Commodities Daily Report

Thursday| November 8, 2012

Agricultural Commodities

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

Research Team
Vedika Narvekar - Sr. Research Analyst vedika.narveker@angelbroking.com (022) 2921 2000 Extn. 6130 Anuj Choudhary - Research Analyst anuj.choudhary@angelbroking.com (022) 2921 2000 Extn. 6132

Vaishali Sheth - Research Associate vaishalij.sheth@angelbroking.com (022) 2921 2000 Extn. 6133
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Commodities Daily Report

Thursday| November 8, 2012

Agricultural Commodities
News in brief
Wheat prices rise as govt struggles to release excess stock
he government's inability to release excess grain stocks under the Open Market Sale Scheme (OMSS) for bulk buyers is pushing wheat prices up. Food minister KV Thomas told FE that the Cabinet would soon decide on the releasing 7 million tonne of wheat from the Food Corporation of India's (FCIs) excess grain stocks. Flour millers said the stocks with private players had been low because FCI and state government-owned agencies this year had purchased more than 39 mt (41% of the total output of 94mt) of wheat mostly from Punjab, Haryana and Madhya Pradesh. For wheat-consuming states in southern, eastern and western regions, the FCI had fixed rates on basis of minimum support price and freight cost from Ludhiana. For producing states such as Punjab and Haryana, OMSS wheat prices have been fixed on the basis of MSP and applicable state taxes paid by the FCI during the procurement of the grain. This makes wheat costlier in producing states and cheaper in the consuming states, Naresh Ghai, president, Punjab Roller Flour Miller Association, said. Ghai said a high taxation regime (14.5%) on grain sale makes wheat available under OMSS costliest. (Source: Financial Express)

Market Highlights (% change)

Last Prev. day

as on Nov 7, 2012
WoW MoM YoY

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

18902 5760 54.21 84.44 1713

0.45 0.62 -0.40 -4.81 -0.05

2.15 2.50 0.74 -2.09 -0.25

-0.19 0.23 4.41 -6.05 -3.68

8.13 9.39 10.30 -10.24 -2.89

Source: Reuters

Rice Stock Sets to Move Up Despite Lower Production

Total stock of rice in central pool kitty 289.54 lakh MT, as on 1st November 2012, in which 286.99 lakh MT is in storage and 2.55 lakh MT is in transit. Procurement starts and stock will continue to rise once again. Current stock is 289.54 which is higher by 161.54 lakh MT from the actual requirement on January 1st of 118 lakh MT. this indicates rice stock in central pool will continue to increase with government intension to buy 40 MT rice in current MY. (Source: Agriwatch)

Wheat market may lose ground on possible FCI release next week
The cabinet is ready to offload more wheat through OMSS and decision is expected next week any time. Quantity in question may be 60 to 70 lakh tones for December and January. Hefty burden of wheat stock (Over 40 million Tonne as on Nov.1st,2012),possibility of bumper crop once again and the ongoing paddy procurement have encouraged govt. to offload more wheat in time and check spiraling prices in the cash market. Flour mills associations have been demanding higher allocation for OMSS as demand for Diwali and Christmas could be met easily. Disparity in prices for various centers like Kerala and Tamil Nadu (Rs 1580 and 1523 per qtl.) for flour millers should be minimized. Flour millers in south India demands ban on export as prices in open market is ruling higher than expectation. Despite record production 93.9 million tones and hefty stock prices are firming up due to lower availability in cash market and restricted release from central pool. We expect wheat prices to come down with release for OMSS next week and availability will increase. Govt. may allow private trade to export from central pool and it will help stabilizing the prices in the cash market as private trades/exporters will be able to source wheat directly from public stock. Decision over it is expected after Diwali. Export from India will continue with better pace as PSU are active with better price realization in the range of around $310 to $315per MT. (Source: Reuters)

Ethanol powerhouse Brazil dabbles in biodiesel - RTRS

International firms are investing in biodiesel production in Brazil, a country on the verge of becoming the world's top grower of soybeans, the main source of the biofuel. They are betting on increasing domestic demand, rather than export potential, in an emerging power that uses more diesel than gasoline. Many also believe Brazil's government soon will raise the amount of biodiesel required in diesel blends. Bunge Ltd BG.N won approval last month to start operating a $30 million biodiesel plant in Brazil in 2013 and has said it is unlikely to build more sugarcane mills here due to the high cost of producing ethanol, a biofuel that the South American country pioneered. (Source: Reuters)

Packaging shift to help sugar sector save Rs 600 cr a year

The announcement to exempt 60 per cent of the output from jute packaging has provided a breather to the sugar industry. Earlier, under the Jute Packaging Materials Act, 1987, sugar manufacturers had to package the entire produce in jute bags. The new norms would lead to savings of about Rs 0.40 a kg for sugar manufacturers. This accounts for two to seven per cent of the earnings before interest, tax, depreciation and amortisation and 4-11 per cent of profit before tax estimates, said Achal Lohade at JM Financial Institutional Securities.
(Source: Business Standard)

Syngenta targets to grow more corn in Vietnam

Multinational seeds and crop inputs company Syngenta will focus on corn crop in Vietnam in the backdrop of downward revision in US corn output, according to Andrew Guthrie, Regional Director, Syngenta Asia Pacific Pte Ltd. Rice is the dominant crop in Vietnam, but the area under corn is expanding rapidly as it is a major animal feed crop. With about 1.2 million hectares under corn cultivation and an average yield of about 4.3 million tonnes, Vietnam also imports over a million tonnes of corn annually. The Government is keen on expanding corn acreage and yield.
(Source: Business Line)

Carryover stocks put pressure on castorseed

Poor demand pulled down castorseed prices in the spot market. On the back of spot, castorseed futures prices also declined 2.92 per cent as market participants booked profits. Despite the area under castor seed declined this kharif season, industry experts expect supplies to be normal on high carryover stocks. According to industry sources, farmers already have a carryover stock of about four lakh tonnes, which is expected to offset the possible decline in production this year. (Source: Business Line)

Palm oil stockpiles to melt if price stays low for 2 mths -Mistry
Malaysian palm oil prices must stay at around 2,200 ringgit ($720) a tonne for two months in order to stimulate demand for the edible oil and reduce high stock levels, a leading industry analyst said on Thursday. Malaysian palm oil prices have already lost about a quarter this year to trade at around 2,400 ringgit ($780) a tonne, as stocks rise in top producers Indonesia and Malaysia and demand slumps, hit by a global economic downturn. But palm prices must fall further within the next 4 to 6 weeks to lure buyers and cut back inventories, said Dorab Mistry, head of edible oil trading at Indian conglomerate Godrej Industries (Source:
Reuters)

Rains may linger over peninsula into next week

The India Meteorological Department (IMD) has said that an easterly wave traversing the Bay of Bengal will bring rains to south peninsula early into next week. Easterly waves, as in the case of western disturbances in northwest India, carry a rain-head in front, at times morphing into cyclonic circulations or even storms. US National Centres for Environmental Prediction sees rains erupting over southeast Tamil Nadu coast and climbing over the south-west coast later this week.
(Source: Business Line)

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Commodities Daily Report

Thursday| November 8, 2012

Agricultural Commodities
Chana
Chana Dec futures opened higher initially, however settled 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 4650 4617 Prev day 1.09 0.26

as on Nov 7, 2012 % change WoW MoM 0.25 1.99 -1.83 -2.82 YoY 39.85 40.29

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

Source: Reuters

Technical Chart - Chana

NCDEX Dec contract

Sowing progress and demand supply fundamentals

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)
Source: Telequote

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

valid for Nov 8, 2012 Resistance 4392-4420

4250-4295

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

Thursday| November 8, 2012

Agricultural Commodities
Sugar
Sugar prices settled marginally lower as supply pressure amid higher stocks to meet the festive season demand is capping the upside in the prices. November futures and spot settled 0.21% closed 0.13% lower respectively on Tuesday. 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 settled lower by 1.9% while ICE raw sugar closed 3.27% lower on Wednesday due to 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 3755

as on Nov 7, 2012 % Change Prev. day WoW -0.13 1.09 MoM 1.67 YoY 12.55

Rs/qtl

3366

-0.12

-0.74

-1.00

10.65

Source: Reuters

International Prices
Unit Sugar No 5- LiffeDec'12 Futures Sugar No 11-ICE Mar '13 Futures $/tonne $/tonne Last 531 421.11

as on Nov 7, 2012 % Change Prev day WoW -1.92 -3.27 -1.41 -2.22 MoM -10.76 -11.53 YoY -21.31 -25.36

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 8, 2012 Resistance 3332-3345

3268-3290

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

Thursday| November 8, 2012

Agricultural Commodities
Oilseeds
Soybean: Soybean futures recovered yesterday and settled 1.20%
higher as lower level buying is supporting 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 3347 3314 697.8 677.5

as on Nov 7, 2012 % Change Prev day 0.33 1.08 0.19 -0.06 WoW 1.73 0.49 -0.73 -1.35 MoM 4.72 2.89 3.39 1.58 YoY 50.02 47.35 9.86 5.61

Source: Reuters

as on Nov 7, 2012 International Prices Soybean- CBOTNov'12 Futures Soybean Oil - CBOTDec'12 Futures Unit USc/ Bushel USc/lbs Last 1509 48.62 Prev day -0.53 -0.12 WoW -2.47 -3.07 MoM -2.66 -4.33
Source: Reuters

International Markets
CBOT Soybean settled lower by 0.53% on Wednesday on supply pressure and favorable weather in South America. 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. Brazil could also churn out 81 mn tn of oilseed and replace the drought-stricken US as the world's top soybean producer. 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 26.23 -6.23

Crude Palm Oil

as on Nov 7, 2012 % Change Prev day WoW 0.44 -0.12 -4.34 0.57

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

Last 2290 427.1

MoM 1.87 0.97

YoY -24.97 -16.45

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 4124 Prev day 2.07 0.05

as on Nov 7, 2012 WoW 1.47 -2.07 MoM 2.68 1.10

Source: Reuters

Refined Soy Oil: Ref soy oil and MCX CPO settled marginally lower
due to higher stocks that are weighing on the prices. Worries over high Palm oil stocks in Malaysia as well as 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: After witnessing correction last week, Rm seed futures settled marginally higher by 0.05% on Wednesday as investors are adopting thw wait and watch policy. Mustard sowing th as on 25 Oct was reported at 8.37 lakh ha as compared to 20.15 lakh ha in the same period last year. However, on the back of higher returns and improved rains, next years output is expected to be better. 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. However, good demand for soy meal might provide support to the prices at lower levels. Export duty cut on CPO by Indonesia will make available cheaper palm oil for overseas buyers and refiners and could dent demand for Malaysian palm oil and weigh on prices.

YoY 38.89 29.40

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 8, 2012 Support 646-653 3260-3298 4075-4128 416.50-422 Resistance 668-672 3370-3410 4220-4255 431-435

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Commodities Daily Report

Thursday| November 8, 2012

Agricultural Commodities
Black Pepper
Pepper futures traded with a negative bias yesterday. Prices opened lower on expectations of a higher output 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 at lower levels. The Spot as well as the December Futures settled 0.26% and 0.32% lower on Wednesday. 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 41933 42605 % Change Prev day -0.26 -0.04

as on Nov 7, 2012 WoW -2.15 -0.85 MoM -1.48 -2.87 YoY 21.14 21.85

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 8, 2012 Support 41900-42180 Resistance 42650-42840

Production and Arrivals

The arrivals in the spot market were reported at 6 tonnes while offtakes were 6 tonnes on Wednesday. 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 sideways with a negative bias 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

Thursday| November 8, 2012

Agricultural Commodities
Jeera
Jeera Futures corrected yesterday as farmers are selling their stocks as they need cash during the festive season. However, demand from the stockists supported prices in the spot. 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%. Expectations of good export demand at lower levels supported prices in the spot. Festive demand is also expected to improve. Exporters have been buying due to tensions between Syria and Turkey. The spot as well as the December Futures settled 0.02% and 1.06% lower on Wednesday. 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 15021 14293 Prev day -0.02 -1.26

as on Nov 7, 2012 % Change WoW -0.15 -0.12 MoM 3.06 0.56 YoY 4.09 3.05

Source: Reuters

Technical Chart Jeera

NCDEX Dec contract

Production, Arrivals and Exports

Unjha markets witnessed arrivals of 7,800 bags, while off-takes stood at 7,800 bags on Wednesday. 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 0.82 0.41

as on Nov 7, 2012 % Change

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

Last 5134 5424

WoW 4.12 5.77

MoM -0.88 -0.91

YoY -7.06 13.81

Outlook
Jeera futures are expected to trade sideways with downside pressure as farmers are liquidating their stocks for want of cash. Prices may recover if the demand increases. Festive buying may also lend support to the prices. However, improvement in sowing may cap sharp gains. 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 account of profit booking at 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 settled 0.82% higher while the December Futures settled 0.63% lower on Wednesday.

Production, Arrivals and Exports

Arrivals in Erode and Nizamabad mandi stood at 8,000 bags and 1,000 bags respectively on Wednesday. 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 8, 2012

Support 1457-14740 5226-5278 Resistance 15060-15200 5446-5520

Outlook
Turmeric prices are expected to continue to trade upward today. Good demand from North India is expected to support prices. Also, export

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Commodities Daily Report

Thursday| November 8, 2012

Agricultural Commodities
Kapas
NCDEX Kapas futures after recovering on Tuesday fell again yesterday as harvesting pressure along with rise in arrivals from all over India is weighing on the prices. Also, weak international market supported the downside. 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 touched a five-week low, however, settled marginally higher as the Chinese government's procurement price mechanism provided support to 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 969.5 16070

as on Nov 7, 2012 % Change Prev. day WoW -1.22 -2.61 -0.74 0.19 MoM 4.08 0.19 YoY -2.96

NCDEX Kapas Futures MCX Cotton Futures

Source: Reuters

International Prices
ICE Cotton Cot look A Index Unit Usc/Lbs Last 69.83 81.35

as on Nov 7, 2012 % Change Prev day WoW -0.39 -0.54 0.00 1.81 MoM -0.85 0.00 YoY -29.82 -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

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

valid for Nov 8, 2012 Support 942-956 940-953 15790-15930 Resistance 978-988 975-985 16190-16290

Outlook
Cotton prices may trade sideways on account of lackluster trades ahead of Diwali festival. 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.

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