Commodities Daily Report

Thursday| October 4, 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

Thursday| October 4, 2012

Agricultural Commodities
News in brief
FMC for minimum daily avg turnover in illiquid contracts
The Forward Markets Commission (FMC) is planning to introduce a minimum daily average turnover criterion for illiquid contracts for all commodity exchanges. The criterion would come into effect in a month. Contracts for commodities that record no trade for years are categorised as illiquid contracts. For a number of commodities, after the initial euphoria, contracts turn illiquid. This has been a concern for FMC. Today, commodity exchanges submitted renewal requests for illiquid contracts, along with detailed plans of action for these. We are planning to frame a mandatory daily average turnover criterion for illiquid contracts to encourage exchanges to make positive efforts. Currently, the guidelines are being prepared, and these would be introduced in a month, said FMC Chairman Ramesh Abhishek. Under the new guidelines, exchanges would have six months to attract participation. During this period, exchanges can organise brokers meetings (in production and consumer segments) and enroll members from across the country. FMC has asked commodity exchanges to prepare a justification note before submitting a proposal for renewal of illiquid contracts. In case a commodity offered for trading fails to attract participation and exchanges renewed it for years, the exchange would need justification for another renewal. Exchanges would also have to submit the details of efforts made by them to attract participation in that commodity. (Source: Business Standard)

Market Highlights (% change)

Last Prev. day

as on Oct 3, 2012
WoW MoM YoY

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

18870 5731 52.23 88.14 1777

0.24 0.22 -0.27 -4.08 0.26

1.27 1.20 -2.50 -2.04 1.53

7.57 7.83 -6.11 -6.85 7.49

14.74 15.88 6.40 8.53 9.96

Source: Reuters

Agri commodities fall on hopes of bumper crop

Agricultural commodities harvested in winter, including soybean and castor seed, hit the lower circuit in futures trade on commodity exchanges, on hopes of a bumper crop this season and cues from global markets. Harvesting of summer sown crop has begun, with estimates of a record output, especially for the soybean crop, the largest in the oilseed basket. The revival in the monsoon rains in early August raised hopes of a better kharif crop, compared to previous estimates. Despite delay in sowing, the rise in yield is expected to increase this years soybean output eight per cent. Soybean production is estimated at an all-time high of 12.68 million tonnes (mt) this kharif harvesting season, compared with 11.65 mt in the previous year. For castor seed, potato and other crops, the revival in monsoon rains aided a steady recovery in crop acreage. With a positive yield sentiment, the overall output of the kharif sowing crops is estimated to be higher than earlier estimates.
(Source: Business Standard)

Withdrawal of Special Margin on Wheat contracts

Bye-laws, Rules and Regulations of the Exchange, Special Margin of 10% (in cash) on the Long Side on all the running contracts and yet to be launched contracts in Wheat (SYMBOL:WHTSMQDELI) have been withdrawn with effect from beginning of day Thursday, October 04, 2012. (Source: NCDEX)

Rain deficit shrinks in Guj, farmers saved by a whisker

Monsoon revival during September has made Gujarat farmers hopeful of a fairly good kharif season. This is despite a 30 per cent rainfall deficit this year. The September rain has helped key crops, including groundnut, cotton, castor and cereals, for which sowing had improved last month. According to the state agriculture department, kharif sowing in Gujarat this year was 91 per cent of the normal, with pulses suffering the most due to erratic monsoon. Sowing of pulses had declined 31 per cent from normal. According to the latest data provided by the Gujarat agriculture department, sowing of cereals declined 18 per cent, at close to 1.4 million hectares (ha) against the normal area of 1.7 million ha. Similarly, area under oilseeds has dropped by about 14 per cent at about 2.16 million ha, from the normal sowing of 2.5 million ha. The area under cotton has suffered a loss of about 10 per cent at 2.47 million ha against the normal of 2.74 million ha. However, pulses sowing has suffered the most with a drop of about 31 per cent at 428,700 ha this kharif season against the normal 624,500 ha. Overall sowing in the state stood at about eight million ha against the normal 8.8 million ha. (Source: Business Standard)

Withdrawal of Special Margin on Rapeseed Mustard Seed Contracts

Bye-laws, Rules and Regulations of the Exchange, Special Margin of 5% (in cash) on the Long Side on all the running contracts and yet to be launched contracts in Rapeseed Mustard Seed (SYMBOL: RMSEED) have been withdrawn with effect from beginning of day Thursday, October 04, 2012. (Source: NCDEX)

Withdrawal of Special Margin on Chana contracts

Bye-laws, Rules and Regulations of the Exchange, Special Margin of 10% (in cash) on the Long Side on all the running contracts and yet to be launched contracts in Chana (SYMBOL: CHARJDDEL) have been withdrawn with effect from beginning of day Thursday, October 04, 2012. (Source: NCDEX)

Retreat of monsoon to stay hampered into next week

A couple of global weather models have put the Bay of Bengal under tropical storm/cyclone watch during the latter half of next week. The storm is forecast to develop from a pulse sent in by a strong South China Sea typhoon across Indochina right into North Bay of Bengal where it would gather strength again. The storm is forecast to cross land at Kolkata, according to initial projections, and head into the east and North-East India. The Climate Prediction Centre (CPC) of the US National Weather Services rates as moderate the possibility of this actually happening. If this were to be the case, it would also set the ground for the launch of North-East monsoon (reverse monsoon) over peninsular India. Meanwhile, the India Meteorological Department (IMD) has said that the monsoon would not be able to resume its withdrawal process from central India for another five days. This is due to the high moisture content and continuing rain activity over central, east and North-East India, it said on Wednesday. (Source: Business Line)

Govt agencies begin rice procurement

With the government agencies starting paddy procurement drive for the kharif season 2012-13 on Wednesday, more-than 1.25 lakh bags of different paddy varieties arrived at the grain market. Procurement went on smoothly and stocks were lifted by Government agencies and rice mills. In the physical market, rice is range-bound but in the negative territory, said Amit Chandna, proprietor of Hanuman Rice Trading Company. (Source: Business Line)

Indian cabinet may allow 1 mln tonnes vegetable oil importsgovt source
Indian cabinet may consider allowing import of 1 million tonnes of vegetable oil from October 2012 to November 2013, for subsidised sale, a government source told Reuters on Wednesday. The cabinet meeting is scheduled on Thursday. (Source: Reuters)

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Commodities Daily Report

Thursday| October 4, 2012

Agricultural Commodities
Chana
Chana spot as well as futures which were in downside pressure in the past couple of weeks, witnessed a sharp reversal on Wednesday and settled higher by 1.56% and 3.54% respectively. Emerging demand at lower levels due to upcoming festive season supported the upside. CACP has recommended a hike in minimum support price (MSP) of gram by Rs.200 to Rs.3000 a quintal and Masoor by Rs.100 to Rs.2900 a quintal for upcoming 212-13 Rabi season to boost the production of pulses. According to the first advance estimates, 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. 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. Prices declined last week on improved rains and reports of expected higher output in Australia, the largest supplier of chickpeas to India. In Australia, chana production rose by 70.5 percent to 8.27 lakh tonnes from 4.85 lakh tonnes in previous year. Ongoing recovery in monsoon and above average rains in the past few days is showing better prospects for Rabi pulses sowing in the coming days. Monsoon has recovered across India, especially in Rajasthan, one of the major chana growing states, and may prove beneficial for the chana sowing.
st

Market Highlights
Unit Rs/qtl Rs/qtl Last 4370 4463 Prev day 1.56 3.29

as on Oct 3, 2012 % change WoW MoM -2.12 -10.81 0.36 -7.43 YoY 29.89 33.18

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

Source: Reuters

Technical Chart - Chana

NCDEX Nov contract

Source: Telequote

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

valid for Oct 4, 2012 Resistance 4325-4362

Sowing progress and demand supply fundamentals

According to the Ministry of Agriculture 99.81 Lakh hectare area has been planted under Kharif pulses as on 21th September, 2012 compared to 108.28 lakh hectare (ha) same period last year. 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)

4180-4220

Outlook
Chana futures are expected to trade sideways with upward bias on emergence of fresh demand at lower levels. Estimated lower kharif pulses output may also support the upside in the prices during the intraday. In the medium term to long term, the trend remains positive on account of supply tightness. However, higher imports from Australia may cap the sharp upside in the prices.

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Commodities Daily Report

Thursday| October 4, 2012

Agricultural Commodities
Sugar
Sugar prices recovered on Wednesday and spot as well as the Futures settled 0.03% and 0.64% higher ahead of short coverings. Also upcoming festive demand provided support to the prices. With the release of higher sugar quota for the next two months prices declined further during the intraday however, prices closed on a flat note on expectations of festive season demand. The Government has decided to make available a quantity of 40 lakh tons of non-levy quota, for the months of October, 2012 and November 2012. Indian mills have signed deals to buy up to 450,000 tonnes of Brazilian raw sugar for delivery from October to December as a gap between domestic and overseas prices widens, making room for the first imports in more than two years, five dealers told Reuters. Millers based in western and southern India and global trading firms bought sugar at around $500/ton a CIF basis, as the price in the domestic market has jumped more than 23% to $680/ tn in the past three months. ICE raw sugar and life white sugar futures on Wednesday settled marginally lower by 0.05% and 0.25%.

Market Highlights
Unit Sugar Spot- NCDEX (Kolkata) Sugar M- NCDEX Oct '12 Futures Rs/qtl Last 3780

as on Oct 3, 2012 % Change Prev. day WoW 0.03 -1.82 MoM 0.63 YoY 21.94

Rs/qtl

3470

0.64

-2.28

0.09

25.95

Source: Reuters

International Prices
Unit Sugar No 5- LiffeOct'12 Futures Sugar No 11-ICE Oct '12 Futures $/tonne $/tonne Last 591.1 479.56

as on Oct 3, 2012 % Change Prev day WoW -0.25 -0.05 3.12 10.10 MoM 4.94 11.58 YoY -7.89 #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 50.99 lakh ha on same period a year ago. 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.

Technical Chart - Sugar

NCDEX Nov contract

Source: Telequote

Technical Outlook
Contract Unit Rs./qtl

valid for Oct 4, 2012 Support 3325-3348 Resistance 3395-3420

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. 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)

Sugar Oct NCDEX Futures

Outlook
Sugar prices may decline in the coming weeks amid higher sugar quota for the next two months and reports of raw sugar import after almost 2 years. However, a delay in crushing in Maharashtra by a month and lower cane output estimates may restrict sharp fall in the short term.

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Commodities Daily Report

Thursday| October 4, 2012

Agricultural Commodities
Oilseeds
Soybean: Soybean Futures as well as spot extended heavy losses
and Spot closed 7.39% lower and Futures closed on 4% lower limit ahead of ongoing harvest pressure and prospects of higher output. CBOT Futures recovered and settled marginally higher by 0.08% due to short coverings. US soybeans condition is reported 35 pct good/excellent as compared to 35 pct week ago, and 54 pct a year ago. US soybeans are 41 pct harvested vs 22 pct week ago and 19 pct to 5-year nd average as on 2 October 2012. In Brazil planting has started 10 days earlier amid good rains. If rains continue in the coming weeks as forecast, Brazil could churn out 81 million tonnes of oilseed and replace the drought-stricken US as the world's top soybean producer, according to the USDA. Brazils grain Association expects the number 2 producers of soybean to produce record 81.3 mn tn in 2012-13. In the domestic markets, as on 20 September, 2012, Oilseeds have been sown in 174.39 lakh ha so far, compared with 178.16 lakh ha same period last year. Soybean area is higher at 106.9 lakh ha. According to first advance estimates, Soybean output is pegged at at 126.2 lk tn for 2012-13. However, drop in area under groundnut, sunflower & castor seed may lead to lower output of these oilseeds in 2012-13 which is estimated 9.6% lower at 187.8 lakh tn.
th

Market Highlights
% Change Unit Soybean Spot- NCDEX (Indore) Soybean- NCDEX Oct '12 Futures Ref Soy oil SpotNCDEX(Indore) Ref Soy oil- NCDEX Oct'12 Futures Rs/qtl Rs/qtl Rs/10 kgs Rs/10 kgs Last 2858 2951 652.1 615 Prev day -7.39 -3.99 -4.19 -3.41

as on Oct 3, 2012

WoW -17.52 -13.30 -13.01 -14.24

MoM -37.61 -26.23 -19.41 -24.60

YoY 29.85 33.77 2.15 -0.13

Source: Reuters

as on Oct 3, 2012 International Prices Soybean- CBOTNov'12 Futures Soybean Oil - CBOTOct '12 Futures Unit USc/ Bushel USc/lbs Last 1532 50.33 Prev day 0.08 0.12 WoW -2.62 -2.56 MoM -11.45 -9.98 YoY 11.04 -12.16

Source: Reuters

Crude Palm Oil

as on Oct 3, 2012 % Change Prev day WoW 4.80 -3.96 -11.98 -12.93

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

Last 2183 407.4

MoM -25.24 -26.06

YoY -35.79 -13.30

Refined Soy Oil: Ref soy oil also extended the fall and settled
3.41% lower after hitting a 4% lower limit taking cues from the domestic soybean markets along with weak international market Although, exports are high the overall stocks of Malaysian palm oil are higher on the back of seasonally higher yield. Exports of Malaysian palm oil products for Sept. 1-25 rose 8 percent to 1,170,720 tonnes from 1,084,343 tonnes shipped during Aug. 1-25. Indias edible oil imports should rise 5.4 percent to a record 10.31 million tonnes in 2012/13, with the entire increase met by palm oil. 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).

MYR/Tonne Rs/10 kg

Source: Reuters

RM Seed
Unit RM Seed SpotNCDEX (Jaipur) RM Seed- NCDEX Oct '12 Futures Rs/100 kgs Rs/100 kgs Last 3975 3712 Prev day 1.40 -1.46

as on Oct 3, 2012 WoW -0.19 -6.83 MoM -7.83 -14.73

Source: Reuters

YoY 35.67 22.79

Technical Chart Soybean

NCDEX Nov contract

Rape/mustard Seed: Mustard futures settled 1.46% lower on

Monday tracking weak oilseeds markets. Mustard output was lower in 2011-12. However, on the back of higher returns and improved rains, next years output is expected to be better. Sowing of rapeseed starts from October and northwestern Rajasthan is the top producing area in the country. As per NCDEX circular, existing Special Margin of 15% (in cash) on the Long side shall be reduced to 5% (in cash) on all the running contracts and yet to be launched contracts in Rapeseed Mustard Seed with effect from Monday, September 24, 2012. Outlook Edible oil complex is expected to trade on a negative note during intraday. Expectations of improved yield and higher supplies of domestic soybean may keep the downside intact in the short term.
Source: Telequote

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

valid for Oct 4, 2012 Support 588-597 2865-2900 3640-3705 395-401 Resistance 610-617 2992-3025 3798-3825 411-416

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Commodities Daily Report

Thursday| October 4, 2012

Agricultural Commodities
Black Pepper
Pepper traded sideways with a positive note yesterday due to low supplies in the domestic markets coupled with festive demand. Farmers are unwilling to sell their stocks at lower levels. Reports that FMC has asked NCDEX to find out if there were any erratic trades in Pepper have capped any sharp upside. Traders are buying pepper directly from the farmers. Exports demand for Indian pepper in the international markets is said to be low due to huge price parity. The Spot as well as the November Futures settled 0.11% and 0.43% higher on Wednesday. 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 $8,4758,450/tonne(C&F) while Indonesia Austa is quoted at $6,750/tonne (FOB). Vietnam was offering 550GL at $6,900/tonne. 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 Oct '12 Futures Rs/qtl Rs/qtl Last 42150 43415 Prev day 0.11 -0.05

as on Oct 3, 2012 WoW 0.56 -0.31 MoM 1.80 2.55 YoY 21.09 26.26

Source: Reuters

Technical Chart Black Pepper

NCDEX Nov 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 Oct 4, 2012 Support 42800-43100 Resistance 43580-43920

Production and Arrivals

The arrivals in the spot market were reported at 45 tonnes while offtakes were 40 tonnes on Wednesday. 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 is expected to trade on a positive note today due to low supplies in the domestic markets. Festive season buying is also expected support prices. However, reports that FMC has asked NCDEX to find out any irregularities in pepper trade may cap sharp upside.

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Commodities Daily Report

Thursday| October 4, 2012

Agricultural Commodities
Jeera
Jeera prices traded in a rangebound manner yesterday. Expectations of better export figures and low arrivals in the spot markets supported the prices at lower levels while reports of higher carryover stocks as compared to last year restricted any sharp upside. Good rains in Gujarat, thereby expectations of better sowing prospects ahead of the rabi sowing have also pressurized the prices. The spot settled 0.19% higher while the Futures settled 0.27% lower on Wednesday. According to markets sources about 75% exports target has already been achieved due to a supply crunch in the global markets. Around 10 lakh bags of Jeera are reported across India. 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 $2,625-2,650 tn (c&f) while Syria and Turkey are not offering. 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 Oct'12 Futures Rs/qtl Rs/qtl Last 14447 13600 Prev day 0.19 -0.27

as on Oct 3, 2012 % Change WoW -0.17 -0.69 MoM -4.57 -2.35 YoY -3.44 -5.75

Source: Reuters

Technical Chart Jeera

NCDEX Nov contract

Production, Arrivals and Exports

Unjha markets witnessed arrivals of 3,000 bags, while off-takes stood at 3,000 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 -1.14 -1.41

as on Oct 3, 2012 % Change

Outlook
Jeera futures may trade on a sideways note today. Prices may find support at lower levels on expectations of higher export figures. However, good rains in Gujarat and higher carryover stocks may cap any sharp gains. In the medium term (September-October 2012), prices are likely to witness a bounce back as there are limited stocks with Syria and Turkey.
Turmeric SpotNCDEX (N'zmbad) Turmeric- NCDEX Oct '12 Futures

Unit Rs/qtl Rs/qtl

Last 5450 5580

WoW -3.40 -1.83

MoM -2.48 -10.66

YoY -4.72 14.72

Turmeric
Turmeric Futures traded on a negative note yesterday on reports that FMC asked NCDEX to find out if there are any erratic trades in Turmeric kept the prices under check. Higher stocks with the stockists also pressurized the prices. However, a reduction in the special cash margin on the long side supported the prices in the Futures at lower levels. Turmeric has been sown in 0.57 lakh hectares in A.P as on 03/10/2012. Sowing is also reported 30-35% lower during the sowing period. The Spot as well as the Futures settled 1.14% and 1.41% lower on Wednesday. Special Cash Margin of 40% on the Long side shall be reduced to 20% (cash) on all the running contracts and yet to be launched contracts in Turmeric w.e.f. beginning of day Wednesday, September 26, 2012.

Technical Chart Turmeric

NCDEX Nov contract

Production, Arrivals and Exports

Arrivals in Erode and Nizamabad mandi stood at 4,000 bags and 2,000 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 Oct Futures Turmeric NCDEX Oct Futures Rs/qtl Rs/qtl

valid for Oct 4, 2012 Support 13550-13680 5420-5500 Resistance 13980-14130 5610-5680

Outlook
Turmeric prices are expected to trade on a negative note today on reports that FMC has asked NCDEX to find out any erratic trades in turmeric. However, a reduction in the special cash margin, lower sowing figures and lower arrivals may support prices.

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Commodities Daily Report

Thursday| October 4, 2012

Agricultural Commodities
Kapas
After recovering on Monday, Kapas futures again corrected and settled marginally lower by 0.38% on ongoing harvesting pressure in the key states. According to the first advance estimates, released by the ministry of agriculture, Indias 2012/13 cotton output is seen at 33.4 mln bales as compared to 352 lakh bales in 2011-12 seasons. ICE cotton Futures closed 0.34% higher on account of short coverings. Cotton harvesting has commenced in US, in all 14% is harvested as compared to 10% a week ago, versus 15% same period a year ago. Cotton crop condition is 42% in Good/Excellent state as compared to 43% a week ago, and 29% same period a year ago.

Market Highlights
Unit Rs/20 kgs Rs/Bale Last 912 16020

as on Oct 3, 2012 % Change Prev. day WoW -0.38 -0.19 -0.92 -1.60 MoM -11.28 -1.60 YoY -15.06

NCDEX Kapas Futures MCX Cotton Futures

Source: Reuters

International Prices
ICE Cotton Cot look A Index Unit Usc/Lbs Last 70.54 81.35

as on Oct 3, 2012 % Change Prev day WoW 0.34 0.73 0.00 0.00 MoM -5.98 0.00 YoY -31.01 -29.20

Domestic Production and Consumption

As on 21 September, 2012, Cotton is being planted on 114 lakh hectares, down, as compared to the last years 119.6 lakh hectares. However, the acreage so far is at par with its normal area of 111.8 lakh hectares. 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. In its September monthly demand supply report on Wednesday, the Agriculture Department (USDA) raised its estimate for the global cotton surplus by next July to a record of 76.5 million 480-pound bales, nearly a two-million bale increase from last month's estimate.
st

Source: Reuters

Technical Chart - Kapas

NCDEX April contract

Source: Telequote

Global Cotton Updates

Global cotton prices are mainly influenced by China, US and India. USDA estimated US Cotton planting for the season 2012-13 at 12.64 mln acres as compared to 14.74 mln acres last season (2011-12). Ending stocks were at 4.8 mln bales (480 pounds/bales) with Production of 17 mln bales and exports of 12.1 mln bales were pegged for the season 2012-13. China's 2012 cotton output is estimated at 6.97 million tns, down 4.2 percent from last year. China's cotton imports in August rose 48 percent on the year to 305,600 tns. Total imports in the first eight months of the year were 3.77 million tns, up 123% from the same period last year, according to the report by the China National Cotton Reserves Corp.

Technical Chart - Cotton

MCX Oct contract

Source: Telequote

Outlook
Kapas futures in intraday is expected to trade sideways as ongoing harvesting in the key states coupled with new cotton crop arrivals from the northern states might pressurize the prices. However, prices in spot market are nearing its MSP, which would restrict any major fall. Also Farm Minister has lowered the output estimates of cotton for the 2012-13 season, that will provide support to the prices in the short term. However, in the international front, cotton harvesting has begun globally which might cap a sharp upside in medium term.

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

valid for Oct 4, 2012 Support 889-902 882-897 15720-15880 Resistance 925-935 922-933 16150-16280

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