk tn in 2011. Production for 2013 is projected at 316832 tn. Indonesian pepper output is expected to rise by 24% and in Vietnam by 10%. According to previous estimates, pepper output in Vietnam is estimated to be 1 lakh tonne in 2012 as compared to 1.1 lakh tonne in 2011. Brazil is also expected to produce 22,000 tn this year. Domestic consumption of Pepper in the world is expected to grow by 3.03% to 1.25 lakh tonnes while exports are likely to grow by 1.48% to 2.46 lakh tonnes in 2012. (Source: Pepper trade board) Pepper production in 2012-13 is expected around 60,000-63,000 tonnes. Currently, pepper is in the fruit formation stage in Kerala.

Outlook
Pepper is expected to trade on a positive to bullish note due to strong demand from Tamil Nadu ahead of Pongal. Winter buying coupled with arrivals of good quality crop may also support prices. However, increasing supplies coupled with higher output expectations may cap sharp gains. FSSAIs sealing of huge quantity of pepper and FMCs probe into complaints against price movement may also pressurise the prices.

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Commodities Daily Report

Saturday| January 12, 2013

Agricultural Commodities
Jeera
Jeera Futures corrected sharply for the fourth consecutive day yesterday hitting a new contract low on account of higher sowing as well as conducive weather in Gujarat, the main jeera growing state. About 95% of sowing is completed and is in its final stage. According to Gujarat State Agri Dept. sowing in Gujarat is reported at 3.074 lakh ha st as on 31 Dec, 2012 compared with 2.822 lakh ha last year. In Rajasthan, sowing is expected to increase by 10-15%. The spot settled higher by 0.21% while the Futures settled 1.12% lower on Friday. 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 $2,850-2,875 tn (c&f) while Syria and Turkey are not offering. Carryover stocks of Jeera in the domestic market is expected to be around 5-6 lakh bags.

Market Highlights
Unit Jeera SpotNCDEX(Unjha) Jeera- NCDEX Mar '13 Futures Rs/qtl Rs/qtl Last 14433 13728 Prev day 0.21 -1.12

as on Jan 11, 2013 % Change WoW -1.02 -5.43 MoM -3.94 -5.34 YoY -7.96 -11.30

Source: Reuters

Technical Chart Jeera

NCDEX March contract

Production, Arrivals and Exports

Arrivals in Unjha were reported at 3,000 tn on Friday. Production of Jeera in 2011-12 is expected around 40 lakh bags as against 29 lakh bags in 2010-11 (55 kgs each). 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 -0.45

as on Jan 11, 2013 % Change

Outlook
Jeera prices may continue to trade on the downside tracking higher sowing figures in Gujarat. However, fresh export enquiries may limit a sharp downside. In the medium term, prices are likely to stay firm as there are limited stocks with Syria and Turkey.
Turmeric SpotNCDEX (N'zmbad) Turmeric- NCDEX Apr '13 Futures

Unit Rs/qtl Rs/qtl

Last 5693 6632

WoW -0.09 -1.46

MoM 9.87 27.39

YoY 9.44 43.05

Turmeric
Turmeric Futures traded on a mixed note yesterday. Huge carryover stocks pressurized the prices while demand from the stockists as well as North India have supported the prices. Turmeric growing regions may receive rainfall in the coming days which can damage the standing crop also led to a sharp rise. Lower production estimates have supported the prices. Also, arrivals of good quality crop have supported prices. There are reports of some crop damage in Erode region. Expectations are that production may be lower by 40-50%. Production is expected around 55 lakh bags. It is estimated that next years carryover stocks would be around 10 lakh bags. There are reports that Turmeric Farmers Association of India have decided to fix their own MSP of Rs.10000/qtl. The Spot as well as the Futures settled 0.13% and 0.36% higher on Thursday.

Technical Chart Turmeric

NCDEX April contract

Source: Telequote

Production, Arrivals and Exports

The spot markets remained closed on account of Pongal festival. Turmeric production in 2012-13 is expected around 64-65 lakh bags. Production in 2011-12 is projected at historical high of 10.62 lakh tn. According to Spices Board of India, exports of Turmeric in April 2012 increased by 1% at 7,300 tn as compared to 7,230 tn in April 2011. Outlook Turmeric may trade on a mixed note today. Higher carryover stocks and weak overseas demand may pressurize prices while lower production expectations coupled with demand from stockists and weather concerns may support prices.
.

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

Valid for Jan 12, 2013

Support 13420-13570 6460-6550 Resistance 13840-14000 6760-6840

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Commodities Daily Report

Saturday| January 12, 2013

Agricultural Commodities
Kapas
Kapas prices witnessed short coverings and settled 0.75% higher on Friday. Registration for exports of cotton yarn has hit the highest in at least two years on burgeoning demand from Indias perennially importing countries i.e. Bangladesh and China. Although, Cotton advisory Board has pegged cotton output lower at 334 th lakh bales, Cotton Association of India (CAI), in its latest 90 annual general meeting said that Cotton production in the season 2012-13 is expected to be around 350 lakh bales, while the consumption is likely to be around 265 lakh bales. According to the data released by Cotton Corporation of India, Supplies until Dec. 16 fell to 6.2 mn bales of 170 kg each, down from 6.9 mn bales th a year earlier. Arrivals were down by 12.5% as on 9 Dec. However, it is still below expectations as many farmers, who are waiting for better returns, hold back their produce. ICE Cotton recovered from lower levels and settled 0.56% higher on Friday on account of short coverings.

Market Highlights
Unit Rs/20 kgs Rs/Bale Last 938.5 16390

as on Jan 11, 2013 % Change Prev. day WoW 0.75 -1.42 0.24 -0.43 MoM -7.03 -0.43 YoY #N/A -9.05

NCDEX Kapas Futures MCX Cotton Futures

Source: Reuters

International Prices
ICE Cotton Cot look A Index Unit USc/Lbs Last 75.62 81.35

as on Jan 11, 2013 % Change Prev day WoW 0.56 0.76 0.00 0.00 MoM 2.48 0.00 YoY -20.79 -29.20

Source: Reuters

Technical Chart - Kapas

NCDEX April contract

Domestic Production and Consumption

According to Cotton Advisory Boards (CAB) estimates (4 Oct 2012) for 2012-13 season that commenced in October, domestic cotton production is pegged 334 lakh bales, down 5.6% from the previous years estimates of 353 lakh bales. Lower opening stocks coupled with estimated lower output will result in lower supplies this season at 374 lakh bales, a decline of 8.7% compared with last years 410.77 lakh bales. On the consumption front, domestic consumption is estimated higher at 270 lakh bales on the back of higher mill consumption. However, after witnessing record exports in 2011-12 season, Indian exports could witness significant fall this season on the back of lower availability along with unattractive domestic cotton prices. CAB estimates cotton exports at 70 lakh bales this season, compared with 128.8 lakh bales last year.
Source: Telequote
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Technical Chart - Cotton

MCX Jan contract

Global Cotton Updates

China, the world's biggest cotton consumer and importer, is studying a proposal to issue extra import quotas for textile mills which have been pushing the government to boost the amount of cheaper overseas cotton they can buy. If approved, the quotas will require mills to buy three tonnes of cotton from state reserves for every tonne they import. Brazils 2012-13 cotton production forecast at 6.3 million bales, down 27 percent from 2011/12 production now estimated at 8.6 million bales. (USDA attach report)

Source: Telequote

Outlook
Cotton prices may recover today due to short coverings. Higher output expectations by Cotton Association of India have turned the sentiments negative for the cotton prices. However, downside may be limited as farmers may not sell their stocks at lower prices. Reports that the Government may purchase cotton from farmers to avoid distress sales may also support prices. Also demand remains strong at low prices.

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

valid for Jan 12, 2013 Support 920-931 16300-16350 Resistance 945-960 16420-16500

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