Commodities Daily Report

Friday| September 7, 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 Associate anuj.choudhary@angelbroking.com (022) 2921 2000 Extn. 6132

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Commodities Daily Report

Friday| September 7, 2012

Agricultural Commodities
News in brief
Oilmeal exports drop 59% in Aug
Oilmeal exports fell by 59 per cent to 1,20,091 tonnes in August from 2,91,466 tonnes a year ago, led by a sharp drop in the overseas sales of soyameal and rapemeal. Soyameal exports, which make up the bulk of sales, fell to 10,005 tonnes in August from 1,65,610 tonnes a year ago, the Solvent Extractors' Association of India (SEAI) said in a press release. Shipments of rapemeal also fell to 68,401 tonnes (1,04,608 tonnes). High price of soyabean has resulted in low availability of soyameal for local and export buying. Lack of buying by Iran and disparity in export of soyameal due to high price in local market led to a steep fall in its exports, SEAI said in the release. Total oilmeal exports during AprilAugust fell by 16 per cent at 14,57,663 tonnes (16,94,301 tonnes), according to the data. Meanwhile, Iran has emerged as the top importer of Indian oilmeals in the first five months of this fiscal. During the AprilAugust period, Iran's import nearly quadrupled to 4,56,133 tonnes from 1,18,212 tonnes in the year-ago period. (Source: Business Line)

Market Highlights (% change)

Last Prev. day

as on Sept 6, 2012
WoW MoM YoY

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

17346 5238 55.66 95.53 1703

0.19 0.24 -0.44 0.18 0.70

-1.11 -1.44 0.05 0.96 2.97

0.86 0.44 -0.16 4.52 6.01

3.79 4.41 21.03 11.06 -8.95

Source: Reuters

Non-urea fertiliser stocks build up on poor offtake

Poor offtake due to erratic monsoon and high prices is leading to a buildup in inventory of non-urea fertilisers such as DAP and NPK complexes. Consumption of urea has largely been marginally down by 3.5 per cent in the kharif season or the April-August period this year. However, the consumption of DAP and NPK has witnessed a sharp fall, according to industry estimates. IFFCO Managing Director and CEO U.S. Awasthi, citing industry estimates, said DAP offtake during kharif was down 29 per cent, while the NPK consumption dropped 27 per cent over last year due to erratic monsoon. IFFCO, the countrys largest fertiliser producer, witnessed a 32 per cent fall in its DAP sales for the April-August period over last year, while its NPK sales dropped 44 per cent, Awasthi said. Such a sluggish trend in sales is resulting in inventory build-up, he said, adding that producers, including IFFCO, were going slow on signing new contracts with global raw material suppliers. (Source: Business Line)

Rain surge cuts down monsoon deficit to 10%

The overall monsoon deficit has reduced to 10 per cent as on Wednesday with a late-in-the-season rain surge still holding strong over parts of the country. These rains have come at a time when the monsoon is normally known to withdraw from the extreme north-western parts of the country. But an unexpected development of favourable conditions in the southwest Indian Ocean revived the monsoon to peak strength. So much so, the week ending Wednesday saw 31 per cent more rainfall than average being dumped over parts of west, peninsular and east-central India. This was the second consecutive week that the run monsoon has turned out to be a surplus. Saurashtra and Kutch top the list with 60 per cent deficit, followed (in percentage figures) by Punjab (54); Gujarat and Haryana (41); Nagaland-Mizoram-Manipur-Tripura (33); Marathawada and West Uttar Pradesh (29); Bihar (28); North Interior Karnataka (24); Kerala (23); and Madhya Maharashtra and Himachal Pradesh (22 each) in that order. Lakshadweep was the only one meteorological subdivision to receive surplus rainfall (+20 per cent) thus far during the season. It was normal in 23 subdivisions while being scanty in Saurashtra and Kutch. (Source: Business Line)

World food prices stabilize but U.N. urges action

World food prices stabilized in August at levels close to those reached in the food crisis of 2008, and global grain stocks are likely to shrink this year as cereal crop output falls short of what is needed, the United Nations food agency said on Thursday. FAO Director General Jose Graziano da Silva called for international action to calm markets but also said the August price index, which remained unchanged from July, provided some cause for optimism. Earlier on Thursday, Russian Deputy Agriculture Minister Ilya Shestakov said G20 countries would hold a meeting on the grain market next month. The FAO Food Price Index, which measures monthly price changes for a food basket of cereals, oilseeds, dairy, meat and sugar, averaged 213 points in August, unchanged from July, when prices surged 6 percent after three months of falls. Prices of cereals, oils and fats were little changed in August, while sugar prices fell sharply, compensating for rising meat and dairy prices, FAO said. FAO's director of trade and markets, David Hallam, said there were still upside risks for food prices, such as the potential for speculative capital to return to markets. A lot would also depend on how plantings develop, he said. (Source: Reuters)

India could become net sugar importer as early as 2013/14

India, the world's largest consumer of sugar, is likely to become a net importer of the sweetener as early as 2013/14, as drought-hit farmers replace cane with less water-intensive crops. The shift to imports, touted by market participants and analysts, would likely bolster global sugar prices, which have been hammered by surplus production at a time of muted growth in consumption due to a sluggish global economy. "Farmers in (top sugar-producing Indian state) Maharashtra are very interested in cane, but water is not available," said Balasaheb Patil, former president of the Maharashtra Co-operative Sugar Factories Federation. "In some areas farmers are walking miles and miles just to get drinking water ... forget cultivating crops." The full force of the impact from farmers switching to crops such as soybeans and wheat, which need less water to cultivate than sugar cane, is likely to hit in the 2013/14 season as cane usually takes 12-18 months to mature.
(Source: Economic Times)

Indonesia has 'hidden' palm oil reserves, says Mistry

Palm oil reserves in Indonesia, the largest producer, may total about four million tonnes (mt), twice as much as typically estimated, according to Godrej International Ltd, which forecast a rise in Malaysian stockpiles to a record. It is difficult to be bullish on palm-oil prices, Dorab Mistry, a director at Godrej International Ltd, told a conference in Singapore, citing the stockpiles, slower economic growth and rising output. The reserves in the two largest producers may limit price gains even as soybeans, which can be crushed to produce a rival oil, are poised to extend a record rally after drought curbed supplies. Benchmark palm oil in Malaysia has dropped 8.2 per cent this year, helping restrain gains in global food costs spurred by the worst US drought in more than half a century. The big story of 2012 is the stockpiles in Indonesia, Mistry told the gathering organised by Goldman Sachs Group Inc today, according to a copy of his remarks Normal stocks of palm products in Indonesia in the last two years have been of the order of 3.5 to 4 mt, as against the normal, conventional estimate of 1.5 to 2 mt. (Source: Business Standard)

Around 12% Cane Diverted For Fodder Purpose in Maharashtra

Around 10-12% of sugarcane is diverted towards fodder in Maharashtra as per recent survey done by Agriwatch. Diversion is mainly in Southern Maharashtra and border of Karnataka which are heavily affected areas by drought. Sugarcane is the cheapest source at present and could be used as fodder. Sugar millers have concern over cane availability for this season as reducing area and yield and higher cane diversion towards fodder might decline sugar output in Maharashtra as well as increase their sugar process costing. (Source: Agriwatch)

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Commodities Daily Report

Friday| September 7, 2012

Agricultural Commodities
Chana
Chana spot as well as futures settled 1.45% and 1.35% higher on Thursday on thin supplies in spot markets and improved demand ahead of festival season. India's monsoon rains were 31 percent above average in the week to Sept. 5. Monsoon has recovered across India that may prove beneficial for the chana sowing, the overall fundamentals still remain supportive for the prices on account of supply tightness amid festive season demand. The Cabinet Committee on Economic Affairs approved the Minimum Support Prices (MSP) for Arhar (Tur) and Moong for 2012-13 season. The MSP for Arhar has been fixed at Rs.3850 per quintal and of Moong at Rs.4400 per quintal marking an increase of Rs.650 per quintal and Rs.900 per quintal respectively. Government released fourth advance estimates wherein it revised upward Chana output at 7.58 mn tn from 7.4 mn tonnes estimated in the third advance estimates and 8.22 mn tn in 2010-11.

Market Highlights
Unit Rs/qtl Rs/qtl Last 4900 4821 Prev day 1.45 1.35

as on Sept 6, 2012 % change WoW MoM 0.87 -0.22 2.10 1.01 YoY 35.74 36.57

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

Source: Reuters

Technical Chart - Chana

NCDEX Oct contract

Sowing progress and demand supply fundamentals

According to the Ministry of Agriculture 97.7 Lakh hectare area has been st planted under Kharif pulses as on 31 August, 2012 compared to 104.18 lakh hectare (ha) same period last year. Sowing is reported lower mainly in Rajasthan. Rajasthan Agriculture Department states that, planted area under Kharif Pulses is down at 19.42 lakh hectares ha compared to 25.55 lakh ha same st period last year. (Dated 31 August, 2012). Sowing which was down by more than 55% has gained momentum after improvement in rainfall in the last one week and is now down by 24%. In Maharashtra, Kharif Pulses sowing is down by 6% at 18.77 lakh hectares. According to the Fourth advance estimates, Pulses output is pegged at 17.21 mn tn in 2011-12 compared with 18.24 mn tn produced in the year 2010-11. While Chana output in 2011-12 is estimated at 7.58 million tones, Tur is estimated at 2.65 million tones, Urad is estimated at 1.83 million tones, Moong is estimated at 1.71 million tones. As per the latest release, Ministry of Commerce & Industry revealed that 20.23 lakh tones of peas, 2.03 lakh tons of Chana, 4.32 lakh tons of Urad & Moong, 1.12 lakh tons of Masoor and 4.26 lakh tons of Tur has been imported by India during April11-March 12. 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) India's consumption of pulses is on the rise, while the growth in output in not consistent amid vagaries of weather, which may lead to increase in imports this year. However, rupee weakness may turn import costlier.

Source: Telequote

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

valid for Sept 7, 2012 Resistance 4960-4985

4850-4885

Outlook
Increasing demand ahead of series of festival coupled with lower supplies may keep chana prices firm in the intraday. However, improved rains have raised prospects for next years sowing and thus may cap sharp gains in the prices. In the medium term to long term, the trend remains positive as supplies may not be sufficient to meet the rising demand of the commodity. Also lower sowing of kharif pulses may support chana prices.

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Commodities Daily Report

Friday| September 7, 2012

Agricultural Commodities
Sugar
Sugar spot as well as futures settled lower by 0.5% and 0.46% on Thursday on account of improved rains in the sugarcane growing areas which, to some extent, reduced concerns over next years output. India's monsoon rains were 31 percent above average in the week to Sept. 5, the second straight week of heavier than normal rains, reducing the threat of a prolonged drought in the south Asian country. According to IMD there are indications that El Nino would affect the monsoon in September. However, some climate models, however, have begun to predict temperature patterns in the Indian Ocean turning favorable for the monsoon, which may negate the effect of El Nino. If the same hold true, then this may help increase cane yield. The Indian government has provided an additional 10 days to sugar mills to sell around 200,000 tonnes of unsold non-levy sugar stocks of August. In the international markets Liffe as well as ICE sugar futures declined as Steady harvesting in the centre-south of Brazil, the world's main growing region, has weighed on sugar prices with more supplies expected from northern hemisphere harvests in coming months. Liffe Sugar as well as ICE sugar settled 1.14% and 1.71% lower on Wednesday.

Market Highlights
Unit Sugar Spot- NCDEX (Kolkata) Sugar M- NCDEX Sept '12 Futures Rs/qtl Last 3756

as on Sept 6, 2012 % Change Prev. day WoW -0.50 0.54 MoM -4.05 YoY 27.14

Rs/qtl

3467

-0.46

-1.28

-2.80

26.95

Source: Reuters

International Prices
Unit Sugar No 5- LiffeOct'12 Futures Sugar No 11-ICE Oct '12 Futures $/tonne $/tonne Last 545.9 419.33

as on Sept 6, 2012 % Change Prev day WoW -1.14 -0.74 -3.62 -4.60 MoM -10.17 -13.56 YoY -28.45 #N/A

Source: Reuters

Domestic Production and Exports

The area under sugarcane is estimated at 52.88 lakh ha for 2012-13 crop season, up from 50.63 lakh ha on same period a year ago. Despite of higher acreage, the producers body has estimated next years output lower at 25mn tn, down by 1mn 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 7 mn tn stocks for the new season beginning October 01, 2012 compared to 5.5 mn tn year ago. India may exports 2.5-3 mn tn sugar in 2012-13. India will likely produce 25 million tonne of sugar in 2012-13 factoring in dry spells in biggest producer Maharashtra as well as Karnataka. With the opening stocks of 7 mn tn, domestic Sugar supplies are estimated at 32mn tn against the domestic consumption of around 22.523 mln tn for 2012-13. Thus, no curbs on exports are seen as of now.

Technical Chart - Sugar

NCDEX Oct contract

Source: Telequote

Global Sugar Updates

Brazilian cane mills produced 3 mn tn of sugar in the first half of August thanks to dry weather. Unica in its latest report stated said that total sugar output since the start of the crushing season is still down 12 percent from the same period a year ago. Brazil exported 2.06 mn tn raw sugar in August 2012, down from 2.08 mn tn exported in July. The International Sugar Organization said on Friday 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 wider surplus reflects expectations for a record global crop of 177.39 million tonnes, raw value, up 2.25 percent from the prior season as production in top grower Brazil rises. 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 Oct NCDEX Futures Unit Rs./qtl

valid for Sept 7, 2012 Support 3525-3548 Resistance 3590-3610

Outlook
Sugar prices may remain sideways as improved rains have offset the firm market sentiments led by higher festive season demand. In the medium term, although sufficient supplies may keep the upside capped, sharp downside will also be restricted on the back of emergence of fresh demand at lower levels amid series of festivals ahead.

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Commodities Daily Report

Friday| September 7, 2012

Agricultural Commodities
Oilseeds Soybean:
Despite of record high international soybean prices, domestic soybean remained range bound on Thursday on account of higher acreage and good rains in the soybean belts of India and thereby expectations of higher output in the season beginning October 2012. However, many parts of soybean growing areas got significantly higher rainfall and more heavy rains this week can hurt yields. CBOT Soybean corrected yesterday after hitting a new high of 1789 cents per bushel in the November contract on Tuesday due to profit booking at higher levels. The upcoming harvest has build downside pressure. CBOT Soybean settled 0.09% lower on Thursday. Soy meal exports fell to 10,005 tn in August, from 165,610 tn a year ago. (Source: Solvent Extractors' Association of India). Soybean exports from Brazil declined from 4.13 mn tn in July to 2.4 mn tn in the month of August. (Source: Reuters) Brazils grain Association expects the number 2 producers of soybean to produce record 81.3 mn tn in 2012-13. Planting in Brazil would commence from Sept. 15 & exports may soar to 37.5 mn tn, beating the 33.8-mn tn record in 2010/11 crop. USDA released its monthly crop report on 10 August wherein its cut U.S. 2012/13 soybean production forecast to 2.692 billion bushels, from 3.05 billion in July. st In the domestic markets, as on 31 August Oilseeds have been sown in 167.15 lakh hectares so far, compared with 174 lakh hectares same period last year. Soybean area is higher at 106.9 lakh hectares. In 2011-12 season, soybean was sown under 102.9 lakh hectares area and recorded 12.28 million tonne output, down from 12.73 mn tn in 2010-11 season.
th

Market Highlights
% Change Unit Soybean Spot- NCDEX (Indore) Soybean- NCDEX Oct '12 Futures Ref Soy oil SpotNCDEX(Indore) Ref Soyoil- NCDEX Aug '12 Futures Rs/qtl Rs/qtl Rs/10 kgs Rs/10 kgs Last 4581 4001 809.1 815.6 Prev day 0.26 -0.10 0.80 0.71

as on Sept 6, 2012

WoW 0.93 -0.62 2.31 2.26

MoM -0.07 -14.10 4.60 5.33

YoY 111.01 84.87 23.61 29.40

Source: Reuters

as on Sept 6, 2012 International Prices Soybean- CBOTSept'12 Futures Soybean Oil - CBOTSept '12 Futures Unit USc/ Bushel USc/lbs Last 1743 56.78 Prev day -0.09 0.00 WoW -1.54 0.34 MoM 8.58 10.70
Source: Reuters

YoY 26.35 -0.91

Crude Palm Oil

% Change Unit
CPO-Bursa Malaysia Sept '12 Contract CPO-MCX- Aug '12 Futures

as on Sept 6, 2012

Last 2840 551

Prev day -1.66 -0.93

WoW -2.57 -0.24

MoM -2.41 -0.47

YoY -16.47 13.82

MYR/Tonne Rs/10 kg

Refined Soy Oil: NCDEX Soy Oil remained steady to firm on

improvement in edible oil demand. While MCX CPO declined on Thursday on higher palm oil stocks in August. Malaysia's August palm oil stocks likely climbed to their highest in nine months as still-high production offset a strong rise in exports. Stocks in the world's second largest palm oil producer most probably climbed 4.5 percent to 2.09 million tonnes, the highest since November and crossing the two-million-tonne mark for the first time since February. Palm oil exports from Indonesia increased by 20 percent to 1.5 million tonnes in July compared to the previous month. Palm oil output is expected to be 23-25 million tonnes, and around 18 million tonnes is likely to be exported. India imported 112,611 tn of refined palm oil in July, down 9.28 percent from June. Total vegetable oil imports in July were 870,328 tn, up from 783,315 tn in the previous month (Source: Sea of India).

Source: Reuters

RM Seed
Unit RM Seed SpotNCDEX (Jaipur) RM Seed- NCDEX Sept '12 Futures Rs/100 kgs Rs/100 kgs Last 4313 4353 Prev day -0.17 0.25

as on Sept 6, 2012 WoW -0.40 -2.31 MoM 2.68 0.09

Source: Reuters

YoY 47.63 50.73

Technical Chart Soybean

NCDEX Oct contract

Rape/mustard Seed: Mustard seed futures settled lower on

Wednesday on account of profit booking. Mustard output was lower in 2011-12 season. However, with on the back of higher returns and improved rains, next years output is expected to be better. Rainfall deficit in Rajasthan has come down sharply due to rainfall in last 4-5 days. It will ensure higher area under rapeseed as its prices are trading near record high level. Sowing of rapeseed starts from October and north-western Rajasthan is the top producing area in the country.

Source: Telequote

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

valid for Sept 7, 2012 Support 794-800 3935-3970 4330-4370 541-546 Resistance 808-813 4025-4050 4440-4465 555-558

Outlook
Oilseed complex is expected to trade sideways as weak domestic fundamentals for soybean for the next season may offset the record higher international soybean prices caused by tightness in global oilseed supply.

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Commodities Daily Report

Friday| September 7, 2012

Agricultural Commodities
Black Pepper
Pepper prices traded on a positive note yesterday due to improvement in demand ahead of the upcoming festive season. Arrivals were also reported as the prices stabilized and improved from lower levels. However lower demand for Indian pepper in the international markets due to huge price parity may cap sharp gains. Low stocks in the domestic markets have supported prices at lower levels. The Spot as well as the Futures settled 0.63% and 0.08% higher on Thursday. th According to the circular released on June 13 2012 the existing Special margin of 10% (cash) on the long side stands withdrawn on all running contracts and yet to be launched contracts in Pepper from beginning of day Friday June 15, 2012. Pepper prices in the international market are being quoted at $8,100/tonne(C&F) while Indonesia Austa is quoted at $63006400/tonne (FOB). Vietnam was offering its produce at $6,000/tonne for 500 GL. Brazil was offering its pepper at $6,150/tonne for B-Asta grade. As per circular dt. 29/06/2012 issued by NCDEX, Hassan will be available as an additional delivery centre for all the yet to be launched contracts. (not applicable to the currently available contracts-till Dec 2012 expiry).

Market Highlights
% Change Unit Pepper SpotNCDEX (Kochi) Pepper- NCDEX Sept '12 Futures Rs/qtl Rs/qtl Last 41406 42335 Prev day 0.63 0.08

as on Sept 6, 2012 WoW 1.48 1.93 MoM -3.22 -5.11 YoY 18.41 17.86

Source: Reuters

Technical Chart Black Pepper

NCDEX Oct contract

Exports
According to Spices Board of India, exports of pepper in April 2012 fell by 47% and stood at 1,200 tonnes as compared to 2,266 tonnes in April 2011. India imported 1,848 tonnes of pepper till March 2012 and has become the third country to import such large quantity after UAE and Singapore. (Source: Agriwatch) According to Vietnam Ministry of Agriculture and Rural Development (MARD) exports of black pepper in 2012 are forecasted at around 1,25,000 tonnes. Exports of Pepper from Vietnam during January till June 2012 is estimated around 73000 mt 73,000 mt, higher by 4.3% in volume and 31.7% in value compared to corresponding year last year. Exports of Pepper from Brazil during January till May 2012 are estimated around 13369 mt. (Source: Peppertradeboard). Pepper imports by U.S. the largest consumer of the spice declined 14.8% in the first 2 months of the year (2012) to 8810 tn as compared to 10344 tn in the same period previous year. Imports of Pepper in the month of February declined by 16.8% to 3999 tn as compared to 4811 tn in the month of January 2012. Exports from Indonesia posted significant decrease of 42% as compared to previous year. Exports stood at 36,500 tonnes as compared to 62,599 tonnes in the last year. During May 2012 Brazil exported 1,705 tonnes of pepper as against 1600 tn in May 2011.

Source: Telequote

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

valid for Sept 7, 2012 Support 43100-43280 Resistance 43800-44100

Production and Arrivals

The arrivals in the spot market were reported at 9 tonnes while offtakes were 7 tonnes on Thursday. Global Pepper production in 2012 is expected to increase 7.2% to 3.20 lakh tonnes as compared to 2.98 lakh tonnes in 2011 with sharp rise of 24% in Indonesian pepper output and in Vietnam by 10%. According to latest report pepper output in Vietnam is estimated to be 1.35 lakh tonne as compared to 1.10 lakh tonne estimated early in the beginning of year (2012). 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 prices are expected to trade upwards today due to improving demand. Lack of supplies may support prices at lower levels. However, prices may correct due to lower demand at higher levels in the domestic as well as international markets.

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Commodities Daily Report

Friday| September 7, 2012

Agricultural Commodities
Jeera
Jeera Futures (Sept contact) recovered yesterday due to low arrivals as farmers are not selling anticipating better prices. However the Octover contract remained negative due to good rains in Gujarat. Good rains are expected to improve moisture levels which may increase prospects of better yield next season. Exporters are also avoiding buying at higher levels, and waiting for the prices to correct. 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 the ongoing civil war in Syria which is hampering supplies. There are reports that there has been an increase in demand from Bangladesh for Indian Jeera. The Spot as well as the Futures settled 0.35% and 0.18% higher on Thursday. Production in Syria and Turkey is being reported around 17,000 tonnes and around 4,000-5,000 tonnes, lesser than expectations. Jeera prices in the international market of Indian origin are being offered at $28,000-2,850 tn (c&f) while Syria and Turkey are not offering their produce. Carryover stocks of Jeera in the domestic market is expected to be around 7-8 lakh bags as compared to 4-5 lakh bags in the last year.

Market Highlights
Unit Jeera SpotNCDEX(Unjha) Jeera- NCDEX Sept '12 Futures Rs/qtl Rs/qtl Last 15139 13928 Prev day 0.35 0.18

as on Sept 6, 2012 % Change WoW -2.88 -7.09 MoM -7.09 -12.61 YoY -2.33 -9.79

Source: Reuters

Technical Chart Jeera

NCDEX Oct contract

Production, Arrivals and Exports

Unjha markets witnessed arrivals of 3,000 bags, while off-takes stood at 3,000 bags on Thursday. Production of Jeera in 2011-12 is expected to be around 40 lakh bags as compared to 29 lakh bags in 2010-11 (each bag weighs 55 kgs). (Source: spot market traders). According to Spices Board of India, exports of Jeera in April 2012 stood at 2,500 tonnes as compared to 2,369 tonnes in April 2011, an increase of 6%.

Source: Telequote

Market Highlights
Prev day 2.13 4.03

as on Sept 6, 2012 % Change

Outlook
Jeera prices are expected to trade sideways to down due to good rains in Gujarat. Prices may recover due to expectation of revival in export demand as well low stocks. In the medium term(September-October 2012) prices are likely to witness a bounce back as there are limited stocks with Syria and Turkey and crop there is 30% short as compared to last year.
Unit Turmeric SpotNCDEX (N'zmbad) Turmeric- NCDEX Sept '12 Futures Rs/qtl Rs/qtl Last 5589 6246

WoW -0.25 1.66

MoM 1.98 11.06

YoY 6.09 36.08

Turmeric
Turmeric prices traded on a bullish note yesterday due to lower sowing figures. Also, farmers are not selling as they have demanded better floor price. Rainfall in Nizamabad is 27% lower than the normal as on 29/8/2012. Turmeric has been sown in 0.54 lakh hectares in A.P th as on 5 September 2012. Sowing is also reported 30-35% lower during the sowing period. The Spot settled 1.22% higher while the Futures settled 0.73% lower on Wednesday. The pre expiry margin on Turmeric has been increased to 5% for last 7 trading days increased on a daily basis on both buy and sell side from the existing 3% on daily basis for last 5 days.

Technical Chart Turmeric

NCDEX Oct contract

Production, Arrivals and Exports

Arrivals in Erode and Nizamabad mandi stood at 2,200 bags and 1,700 bags respectively on Thursday. Turmeric production for the year 2011-12 is projected at historical high of 90 lakh bags (1 bag= 70 kgs) compared to 69 lakh bags in 201011. Erode is expected to produce 55 lakh bags of turmeric a rise of 29% as compared to previous year. According to Spices Board of India, exports of Turmeric in April 2012 increased by 1% at 7,300 tn as compared to 7,230 tn in April 2011.

Source: Telequote

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

valid for Sept 7, 2012 Support 13800-14000 6010-6070 Resistance 14450-14650 6230-6320

Outlook
Turmeric prices are expected to continue to trade upwards taking cues from lower sowing figures and lower arrivals. Traders also expect fresh export orders in the coming days. However, improving weather conditions may cap sharp gains. In the medium term (September) prices may take cues from the sowing figures.

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Commodities Daily Report

Friday| September 7, 2012

Agricultural Commodities
Kapas
NCDEX Kapas April futures and MCX Cotton futures closed up and settled 0.83% and 0.51% respectively on Thursday on account of short coverings. Cotton prices declined sharply in the last two weeks as cotton advisory board in its latest meeting has made and upward revision in the end stocks estimates. Further improved rains in August and higher imports of cheaper global cotton also supported the weak market sentiments. According to the latest report by IMD, India received 12% below normal rains during June 01- August 31. The month of August witnessed 99.7% th rainfall as on 29 August. However, reports of good rains in the past few days in Gujarat, the top producer of Cotton has provided some relief. ICE cotton Futures settled 0.93% higher on Thursday.

Market Highlights
Unit Rs/20 kgs Rs/Bale Last 1028 17580

as on Sept 6, 2012 % Change Prev. day WoW 0.98 -6.38 0.51 -0.68 MoM -11.23 -3.25 YoY -

NCDEX Kapas Futures MCX Cotton Futures

Source: Reuters

International Prices
ICE Cotton Cotlook A Index Unit Usc/Lbs Last 75.59 81.35

as on Sept 6, 2012 % Change Prev day WoW 0.93 -1.16 0.00 0.00 MoM 0.63 0.00 YoY -31.47 -29.20

Domestic Production and Consumption

In India Cotton harvesting commences by mid September from the North Indian irrigated states like Punjab, Haryana and Rajasthan. While, in rain fed areas its starts in October. st As on 31 August, 2012, Cotton is being planted on 112.83 lakh hectares; lower by 4.3% compared to the last years 118.37 lakh hectares. However, the acreage so far is at par with its normal area of 111.8 lakh hectares. Area covered under cotton in Gujarat is 23.42 Lh ha as compared to 29.56 Lh ha last year, in Maharashtra 41.27 Lh ha compared to 40.95 Lh ha and in Andhra Pradesh 21.17 lh ha compared to 17.75 Lh ha same th period last year as on August 30 2012. (Source: business Line) According to the latest updates by Cotton Advisory Board (CAB), Cotton production for 2011-12 seasons is revised upward to 357 lakh bales compared with 347 lakh bales estimated earlier. Also, on account of cheaper cotton available in the global markets, imports have more than double from 5 lakh bales to 12 lakh bales. On the demand front, exports increased to around 127 lakh bales from the earlier estimates of 115 lakh bales taking total cotton consumption to around 382 lakh bales. Thus, the ending stocks figure for 2011-12 season, that would end in September, has been revised upward to 28 lakh bales from the previous estimates of 25 lakh bales. However, 28 lakh bales is the lowest since 2004-05 caused by robust exports.

Source: Reuters

Technical Chart - Kapas

NCDEX April contract

Source: Telequote

Global Cotton Updates

Global cotton prices are mainly influenced by China, US and India. China is the largest producer, consumer, and importer of Cotton, While India is the second largest producer, consumer and exporter of Cotton. US is third largest producer and a largest exporter of Cotton in the world. The global cotton market surplus will total more than 3 million tonnes in 2012-13 (August- July) from growing output and falling demand in China, the world's largest textile market China's 2012 cotton output is estimated at 6.97 million tonnes, down 4.2 percent from last year. China has issued fresh import quota to textile mills to procure cotton from international markets, which are 40 percent cheaper than domestic stock. This is additional to 1 million tonne issued in May this year.

Technical Chart - Cotton

MCX Oct contract

Outlook
Cotton futures in intraday might correct further as good recovery in monsoon in the few days has provided relief to the cotton crop in the major growing belts. Moreover if Prices in international market fall further, imports might be cheaper which would lead to higher ending stocks resulting in downside pressure in short term. Also reports of negligible damage done by the tropical storm Isaac in US in the cotton growing belts might put further pressure on the prices.

Source: Telequote

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

valid for Sept 7, 2012 Support 1005-1015 1005-1016 17340-17470 Resistance 1036-1045 1036-1044 17690-17780

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