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Commodities Daily Report

Monday| December 31, 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


Monday| December 31, 2012

Agricultural Commodities
News in brief
Government may not be able to roll out GST before 2014 polls
Even as Finance Minister P Chidambaram has been holding out hope for an early rollout of the Goods & Services Tax (GST), some Bharatiya Janata Party (BJP) - ruled states like Madhya Pradesh and Gujarat, still opposed to the indirect tax regime, could pour cold water on his plan to bring it before the general elections, scheduled for 2014. Two sub- committees, set up by the government to resolve the issues of compensation to states for revenue loss on account of a reduction in central sales tax and the final design of GST, are also likely to miss the December 31 deadline for giving their reports. Madhya Pradesh Finance Minister Raghavji says his state will support GST, provided the Centre agrees to a model suggested by it. Though GST is expected to be both central and state tax on a common pool of goods and services, with some flexibility, Madhya Pradesh has been insisting states should be allowed to collect service tax and the Centre should not get into areas already taxed by states. Madhya Pradesh, with some other states, has also been asking for more flexibility in altering tax rates, while the Centre wants a uniform GST rate across the country. The finance minister of a state said there had not been much headway in the talks between the Centre and states and the subcommittees might have to be given more time to complete their reports.
(Source: Business Standard)

Market Highlights (% change)


Last Prev. day

as on Dec 28, 2012


WoW MoM YoY

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

19445 5908 54.76 90.8 1655

0.63 0.65 -0.32 -0.08 -0.46

-0.05 -0.14 -0.21 0.74 0.61

1.43 1.43 0.07 3.10 -4.19

25.10 27.16 3.31 -8.88 7.47

.Source: Reuters

Coffee Harvest to be Lower Than Forecast


Indian coffee production for the current year will be lower than estimates with diseases and weather vagaries affecting the crop. Prices are expected to remain firm despite dim export prospects as the coffee stock in the country is thin. Coffee Board's post-monsoon crop forecast for 2012-13 has been pegged at 3,15,500 tonne, a 3% reduction over the post-blossom estimate of 3,25,300 tonne. But this is higher by 0.48% over the crop estimate in 2011-12. But growers feel the output will be still lower. We fear a drop in Arabica production. As for Robusta, it is too early to say anything as the pickings have just started, said Marvin Rodrigues, former chairman of Karnataka Planters' Association. The growers estimate the crop to be around 3 lakh tonne with 85,000 tonne of Arabica and 2.15 lakh tonne of Robusta. Coffee Board's post-monsoon prediction is 1,00,225 tonne of Arabica and 2,15,275 tonne of Robusta. Apart from the normal drop in berry formation during monsoon, black rot and stalk rot in certain high rainfall areas have affected the crop in Kodagu, Chikmagalur and Hassan districts in Karnataka. There is a marginal fall in Wayanad and Travancore regions of Kerala while Tamil Nadu has shown a slight increase in production. (Source: Economic Times)

India may see a bumper rabi harvest


As the rabi sowing season nears its end, acreage of most crops, barring wheat, is almost the same as last year, raising hopes that if the weather remains benign in the next few months, India could have a bumper rabi harvest. The acreage under wheat, which is marginally down compared with last year, as on Thursday is not likely to have much impact on the output as the area in the four major wheat growing states Punjab, Haryana, Madhya Pradesh and Uttar Pradesh is almost same as last year. The shortfall in acreage is only in Maharashtra, which is not a big producer of wheat. According to the latest government data, wheat has been sown in around 27.27 million hectares as on December 27, just 1.45 per cent less than last year. The acreage is almost 1million hectares more than the normal area. Among other crops, pulses have been sown in around 13.25 million hectares till Thursday, just 1.2 per cent less than the area covered during the same period last year. Oilseeds have been sown in around 7.88 million hectares, 98,000 hectares more than last year, mainly due to good mustard sowing. Coarse cereals have been sown in around 5.62 million hectares till Thursday, almost 1.92 per cent more than the corresponding period of last year. The only let- down has been in rabi rice, which has been planted in around 187,000 hectares as on December 27, almost 38 per cent less than last year because of poor northwest monsoon rains in south. The India Meteorological Department said northwest rains have been 19 per cent below normal till December 19, since October. (Source: Business Standard)

Bengal potato farmers happy, but paddy growers not so


Purely from market price end, 2012 was a watershed year for farmers in West Bengal. Paddy and potato the two major agri commodities produced in the State have fetched higher market prices in last one year, when compared to 2011. The analogy, however, may not hold good if cost push and market uncertainty are taken into account. Net realisation for paddy has hardly improved against 25-30 per cent cost push on account of fertiliser and labour costs. The year, however, brought cheers to potato farmers with prices moving ahead of input cost inflation. And, early indications suggest that the new crop, slated to hit the market between January and March, may also get good prices riding on lower crop. However, as a parallel development potato farmers are showing a clear preference to contract farming against stable or assured return potential than taking the market risk. (Source: Business Line)

Chinas new quality norms unsettles palm oil trade


A couple of tough trade-related measures including border control measures taken by China recently have unnerved the global vegetable oil and oilseeds trade and industry. Benchmark soyabean prices had stayed firm over the last few months on a combination of supportive factors including tight supplies, strong US export sales and crush data (the highest in 3 years). Of greater impact potentially is the report that China has decided to impose tough new regulations for import of vegetable oil with effect from Jan 1. According to trade reports, the new regulation would include documentation relating to the vessels last three cargoes, in addition to the normal safety specifications including health parameters, agricultural chemical residues, contaminants and so on. Some of the quality specifications have been tightened. Until now, vegetable oil import consignments that did not meet Chinese standards were allowed to be discharged under supervision for further refining. However, a week from now, new food safety measures will come into force for vegetable oil shipments that arrive in Chinas ports. (Source:
Business Line)

Government to spend more on wheat buy


The Union food ministry will have to shell out Rs 921 more per tonne for the procurement and storage of wheat in the new harvest season starting April. The increase in the minimum support price (MSP) of wheat by Rs 650 a tonne has driven up the economic cost the money the food ministry incurs to buy and store food grains of wheat from Rs 18,258 a tonne to Rs 19,179. This will have an impact on governments overall food subsidy bill, which may swell by Rs 4,000 crore. The government bears around Rs 85,000 crore annually on the distribution of cheaper food grains through the public distribution system, said a ministry official. Last year, the government had bought 38 million tonne wheat against a target of 32 million tonne. This year, it expects to buy a similar quantity in view of a conducive weather and the progress in wheat sowing. (Source: Economic Times)

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Commodities Daily Report


Monday| December 31, 2012

Agricultural Commodities
Chana
Chana futures continued its downward trend on Saturday on higher acreage expectations and rising imports of Australian Chana. The spot as well as the Futures settled 1.87% and 0.89% lower on Saturday. Sentiments have also turned negative on the back of fresh arrivals of new crop from Karnataka and AP. Although the quantity so far received is negligible, but is expected to improve in the coming weeks.

Market Highlights
Unit Rs/qtl Rs/qtl Last 3850 3806 Prev day -1.87 -0.89

as on Dec 29, 2012 % change WoW MoM -6.56 -13.22 -5.51 -10.17 YoY 15.83 15.47

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

Sowing progress
Total pulses acreage as on 28 December 2012 stood at 132.52 lakh st hectares, down marginally by 1.2% yoy. As on 21 December, pulses acreage was lower by 0.9 percent. (Source: PIB) Chana sowing is however higher in Rajasthan, where it is up by 4% at 14.57 lakh hectares. In Maharashtra Chana acreage is up at 10 lakh ha as th th on 21 Dec, 2012. While in AP it is up at 6.64 lakh ha as on 19 Dec. (Source: State farm dept)
th

Source: Reuters

Technical Chart - Chana

NCDEX Jan contract

Demand supply fundamentals


Chana fresh crop arrival have started in Karnataka & Andhra Pradesh and about 200 bags new Chana arrivals reported on a daily basis. Furthermore, the new crop was traded at Rs.4100-4200 per quintal. 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 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. 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. 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).

Source: Telequote

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

valid for Dec 31, 2012 Resistance 3830-3850

3770-3790

Trade Scenario
USDA revealed that Myanmar beans and pulses export is up by 56 per cent to 110498 MT as compared with same period in last year. Out of the total export, 73 percent (80721 MT) was exported to India followed by Singapore (11316 MT). (Source: Agriwatch dated Dec 27) In Australia, total chickpea production in 201213 is estimated to have increased to a record of around 746000 tones as compared with 485000 tons 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.

Outlook
During the intraday, are expected to continue to trade downwards as sufficient supplies amid higher shipments and expectations of better output next season may exert downside pressure on Chana prices. Harvesting of new crop have commenced in AP and Karnataka. In Maharashtra arrivals would commence in January and gradually increase February onwards once the arrivals from MP begin.

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Commodities Daily Report


Monday| December 31, 2012

Agricultural Commodities
Sugar
Indian sugar futures continued to trade lower on Saturday extending previous days losses and settled 0.22% lower on Saturday on account of sufficient supplies in the domestic markets and subdued demand. The government is planning to remove quantitative restrictions on sugar exports and imports and will use tariffs to regulate trade as part of a new liberalized policy for the sector. With lower sales realization and higher sugarcane payment to farmers, ISMA has already requested government to increase the import duties on raw sugar from current level to the normal rate of 60%, so as to avoid cane price arrears during the season. 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. Raw sugar futures on ICE as well as Liffe white sugar settled 0.08% and 0.15% lower on Friday on account of supply glut in the global markets. According to Unica, Brazil's 2012-2013 center-south sugar output is expected to reach 34.05 million tonnes, an estimate 4.1% higher than its 32.7 million tonnes September forecast.
Sugar No 5- LiffeMar'13 Futures Sugar No 11-ICE Mar '13 Futures

Market Highlights
Unit Sugar Spot- NCDEX (Kolhapur) Sugar M- NCDEX Jan'13 Futures Rs/qtl Last 3264

as on Dec 29, 2012 % Change Prev. day WoW -0.28 -0.74 MoM -5.28 YoY 11.12

Rs/qtl

3243

-0.22

-0.67

-2.26

11.37

Source: Reuters

International Prices
Unit $/tonne $/tonne Last 522 431.56

as on Dec 28, 2012 % Change Prev day WoW -0.08 -0.15 0.81 0.99 MoM 2.47 1.41 YoY -13.29 -16.65

.Source: Reuters

Domestic Production and Exports


Mills in the country have produced 4.91 mln tn sugar in the current sugar season till Dec 15, up nearly 2% from 4.82 mln tn produced a year ago. In Maharashtra, the largest sugar producer in the country, 155 mills are operational and have produced 1.88 mln tn sugar till Dec 15, compared with 1.83 mln produced a year ago by 165 mills. In Uttar Pradesh, the second largest sugar producer in the country, total output as on Dec 15 was 1.03 mln tn, about 20% lower on year, as some mills in the eastern part of the state are still to commence cane crushing. 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. The producers body has estimated 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.

Technical Chart - Sugar

NCDEX Jan contract

Source: Telequote

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

valid for Dec 31, 2012 Resistance 3255-3270

3225-3235

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. (Source: Reuters)

Outlook
Sugar prices are expected to trade on a negative note today account of sufficient supplies in both the domestic as well as global markets. However, a sharp downside may by restricted on expectations government may remove quantitative restrictions on sugar import/export.

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Commodities Daily Report


Monday| December 31, 2012

Agricultural Commodities
Oilseeds
Soybean: Soybean futures traded on a flat note on Saturday. The spot settled marginally higher by 0.36% while the Futures settled marginally lower by 0.02% on Saturday.
Arrivals in the domestic markets remained at 2.5 lakh bags, while demand is comparatively lower amid subdued overseas demand. 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 Nov from 3.97 lakh tn year ago. Overall oil meal exports in the first eight months of the year beginning April fell to 2.4 mn tn from 3 mn tn a year ago.

Market Highlights
Unit Soybean Spot- NCDEX (Indore) Soybean- NCDEX Jan '13 Futures Ref Soy oil SpotNCDEX(Indore) Ref Soy oil- NCDEX Jan '13 Futures Rs/qtl Rs/qtl Rs/10 kgs Rs/10 kgs Last 3310 3242 711.8 704.4

as on Dec 29, 2012 % Change Prev day 0.36 -0.02 0.10 0.23 WoW -0.12 -1.35 -0.98 -0.02 MoM 0.58 -0.89 -4.06 -3.61 YoY 33.20 30.65 -2.20 -2.50

International Markets
Soybean futures on the Chicago Board of Trade fell around 0.4% Thursday on expectations of weak export sales data. Trade expects USDA today to show export sales of U.S. soybeans in the latest reporting week at 100,000 to 300,000 tonnes. Net sales of 619,400 MT for the 2012/2013 marketing year down 53 percent from the previous week and 23 percent from the prior 4week average. Last week, private exporters reported the cancellation of 540,000 tonnes of U.S. soybeans sold to China - the biggest cancellation by the world's top importer of the oilseed in at least 14 years. Brazil's government food supply agency Conab forecast the soybean crop at a record 82.6 million tonnes.

Source: Reuters

as on Dec 28, 2012 International Prices Soybean- CBOTJan'13 Futures Soybean Oil - CBOTJan'13 Futures Unit USc/ Bushel USc/lbs Last 1424 48.94 Prev day 0.37 1.35 WoW 1.08 2.15 MoM -1.74 -2.35
Source: Reuters

YoY 19.92 -4.30

Crude Palm Oil

as on Dec 29, 2012 % Change Prev day WoW 0.72 -0.02 7.54 2.70

Unit
CPO-Bursa Malaysia Jan '13 Contract CPO-MCX- Dec '12 Futures

Last 2367 418.5

MoM 8.68 -1.02

YoY -24.13 -22.73

Refined Soy Oil: Malaysian palm oil futures climbed to a five-week


high on Friday on expectations for stronger demand and as monsoon-driven floods in the country's key producing regions sparked concerns of supply disruptions. CPO prices have gained significantly last week as a cut in export duty on Malaysian palm oil is likely to boost exports and reduce palm oil stock piles. Taking cues from the international markets, domestic CPO as well as ref soy oil prices also settled higher by 2.51% and 0.33% respectively on Thursday. Indonesia, the world's top palm oil producer, reduced its export tax on crude palm oil to 7.5 percent for January from 9 percent in December. Exports of Malaysian palm oil products for Dec. 1-20 fell 1.9 percent to 1,004,159 tn from 1,023,517 tn for the Nov. 1-20 period.

MYR/Tonne Rs/10 kg

Source: Reuters

RM Seed
Unit RM Seed SpotNCDEX (Jaipur) RM Seed- NCDEX Jan'13 Futures Rs/100 kgs Rs/100 kgs Last 4249 4189 Prev day -0.02 0.41

as on Dec 29, 2012 WoW -0.14 -1.20 MoM 0.57 -0.59


Source: Reuters

YoY 24.01 16.10

Rape/mustard Seed: Mustard seed futures traded on a mixed


note on Saturday. Prices corrected on higher acreage. However, low stocks in the domestic market have supported the prices at lower levels. The agriculture ministry data showed higher mustard seed planting figures. Acreage in Rajasthan, largest producing state as on 14 Dec 2012 is 2656.6 thousand ha compared to 2441 thousand ha during the same period last year (Mustard has been planted over 63.6 lakh ha so far, 3.3% higher compared with a year ago. rapeseed output is expected to rise by 5% to 6.5 mn tn from 6 mn tn last year.

Technical Chart Soybean

NCDEX Jan contract

Outlook
Soybean complex may recover in the initial part of the session today on account of short coverings. However, prices may again come under downside pressure on account of weak demand. Mustard seed prices trade on a positive note today as sentiments remain positive amid tight supplies till the fresh crop arrives in February. Palm oil may continue to trade with a positive bias on expectations of supply disruptions in Malaysia caused by monsoon driven floods. Also, export duty cut may reduce Malaysian palm oil stocks.

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 31, 2012 Support 696-700 3190-3220 4130-4160 435-438.50 Resistance 709-714 3260-3300 4210-4230 444-448

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Commodities Daily Report


Monday| December 31, 2012

Agricultural Commodities
Black Pepper
Pepper Futures traded on a flat note with a negative bias on Saturday. Prices have corrected as Food Safety and Standards Authority of India sealed the entire quantity of pepper stored in six warehouses in Kerala of about 5,000 tonnes. The six warehouses have also been sealed. Harvesting of the fresh crop has commenced and is expected to gain momentum in the coming days. Arrivals of the fresh crop have also pressurized prices. However, winter demand coupled with low stocks in the domestic markets has supported prices at lower levels. FMC is probing into complaints against movement in the pepper market which has pressurized prices. Better output expectations in the domestic as well as the international markets have also pressurized prices over the last couple of weeks. Exports demand for Indian pepper in the international markets is also weak due to price parity. The Spot settled 0.15% higher while the Futures settled 0.12% lower on Saturday. Pepper prices in the international market are being quoted at $7,200/tn(C&F Europe), while Vietnam was offering Austa at $7,000/tn, Brazil Austa at $6,000-6,500/tn, and Indonesia Austa at $6,500/tn (FOB).

Market Highlights
Unit Pepper SpotNCDEX (Kochi) Pepper- NCDEX Feb'13 Futures Rs/qtl Rs/qtl Last 37806 34010 % Change Prev day 0.15 -0.12

as on Dec 29, 2012 WoW -0.82 -2.28 MoM -1.28 -11.12 YoY 13.63 4.04

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. 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. Brazil exported 25,900 tn pepper during Jan-Nov 2012, around 20% lower compared with 32,650 tn in the same period last year. Exports from Malaysia 8,300 tn pepper during Jan-Oct 2012, lower by 30% last year while exports in October. stood at 1,077 mt in.

Source: Telequote

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

valid for Dec 31, 2012 Support 33640-33830 Resistance 34190-34370

Production and Arrivals


The arrivals in the spot market were reported at 7 tonnes while off takes were reported at 7 tonnes on Saturday. 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 trade on a negative to bearish note today. Reports that FSSAI has sealed huge quantity of pepper are expected to maintain pressure on the prices. Good arrivals coupled with higher output expectations, as well as reports that FMC is probing into complaints against price movement may pressurize prices. However, winter buying may support prices at lower levels.

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Commodities Daily Report


Monday| December 31, 2012

Agricultural Commodities
Jeera
Jeera Futures resumed its downward on Saturday tracking Improvement in the ongoing sowing coupled with weak domestic demand. Fresh export enquiries coupled with demand from stockists and masala millers had boosted the prices over the last couple of days. According to Gujarat State Agri Dept. sowing in Gujarat is reported at th 2.635 lakh ha as on 18 Dec, 2012 compared with 2.319 lakh ha last year. In Rajasthan, sowing is expected to increase by 10-15%. Higher stocks for delivery on the exchange warehouse were pressurizing prices during the last one month. The spot as well as the Futures settled 0.08% and 1.13% lower on Saturday. 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 $2,775-2,825 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 Mar '13 Futures Rs/qtl Rs/qtl Last 14848 14710 Prev day -0.08 -1.13

as on Dec 29, 2012 % Change WoW -1.81 -5.61 MoM -1.69 2.78 YoY -4.08 -7.34

Source: Reuters

Technical Chart Jeera

NCDEX March contract

Production, Arrivals and Exports


Arrivals in Unjha were reported at 3,000 tn on Saturday. Production of Jeera in 2011-12 is expected around 40 lakh bags as against 29 lakh bags in 2010-11 (55 kgs each). 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 0.00 -0.18

as on Dec 29, 2012 % Change

Unit Turmeric SpotNCDEX (N'zmbad) Turmeric- NCDEX Apr '13 Futures Rs/qtl Rs/qtl

Last 5541 6580

WoW 4.91 3.69

MoM 10.42 32.23

YoY 7.87 40.12

Outlook
Jeera futures may trade with a negative bias today. Higher sowing thereby higher output expectations in Gujarat may pressurize prices. However, export demand may support prices at lower levels. In the medium term (Dec-Jan), prices are likely to stay firm as there are limited stocks with Syria and Turkey.

Turmeric
Turmeric Futures opened on a negative note extending previous days correction. However, prices recovered from lower levels towards the end.. Prices have gained over the last few days as stockists were buying at lower levels. Good quality crop arrivals have also supported prices. There are reports of some crop damage in Erode region. Buyers are looking for turmeric with higher curcumin level at 5% which is unavailable, thereby supporting prices in the spot markets. Expectations are that production may be lower by 40-50%. Production is expected around 55 lakh bags. 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 remained closed while the Futures settled 0.18% lower on Saturday.

Technical Chart Turmeric

NCDEX April contract

Source: Telequote

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

Valid for Dec 31, 2012


Support 14565-14640 6420-6500 Resistance 14820-14930 6640-6700

Production, Arrivals and Exports


Arrivals in Nizamabad and Erode mandi stood at 1,000 bags and 6,000 bags respectively on Friday. 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 may trade sideways with a negative bias today as higher carryover stocks and weak overseas demand weigh in on the prices. However, demand from the stockists may support prices at lower levels.

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Commodities Daily Report


Monday| December 31, 2012

Agricultural Commodities
Kapas
Kapas prices traded on a negative note extending previous days losses on account of long liquidation. NCDEX Kapas and MCX Cotton settled 0.66% and 0.12% lower respectively on Saturday. Although, Cotton advisory Board has pegged cotton output lower at 334 th lakh bales, Cotton Association of India (CAI), in its latest 90 annual general meeting said that Cotton production in the season 2012-13 is expected to be around 350 lakh bales, while the consumption is likely to be around 265 lakh bales. According to the data released by Cotton Corporation of India, Supplies until Dec. 16 fell to 6.2 million bales of 170 kg each, down from 6.9 th million bales a year earlier. Arrivals were down by 12.5 percent as on 9 December. However, it is still below expectations as many farmers, who are waiting for better returns, hold back their produce. Cotton yarn prices have jumped 14.7 percent from Rs.170/Kg to Rs. 195/Kg in Mumbai benchmark market of cotton yarn due to spur in demand form millers and exporters. Demand is mainly coming from China. While domestic market demand is also picking up on seasonal demand. (Dated 21 Dec) ICE Cotton futures settled lower by 1.78% on Friday. Global Cotton Prices are expected to recover on account of good demand from china. The USDA monthly report cuts cotton stocks estimate to 79.64 million bales, from last month's forecast of 80.27 million.

Market Highlights
Unit Rs/20 kgs Rs/Bale Last 980.5 16230

as on Dec 29, 2012 % Change Prev. day WoW -0.66 -4.39 -0.12 -2.17 MoM 1.87 -2.17 YoY #N/A -5.80

NCDEX Kapas Futures MCX Cotton Futures

Source: Reuters

International Prices
ICE Cotton Cot look A Index Unit Usc/Lbs Last 74.66 81.35

as on Dec 28, 2012 % Change Prev day WoW -1.78 -1.62 0.00 0.00 MoM 4.77 0.00 YoY -18.67 -29.20

Source: Reuters

Technical Chart - Kapas

NCDEX April contract

Domestic Production and Consumption


According to Cotton Advisory Boards (CAB) estimates (4 Oct 2012) 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.
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Source: Telequote

Technical Chart - Cotton

MCX Jan 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 from th 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 31, 2012 Support 965-975 16410-16455 Resistance 986-1000 16540-16580

Outlook
Cotton prices may trade sideways with a negative bias as higher output expectations by Cotton Association of India has turned the sentiments negative for the cotton prices. However, sharp downside in the domestic markets is expected to be limited in the coming weeks as farmers will not sell their stocks at very low prices. Also demand remains strong at low prices.

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