Commodities Daily Report

Saturday| February 16, 2013

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

Saturday| February 16, 2013

Agricultural Commodities
News in brief
FCRA Bill to develop the commodities futures market could be passed in Budget session: K V Thomas
The FCRA Bill to develop the commodities futures market could be passed in the forthcoming Budget session of Parliament, Food and Consumer Affairs Minister K V Thomas said here today. "I believe the Forward Contract Regulation Act (FCRA) Bill will be passed in the coming session of Parliament," the Minister said while addressing an Assocham event on the commodity futures market. "There are apprehensions about futures trade that it is leading to price rise in commodities. But a number of studies have indicated there is no evidence to prove it," he added. The FCRA Amendment Bill, 2010 aims at developing the commodities futures market by arming the regulator Forward Markets Commission (FMC) with financial autonomy and facilitating the entry of institutional investors, among others. On reports that government was mulling imposing commodity transaction tax (CTT), the Minister said: "When the issue of CTT came before us in October last year, we immediately discussed it with stakeholders and an independent view has been passed on to the Finance Ministry." "This is a goose (commodity market) that lays the golden eggs. When the issue (CTT) comes, we should not take a partisan view," he said. (Source: Financial Express)

Market Highlights (% change)

Last Prev. day

as on Feb 15, 2013

WoW MoM YoY

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

19468 5887 54.33 95.86 1609

-0.15 -0.16 0.61 -1.49 -1.58

-0.09 -0.27 1.36 0.15 -3.43

-1.76 -1.91 -0.51 2.77 -4.43

6.95 6.43 10.00 -5.83 -6.81

.Source: Reuters

Rice, wheat, onion prices to remain high till March: Report

A drop in Indias overall food production due to an uneven south- west monsoon could keep rice and wheat prices high till March. Onion prices, too, are expected to move upwards, around March- April. According to the Quarterly Agriculture Outlook Report prepared by the National Council of Applied Economic Research for the Department of Agriculture, rice prices would rise by less than 10 per cent in 2012- 13 ( July to June) as compared to last year, and wheat prices by about 20 per cent, compared to last year. (Source: Business Stanrdard)

Chana acreage rises on higher support price

Chana (gram) acreage has touched a record 94.99 lakh hectares (lha), as farmers in Andhra Pradesh, Karnataka, Madhya Pradesh and Maharashtra have planted more area. The increase is about 5 lakh ha more than last year. The rise in chana prices, coupled with a hike in minimum support prices (MSP), has helped expand overall acreage by over 5 lakh ha. The Centre has hiked the MSP by 14 per cent to Rs 3,200 a quintal for both chana and urad as part of its strategy to encourage farmers to grow more pulses to reduce import dependence. The area under moong also saw a marginal increase at 6.71 lha against last years 6.22 lha, while that under urad registered a decline of 1.36 lha at 8.22 lha. As rabi sowing comes to an end, the acreage of coarse cereals, such as maize and barley, also saw a marginal increase. Maize acreage touched a record 15.33 lakh ha against last years 13.45 lakh ha. The increase in maize acreage is driven by higher planting in Andhra Pradesh and Bihar. Rice planting, however, continued to trail by about 2.79 lha at 24.28 lha over last years 27.07 lha, on poor availability of water, mainly in Andhra Pradesh and Tamil Nadu. Wheat acreage touched 298.38 lha, but was marginally down from last years 298.61 lha. Oilseeds acreage also continued to trail, mainly due to lower area under groundnut, which was lower by 1.04 lha at 9.02 lha, while the area under rapeseed mustard was higher by 1.41 lha at 67.26 lha. (Source: Business Line)

Food security scheme likely to get 5,000 cr in Budget

The UPA- 2 governments most ambitious social security programme, the national food security scheme, is likely to get 5,000 crore as initial allocation in the 2013- 14 Budget, to be presented by Finance Minister P Chidambaram on February 28. The programme will start in 2013- 14 and the Budget would provide this allocation, said officials in the know. This sum has been kept aside for food security and will be different from the usual allocation of food subsidy, an official said. The Food Security Bill, which seeks to provide legal entitlement for cheap grain to almost 67% of the population, has been vetted by a standing committee of Parliament. The department of food and consumer affairs is preparing a Cabinet note for a revised Bill, likely to be moved in the Budget session. Officials estimate the yearly food subsidy at 1,20,000 crore to 1,40,000 crore, depending on the quantity of food allocated under the Bill. The Budget had provided for 75,000 crore in 2012- 13, but the requirement is said to have swelled to more than 95,000 crore. In the 2013- 14 Budget, the finance minister will try to strike a balance between various departments demands to rein in the fiscal deficit at 4.8% of GDP from the 5.3% estimated in the current financial year. (Source: Business
Standard)

Govt hikes edible oil tariff value

To curb the spurt in edible oil import, the government today raised the tariff value of edible oils by four to five per cent. In January, edible oil import had touched a two- decade high of 1.15 million tonnes, 75% more than in January 2012. Tariff value is the rate at which import duties are determined to prevent underinvoicing. According to an official statement, the tariff value of crude palm oil, the edible oil India imports most, has been raised from $ 815 a tonne to $ 848 atonne, a rise of 4.04%. Last month, the government had lifted a two- year freeze on the tariff value of edible oils. To ensure a level field for the domestic oilseed processing industry, it had aligned the value with international prices.
(Source: Business Standard)

Cotton export registrations rise on hopes of Chinese demand

Cotton exports are showing signs of recovery with registrations for shipments jumping 20 lakh bales since the beginning of the year. According to sources, registration for cotton exports has increased to 58 lakh bales from 38 lakh bales. However, cotton trade and analysts say that it may be less than 50 lakh bales only. Sources said that exporters are now buying half of the two lakh bales (of 170 kg) that are arriving daily in the market. While the Cotton Corporation of India is procuring some 40,000 bales, domestic textile mills are buying 60,000 bales.
(Source: Business Line)

Govt weighing proposal to allow private traders in wheat exports from central stocks
The Government said it is working on a proposal to allow private traders in additional wheat export from the central stocks as part of its efforts to create space for the new crop. So far, the Government has allowed export of 4.5 mt of wheat from the Central pool stocks mainly by Staterun trading corporations. We are thinking of allowing private traders in export of additional wheat from the FCI. Discussions with various ministries are going on, Food Minister K. V. Thomas said. (Source: Business
Line)

Sugar decontrol decision in 15 days

Food Minister K V Thomas today exuded confidence that the FCRA Amendment Bill, seeking to give more power to the commodity markets regulator, was likely to be passed in the coming Budget session of Parliament. He also said the government was likely to take a decision on partial deregulation of the sugar sector in the next 15 days. "I believe the Bill will be passed in the coming session," he said. (Source: Business Standard)

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Commodities Daily Report

Saturday| February 16, 2013

Agricultural Commodities
Chana
Chana futures witnessed sharp gains on Friday and settled 1.54% higher on account of increased demand from stockiest at lower prices levels. Spot also settled 0.73% higher on Friday. Ministry of Agriculture in its second advance estimates, have pegged, bumper chana output for 2012-13 season at 8.57 mn tn, up 11% from 2011-12 final estimates of 7.7 mn tn.

Market Highlights
Unit Rs/qtl Rs/qtl Last 3661 3493 Prev day 0.73 1.54

as on Feb 15, 2013 % change WoW MoM 3.68 -6.40 2.07 -1.88 YoY 2.80 -2.43

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

Pulses Sowing 2012-13

Total pulses acreage as on 08 Feb 2013 stood at 148 lakh ha, up by 0.5% yoy. Chana sowing is 5.4% higher at 94.78 lakh ha compared to previous year. Chana acreage is marginally higher by 3% this year in Rajasthan at 14.80 lakh ha, In Maharashtra, Chana acreage is up at 11.12 lakh ha vs normal area of 10.6 lakh ha. While in AP it is up at 7.27 lakh ha, up by 28%. Compared to previous year. (Source: State farm dept)

Source: Reuters

Technical Chart - Chana

NCDEX April contract

Demand supply fundamentals

According to second advance Estimates released on 8 Feb 2013, Total pulses output for 2012-13 season has been pegged at 17.58 mn tn, down 3.3% compared to previous year. The target for 2012-13 pulses crop output was set at 18.24 million tonne during the year. However, drought conditions have hampered kharif pulses output, which has been only partially offset by Rabi pulses output, especially chana. Out of the total pulses output, kharif output is estimated at 23% lower at 5.48 mn tn while rabi pulses output is pegged 8.72% higher at 12.09 mn tn compared with the final estimates of 2011-12. There has been a sharp increase in the chana output estimates. on the back of higher acreage and good yield. Chana output is expected to breach its 2010-11 record of 8.2 mn tn and is estimated at 8.57 mn tn for 2012-13. In its first advance estimates chana output was pegged at 7.9 mn tn. India needs imports as its domestic production is insufficient to meet the rising demand. The countrys import bill on pulses stood at $1.83 billion in 2011-12. Assocham estimates, 21 mn tn of pulses demand in 2012-13 and is likely to reach at 21.42 mn tn in 2013-14 and 21.91 MT in 2014-15. (Source: Agriwatch).
Source: Telequote
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Technical Outlook
Contract Chana Apr Futures Unit Rs./qtl Support

valid for Feb 16, 2013 Resistance 3510-3530

3425-3455

Trade Scenario
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
Chana futures trade lower initially on account of profit taking. However, price may again bounce back on expectations of demand to improve further in the coming days.

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Commodities Daily Report

Saturday| February 16, 2013

Agricultural Commodities
Sugar
Sugar futures settled 0.36% higher on hopes government may soon take decision over partial decontrol of the sugar industry. However, spot settled marginally lower by 0.16% on Friday. Traders expect demand to improve in the coming summer months. Indias sugar production for the 2013/14 season is set to fall below consumption for the first time in four years as a water shortage trims acreage in three key states. (Reuters) Food minister KV Thomas on Thursday said the government is likely to take a decision on decontrolling the sugar industry before the Budget. Food ministry has proposed dispensing with the regulatory release mechanism and abolishing the levy system. India has fixed FRP (Fair and Remunerative Price), the price sugar mills must pay to cane growers at 210 rupees per 100 kg in the 2013/14 year, compared to current years 170 per qtl. Higher floor price increases the cost of production as the raw material cost constitute the major part of cost of production of sugar. This should actually increase the prices of sugar. Liffe white sugar settled marginally higher by 0.02% while Raw sugar futures on ICE settled marginally higher by 0.33% on account of short coverings. A global surplus situation has led the prices to a sharp decline. Currently the prices are trading around their 2 year lows.

Market Highlights
Unit Sugar Spot- NCDEX (Kolhapur) Sugar M- NCDEX Feb'13 Futures Rs/qtl Last 3200

as on Feb 15, 2013 % Change Prev. day WoW -0.16 0.76 MoM -2.17 YoY 10.03

Rs/qtl

3063

0.36

1.63

-6.10

7.89

Source: Reuters

International Prices
Unit Sugar No 5- LiffeMay'13 Futures Sugar No 11-ICE Mar '13 Futures $/tonne $/tonne Last 490.3 400.00

as on Feb 15, 2013 % Change Prev day WoW -0.02 0.33 0.37 -2.39 MoM -1.86 -2.44 YoY -22.74 #N/A

.Source: Reuters

Technical Chart - Sugar

NCDEX March contract

Domestic Production and Exports

Out of the estimated 24 mn tn sugar output for the season 2012-13, Indian 13.7 mn tn in the first four months of the season beginning October 2012, up 3 percent a year ago period. 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. Exports are not viable as international prices have also declined significantly.

Global Sugar Updates

The USDA on Friday boosted its domestic sugar supply forecast in the 2012/13 marketing year, projecting record production. U.S. sugar production in the current marketing year is pegged at 9.22 million short tons, up from last month's estimate at 9.07 million tons. If the forecast is realized, it will be a record high, exceeding the record 9.032 million short tons harvested in the United States in 1999/2000. In the international markets, ICE Raw sugar fell to their lowest level since August 2010 to 18.46 cents in the last week expecting third consecutive year of global surplus in 2012-13. A third consecutive global sugar surplus will trim prices as supply is forecast to exceed demand by more than 8 million tonnes in the crop year to September 2013. Markets would need weather scares or bullish ethanol policy changes in Brazil to encourage new longs. Otherwise, prices will remain depressed. Brazil's main center-south cane crop will produce between 580 million and 590 million tonnes of sugar cane in 2013/14. Brazil will likely favor ethanol production over sugar from the 2013/14 cane crop.
Source: Telequote

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

valid for Feb 16, 2013 Resistance 3120-3135

3050-3075

Outlook
Sugar prices may consolidate at the current levels as markets may adopt a wait and watch policy expecting government to take decision levy sugar mechanism, one of the major reforms of sugar decontrol. The hike in cane price and thereby increase in sugar production cost may also support prices as this may force government to take some measures to increase sugar prices.

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Commodities Daily Report

Saturday| February 16, 2013

Agricultural Commodities
Oilseeds
Soybean: Soybean futures extended the gains of the previous
session and settled 1.06% higher on weak rupee. Higher demand for soybean exports also supported an upside in the prices. Oil meal exports rose by almost 40 per cent to 7.68 lakh tonnes in January this year, industry body Solvent Extractors Association of India said. The export of oil meals, however declined by 18 per cent to 36.79 lakh tonnes in the first 10 months of this fiscal compared to 44.85 lakh tonnes in the year-ago period. The country exported 25.36 lakh tn soybean meal in first 10 months compared to 30.82 lakh tn in the same period last year which showing a decline of 17.72%. According to the second advance estimates, 2012-13 oilseed output is pegged at 29.4 mn tn, down by 1.1%, while soybean output is pegged higher at 12.9 mn tn, up 3.2%.
Soybean Spot- NCDEX (Indore) Soybean- NCDEX Feb '13 Futures Ref Soy oil SpotNCDEX(Indore) Ref Soy oil- NCDEX Feb '13 Futures

Market Highlights
Unit Rs/qtl Rs/qtl Rs/10 kgs Rs/10 kgs Last 3354 3327 737.3 735.4

as on Feb 15, 2013 % Change Prev day 0.36 1.12 0.20 0.65 WoW -0.53 -0.18 0.31 1.43 MoM 3.61 2.75 -1.16 1.62 YoY 24.45 22.72 4.15 3.69

Source: Reuters

as on Feb 15, 2013 International Prices Soybean- CBOTMar'13 Futures Soybean Oil - CBOTMar'13 Futures Unit USc/ Bushel USc/lbs Last 1425 51.62 Prev day 0.46 -0.15 WoW -0.49 0.74 MoM -0.84 0.60
Source: Reuters

YoY 12.39 -3.33

International Markets
CBOT Soybean traded higher yesterday and settled 0.46% higher on Friday on account of short coverings. USDA has raised its forecast of global 2012/13 soybean ending stocks above 60 mn tns, up from 59.46 mn in January. Upward revision in Brazils soy output is offset by downward revision in the Argentina production. However, persistent dry, hot weather in much of Argentina is hurting 2012/13 crops as they enter crucial growth stages, and rains are needed to safeguard potential yields, the countrys agriculture ministry said last week. Thus output may be revised down further. China, the world's largest soy buyer, imported 4.78 million tonnes of soybeans in January, down 18.8 percent from 5.89 million tonnes in December

Crude Palm Oil

as on Feb 15, 2013 % Change Prev day WoW -0.33 0.22 -2.10 -0.71

Unit
CPO-Bursa Malaysia Feb '13 Contract CPO-MCX- Feb '13 Futures

Last 2428 448.6

MoM 4.21 1.38

YoY -23.53 -18.08

MYR/Tonne Rs/10 kg

Refined Soy Oil: Despite higher edible oil import figures, released
on Thursday, soy oil settled 0.86% higher on account of weak rupee which makes edible oil costlier. India's vegetable oil imports soared 27.4 percent from a month earlier to hit an all-time high in January on record purchases of cheap palm oil from Southeast Asia. However, 1-10 Feb Malaysian exports rose 25%. If the trend continues, CPO prices may witness an upside in the coming days.

Source: Reuters

RM Seed
Unit RM Seed SpotNCDEX (Jaipur) RM Seed- NCDEX Apr'13 Futures Rs/100 kgs Rs/100 kgs Last 3750 3458 Prev day 0.00 1.56

as on Feb 15, 2013 WoW -10.71 1.50 MoM -12.79 0.12

Source: Reuters

YoY 12.23 -3.81

Technical Chart Soybean

NCDEX March contract

Rape/mustard Seed: Mustard Futures settled 1.56% higher on

account of lower level demand Mustard seed sowing is now up by 2.2% at 67.23 lakh ha. Arrivals are expected to commence in February and thus no major upside in the prices is seen if weather condition improve in the coming days. Agriculture ministry in its third advance estimates, pegged mustard output at 7.36 mn tn, up by 11.5%.

Outlook
Soybean complex may trade on a mixed note with a positive bias today. Lower arrivals in the domestic markets may support prices. However, USDA monthly crop report raised its forecast of ending stocks may pressurize prices at higher levels. Mustard seed is expected to trade higher on account of short coverings however; higher output expectations may cap sharp upside. CPO is expected to open higher tracking positive BMD prices. However, prices may decline from higher levels during the intraday.

Source: Telequote

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

valid for Feb 16, 2013 Support 704-707 3160-3189 3420-3440 444-446.50 Resistance 713-717 3240-3270 3485-3505 452-455

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Commodities Daily Report

Saturday| February 16, 2013

Agricultural Commodities
Black Pepper
Pepper March Futures traded on a bullish note yesterday on account of low stocks, thin supplies and delayed harvesting due to lack of skilled laborers. Harvesting of the fresh crop is going in and is expected to gain momentum in the coming days. Good winter demand also supported the prices. Some improvement in the arrivals of the fresh crop led to a decline in the prices earlier last week. Food Safety and Standards Authority of India sealed the entire quantity of pepper stored in six warehouses in Kerala of about 8,000 tonnes. Exports demand for Indian pepper in the international markets is also weak due to price parity. The Spot as well as the Futures settled 0.08% and 2.7% higher on Friday. According to a circular issued by NCDEX on 09/02/2013, launch of June 2013 expiry contract in Pepper which is scheduled on February 11, 2013, has been postponed till further notice. The revised launch date will be announced in due course. Spices Board has announced plans to import high yielding Madagascar variety that was behind the record productivity in Vietnam. It could raise productivity of Indian pepper from 2,000 kg/ha to 7,000 kg/ha. Pepper prices in the international market are being quoted at $8,000/tn(C&F Europe). Vietnams 550 GL is quoted at $6,500/tn, Malaysia and Indonesia Austa variety are quoted at $7,000/tn and Brazil black pepper is quoted at $6,600/tn.

Market Highlights
Unit Pepper SpotNCDEX (Kochi) Pepper- NCDEX Feb'13 Futures Rs/qtl Rs/qtl Last 40738 39695 % Change Prev day 0.08 0.42

as on Feb 15, 2013 WoW 1.29 2.82 MoM 4.60 5.94 YoY 3.04 -1.26

Source: Reuters

Technical Chart Black Pepper

NCDEX March 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 Mar Futures Unit Rs/qtl

valid for Feb 16, 2013 Support 36410-36800 Resistance 37540-37940

Production and Arrivals

The arrivals in the spot market were reported at 27 tonnes while off takes were reported at 30 tonnes on Friday. 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 higher today on account of low stocks coupled with thin arrivals. Reports that farmers are holding back stocks may also support prices at lower levels. However, any improvement in arrivals will cap sharp upside.

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Commodities Daily Report

Saturday| February 16, 2013

Agricultural Commodities
Jeera
Jeera Futures traded on a positive note yesterday on account of some export enquiries. Commencement of arrivals of the new crop has led to a sharp decline. The arrivals of new crop are around 2,000 bags/day and are expected to increase in the coming days. Higher sowing as well as conducive weather in Gujarat, the main jeera growing region has increased output expectations. According to Gujarat State Agri Dept. sowing in Gujarat is reported at 3.244 lakh ha till Jan, 2013 compared with 3.64 lakh ha last year. In Rajasthan, sowing is expected to increase by 10-15%. The spot as well as the Futures settled 1.05% and 1.94% higher on Friday. 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 $2,975 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 Spot- NCDEX (Unjha) Jeera- NCDEX Mar '13 Futures Rs/qtl Rs/qtl Last 13921 13548 Prev day 1.05 1.94

as on Feb 15, 2013 % Change WoW -0.07 2.46 MoM -2.61 -1.04 YoY 0.45 1.16

Source: Reuters

Technical Chart Jeera

NCDEX March contract

Production, Arrivals and Exports

Arrivals in Unjha were reported at 5,500 tn on Friday. 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 0.44

as on Feb 15, 2013 % Change

Outlook
Jeera may trade on a positive note. Overseas demand at lower levels may support prices. Demand from domestic traders and millers may also support prices at lower levels. However, prices may decline on the back of commencement of arrivals of the new crop. Higher sowing figures coupled with conducive weather in Gujarat may also pressurize prices. In the medium term, prices are likely to stay firm as Syria and Turkey have stopped shipments.
Turmeric SpotNCDEX (N'zmbad) Turmeric- NCDEX Apr '13 Futures

Unit Rs/qtl Rs/qtl

Last 5471 6350

WoW 2.37 2.85

MoM -2.01 -0.31

YoY 25.16 36.27

Technical Chart Turmeric

NCDEX April contract

Turmeric
Turmeric Futures traded on a positive note as good demand from local buyers has supported prices at lower levels. Prices have corrected from higher levels over the last couple of days due to huge carryover stocks. The Spot remained closed while the Futures settled 0.44% higher on Friday.

Production, Arrivals and Exports

Arrivals in Erode stood at 2,500 bags while Nizamabad mandi remained closed on Friday. Expectations are that production may be lower by 40-50%. There are reports of some crop damage in Erode region. Turmeric production in 2012-13 is expected around 50 lakh bags. Production in Nizamabad is expected around 12 lakh bags. Production in 2011-12 is projected at historical high of 10.62 lakh tn. It is estimated that next years carryover stocks would be around 10 lakh bags 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 on a mixed note today with a positive bias. Lower output concerns and demand from stockists at lower levels is expected to support prices at lower levels. However, higher carryover stocks and weak overseas demand may pressurize prices at higher levels.
.

Source: Telequote

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

Valid for Feb 16, 2013

Support 13220-13360 6170-6220 Resistance 13620-13730 6430-6490

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Commodities Daily Report

Saturday| February 16, 2013

Agricultural Commodities
Kapas
NCDEX Kapas settled 0.72% higher taking cues from the international markets. However, higher supplies in the domestic markets capped sharp upside in the prices. Cotton supplies from the new crop in the domestic markets until Jan. 20 fell were down at 134 lakh bales, from 144 lakh bales a year earlier. However, gap has narrowed down with increasing pace of arrivals. The Cotton Advisory Board, which met in Mumbai on Wednesday, has estimated cotton production this season (Oct 2012 to Sep 2013) will be 330 lakh bales against the previous estimates in October at 334 lakh bales. Also, exports and domestic consumption has been revised upward to 253 and 80 lakh bales respectively from 250 and 70 lakh bales estimated earlier. As on January 9 this year, nearly 38 lakh bales were registered for exports. ICE Cotton settled 0.37% higher on Friday on account of short coverings. Higher certified stocks coupled with demand from China due to New Year holidays led to a correction earlier this week. Prices have gained sharply late last week as USDA monthly report trimmed US stocks.

Market Highlights
Unit Rs/20 kgs Rs/Bale Last 915.5 17150

as on Feb 15, 2013 % Change Prev. day WoW 0.72 3.92 0.29 2.27 MoM -0.54 2.27 YoY #N/A 4.13

NCDEX Kapas Apr Futures MCX Cotton Feb Futures

Source: Reuters

International Prices
ICE Cotton Cot look A Index Unit USc/Lbs Last 81.32 81.35

as on Feb 15, 2013 % Change Prev day WoW 0.37 -1.93 0.00 0.00 MoM 5.16 0.00 YoY #N/A -29.20

Source: Reuters

Technical Chart - Kapas

NCDEX April contract

Domestic Production and Consumption

According to Cotton Advisory Boards (CAB) estimates (23 Jan 2013) for 2012-13 season that commenced in October, domestic cotton production is pegged 330 lakh bales, down from the previous years estimates of 353 lakh bales. However, higher exports and domestic consumption can be met through revised higher opening stocks of 40 lakh bales and higher imports. 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 80 lakh bales this season, compared with 128.8 lakh bales last year.
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Global Cotton Updates

The U.S. government on Friday nudged higher its global cotton stockpile forecast for 2012/13 amid expectations that China, the world's largest textile market, will import even more fiber for its massive strategic supply. However, the government lowered US carryover by 300,000 bales, or 6 percent, to 4.5 million bales due to an increase of the same size in its export estimate to 12.5 million bales.

Source: Telequote

Technical Chart - Cotton

MCX Feb contract

Outlook
Kapas prices may trade higher during the intraday due to buying by exporters and stockists at lower levels. However, sufficient supplies in the domestic markets and lower export demand expectations may cap sharp upside. Also, international prices which had gained sharply in the last two weeks are due for correction amid rising certified stocks, and Chinese lunar New Year approaching.

Source: Telequote

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

valid for Feb 16, 2013 Support 898-907 17000-17070 Resistance 924-930 17220-17290

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