Commodities Daily Report

Friday| May 31, 2013

Agricultural Commodities

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

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

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Commodities Daily Report

Friday| May 31, 2013

Agricultural Commodities
News in brief
Monsoon set to hit Kerala a day early
The monsoon could hit Kerala by Sunday, a day before the Met department's predicted date of June 3, with conditions becoming favourable for its advance into parts of south Arabian sea, Maldives, the Comorin areas and some more parts of Bay of Bengal during the next 48 hours. Senior officials at the India Meteorological Department (IMD) said on Thursday that a low pressure system that had formed over the Bay of Bengal had hastened the formation of rain-clouds, which are expected to come to Kerala by June 2. Officials said the intense heat wave over north and central India in the past two weeks would have played a part too in setting the stage for the monsoon's onset over the Indian mainland. According to the department's prediction, pre-monsoon rain and thundershowers are also expected at many places over Andaman and Nicobar Islands, Kerala, Lakshadweep and coastal Karnataka; at a few places over Andhra Pradesh and interior Karnataka and at one or two places over Maharashtra, Goa and Tamil Nadu till the morning of June 2. (Source: The Times of India)

Market Highlights (% change)

Last Prev. day

as on May 30, 2013

WoW MoM YoY

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

20215 6124 56.39 93.61 1412

0.34 0.32 0.14 0.52 1.45

2.75 2.63 1.20 -0.68 1.40

3.65 3.27 5.03 0.16 -4.12

23.93 23.70 0.44 6.59 -9.72

.Source: Reuters

Indian soybean down on monsoon prospects

Indian soybean futures fell on Thursday as prospects of timely onset of monsoon rains brightened, while soyoil declined on profit-booking taking cues from rival palm oil. India's vital monsoon rains are expected to hit anytime now over the southern coast. Timely progress of the monsoon over soybean-growing areas of central India will boost output prospects for the main summer season oilseed crop by giving sufficient time to mature. The June soybean contract on the National Commodity and Derivatives Exchange fell 0.6 percent to 3,805 rupees per 100 kg. The rapeseed June contract fell 0.4 percent to 3,448 rupees per 100 kg. Chance of monsoon arrival anytime is keeping soybean down. (Source:
Reuters)

As wheat prices rise, govt cuts procurement

Failing to get wheat from farmers, the state government has slashed its target of procurement to half. The revised target is now 30 lakh MT instead of 60 lakh MT as originally fixed. The wheat purchase season began on April 1 and ends on June 30. As many as 6,000 purchase centres were opened. The Food and Civil Supplies Department had decided that 15 lakh MT wheat would be purchased in April, 30 lakh MT in May and 15 lakh MT in June. Until Tuesday, the state government had procured only 6.6 lakh MT. Poor wheat procurement is due to the higher rate of wheat in the open market than the minimum support price. The state government is offering minimum support price (MSP) of Rs 1,350 per quintal. The rate of wheat in the mandi at Hapur was Rs 1,495 per quintal and lowest was at Rs 1350 per quintal at Banda, Fatehpur and several other districts on Wednesday. (Source: Indian Express)

Argentina's 2012/13 soy crop nearly harvested -exchange

Argentina's soybean harvest advanced by 3.1 percentage points to reach a total of 96.1 percent of planted area in the world's No. 1 exporter of soyoil and soymeal, the Buenos Aires Grains Exchange said in its weekly crop report on Thursday. The South American country, also the world's third-biggest supplier of raw soybeans, is expected by the exchange to harvest 48.5 million tonnes of beans in the 2012/13 season. "Over the last seven days, the harvest has been completed in north-central Cordoba province," the report said. The average yield in that part of the Pampas farm belt is 14 percent higher this crop year than in the 2011/12 season, it said. Argentina as a whole produced 40.1 million tonnes of soybeans in 2011/12, according to government data, after a mid-season drought took a heavy toll on yields. More than 70 percent of Argentine lands that remain to be harvested are in the country's grains bulwark province of Buenos Aires, where some fields were hurt by earlier-thanusual frosts, the report said. "Consequently, the national average yield will continue to fall over the next few weeks until the harvest is concluded," the exchange said, adding that it expects a final nationwide average of 2.55 tonnes of soy per hectare. (Source: Reuters)

FMC might restrict number of delivery centres in agri commodities

The Forward Markets Commission (FMC), the commodity derivatives markets regulator, is planning to restrict the number of delivery centres in agri commodities to avoid some complexities in futures trading. "Sometimes, a large number of delivery centres create problems. Hence, we want to restrict it for which the Commission is waiting for the final recommendations of the sub-committee of the advisory committee," said Ramesh Abhishek, chairman, FMC. Surprisingly, in most agri commodities, the number of delivery centres is restricted already due to the lack of widespread network of participants. While in the commodities like soybean on NCDEX, the number of delivery centres is just "one" and in the case of guar, wheat and turmeric, the same stands at seven, nine and six, respectively. On the MCX too, the number of delivery centres in guar and cotton stands at nine and seven, respectively. (Source: Business
Standard)

EU to re-introduce grain quota import duties-FranceAgriMer

The European Union's cereals management committee voted on Thursday not to extend zero import duties for feed wheat and barley quotas beyond the end of the current season on June 30, French farm office FranceAgriMer said. The move means that the EU will re-introduce import duties of 12 euros per tonne for low- and medium-quality wheat and 16 euros a tonne for feed barley under its tariff-rate quotas. The EU had suspended the duties from the start of the current 2012/13 season on July 1 in response to high grain prices. (Source: Reuters)

US genetically modified wheat stokes fears, Japan cancels tender

A strain of genetically modified wheat found in the United States fuelled concerns over food supplies across Asia on Thursday, with major importer Japan cancelling a tender offer to buy U.S. grain. Other top Asian wheat importers South Korea, China and the Philippines said they were closely monitoring the situation after the U.S. government found genetically engineered wheat sprouting on a farm in the state of Oregon. The strain was never approved for sale or consumption. Asian consumers are keenly sensitive to gene-altered food, with few countries allowing imports of such cereals for human consumption. However, most of the corn and soybean shipped from the U.S. and South America for animal feed is genetically modified. (Source: Reuters)

Floods close Mississippi River locks, halt barge shipments

Heavy spring rains across the U.S. Midwest swelled the Mississippi River above flood stage at some locations and forced the closure of three river locks on the major shipping waterway, the U.S. Army Corps of Engineers said. At least four more locks were likely to be closed by early next week, disrupting the flow of grain barge shipments from the Midwest farm belt to export terminals at the Gulf of Mexico. This second wave of floodrelated lock closures so far this spring comes just five months after nearrecord low water had threatened to close the river to commercial vessels. (Source: Reuters)

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Commodities Daily Report

Friday| May 31, 2013

Agricultural Commodities
Chana
After witnessing a sharp recovery in the preceding session, Chana futures traded in a rangebound manner yesterday and settled marginally higher by 0.22% on Thursday. Demand from stockists as well as value buying emerging at lower levels support prices. Prices have declined sharply on account of higher supplies in the domestic markets. Peak arrival period this season has been extended on account of record high production and delayed start to harvesting. Supplies are at its peak as new crop from the major producing states such as Madhya Pradesh and Rajasthan have increased significantly. However, supplies are expected to slow down towards the end of the month. Also, stockists are building inventories at lower levels to meet the demand for the entire season. Thus, tracking seasonality pattern, chana prices may start recovering gradually from June onwards.

Market Highlights
Unit Rs/qtl Rs/qtl Last 3250 3190 Prev day 0.78 0.22

as on May 30, 2013 % change WoW MoM -2.99 -4.41 -4.80 -7.05 YoY -24.86 -24.66

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

Source: Reuters

Technical Chart - Chana

NCDEX June contract

Demand supply scenario

Higher returns earned in 2012, coupled with a hike in minimum support prices (MSP), have helped expand overall acreage in 2012-13 season. Chana sowing in the current season is 5.65% higher at 95.17 lakh ha compared to previous year. Acreage is up in Rajasthan, Maharashtra, MP and AP at 15.7 lakh ha, 12.53 lakh ha, 32.99 lakh ha and 7.33 lakh ha respectively. According to third advance Estimates released on 3 May 2013, Total pulses output for 2012-13 season has been pegged at 18 mn tn, up 5.76% compared to previous year. The target for 2012-13 pulses crop output was set at 18.24 million tonne during the year. Out of the total pulses output, kharif output is estimated at 4.03% lower at 5.95 mn tn while rabi pulses output is pegged 9.25% higher at 12.05 mn tn compared with the final estimates of 2011-12. Chana output is pegged marginally lower to 8.49 mn tn compared with its second advance estimates of 8.57 million tonnes. However, chana output is expected to breach its 2010-11 record output of 8.2 mn tn in 2012-13. Erratic weather in M.P. lowered the yield.
rd

Source: Telequote

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

valid for May 31, 2013 Resistance 3210-3230

3140-3160

Trade Scenario
According to IBIS, imports of chana in the month of April declined to 0.04 lakh metric tonnes compared to 0.11 lakh metric tonnes during the previous month. 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. In Australia, total chickpea production in 201213 is estimated to have increased to a record 713000 tones as compared with 485000.

Outlook
Chana may trade on a mixed note today. Prices may continue to decline as higher supplies coupled with higher output estimates may keep prices under the grip of the bears. However, lower value buying coupled with demand from stockists at lower levels may support prices. Seasonal pattern in chana indicates that prices generally bottom out in May when arrivals reach their peak, while they start recovering gradually June onwards with declining supply pressure. Thus, going forward downside seems to be limited as prices are nearing its MSP levels.

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Commodities Daily Report

Friday| May 31, 2013

Agricultural Commodities
Sugar
Sugar prices traded on a flat note yesterday and settled 0.7% lower on Thursday. Prices have declined sharply over the last few sessions on the back of comfortable supplies along with weak international markets. Prices have recovered from lower levels after the government notified the cabinet committee on economic affairs (CCEA) decision to remove two key controls on sugar sector. Improving demand from bulk consumers and expected lower output next season in Maharashtra also supported an upside in the prices. The Minimum Initial Margin has been revised to 5% of the value of the contract or VaR based margin whichever is higher and will be imposed on all running contracts and yet to be launched contracts w.e.f beginning of trading day Monday, May 13, 2013. The Government has cleared the partial decontrol of sugar on April 4, 2013, however, notified the same after almost a month. The government will now have to buy sugar from the mills at open market prices. Also the release mechanism will be done away with, after September 2013. According to the Ministry of Agriculture, Sugarcane has been planted in 41.24 lakh ha as compared to 45.98 lakh ha at this time last year. Less area is reported mainly in Karnataka, Maharashtra and Tamil Nadu.

Market Highlights
Unit Sugar Spot- NCDEX (Kolhapur) Sugar M- NCDEX June '13 Futures Rs/qtl Last 3054

as on May 30, 2013 % Change Prev. day WoW -0.59 -0.57 MoM 0.78 YoY 4.36

Rs/qtl

3017

-0.07

-1.24

2.69

7.14

Source: Reuters

International Prices
Unit Sugar No 5- LiffeAug'13 Futures Sugar No 11-ICE July '13 Futures $/tonne $/tonne Last 478 370.00

as on May 30, 2013 % Change Prev day WoW 0.55 -0.12 0.65 -0.66 MoM -5.37 -5.77 YoY -14.12 -14.53

.Source: Reuters

Domestic Production and Exports

According to ISMA, Indias Sugar production between October -April stood at 24.52 mn tn, lower by 3% during the same period last year. Maharashtras production dipped 10% to 8 mn tn while production in Uttar Pradesh increased by 7% to 7.43 mn tn. India is likely to produce 24.6 mn tn of sugar in 2012-13 year ending on Sept. 30, higher than the previous estimate of 24.3 mn tn, the Indian Sugar Mills Association (ISMA) said. With the opening stocks of 6.5 mn tn, domestic Sugar supplies are estimated at higher against the domestic consumption of around 22. 5 mln tn for 2012-13. Exports are not viable as international prices have also declined significantly.

Technical Chart - Sugar

NCDEX June contract

Global Sugar Updates

LIFFE sugar recovered from lower on account of short coverings while Raw sugar on the ICE settled 0.12% lower on Thursday as Unica reported Brazils sugar production at 3.76 mn tn, higher by 140% by m id-May. Ethanol output has also increased by 146%. According to the ICE, Raw Sugar open interest has climbed to a 5 year high. Prices have declined sharply on the back of third consecutive year of sugar surplus and are trading at the lowest levels since July 2010. The ISO forecast sugar surplus of atleast 3.5 mn tonnes for 2013-14 season. Reports that China may curb imports as their stocks have more than doubled last season have also added to the downside. However, there are reports that demand from Brazil's resurgent biofuels industry will cut burgeoning global sugar surplus, helping cushion prices that fell below 17 cents per lb for the first time in almost three years. According to Unica, South-Central Brazil cane crush projected at 589.60 million tons for 2013/2014. Main center-south sugar cane crop will produce a record 35.5 mn tn of sugar in the 2013/14 season, higher by 4.1% compared to 34.1 mn tn last year.

Source: Telequote

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

valid for May 31, 2013 Resistance 3030-3050

2990-3010

Outlook
Sugar may trade on a mixed note today with a negative bias as higher supplies and lower than expected demand may pressurize prices. Weak international markets may also pressurize prices. However, improvement in demand from bulk manufacturers coupled with the governments decontrol of sugar sector may support prices at lower levels.

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Commodities Daily Report

Friday| May 31, 2013

Agricultural Commodities
Oilseeds
Soybean: Soybean opened lower tracking weak international
markets coupled with weak oil meal export demand and forecast of a normal monsoon. However, prices recovered towards the end on account of short coverings and settled 0.04% lower on Thursday. Poor supplies in the domestic markets have supported prices at lower levels. India may also resume oil meal exports to China. Indias soy meal exports for the month of April 2013 were 99.451 tonnes, lower by 68.31 percent from 313,832 tonnes a year ago. According to the 3rd advance estimates, Soybean output is pegged at 14.14 mn tonnes. IMDs forecasts of normal monsoon have raised hopes of better output next season too.

Market Highlights
% Change Unit Soybean Spot- NCDEX (Indore) Soybean- NCDEX June '13 Futures Ref Soy oil SpotNCDEX(Indore) Ref Soy oil- NCDEX June '13 Futures Rs/qtl Rs/qtl Rs/10 kgs Rs/10 kgs Last 3901 3827 726.8 714.6 Prev day -1.07 -0.04 -0.32 0.20

as on May 30, 2013

WoW -2.06 -1.26 0.03 1.47

MoM -3.06 -2.67 -1.72 -0.66

YoY 12.91 13.34 -0.40 -2.76

International Markets
CBOT Soybean declined by 0.4% on account of profit booking at higher levels. Prices gained earlier this week due to delayed planting coupled with tight soybean stocks and good demand for US soymeal. Soybean planting has been delayed due to heavy rains in the US Midwest and is reported at 44% as against 04% last week. However, it is much lower as against 87% last year and five year average of 61%. However, large South American crop coupled with forecasts for US weather to improve in the coming week have capped sharp gains. Argentinas agriculture ministry has cut its 2012/13 forecast to 50.6 mn tn from its April forecast of 51.3 mn tn. NOPA reported that the soybean crush fell to 120.11 million bushels in April, from 137.08 million in March. China is forecast to import a record 66 mn tn of soy in 2013/14, 11% higher than the estimates of current season, driven by robust domestic demand and low stocks.

Source: Reuters

as on May 30, 2013 International Prices Soybean- CBOTJuly'13 Futures Soybean Oil - CBOTJuly'13 Futures Unit USc/ Bushel USc/lbs Last 1496 48.58 Prev day -0.40 -0.10 WoW -0.25 -2.17 MoM 1.91 -1.12
Source: Reuters

YoY 8.92 -2.23

Crude Palm Oil

as on May 30, 2013 % Change Prev day WoW -1.40 -0.46 -0.60 1.44

Unit
CPO-Bursa Malaysia June '13 Contract CPO-MCX- May '13 Futures

Last 2326 480

MoM 3.42 3.25

YoY -24.46 -18.06

MYR/Tonne Rs/10 kg

Refined Soy Oil: Ref soy oil settled 0.2% higher while CPO settled
0.46% lower tracking a correction in the international markets. Palm stocks in Malaysia and Indonesia are expected to decline & demand is set to rebound ahead of Ramadan. Exports of Malaysian palm oil products from May 1 to 25 declined 5.2 percent to 1,064,925 tonnes from 1,123,129 tonnes shipped during April 1 to 25. However, it is expected that output in Malaysia, the world's second largest producer, to slow this month and help to further ease stocks that have dipped below the psychological 2 million tonne mark to 1.93 million tonnes in April. Stocks data from industry regulator the Malaysian Palm Oil Board showed inventory levels at the end of April down 11.3 percent against the previous month's 2.17 mn tn. India's palm oil imports declined for a third straight month in April. But India, the world's largest importer of edible oils, is still on track to surpass last year's record purchases of 10 million tonnes of cooking oil as demand rises.

Source: Reuters

RM Seed
Unit RM Seed SpotNCDEX (Jaipur) RM Seed- NCDEX June '13 Futures Rs/100 kgs Rs/100 kgs Last 3476 3453 Prev day -0.11 -0.26 WoW -1.39 -1.71

as on May 30, 2013 MoM 0.29 0.00

Source: Reuters

YoY -11.44 -10.10

Technical Chart Soybean

NCDEX June contract

Rape/mustard Seed: Mustard Futures declined by 0.26% on

Thursday on account of weak meal export demand coupled with arrival pressure. Huge supplies of the new crop coupled with higher output estimates led to a sharp decline in the prices. Sowing of Mustard seed is up by 2.2% at 67.23 lakh ha. Agriculture ministry in its third advance estimates, pegged mustard output at 7.36 mn tn, up by 11.5%.

Source: Telequote

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

valid for May 31, 2013 Support 708-711 3765-3795 3400-3430 473-476 Resistance 718-722 3840-3860 3470-3490 482-486.50

Outlook
Soybean prices may trade on a mixed note today. Weak meal export demand coupled with forecast of a normal monsoon may pressurize prices. However, poor supplies may support prices. Soy oil as well as CPO may continue to gain due to lower yield period. However, comfortable stock levels may cap the upside.

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Commodities Daily Report

Friday| May 31, 2013

Jeera Agricultural Commodities

Jeera prices traded on a flat note yesterday and settled 0.02% lower. Value buying and expectations of improvement in exports supported prices. However, an increase in the arrivals over the few days capped the upside. Prices gained last week on account of thin supplies coupled with expectations of improvement in the export demand in the coming weeks. 25-30% of total arrivals have been exported, mainly to Singapore, Europe and Dubai. Prices had declined sharply over the last few months on the back of higher production estimates. According to Gujarat State Agri Dept. sowing in Gujarat is reported at 3.352 lakh ha in 2013 compared with 3.719 lakh ha last year. Due to the ongoing geo-political tensions in Syria and Turkey, supply concerns from these two major exporting countries still exist. Export orders may still continue to be diverted to India 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 4,0005,000 tonnes, lesser than expectations. Jeera prices of Indian origin are being offered in the international market at $2,425-2,450 tn (FOB Mumbai) while Syria and Turkey are not offering. Carryover stocks of Jeera in the domestic market is expected to be around 8-9 lakh bags.

Market Highlights
Unit Jeera Spot- NCDEX (Unjha) Jeera- NCDEX June '13 Futures Rs/qtl Rs/qtl Last 13451 13048 Prev day -0.21 -0.02

as on May 30, 2013 % Change WoW -1.26 -1.92 MoM 0.65 1.24 YoY -0.06 2.70

Source: Reuters

Technical Chart Jeera

NCDEX June contract

Production, Arrivals and Exports

Arrivals in Unjha were reported at 13,000 bags on Thursday. Production of Jeera in 2012-13 is expected around 38-40 lakh bags (55 kgs each), same as last year. Exports of Jeera between Apr 2012- Jan 2013 stood at 64,400 tn, an increase of up 86%. (Source: Factiva)

Source: Telequote

Market Highlights
Prev day -0.98 -0.60

as on May 30, 2013 % Change

Outlook
Jeera may trade lower today due to higher arrivals. However, prices may find support at lower levels on improvement in overseas as well as domestic demand. Overall trend remain positive for the Jeera prices due to overseas demand as Syria & Turkey have stopped shipments which may keep prices firm.
Unit Turmeric SpotNCDEX (N'zmbad) Turmeric- NCDEX June '13 Futures Rs/qtl Rs/qtl Last 5975 5932

WoW -2.02 -1.82

MoM -7.55 -7.51

YoY 67.43 61.37

Turmeric
Turmeric futures declined by 0.6% on Thursday on account of lack of fresh overseas demand as well as huge carryover stocks. NCDEX issued a circular whereby the earlier circular regarding modification in the tick size and lot size has been kept in abeyance. The regulator also withdrew special margins on the long side. There are expectations of improvement in overseas demand in June ahead of Ramadan. Unseasonal rains in Andhra Pradesh have damaged about 9240 tonnes of turmeric earlier. Special Margin of 10% on the Long Side on all the running contracts in Turmeric have been withdrawn w.e.f Thursday, May 16, 2013.

Technical Chart Turmeric

NCDEX June contract

Production, Arrivals and Exports

Arrivals in Erode and Nizamabad mandi were reported at 4,000 bags and 1,500 bags on Thursday. Exports of Turmeric between Apr 2012Jan 2013 stood at 66,550 tn, a decline of 4%. (Source: Factiva) Expectations are that production may be lower by 40-50%. There are reports of some crop damage in Erode region. Turmeric production in 2012-13 is expected around 45 lakh bags. Production in Nizamabad is expected around 12 lakh bags. Production in 2011-12 is projected at historical high of 10.62 lakh tn. It is estimated that current years carryover stocks would be around 10 lakh bags. (1 bag= 75 kgs) Outlook Turmeric may trade on a mixed note today. Higher stocks with farmers; especially in Erode coupled with huge carryover stocks may pressurize prices. However, withdrawal of margins coupled with declining arrivals and expected improvement in export demand may support prices. Output concerns may also support prices at lower levels.

Source: Telequote

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

Valid for May 31, 2013

Support 12840-12930 5800-5860 Resistance 13110-13200 6000-6070

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Commodities Daily Report

Friday| May 31, 2013

Agricultural Commodities
Kapas
NCDEX Kapas settled 1.61% higher while MCX Cotton settled 0.83% higher on account pickup in the yarn demand coupled with lower arrivals. However, active selling by the CCI in the open markets has kept th prices under check. CCI has offered 38,100 bales on Monday (27 May, 2013) through e-auction of which 6,000 bales have been sold. Emergence of fresh demand at lower price levels is also supporting an upside in the prices. India's imports of cotton this year could reach 1.5 mn bales, missing earlier estimates of more than 2 mn as the govt may to start selling its stockpiles. Cotton supplies since the beginning of the year in October 2012 until February 10, 2013 were down at 183.4 lakh bales, down from 189.27 lakh bales a year earlier.

Market Highlights
Unit Rs/20 kgs Rs/Bale Last 1070 18330

as on May 30, 2013 % Change Prev. day WoW 1.61 3.38 0.83 1.27 MoM YoY 1.28 11.05 1.27 15.21

NCDEX Kapas Apr Futures MCX Cotton May Futures

Source: Reuters

International Prices
ICE Cotton Cot look A Index Unit USc/Lbs Last 80.13 89.6

as on May 30, 2013 % Change Prev day WoW -0.71 -2.02 -0.55 -2.08 MoM -6.31 -3.86 YoY 13.00 8.08

Sowing Progress
Cotton planting has been reported at 9.35 lakh ha as against 9.13 lakh ha during the same period last year. Higher sowing is report from Punjab and Haryana while a decline has been reported in Rajasthan.

Source: Reuters

Technical Chart - Kapas

NCDEX April contract

Domestic Production and Consumption

CAB in its latest meet has projected cotton crop at 34 mn bales for 201213 season compared to the previous estimates of 33 mn bales. Mill consumption is expected to go up from 22.3 million bales last year to 23.5 million bales. Exports are estimated at 8.1 mn bales while imports are estimated 2.5 mn bales.

Global Cotton Updates

ICE Cotton futures traded lower for the eighth consecutive session on Thursday and settled 0.71% lower on worries of a potential slowdown in China, the largest consumer of the fibre. Improved weather in the US has also eased concerns over delayed plantings. Cotton prices have closed in the negative in 8 of the last 10 days. Cotton Plantings were reported at 59% v/s 39% last week, but lower against 5 year avg of 69%. Export sales data has remained mixed. China cotton imports declined 18.5% in April compared to March. The USDA monthly crop report forecast a sharp rise in the in the cotton stockpiles by almost 10%. The U.S. Department of Agriculture has forecast global cotton stockpiles will rise almost 10 percent to a record high in 2013/14, pushing prices lower and reinforcing concerns about stagnating demand in China, the world's No. 1 textile market. According to the USDA report, planting intentions for the 2013-14 season are said to be at a 4 year low. Also, there are expectations of good export demand from China. Reports of India and China releasing stocks from the state reserve led to a decline in the prices.
Source: Telequote

Source: Telequote

Technical Chart - Cotton

MCX May contract

Technical Outlook
Contract Kapas NCDEX April 14 Fut Unit Rs/20 kgs Rs/bale

valid for May 31, 2013 Support 1055-1065 17970-18150 Resistance 1080-1090 18440-18550

Outlook
Prices may trade with a positive bias today as good yarn demand may support further upside in the prices. Lower sowing in the US and expectatations that cotton may lose acreage to more remunerative crops like soybean and grains in India may also support an upside in the prices over the medium term.

Cotton MCX June Futures

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