Commodities Daily Report

Friday| November 23, 2012

Agricultural Commodities

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

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

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

Friday| November 23, 2012

Agricultural Commodities
News in brief
Cane price row: Maharashtra farmers threaten to stop sugar trucks
Farmers associations in Maharashtra, that have been agitating for higher sugarcane prices have threatened to stop trucks leaving sugar mills, with processed sugar and other by-products. Due to the substantial increase in the input cost of sugarcane, farmers are seeking Rs 3,000 a tonne from co-operative sugar mills. The price offered by a number of mills is in the range of Rs 2,300. Raghunathdada Patil of Maharashtra Shetkari Sanghtana told Business Line that the three associations have decided to block the movements of trucks, so that there is a shortage in the market. This, he said, will force the sugar mills and the State Government to come to the negotiating table. Patil said that blocking of trucks is a part of a new strategy and it would be launched after November 29. Earlier, the associations were asking farmers not to sell sugarcane to the mills, Now farmers can sell sugarcane, but we will ensure that sugar does not leave the mills, said Patil. (Source: Business Line)

Market Highlights (% change)

Last Prev. day

as on Nov 22, 2012

WoW MoM YoY

Sensex Nifty INR/$ Nymex Crude Oil - $/bbl Comex Gold - $/oz*
*Prices as on Nov 21, 2012

18517 5628 55.13 87.12 1728

0.31 0.23 0.02 -0.30 0.27

0.25 -0.06 0.86 1.95 -0.09

-0.88 -0.99 2.38 -3.25 0.30

16.12 17.78 5.88 -10.11 2.96

.Source: Reuters

Wheat production to be lower in 2012-13 season

Wheat production is projected to be slightly lower in rabi season 201213. This is due to two reasons farmers are facing cost pressures in cultivating wheat, and acreage under wheat is stagnant. Talking to Business Standard, Indu Sharma , director of the Wheat Research Institute in Karnal, said, Acreage is likely to remain stagnant this season and the yield is expected to be slightly lower than last year. The estimated area under wheat was 2.99 million hectares last year and keeping cognisance of the constant MSP (minimum support price) of wheat (Rs 1,285 per quintal), there is no expectation of increase in acreage. Wheat productivity is higher when the winter is strong and prolonged. A slight aberration in temperature can undermine the yield. The sharp increase in cost of diammonium phosphate ( DAP ) from Rs 470 per 50 kg last year to Rs 1,200 per 50 kg this year is also a discouraging factor for increase in acreage under wheat. Farmers in various districts of Punjab and Haryana said they may have to look for an alternative to wheat, as the crop was highly agrochemical intensive and the cost of agrochemicals was unviable for them. (Source: Business Standard)

UP govt may announce cane prices after Nov 30

The Uttar Pradesh government has further delayed the announcement of sugarcane SAP. Sources say the government could not reach a consensus price that could benefit state millers and farmers. Sources had earlier said Uttar Pradesh CM Akhilesh Yadav would announce cane prices on Thursday. It is believed that the announcement has been put off not only due to differing opinion on price, but also on account of the Assembly session that begins on Friday. (Source: Financial Express)

Govt to move from quarterly to 4-mthly release of sugar

In a move towards decontrol of the sugar sector, the government has decided to allocate the open market sale quota for the next four months (December-March) instead of current system of quartely release. The food ministry, which oversees the sugar sector, is likely to allocate seven million tonne of sugar for the next four months of 2012-13 fiscal. That apart, the ministry has decided not to put any condition for selling the open market sale quota. Earlier, it used to direct mills to sell atleast a minimum quantity of sugar every month out of total quarterly quota.
(Source: Financial Express)

OMSS price hike for bulk buyers may push market wheat cost up
he government's move to hike wheat prices supplied under the Open Market Sale Scheme (OMSS) to bulk buyers is expected to push up the prices of grain. To exhaust surplus wheat stocks held with various state procuring agencies and Food Corporation of India (FCI) from Punjab, the government has fixed OMSS prices at R1,484 per quintal which is an increase of R199 over the minimum support price offered to the farmers. Under OMSS pricing for Madhya Pradesh and Uttar Pradesh, the government has fixed the prices of wheat grown in the state at R1,414 per quintal and R1,403 per quintal respectively while grain coming from Punjab would have higher prices. (Source: Financial Express)

Weather woes delay potato sowing in Bengal

Potato sowing in West Bengal has been delayed by over a fortnight this year on account of unfavourable weather conditions. Sowing, which usually starts by end-October or early November, has just begun, said potato farmers and traders. Sowing usually gets completed by December 15. According to Ram Pada Pal, President, West Bengal Cold Storage Association, the delay in harvesting of paddy on account of poor monsoon this year has also led to a delay in sowing of potatoes in the State. The remunerative prices the tuber fetched this year is encouraging farmers to sow the crop this season despite the increase in input costs. Potato prices had been on an upward trend since February this year on account of a dip in production. Potato production dropped to about 85 lakh tonne in 2011-12, against 95 lakh tonne last year. (Source: Business Line)

India seeks clear norms from Iran for wheat export

India has asked Iran to lay down clear norms for wheat imports from the country in order to avoid further delay by the Iranian quarantine department, which is yet to give quality clearance to Indian shipments. The country had hoped to export up to 3 million tonne of wheat to Iran this year, but no transaction has taken place yet as Iran is still not sure about the quality of Indian wheat. The country had hoped to export up to 3 million tonne of wheat to Iran this year, but no transaction has taken place yet as Iran is still not sure about the quality of Indian wheat. Iran, which is facing economic sanctions from the US and the EU for its nuclear programme, is interested in increasing imports from India so that the rupee payment mechanism put in place by the two countries is implemented better. (Source: Economic Times)

Fertiliser ministry seeks extra subsidy to pay urea arrears

The chemicals & fertiliser ministry has sought additional subsidy from the finance ministry to pay arrears related to phospthatic (P) and potassic (K) fertiliser. The ministry has already spent R12,477 crore out of the subsidy of R12,576 crore allocated for imprtored P&K in the Union Budget for 2012-13. The fertiliser ministry, however, has enough funds to meet subsidy payment for imported urea. Meanwhile, the government is also working on a policy to make all urea fertiliser firms running on costlier naphtha to switch to cost-effective natural gas. The fertiliser department is considering the policy as gas is much more efficient and cheaper fuel than naphtha, he said. (Source: Financial Express)

Onion, potato, banana, pulses price might rise in 2012-13: NCAER

The southwest monsoon in 2012 might have left Indian shores a couple of months back after having a rather uneven run during the four-month season, but its after-effect in pushing up prices of onion , edible oils , pulses , potatoes and banana is likely to be felt all year long. Demand pressure would be more on available supplies of edible oils and pulses, the report added. (Source: Business Standard)

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Commodities Daily Report

Friday| November 23, 2012

Agricultural Commodities
Chana
Chana spot as well as futures extended the losses and settled lower by 1.19% and 0.68% respectively on Wednesday on prospects of better sowing this Rabi season. Overall demand for Chana will be subdued in the coming days while supplies are expected to ease amid higher shipments. Total pulses acreage is so far down this year by 17% to 65.3 lakh hectares. However, according to state farm department data, pulses sowing is higher in Maharashtra and AP, while it is lagging behind in Rajasthan. Area under Chana cultivation in Maharashtra is up by 20 percent at 4.9 lakh hectares. While in Andra Pradesh it is at 4.64 lakh hectares compared with 3 lakh hectares. However, in Rajasthan, sowing is much behind last years level due to late harvesting of kharif crops on account of delayed and deficient rains. Except for Wheat, minimum support price of all other Rabi crops has been increased by CCEA for 2012-13 season. MSP of Chana/Gram is raised by Rs 400 per qtl for 2012-13 season to Rs 3200. Higher returns and favorable soil condition will definitely boost acreage in the coming season. The Commission for Agriculture Costs and Prices (CACP) has suggested 10 per cent import duty on pulses to encourage domestic production. in the first six months of the new fiscal that is from April to September this year, imports were an estimated 12 lakh tonnes.

Market Highlights
Unit Rs/qtl Rs/qtl Last 4400 4239 Prev day -1.19 -0.68

as on Nov 22, 2012 % change WoW MoM -4.35 -4.53 -9.87 -9.56 YoY 37.14 37.05

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

Source: Reuters

Technical Chart - Chana

NCDEX Dec contract

Source: Telequote

Sowing progress and demand supply fundamentals

Improved rains towards the end of monsoon season coupled with hike in MSP have raised prospects of Chana sowing in the 2012-13 season. Also, farm ministry has targeted 7.9 mn tn chana output for 2012-13 season, higher compared to 7.58 mn tn in 2011-12. According to the Ministry of Agriculture 99.81 Lakh hectare area has been planted under Kharif pulses in 2012-13 compared to 108.28 lakh hectare (ha) in the previous year. According to the first advance estimates of 2012-13 season, kharif pulses output is estimated lower by 14.6% at 5.26 million tonnes compared with 6.16 mn tn last year. Kharif pulses harvesting would commence from next month. Assocham estimates, 21 mn tn of pulses demand in 2012-13 and is likely to reach at 21.42 mn tn in 2013-14 and 21.91 MT in 2014-15. (Source: Agriwatch)

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

valid for Nov 23, 2012 Resistance 4270-4305

4150-4198

Outlook
Chana futures may open higher initially amid short coverings; however, selling at higher levels is advisable as fundamentals remain supportive for the downside. Expectations of ease in supplies amid higher shipments coupled with subdued demand will keep bearishness intact. Going forward, prices may also take cues from sowing progress of Rabi pulses which is expected to gain momentum in the coming days.

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Commodities Daily Report

Friday| November 23, 2012

Agricultural Commodities
Sugar
Sugar spot as well as futures settled marginally by 0.34 and 0.7% on Thursday as reports of upward revision in sugar production for 2012-13 season exerted pressure on the prices. Disputes over cane pricing is almost over and crushing is expected to start in full pace. However, in Maharashtra, Farmers associations have been agitating for higher cane prices have threatened to stop trucks leaving sugar mills. There are reports that the government has decided to allocate the open market sale quota for the next four months (December-March) instead of current system of quarterly release. 9.84 lakh tons of sugar has been produced in the current sugar season 2012-13 upto 15th November, 2012 that is 2 lakh tons higher to the production in the same period last year of 7.76 lakh tons. (Source: PIB) Maharashtra Finance Minister Jayant Patil on 18 Nov said most of the cooperative sugar factories in western Maharashtra have agreed to pay Rs 2,500 for a tonne of sugarcane as first advance to farmers. According to sources, the UP Government may announce a hike of Rs 20-30 a quintal over the next few days against Rs 240 a quintal last season. Also, Tamil Nadu State Government for the 2012-13 season fixed State Advised Price (SAP) for a tonne of sugarcane at Rs 2,350 linked to a sugar recovery of 9.5 per cent from last season price of Rs 2,100 a ton. Liffe white sugar settled marginally higher by 0.85% on Thursday amid long liquidation, while ICE remained closed on account of thanks giving day in US. Higher pace of crushing in Brazil coupled with higher sugar surplus forecast for fourth straight year has led to a sharp decline in international sugar prices.
th

Market Highlights
Unit Sugar Spot- NCDEX (Kolhapur) Sugar M- NCDEX Nov '12 Futures Rs/qtl Last 3450

as on Nov 22, 2012 % Change Prev. day WoW -0.34 0.01 MoM -0.66 YoY 12.41

Rs/qtl

3270

-0.70

-5.24

-0.67

9.07

Source: Reuters

International Prices
Unit Sugar No 5- LiffeMar'13 Futures Sugar No 11-ICE Mar '13 Futures * $/tonne $/tonne Last 522.4 436.44

as on Nov 22, 2012 % Change Prev day WoW 0.85 -1.31 2.57 2.08 MoM -3.62 -2.09 YoY -12.67 -16.21

*Prices as on Nov 21, 2012

.Source: Reuters

Technical Chart - Sugar

NCDEX Dec contract

Domestic Production and Exports

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. 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.

Source: Telequote

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

valid for Nov 23, 2012 Resistance 3285-3298

3230-3249

Global Sugar Updates

Sugar output in Brazil jumped 57% during the first fortnight of October. Thus, sugar output in brazil which was lower compared to last year since the beginning of the crushing season in May, is now up marginally by 0.1% at 29.3 mn tn. Brazil has exported only 15.59 million tons of sugar this year till October which was 17.17 million tons, raw value, last year same period. The International Sugar Organization said it expected a global sugar surplus of 5.86 million tonnes in the season running from October 2012 to September 2013, up from the prior season's surplus of 5.19 million tonnes. The ISO said the stocks/consumption ratio could rise to around 40 percent in 2012/13, from 37.6 percent in 2011/12. (Source: Reuters)

Outlook
Sugar prices may trade sideways with downward bias as upward revision in the production of sugar this season might pressurize the prices. Also sufficient supplies due to higher non-levy quota might cap the upside. But, any further delay in cane crushing in Maharashtra and UP may lead to a sharp upward reversal in the sugar prices.

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Commodities Daily Report

Friday| November 23, 2012

Agricultural Commodities
Oilseeds
Soybean: Soybean Dec futures traded on a negative note and
settled lower by 1% yesterday as improved arrivals post Diwali are exerting to pressurize the prices. Average daily arrivals have increased to 5.5 lakh bags compared to 1.5 lakh bags during Diwali period. Soy meal exports during October are down 49,840 tn in October, the seventh consecutive month of fall in the current fiscal year, from 223,594 tn a year ago. This is because; most export commitments were done for forward trade like Nov-Dec amid uncertainty over supplies in October. According to first advance estimates, Soybean output is pegged at 126.2 lakh tn for 2012-13.

Market Highlights
Unit Soybean Spot- NCDEX (Indore) Soybean- NCDEX Dec '12 Futures Ref Soy oil SpotNCDEX(Indore) Ref Soy oil- NCDEX Dec '12 Futures Rs/qtl Rs/qtl Rs/10 kgs Rs/10 kgs Last 3270 3220 728.5 710.4

as on Nov 22, 2012 % Change Prev day -0.18 -1.00 1.61 0.71 WoW -0.34 -0.82 3.41 2.34 MoM -0.91 -4.08 2.78 1.37 YoY 43.80 42.51 13.60 10.78

Source: Reuters

International Markets
CBOT remained closed on Thursday on account of thanks giving day in US. As per Argentina's Agriculture Ministry weekly crop progress report, farmers have planted 31 percent of the estimated acreage for soybean to 5.921 million hectares, down 13 percent from the previous year. The National Oilseed Processors Association (NOPA) reported the U.S. soybean crush for October at 153.536 million bushels, the largest monthly figure since January 2010 and the highest for October since 2009. According to the USDA November monthly report, The U.S. Department of Agriculture on Friday raised its estimate for soybean production by 4% from its forecast last month, saying that rainfall late in the growing season softened the impact of the U.S. drought. Brazil's government on 8 Nov 2012 edged up its forecast for a record 2012/13 soybean crop to between 80.1 and 83 mn tn.
th

as on Nov 21, 2012 International Prices Soybean- CBOTNov'12 Futures Soybean Oil - CBOTDec'12 Futures Unit USc/ Bushel USc/lbs Last 1408 48.53 Prev day -0.32 0.43 WoW -1.71 1.80 MoM -8.94 -6.06
Source: Reuters

YoY 22.67 -2.73

Crude Palm Oil

as on Nov 22, 2012 % Change Prev day WoW -1.71 -0.11 6.98 -0.18

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

Last 2300 434.6

MoM -4.01 -0.14

YoY -28.13 -14.33

MYR/Tonne Rs/10 kg

Source: Reuters

RM Seed
Unit RM Seed SpotNCDEX (Jaipur) RM Seed- NCDEX Dec'12 Futures Rs/100 kgs Rs/100 kgs Last 4300 4187 Prev day 2.56 0.77

as on Nov 22, 2012 WoW 0.00 -1.20 MoM 5.65 -3.48

Source: Reuters

Refined Soy Oil: Ref soy oil traded on a positive note due to
increasing demand for the edible oil. MCX CPO traded lower yesterday tracking as the weak international BMD prices amid fall in exports. Exports of Malaysian palm oil products for Nov. 1-20 fell 3.8 percent to 1,010,417 tonnes compared with 1,050,548 tonnes shipped during Oct. 1-20According to latest data from SEA, total vegetable oil imports in September were 993,912 tn, up from 897,018 tn in the previous month. As per MPOBs latest report, Malaysia's September palm oil stocks rose 17 percent to record high 2.48 million tons compared to previous month.

YoY 38.21 32.96

Technical Chart Soybean

NCDEX Dec contract

Rape/mustard Seed: Rm seed futures settled higher by 0.7% on

account of short coverings. Prospects of better sowing are seen th exerting pressure on the prices. Rabi oilseeds sowing as on 10 November was reported at 43.21 lakh ha as compared to 35.18 lakh ha in the same period last year. MSP for Mustard seed is increased by 20% from Rs 2500/Quintal to Rs 3000/Quintal for 2012-13 season.

Outlook
Edible oil complex may trade sideways with negative bias today on expectations of arrivals to improve in the current week might pressurize the prices. However, higher crushing led by robust demand soy meal in the domestic as well as global markets may restrict a sharp downside.

Source: Telequote

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

valid for Nov 23, 2012 Support 699-705 3138-3180 4080-4130 429-435 Resistance 716-722 3255-3288 4220-4260 444-447

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Commodities Daily Report

Friday| November 23, 2012

Agricultural Commodities
Black Pepper
Pepper futures recovered from lower levels yesterday after correcting sharply in the preceding day on account of short covering. Pepper prices have corrected sharply due to skepticism over reports that FMC has launched probe into complaints against pepper market movement. Also expectations of better output in the domestic as well as the international markets pressurized prices. Farmers are trying to liquidate their stocks ahead of the commencement of arrivals of the fresh crop. Exports demand for Indian pepper in the international markets remains weak due to huge price parity. However, there is good festive as well as winter demand. The Spot settled lower by 0.55% while the Futures settled 1.34% higher on Thursday. Pepper prices in the international market are being quoted at $7,750/tn(C&F) while Vietnam was offering Austa at $7,000/tn, Brazil Austa at $6,700/tn, and Indonesia Austa at $6,500/tn (FOB).

Market Highlights
Unit Pepper SpotNCDEX (Kochi) Pepper- NCDEX Dec '12 Futures Rs/qtl Rs/qtl Last 38544 38115 % Change Prev day -0.55 1.34

as on Nov 22, 2012 WoW -6.37 -8.01 MoM -9.69 -13.72 YoY 10.03 6.20

Source: Reuters

Technical Chart Black Pepper

NCDEX Dec 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 September 2012 is estimated around 80,433 mt, higher by 4.3% in volume and 31.7% in value compared to corresponding year last year. Exports of Pepper from Brazil during January till May 2012 are estimated around 13369 mt. (Source: Peppertradeboard). Pepper imports by U.S. the largest consumer of the spice declined 14.8% in the first 2 months of the year (2012) to 8810 tn as compared to 10344 tn in the same period previous year. Imports of Pepper in the month of February declined by 16.8% to 3999 tn as compared to 4811 tn in the month of January 2012. Exports from Indonesia posted significant decrease of 42% as compared to previous year. Exports stood at 36,500 tonnes as compared to 62,599 tonnes in the last year. During May 2012 Brazil exported 1,705 tonnes of pepper as against 1600 tn in May 2011.

Source: Telequote

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

valid for Nov 23, 2012 Support 37100-37500 Resistance 38475-38740

Production and Arrivals

The arrivals in the spot market were reported at 4 tonnes while offtakes were 3 tonnes on Wednesday. As per IPC, Global pepper production in 2012 is projected at 3.27 lk tn, up by 12.7% compared with 2.98 lk tn in 2011. Indonesian pepper output Is expected to rise by 24% and in Vietnam by 10%. According to previous estimates, report pepper output in Vietnam is estimated to be 1.35 lakh tonne as compared to 1.10 lakh tonne estimated early in the beginning of year (2012). Brazil is also expected to produce 22,000 tn this year. Domestic consumption of Pepper in the world is expected to grow by 3.03% to 1.25 lakh tonnes while exports are likely to grow by 1.48% to 2.46 lakh tonnes in 2012. (Source: Pepper trade board) On the other hand production of pepper in India in 2011-12 is expected to decline further by 5% to 43 thousand tonnes as compared to 48 thousand tonnes in the last year. Production is lowest in a decade.

Outlook
Pepper is expected to trade downwards today. Reports that FMC is probing into complaints against price movement may pressurize prices. Liquidation pressure from farmers as well as low export demand may pressurize prices. However, festive season as well as winter demand may support prices at lower levels.

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Commodities Daily Report

Friday| November 23, 2012

Agricultural Commodities
Jeera
Jeera Futures traded sideways with a positive bias yesterday on account of short coverings. Prices are trading lower tracking the ongoing sowing of the crop. The sowing is expected to gain momentum in the coming days, and have pressurized prices. However, export demand has supported prices at lower levels. Sowing in Gujarat is currently lower by 15-20%. Festive demand is also expected to improve. Exporters have been buying due to tensions between Syria and Turkey. The spot as well as the Futures settled 0.68% and 0.59% higher on Thursday. According to markets sources about 75% exports target has already been achieved due to a supply crunch in the global markets. Supply concerns from Syria and Turkey still exists. Expectations are that export orders may still be diverted to India from the international markets due to lack of supplies from Syria on back of the ongoing civil war. Production in Syria and Turkey is being reported around 17,000 tonnes and around 4,000-5,000 tonnes, lesser than expectations. Jeera prices of Indian origin are being offered in the international market at $2,850 tn (c&f) while Syria and Turkey are not offering. Carryover stocks of Jeera in the domestic market is expected to be around 4-5 lakh bags lower by around 3 lakh bags last year.

Market Highlights
Unit Jeera SpotNCDEX(Unjha) Jeera- NCDEX Dec '12 Futures Rs/qtl Rs/qtl Last 15203 14848 Prev day 0.68 0.59

as on Nov 22, 2012 % Change WoW 0.92 1.14 MoM 1.08 0.30 YoY 8.04 9.91

Source: Reuters

Technical Chart Jeera

NCDEX Dec contract

Production, Arrivals and Exports

Unjha markets witnessed arrivals of 8,000 bags, while off-takes stood at 8,000 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 0.50 4.02

as on Nov 22, 2012 % Change

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

Last 5085 5284

WoW 0.47 -2.18

MoM 1.28 6.40

YoY -8.29 14.52

Outlook
Jeera futures are expected to trade downwards today. Prices may correct as farmers are liquidating their stocks for want of cash. However, sharp downside may be capped due to export demand. In the medium term (November-December 2012), prices are likely to stay firm as there are limited stocks with Syria and Turkey.

Technical Chart Turmeric

NCDEX Dec contract

Turmeric
Turmeric Futures traded on a bullish note yesterday hitting the 4% circuit breaker on reports that Turmeric Farmers Association of India have decided to fix their own Minimum Support Price at Rs. 10,000/qtl, stating their cost of production is about Rs. 8,700/qtl. However, the spot remained weak on low overseas demand. Turmeric has been sown in 0.58 lakh hectares in A.P as on 10/10/2012. Sowing is also reported 30-35% lower during the sowing period. The Spot as well as the Futures settled 0.5% and 4% higher on Thursday. Production, Arrivals and Exports Arrivals in Erode and Nizamabad mandi stood at 7,000 bags and 1,200 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. Outlook Turmeric prices are expected to trade on a positive to bullish note today as farmers are unwilling to sell their stocks at lower prices and have set their own MSP at Rs. 10,000/qtl..
Source: Telequote

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

Valid for Nov 23, 2012

Support 14500-14685 5184-5240 Resistance 14970-15080 5380-5458

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Commodities Daily Report

Friday| November 23, 2012

Agricultural Commodities
Kapas
NCDEX Kapas futures extended losses and settled 1.13% lower on the back of improved arrivals that are pressurizing the prices. Also dull demand supported the downside. As on 4th November 2012, 13.02 lakh bales of Cotton has arrived so far, down by 29% compared to last year 18.57 lakh bales during the same period. ICE cotton markets remained closed yesterday on account of Thanksgiving Day in US.

Market Highlights
Unit Rs/20 kgs Rs/Bale Last 963.5 16190

as on Nov 22, 2012 % Change Prev. day WoW -1.13 -1.43 -0.25 -0.18 MoM -3.65 -0.18 YoY #N/A -2.53

NCDEX Kapas Futures MCX Cotton Futures

Source: Reuters

International Prices
Cotton harvesting has commenced in US, in all 84% is harvested as compared to 75% a week ago, versus 85% same period a year ago. Cotton crop condition is 43% in Good/Excellent state compared to 29% th same period a year ago as on 20 Nov 2012.
ICE Cotton Cot look A Index Unit Usc/Lbs Last 72.38 81.35

as on Nov 21, 2012 % Change Prev day WoW -0.17 1.05 0.00 0.00 MoM -5.91 0.00 YoY -19.53 -29.20

Domestic Production and Consumption

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

Source: Reuters

Technical Chart - Kapas

NCDEX April contract

Global Cotton Updates

The U.S. government has raised its 2012/13 forecast for global cotton inventory to above 80 million 480-pound bales for the first time due to larger-than-expected output in the United States, the world's third largest producer, and falling demand from China, the world's largest consumer. In its monthly crop report, the U.S. Department of Agriculture increased its estimate for 2012/13 ending stocks for a fourth straight month to a new all-time high of 80.27 million bales. Higher global ending stocks are seen capping the upside in the cotton prices this year too. However, downside is also limited as prices are again nearing its 12 year average price of 65 cents per pound. Markets will now take cues from the Chinese demand for cotton and trade policies of India with respect to cotton exports. In its November monthly demand supply report, the Agriculture Department (USDA) raised its cotton crop for 2012/13 cotton crop season to 17.45 mln bales (Prev 17.29) along with upward revision in end stocks 5.80 mln 480 pounds/bales (Prev 5.60). Exports were unchanged at 11.60 mln 480 pounds/bales.

Source: Telequote

Technical Chart - Cotton

MCX Nov contract

Source: Telequote

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

valid for Nov 23, 2012 Support 942-954 947-959 15920-16040 Resistance 972-982 979-986 16300-16420

Outlook
Cotton prices might trade sideways as harvesting pressure is weighing on the prices. However, no major downside is expected in the domestic markets as farmers will not sell their stocks at very low prices. Also, CCI procurement at MSP levels may support prices from falling sharply.

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