Commodities Daily Report

Wednesday| December 19, 2012

Agricultural Commodities

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

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

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Commodities Daily Report

Wednesday| December 19, 2012

Agricultural Commodities
News in brief
Sugar output recovers after UP mills begin operations
Sugar production has recovered well in the first few weeks of the current season, despite delayed commencement of cane crushing in Uttar Pradesh. The state is the countrys second largest sugar producer. The Indian Sugar Mills Association (Isma) has estimated production at 4.91 million tonnes at the end of last week, a rise of two per cent from the 4.81 mt in the same period last year. Delay in the start of mill operations had pulled down sugar output by 2.7 per cent by the end of November. But crushing has started well in Uttar Pradesh, after a late start, says Isma. Currently, 455 mills are operational in the country, as compared to 473 last year this time. Maharashtra has produced 1.88 mt of sugar as against 1.83 mt last year, with 155 mills operational till now, 10 less than last year ( 14 less in the cooperative sector but four more in the private one). Yet, capacity utilisation of the Maharashtra mills is better, having crushed more cane than last year. Isma has estimated around 6.5 mt sugar production from Maharashtra in 2012- 13, though with a shorter season, a lower output with diversion of cane to fodder. Recoveries are almost the same as last year, at 10 per cent. (Source: Business Standard)

Market Highlights (% change)

Last Prev. day

as on Dec 18, 2012

WoW MoM YoY

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

19365 5897 54.94 87.93 1670

0.63 0.66 0.15 0.84 -1.62

-0.12 -0.03 1.23 2.49 -2.27

5.59 5.84 -0.31 1.36 -3.12

27.61 29.77 4.84 -10.88 3.57

.Source: Reuters

Illegal Trades Drive Up Gaur Gum Prices

Guar prices have risen mysteriously in three months as flourishing dabba (illegal) trading in small towns of Rajasthan has driven up the price of the commodity despite weak demand. Prices of guar seed in the illegal trade have trebled to . 14,000 per quintal (100 kg), while guar trading at exchanges was banned last year after the prices jumped 1,000%. Guar gum price, used in producing shale gas, has doubled to . 40,000 a quintal in the past three months. Prices have jumped despite a record harvest of 18 lakh tonne and in the absence of any overseas demand. This has encouraged farmers to hold their stock, anticipating Marchs price levels when guar gum had breached . 1 lakh-a-quintal mark. Industry officials warn that the farmers may suffer once the bubble bursts. Theres no demand from US. Theres no transaction taking place. Even then, prices are soaring. Doesnt it look unnatural? A select bunch of industry people are fueling prices by speculation just to trap farmers, said Purshottam Hisaria, president, All India Guar Gum Manufacturers Association, who recently visited US to promote exports. (Source: Economic Times)

Kerala coop body seeks ban on rubber imports

The Kerala State Cooperative Rubber Marketing Federation (RubberMark) has called for steps to impose a total ban on import of rubber as well as encouraging exports by extending subsidy. T.H. Musthaffa, President, RubberMark, said that the quantity of rubber produced in Kerala is sufficient for domestic consumption and there is no need for import under any circumstances. The production in the last financial year was 9.04 lakh tonnes and consumption during the period was 9.64 lakh tonnes. Out of this, 48,200 tonnes were exported. Up to August, 2,13,785 tonnes were imported, he said and stressed the need to take steps for exporting the surplus quantity over own consumption. In a memorandum submitted to the Union Commerce Ministry, Musthaffa pointed out that the fall in rubber price is the result of RSS IV and ISNR 20 to help rubber companies. The Federation also requested the Ministry to grant a short term loan of Rs 50 crore as a need-based working capital and Rs 1 crore each to the member societies to reinforcing the cooperative marketing set up. (Source: Business Line)

Centam, Mexico, Colombia coffee exports increase 19.1% in Nov

Coffee exports from Central America, Mexico, Colombia, Peru and the Dominican Republic rose 19.1 percent in November compared to the same month last year, Guatemala's coffee association Anacafe said on Tuesday. Anacafe said the region's exporters shipped 2 million 60kilogram bags in November, the second month of the current 2012/2013 harvesting season. Anacafe, which collates figures from the mostly Arabica growing region, said exports for the first two months of the 2012/2013 season were up 20.6 percent from the 3.17 million bags exported during the same two-month period during the 2011/2012 season. Monthly export totals for both October and November compiled by Anacafe for Honduras, the region's top producer, differ from totals released by the Honduran national coffee institute Ihcafe by about 91,000 bags. (Source: Reuters)

Statistics plays prime role in farm research, saysSen

Statistics plays an important role in research and planning in all areas including farm sector, the Planning Commission Member, Abhijit Sen said today. Agricultural statistics together with judicious use of informatics provides the foundation for sound agricultural research and planning, a release quoted Sen as saying. Informatics is the study of the processing, management, and retrieval of information. Indian Statisticians have made significant contributions in areas of design of experiments, sampling technique, statistical genetics, modelling and forecasting techniques, he said. The Indian Council of Agricultural Research (ICAR) Director General, S Ayyappan expressed satisfaction on the efforts made by statistician in National Agriculture Research System (NARS). (Source:
Business Line)

U.S. soybeans fall as China cancels deals

U.S. soybean futures dropped 2 percent on Tuesday, their biggest daily decline in more than a month, due to China's decision to cancel a purchase of 300,000 tonnes of U.S. supplies, traders said. The U.S. Agriculture Department said the soybean cancellations also included 120,000 tonnes of supplies sold to unknown destinations in addition to the 300,000 tonne deal that China, the world's top buyer of soybeans, scuttled. China's move suggested that demand for U.S. soybeans might be slowing down from its robust pace of the past few months, especially with harvest of the South American crop starting soon. (Source: Reuters)

Groundnuts shortage lifts its oil

Shortage of nuts pushed up a 15-kg groundnut oil tin above Rs 2,200. In the past four days, groundnut oil has increased by Rs 70 a tin. Cottonseed oil declined on lower demand. Loose groundnut oil was traded at Rs 1,320-1,325 for 10 kg. A new 15-kg tin was Rs 2,210-2,220. A 15-kg telia tin was quoted at Rs 2,022-2,023. About 50-60 tonnes of the oil was traded in Saurashtra mills. In Gujarat, 5,000 bags arrived in Rajkot, 9,000 in Gondal and 350 in Jamnagar. Nuts output has tumbled because of poor monsoon this year, said a miler in Gondal. Only about 15,000 bags of groundnuts are arriving daily in the State, which is not enough for millers. Moreover, peanut traders have bought almost half of the arrivals creating a shortage for crushers. (Source: Business Line)

Argentina to slow wheat shipments due to poor harvest

Argentina will limit wheat shipments in January and February as wet weather dampens harvest prospects but an original export target of 6 million tonnes should still be met, a government official said on Tuesday. The South American country, a leading global wheat supplier, controls exports of the grain through a quota system designed to guarantee affordable local food supplies and help tame high inflation. This season, the government said it would free up 6 million tonnes for shipment, but months of wet weather have flooded fields in key wheat-growing areas, hitting yields and raising doubts about exports. (Source: Reuters)

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Commodities Daily Report

Wednesday| December 19, 2012

Agricultural Commodities
Chana
Chana settled higher for the second straight session on Tuesday on account of short coverings. Spot also settled marginally higher on as buying was seen emerging at lower levels. Total pulses acreage as on 14 December 2012 stood at 121.22 lakh hectares, up marginally by 0.5% yoy. As on 7th December, pulses acreage was down by 0.9 percent. Chana sowing picked pace mainly in Rajasthan, where it is up by 4% at 14.54 lakh hectares compared to last week when acreage was up by 1%. th In Maharashtra Chana acreage is up by 43% at 9.28 lakh ha as on 14 th Dec, 2012. While in AP it is up by 22% at 6.25 lakh ha as on 5 Dec. In Australia, total chickpea production in 201213 is estimated to have increased to a record of around 746000 tones as compared with 485000 tones in 2011-12. India imports Chana mainly from Australia and Canada and higher availability in these countries at comparatively cheaper rates is seen boosting imports of Chana to meet the domestic shortfall. Australian Chana is quoted at lower rates -USD 625-635 per MT. 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.
th

Market Highlights
Unit Rs/qtl Rs/qtl Last 4070 4121 Prev day 0.68 0.51

as on Dec 18, 2012 % change WoW MoM -3.10 -11.76 -0.89 -11.94 YoY 18.92 24.61

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

Source: Reuters

Technical Chart - Chana

NCDEX Jan contract

Source: Telequote

Sowing progress and demand supply fundamentals

Improved rains towards the end of monsoon season coupled with hike in MSP have boosted 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. 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. 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 Jan Futures Unit Rs./qtl Support

valid for Dec 19, 2012 Resistance 4000-4030

3930-3950

Outlook
Chana January contract may open higher initially, however, selling is advisable at higher levels as fundamentals remain weak on account of higher sowing. Sufficient supplies amid higher shipments and expectations of better output next season. Harvesting of new crop would commence from January in Maharashtra and Karnataka and gradually increase February onwards once the arrivals from MP begin.

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Commodities Daily Report

Wednesday| December 19, 2012

Agricultural Commodities
Sugar
Sugar spot settled marginally higher by 0.6% on Tuesday. However, January futures declined further on Tuesday amid higher supplies in the domestic markets. The government is likely to take a decision on sugar exports in January after assessing the final cane crop and the estimated sugar output. The government extended the deadline for sale of unsold Oct-Nov nonlevy sugar quota till Dec 31. The initial deadline for sale of around 200,000 tn of the Oct-Nov quota was Dec 10. Government has allocated total 70 lac tons of non-levy sugar quota for Dec-March 2012-13 period which is higher from 59.5 lac tons last year. India is set to produce at least 24 mn tn of sugar in the 2012-13 year and there is no need for overseas purchases. (Source: Reuters) The country is expected to decide on raising the import duty on the sweetener in a fortnight, as lower prices in the world market made room for such imports in the past two months. The country can even export about 1.5 mn tn of sugar as it started the year with carry-forward stocks of 6.5 mn tn while annual consumption is pegged at around 22.5 mn tn. The UP state government fixed the state advisory price (SAP) for early maturing variety of cane at Rs 290 per qtl against Rs 240 in the previous season, for common variety Rs 280 per qtl against Rs 245 and for late maturing variety, Rs 275 per qtl against Rs 240. Liffe white sugar settled 0.02% higher while ICE sugar settled 0.1% lower on Tuesday.

Market Highlights
Unit Sugar Spot- NCDEX (Kolhapur) Sugar M- NCDEX Dec '12 Futures Rs/qtl Last 3317

as on Dec 18, 2012 % Change Prev. day WoW 0.06 -0.57 MoM -4.54 YoY 12.23

Rs/qtl

3197

-0.19

-2.17

-9.10

14.38

Source: Reuters

International Prices
Unit Sugar No 5- LiffeMar'13 Futures Sugar No 11-ICE Mar '13 Futures $/tonne $/tonne Last 520.9 430.89

as on Dec 18, 2012 % Change Prev day WoW 0.02 -0.10 2.50 2.70 MoM 2.28 1.25 YoY -14.35 -17.45

.Source: Reuters

Technical Chart - Sugar

NCDEX Jan 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 6.5 mn tn stocks for the new season beginning October 01, 2012 compared to 5.5 mn tn year ago. India may export 1.5 mn tn sugar in 2012-13. With the opening stocks of 6.5 mn tn, domestic Sugar supplies are estimated at 30.5 mn tn against the domestic consumption of around 22. 5mln tn for 2012-13.

Source: Telequote

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

valid for Dec 19, 2012 Resistance 3285-3299

3250-3260

Global Sugar Updates

According to the Brazil Agriculture Ministry, 2012-13 sugar output will reach 37.66 mn tn by the end of the season, less than the 39 mn tn forecast in August. Consultancy Kingsman revised up its 2012/13 world sugar surplus estimate to 9.2 million tonnes raw value on Friday, citing increased supply from producers including Brazil and China. Kingsman pegged global 2012/13 sugar output at 180.1 million tonnes raw value, up from the previous estimate of 177.3 million tonnes, and up from 2011/12 output of 175.4 million tonnes. (Source: Reuters) Thailand, the world's second-largest exporter after Brazil, has slashed its output forecast in the year to October 2013 to 9.4 million tonnes from 10 million due to poor rain. About 1 mn tn of cane have been crushed in Thailand as the harvest progresses, producing up to 56,000 tn of sugar so far, a 28% increase from the same year-ago period.

Outlook
Sugar prices may trade range bound on account of sufficient supplies in both the domestic as well as global markets.

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Commodities Daily Report

Wednesday| December 19, 2012

Agricultural Commodities
Oilseeds
Soybean: Soybean corrected due to long liquidation on account of
weak international markets and depreciation in Indian rupee. Cut in export duty on CPO by Malaysia will make edible oil cheaper for Indian importers. Total soybean arrivals improved on Saturday to 3.1 lakh bags compared with Friday at 3.05 lakh bags while demand from solvent extractors remained strong. According to first advance estimates, Soybean output is pegged at 126.2 lakh tn for 2012-13. Exports of soy meal rose to 517,103 tonnes in November from 397,659 tonnes a year ago. Overall oil meal exports in the first eight months of the year beginning April fell to 2.4 million tonnes from 3 million tonnes in the previous year.
Soybean Spot- NCDEX (Indore) Soybean- NCDEX Dec '12 Futures Ref Soy oil SpotNCDEX(Indore) Ref Soy oil- NCDEX Dec '12 Futures

Market Highlights
Unit Rs/qtl Rs/qtl Rs/10 kgs Rs/10 kgs Last 3373 3341 726.3 723.6

as on Dec 18, 2012 % Change Prev day -1.14 -1.07 -0.72 -0.83 WoW 2.34 1.53 -0.26 0.36 MoM 2.31 2.42 1.72 1.75 YoY 39.67 40.29 6.99 7.30

International Markets
CBOT soybean corrected sharply on reports of cancellation of some export orders by China. and settled 2.02% lower on Tuesday. NOPA reported the November U.S. soybean crush at 157.3 million bushels, the largest monthly total in nearly three years, due to strong demand for soy meal. Higher weekly export sales data at 1,319,500 tn also boosted the prices. According to the USDA monthly crop report, U.S. soybean end stocks are forecasted at 130 mn bsh, below its November estimate of 140 mn. Also, global soybean end stocks were forecast to 59.93 mn tn from 60.02 mn in November. Output estimates for Brazil and Argentina were unchanged at 81 mn tn and 55 mn tn respectively. China, the world's largest soy buyer, imported 4.16 mn tn of soybeans in November, up 3.2% from October with crushing margins improving from a month ago. Imports for the first 11 months stood at 52.49 mn tn, up 11.4% on the year.
International Prices Soybean- CBOTJan'13 Futures Soybean Oil - CBOTJan'12 Futures Unit USc/ Bushel USc/lbs Last 1466 49.17 Prev day -2.02 -1.25 WoW -0.41 -1.40

Source: Reuters

as on Dec 18, 2012 MoM 5.98 4.51

Source: Reuters

YoY 28.09 -0.43

Crude Palm Oil

as on Dec 18, 2012 % Change Prev day WoW 0.00 -0.76 5.27 -1.05

Unit
CPO-Bursa Malaysia Jan '12 Contract CPO-MCX- Dec '12 Futures

Last 2197 404.2

MoM -6.91 -7.57

YoY -27.28 -21.16

MYR/Tonne Rs/10 kg

Refined Soy Oil: Ref soy oil January contract as well as MCX CPO
settled lower on Tuesday on tracking weaker international markets. A cut in export duty on Malaysian palm oil will boost exports and reduce palm oil stock piles. Malaysia, the world's No.2 palm oil producer, will set its crude palm oil export tax for January at zero percent, a government circular showed on Monday. (Source: Reuters). India's cooking oil imports fell by a third in November from the previous month largely due to a drop in purchases of palm oil. Exports of Malaysian palm oil products for Dec. 1-15 fell 6.4 percent to 719,817 tonnes from 769,087 tonnes for the Nov. 1-15 period. Malaysia's November palm oil stocks rose 2.3 percent to a record high of 2,562,900 tonnes from a revised 2,505,713 tonnes in October. Dorab Mistry, head of edible oils trading, Godrej is predicting CPO futures on BMD to trade in a range of 2300 and 2600 from now until February 2013. This will ensure high stock levels in both countries but particularly in Malaysia. Palm oil output in the world's biggest producer Indonesia is expected to climb 7% next year to 27 mn tn.

Source: Reuters

RM Seed
Unit RM Seed SpotNCDEX (Jaipur) RM Seed- NCDEX Dec'12 Futures Rs/100 kgs Rs/100 kgs Last 4228 4095 Prev day -2.03 0.74

as on Dec 18, 2012 WoW 0.06 0.00 MoM -2.25 -3.60

Source: Reuters

YoY 28.89 17.00

Technical Chart Soybean

NCDEX Jan contract

Rape/mustard Seed: RM seed futures witnessed short coverings

and settled higher 0.22% on Tuesday. The agriculture ministry data showed higher mustard seed planting figures. Mustard has been planted over 63.6 LH so far, 3.3% higher compared with a year ago. MSP for Mustard seed is increased to Rs 3000/qtl. Indias rapeseed output is expected to rise by 5% to 6.5 mn tn from 6 mn tn last year.

Source: Telequote

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

valid for Dec 19, 2012 Support 695-700 3300-3330 4085-4115 405-407 Resistance 712.50-720 3395-3440 4170-4195 413.50-417

Outlook
Soybean complex trade on a negative note during the intraday tracking weaker international markets. Mustard seed prices may trade with negative bias on higher planting figures while, Palm oil may trade lower tracking weaker international markets.

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Commodities Daily Report

Wednesday| December 19, 2012

Agricultural Commodities
Black Pepper
Pepper February Futures traded on a positive note yesterday. Winter demand coupled with low stocks in the domestic markets supported prices. However, higher output expectations capped sharp upside. Prices have corrected sharply over the last one month over reports that FMC is probing into complaints against movement in the pepper market. Better output expectations in the domestic as well as the international markets have also pressurized prices over the last couple of weeks. Farmers are trying to liquidate their stocks ahead of the commencement of harvesting of the fresh crop. Exports demand for Indian pepper in the international markets is also weak due to price parity. The Spot settled as well as the February Futures settled 0.26% and 1.46% higher on Tuesday. 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 38722 39150 % Change Prev day 0.26 0.18

as on Dec 18, 2012 WoW 0.62 0.81 MoM -3.48 -1.15 YoY 6.52 3.45

Source: Reuters

Technical Chart Black Pepper

NCDEX Feb contract

Exports and Imports

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 pepper during Jan-Oct 2012 stood at 102,340 mt, lower by 12% as compared to 1,15,780 mt in the same period last year. Total exports in 2012 are forecasted at around 1,10,000 tonnes. Exports of Pepper from Brazil during January till May 2012 are estimated around 13369 mt. Pepper imports by U.S. the largest consumer of the spice declined 26% during January-September 2012 period to 41,923 tn as compared to 52,489 tn in the same period previous year. 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. Exports from Lampung were reported at 25,600 mt during July-Oct against 4,700 mt in the same period last year.

Source: Telequote

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

valid for Dec 19, 2012 Support 34790-35230 Resistance 35980-36290

Production and Arrivals

The arrivals in the spot market were reported at 20 tonnes while offtakes were reported at 10 tonnes on Tuesday. As per IPC, Global pepper production in 2012 is projected at 3.27 lk tn, up compared with 3.18 lk tn in 2011. Production for 2013 is projected at 316832 tn. Indonesian pepper output is expected to rise by 24% and in Vietnam by 10%. According to previous estimates, pepper output in Vietnam is estimated to be 1 lakh tonne in 2012 as compared to 1.1 lakh tonne in 2011. 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) Pepper production in 2012-13 is expected around 60,000-63,000 tonnes. Currently, pepper is in the fruit formation stage in Kerala.

Outlook
Pepper is expected to continue to trade on a positive note today extending yesterdays gains in the February contract. Festive demand coupled with winter buying may support prices at lower levels. However, higher output expectations as well as reports that FMC is probing into complaints against price movement may cap sharp upside.

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Commodities Daily Report

Wednesday| December 19, 2012

Agricultural Commodities
Jeera
Jeera March Futures traded on a bullish note yesterday due to fresh export enquiries supported prices which the ongoing sowing capped the upside. Spot market remained closed due to Gujarat State Assembly elections. According to Gujarat State Agri Dept. sowing in rd Gujarat as on 3 Dec is reported at 2.219 lakh ha compared with 1.926 lakh ha in the same period last year. About 50-55% sowing is completed in Gujarat. Higher stocks for delivery on the exchange warehouse were pressurizing prices during the last one month. Exporters are buying due to tensions between Syria and Turkey as they are not offering. The spot as well as the March Futures settled 0.45% and 1.13% higher on Tuesday. 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 $2,775 tn (c&f) while Syria and Turkey are not offering. Carryover stocks of Jeera in the domestic market is expected to be around 5-6 lakh bags.

Market Highlights
Unit Jeera SpotNCDEX(Unjha) Jeera- NCDEX Dec '12 Futures Rs/qtl Rs/qtl Last 15055 14788 Prev day 0.45 1.13

as on Dec 18, 2012 % Change WoW 1.01 1.56 MoM -0.06 2.96 YoY 4.64 2.49

Source: Reuters

Technical Chart Jeera

NCDEX March contract

Source: Telequote

Production, Arrivals and Exports

Unjha markets remained closed due to elections. Production of Jeera in 2011-12 is expected around 40 lakh bags as against 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%.

Market Highlights
Prev day 0.78 2.03

as on Dec 18, 2012 % Change

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

Last 5297 5428

WoW 2.66 2.42

MoM 4.94 3.31

YoY 0.46 27.90

Outlook
Jeera futures are expected to trade on positive note due to good export demand at lower levels. However, higher stocks for delivery on the exchange warehouses coupled with improvement in sowing in Gujarat may pressurize prices. In the medium term (Dec-Jan), prices are likely to stay firm as there are limited stocks with Syria and Turkey.

Technical Chart Turmeric

NCDEX April contract

Turmeric
Turmeric April Futures traded on a bullish note yesterday due to demand from the upcountry markets. Also, good quality arrivals kept the prices firm. Buyers are looking for turmeric with higher curcumin level at 5% which is unavailable, thereby supporting prices. There are reports that many farmers have shifted to other crops. Expectations are that production may be lower by 40%. Production is expected around 65 lakh bags. Improved weather conditions in Andhra Pradesh and Karnataka has led to the revision in the production estimates. It is estimated that next years carryover stocks would be around 10 lakh bags. There are reports that Turmeric Farmers Association of India have decided to fix their own MSP of Rs.10000/qtl. The Spot settled as well as the April Futures settled 0.78% and 2.55% higher on Tuesday.

Source: Telequote

Technical Outlook
Unit Jeera NCDEX March Futures Turmeric NCDEX April Futures Rs/qtl Rs/qtl

Valid for Dec 19, 2012

Support 15450-15580 6360-6480 Resistance 15940-16140 6680-6760

Production, Arrivals and Exports

Arrivals in Nizamabad and Erode mandi stood at 1,000 bags and 5,000 bags respectively on Tuesday. Turmeric production in 2012-13 is expected around 64-65 lakh bags. Production in 2011-12 is projected at historical high of 10.62 lakh tn. 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 on good demand from the stockists. Also, traders expect upcountry demand to improve in the coming days. However, improved production estimates, higher carryover stocks and weak overseas demand might cap sharp gains.

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Commodities Daily Report

Wednesday| December 19, 2012

Agricultural Commodities
Kapas
NCDEX Kapas Futures as well as MCX Cotton traded on a positive note yesterday but corrected from higher levels due to profit booking and settled marginally lower by 0.05% and 0.12% on Tuesday. The USDA monthly report cuts cotton stocks estimate to 79.64 million bales, from last month's forecast of 80.27 million. According to the data released by Cotton Corporation of India, Supplies until Dec. 9 fell to 5.1 million bales of 170 kg each, down from 5.8 million rd bales a year earlier. Arrivals were down by 18.5 percent as on 3 December. However, it is still below expectations as many farmers, who are waiting for better returns, hold back their produce. The government has procured 20.74 lakh quintals of cotton at the minimum support price (MSP) so far in the 2012-13. As per the DGFT notification dated 30 Nov 2012, the government has eased quantitative restrictions on exporters applying for permits to sell cotton in the overseas market and set the cap at 30,000 bales from 10,000 bales per exporter before. An exporter can apply for RC (registration certificate) for a maximum quantity of 30,000 bales (1 bale=170kg) or actual quantity exported in the previous cotton season, whichever is less. (DGFT) ICE Cotton futures traded on a positive note yesterday and settled 0.13% higher on Tuesday on account of lower certificated cotton stocks deliverable against the ICE No. 2 cotton futures contract as of Dec 17 totalled 82,208 (480-lb) bales, from 127,213 the previous session. ICE has reduced Cotton No. 2 maintenance margin requirements by 14.3 percent to $1,500 per contract from $1,750 w.e.f Friday, 14/12/2012
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Market Highlights
Unit Rs/20 kgs Rs/Bale Last 1041 16630

as on Dec 18, 2012 % Change Prev. day WoW -0.05 5.26 -0.12 1.46 MoM 6.01 1.46 YoY #N/A -0.30

NCDEX Kapas Futures MCX Cotton Futures

Source: Reuters

International Prices
ICE Cotton Cot look A Index Unit Usc/Lbs Last 75.95 81.35

as on Dec 18, 2012 % Change Prev day WoW 0.13 1.40 0.00 0.00 MoM 4.43 #N/A YoY -12.50 -29.20

Source: Reuters

Technical Chart - Kapas

NCDEX April contract

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: Telequote

Technical Chart - Cotton

MCX Dec contract

Global Cotton Updates

Net Upland sales of 283,900 running bales for the 2012/2013 marketing year were down 32 percent from the previous week and 24 percent th from the prior 4-week average. (dated 13 Dec 2012). Cotton harvesting is 84% completed in US, versus 85% same period a year ago. Cotton crop condition is 43% in Good/Excellent state compared to 29% same period a year ago as on 20th Nov 2012. Brazils 2012-13 cotton production forecast at 6.3 million bales, down 27 percent from 2011/12 production now estimated at 8.6 million bales. (USDA Attach report)
Source: Telequote

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

valid for Dec 19, 2012 Support 1020-1035 16740-16800 Resistance 1050-1060 16940-17020

Outlook
Domestic cotton prices are expected to trade sideways with a positive bias on account of lower arrivals in the domestic markets. Downside is expected to be limited in the domestic markets as farmers will not sell their stocks at very low prices. Also demand remains strong at such low prices.

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