Commodities Daily Report

Thursday| May 09, 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

Angel Commodities Broking Pvt. Ltd. Registered Office: G-1, Ackruti Trade Centre, Rd. No. 7, MIDC, Andheri (E), Mumbai - 400 093. Corporate Office: 6th Floor, Ackruti Star, MIDC, Andheri (E), Mumbai - 400 093. Tel: (022) 2921 2000 MCX Member ID: 12685 / FMC Regn No: MCX / TCM / CORP / 0037 NCDEX: Member ID 00220 / FMC Regn No: NCDEX / TCM / CORP / 0302

Disclaimer: The information and opinions contained in the document have been compiled from sources believed to be reliable. The company does not warrant its accuracy, completeness and correctness. The document is not, and should not be construed as an offer to sell or solicitation to buy any commodities. This document may not be reproduced, distributed or published, in whole or in part, by any recipient hereof for any purpose without prior permission from Angel Commodities Broking (P) Ltd. Your feedback is appreciated on commodities@angelbroking.com

www.angelcommodities.com

Commodities Daily Report

Thursday| May 09, 2013

Agricultural Commodities
News in brief
Basmati acreage seen rising on hopes of higher returns
Basmati acreage is set to increase by at least a tenth this kharif season as expectation of higher returns may prompt farmers in northern States to plant more area under the aromatic rice variety. Basmati prices had almost doubled last year over the previous year on an estimated 30 per cent shortfall in crop size and rising demand from both domestic and overseas markets. Basmati acreage in 2012-13 stood at 1.85 million hectares, an increase of 32,000 hectares over the previous year. The transplanting of basmati planting normally starts in July every year, but the nurseries for transplantation are raised during June. Based on the trend in sales of seeds in Punjab, Haryana and Uttar Pradesh, trade sources see farmers switching over to basmati from the other rice varieties and cotton to some extent eyeing better returns. (Source: Business
Line)

Market Highlights (% change)

Last Prev. day

as on May 08, 2013

WoW MoM YoY

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

19990 6069 54.09 96.62 1474

0.51 0.43 0.04 1.05 1.72

2.49 2.35 0.75 6.14 1.91

8.42 9.50 -0.96 3.49 -6.24

20.81 21.39 1.81 -0.40 -8.11

.Source: Reuters

India's sugar output may decline this year due to Maharashtra drought
India's sugar output is set to decline 10-15 per cent in the 2013-14 crushing season due to lower cane availability from drought-hit Maharashtra districts, where sowing could not be finished or crops were damaged due to lack of monsoon showers in 2012. As many as 16 districts in Maharashtra, including major cane growing regions like Marathwada, were affected badly due to water shortage. In the 2012 season, the monsoon showers were delayed by over a month in the beginning and oddly distributed later, thereby leaving these regions very dry.As the largest sugar-producing state in India, Maharashtra contributes a third of India's overall sugar output. In the 2012-13 crushing season (October - September), the total sugar output in Maharashtra was estimated at between 7.9 - 8 million tons. By April 6, 2013, with a recovery of 11.54 per cent (against 11.36 per cent last year), the total sugar output was reported at 7.8 million tons (a decline from 8.25 million tons from the same time last year). (Source: Business Standard)

Turmeric loses sheen as orders dry up

Spot turmeric prices are on a downward spiral on lack of any fresh orders from North India. The buyers expect good quality turmeric, but only medium variety is arriving for sale. So most of the buyers prefer the finger variety and few bags of root variety was sold. The root variety usually will have good demand during this period at Delhi. Fortunately, the price in the turmeric futures has increased by Rs 50-100 a quintal on Wednesday. But this has not made an impact among the buyers. (Source:
Business Line)

Ukraine to raise oilseed, soybeans harvests in 2013

Ukraine, the world's leading exporter of sunflower oil, is likely to increase sunflower output this year to 9.86 million tons from 8.57 million tons in 2012, UkrAgroConsult said on Wednesday.The consultancy said Ukraine could also raise its rapeseed production by 67.5 percent to 2.01 million tons and increase its soybeans harvest by 20 percent to 2.89 million tons. Last summer's record heat hit Ukrainian sunflower crops, reducing yields to 1.55 tonne per hectare. This year, the consultancy said, the yield could rise to 1.86 tonne per hectare. It also said that better weather conditions this spring could help Ukraine to recover its rapeseed output after last year's fall caused by severe frost and drought. Ukraine harvested 1.2 million tonnes of rapeseed in 2012. (Source: Reuters)

Corn falls for second straight session on dry weather forecast

Corn under pressure as forecasts for dry weather in the U.S. Midwest bolstered hopes that growers will be able to push planting back on schedule after damp field conditions caused the slowest start to corn seeding in 29 years. Better corn planting weather is expected in the U.S. Midwest over the next week to 10 days following wet weather that has hampered the seeding pace, an agricultural meteorologist said on Wednesday. U.S. corn supplies at the end of the 2013/14 crop year were forecast at a nine-year high due to the biggest plantings since the 1930s, analysts said ahead of the government's first forecast for new-crop stocks (Source: Reuters)

Weakening whites premium may signal Thai rush to crush

A weakening white sugar premium this week may signal Thai industry is rushing to crush the remnants of a larger than expected cane crop, and may indicate weaker than expected demand linked to the Muslim festival of Ramadan. The August/July whites-over-raws premium, a measure of the profitability of refining, was $103 per tonne on Wednesday, down from $118 a week ago. Refining is generally considered remunerative at a whites premium of around $90 per tonne. Thai industry is currently scrambling to crush the tail, or end, of a higher than expected cane output, likely to reach 100 million tonnes in the next few days, up from forecasts made several weeks ago of 88-90 million tonnes. Thailand is the worlds number 2 sugar exporter, after Brazil. ( Source: Reuters)

Cotton Corporation & NAFED expected to offload 8 lakh bales at lower prices
After an unsuccessful bid to offload of 2.5 lakh bales of cotton in April, the government has now decided to give it a fresh chance. The Cotton Corporation of India (CCI) and the National Agricultural Cooperative Marketing Federation of India (NAFED) are expected to offload over 8 lakh cotton bales (a bale weighs 170 kg) in the domestic market this month and the asking price may be lower by Rs 1,000 per candy than the previous price. In April, the government had offered a price of Rs 39,500 per candy, which received lukewarm response from the textile industry. In March, cotton prices had firmed up to Rs 41,000 a candy but the current prices are around Rs 38,000-38,500 in the Guntur market of Andhra Pradesh. (Source: Economic Times)

Govt plans ordinance option on Food Security Bill

The Govt, unsuccessful in getting nits food security bill passed in the just concluded Parliament session, is exploring options of issuing an ordinance on the scheme. Union food minister, K.V Thomas said that the constitutional & legal aspects of bringing about an ordinance were being considered. If an ordinance is promulgated, the legal framework for implementing the food security scheme will be in place before the parliament passes the legislation. ( Source- Economic times)

As on 1st May 2013, Government agencies hold 427.30 Lakh tons of Wheat stocks
As on 1st May 2013, government agencies hold 427.30 Lakh tons of wheat stock, which is higher than last year at the same time. 369.83 lakh tons is with various government agencies, 2.65 lakh tons is in transit and 52.82 lakh tons is lying in Mandis (source: Agriwatch)

www.angelcommodities.com

Commodities Daily Report

Thursday| May 09, 2013

Agricultural Commodities
Chana
Chana June futures remained under downside pressure yesterday and settled 1.41% lower on the back of supplies of the new crop coupled with higher output estimates. However, expectations that demand from stockists may emerge at lower levels has cushioned sharp downside in the prices. Lower yield in MP due to unseasonal rainfall in February have also supported prices at lower levels. The supplies are expected to slow down towards the end of the month. Higher supplies of the new crop from the major producing states such as Madhya Pradesh, Rajasthan and Maharashtra is seen pressurizing prices in the physical markets. Concerns over the yield in Madhya Pradesh, the largest chana producing state, due to unfavorable weather conditions has been seen supporting prices at lower levels. Chana prices may find support at lower levels as stockists will build inventories at lower levels to meet the demand for the entire season.

Market Highlights
Unit Rs/qtl Rs/qtl Last 3400 3360 Prev day 0.00 -1.12

as on May 08, 2013 % change WoW MoM 0.00 -5.78 -2.10 -5.96 YoY -19.51 -21.39

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

Source: Reuters

Technical Chart - Chana

NCDEX June contract

Demand supply scenario

Higher returns earned in 2012, coupled with a hike in minimum support prices (MSP), have helped expand overall acreage in 2012-13 season. The Centre has hiked the MSP by 14 per cent to Rs 3,200 a quintal for chana and as part of its strategy to encourage farmers to grow more pulses to reduce import dependence. Chana sowing in the current season is 5.65% higher at 95.17 lakh ha compared to previous year. Acreage is up in Rajasthan, Maharashtra, MP and AP at 15.7 lakh ha, 12.53 lakh ha, 32.99 lakh ha and 7.33 lakh ha respectively. According to third advance Estimates released on 3 May 2013, Total pulses output for 2012-13 season has been pegged at 18 mn tn, up 5.76% compared to previous year. The target for 2012-13 pulses crop output was set at 18.24 million tonne during the year. Out of the total pulses output, kharif output is estimated at 4.03% lower at 5.95 mn tn while rabi pulses output is pegged 9.25% higher at 12.05 mn tn compared with the final estimates of 2011-12. Chana output is pegged marginally lower to 8.49 mn tn compared with its second advance estimates of 8.57 million tonnes. However, chana output is expected to breach its 2010-11 record of 8.2 mn tn in 2012-13. Erratic weather in M.P. lowered the yield. 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).
rd

Source: Telequote

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

valid for May 09, 2013 Resistance 3445-3490

3350-3380

Trade Scenario
According to IBIS, imports of chana in the month of February declined to 0.46 lakh metric tonnes compared to 2.31 lakh metric tonnes during the previous month. 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. In Australia, total chickpea production in 201213 is estimated to have increased to a record 713000 tones as compared with 485000.

Outlook
Chana prices may continue to decline today. Higher supplies of the new crop may pressurize prices. However, value buying is expected emerge at lower levels. Improvement in demand from stockists may also support prices at lower levels. Overall output in the current season is comparatively higher and thus no major upside is expected over a medium term.

www.angelcommodities.com

Commodities Daily Report

Thursday| May 09, 2013

Agricultural Commodities
Sugar
Sugar Futures gained from lower levels yesterday as improving demand from the bulk consumers supported prices at lower levels. Higher supplies from mills have been seen offsetting the summer demand. Sugar prices in the domestic markets have consolidated at lower levels over the past couple of weeks. The spot settled marginally lower by 0.11% while the June Futures settled 0.61% higher on Wednesday. The Government has cleared the partial decontrol of sugar in April. According to this, the government will now have to buy sugar from the mills at open market prices. Also the release mechanism will be done away with, after September 2013. States will decide on the FRP of cane. Indian sugar mills produced 23 million tonnes of the sweetener between Oct. 1 and March 31, about 2 percent less than a year earlier. The Central Government has decided to make available quantity of 104 lakh tons of sugar, as non-levy quota for open market sale, for the 6 months of April, 2013 to September, 2013.

Market Highlights
Unit Sugar Spot- NCDEX (Kolhapur) Sugar M- NCDEX May '13 Futures Rs/qtl Last 3038

as on May 08, 2013 % Change Prev. day WoW -0.11 0.25 MoM -0.38 YoY 2.22

Rs/qtl

2973

1.54

1.19

3.19

1.92

Source: Reuters

International Prices
Unit Sugar No 5- LiffeMay'13 Futures Sugar No 11-ICE May '13 Futures $/tonne $/tonne Last 487.2 388.22

as on May 08, 2013 % Change Prev day WoW -1.38 -0.96 -2.58 0.81 MoM -4.34 -1.30 YoY -12.75 -14.24

Domestic Production and Exports

According to ISMA, Indias Sugar production between OctoberApril stood at 24.52 mn tn, lower by 3% during the same period last year. Maharashtras production dipped 10% to 8 mn tn while production in Uttar Pradesh increased by 7% to 7.43 mn tn.
India is likely to produce 24.6 mn tn of sugar in 2012-13 year ending on Sept. 30, higher than the previous estimate of 24.3 mn tn, the Indian Sugar Mills Association (ISMA) said last week. With the opening stocks of 6.5 mn tn, domestic Sugar supplies are estimated at 30.8 mn tn against the domestic consumption of around 22. 5 mln tn for 2012-13. Exports are not viable as international prices have also declined significantly. A severe drought in top sugar producing Maharashtra state has been affecting new plantation and is likely to affect on sugar production in the year starting from Oct. 1, 2013.

.Source: Reuters

Technical Chart - Sugar

NCDEX June contract

Global Sugar Updates

Liffe sugar as well as ICE Raw Sugar declined for the second consecutive day and settled 1.38% and 0.96% lower on Wednesday, on account of improvement in the pace of cane crush in Brazil supported by favorable weather. Sugar prices in the international markets are trading at their lowest levels in since July 2010 on account of a global surplus situation for the third consecutive year. According to Unica, South-Central Brazil cane crush projected at 589.60 million tons for 2013/2014. Main centersouth sugar cane crop will produce a record 35.5 mn tn of sugar in the 2013/14 season, higher by 4.1% compared to 34.1 mn tn last year. Brazil's sugar production will jump to a record level in the 2013/14 season just now starting, with a surge in cane output from an expanded planted area, favorable weather and efforts to renew old and less productive cane plants. Expectations of abundant supplies from the 2013-14 harvest in the other leading producers, such as Thailand, Mexico and the United States have kept prices under pressure. Sugar prices are trading around 2 year lows.

Source: Telequote

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

valid for May 09, 2013 Resistance 2995-3010

2945-2965

Outlook
Sugar prices are expected to increase today extending yesterdays gains. Improvement in demand from the bulk manufacturers will support prices at lower levels. A decline in sugar production may also support prices at lower levels. However, supplies will continue to remain high as millers will release stocks to clear cane arrears. This will offset summer season demand. Weak international prices may also cap sharp gains.

www.angelcommodities.com

Commodities Daily Report

Thursday| May 09, 2013

Agricultural Commodities
Oilseeds
Soybean: Soybean futures traded on a positive note yesterday on
account of poor supplies in the domestic markets coupled with positive international markets. However, weak meal export demand as well as IMDs prediction of a normal monsoon capped sharp rd upside. According to the 3 Advance Estimates, Soybean output is pegged at 14.14 mn tonnes. The spot as well as the Futures settled 0.45% and 0.7% higher on Wednesday. Special Margin (in Cash) of 10% on the Long side has be imposed in Soyabean May 2013, June 2013 & July 2013 expiry contracts with effect from beginning of day Tuesday, April 30, 2013. Indias soy meal exports in April are likely to fall to 200,000 tonnes, down 36 percent from a year ago, unless buying from Iran improves. Exports of Soybean meal during March, 2013 was 3,20,265 tonnes as compared to 4,61,892 tonnes in March, 2012 lower by 30.66% y-o-y.

Market Highlights
% Change Unit Soybean Spot- NCDEX (Indore) Soybean- NCDEX May '13 Futures Ref Soy oil SpotNCDEX(Indore) Ref Soy oil- NCDEX May '13 Futures Rs/qtl Rs/qtl Rs/10 kgs Rs/10 kgs Last 4039 4026 724.2 715.1 Prev day 0.45 0.61 -0.33 0.32

as on May 08, 2013

WoW 0.37 2.39 -2.08 -0.58

MoM -1.13 -2.14 -0.05 -0.74

YoY 12.10 11.86 -3.19 -4.99

Source: Reuters

as on May 08, 2013 International Prices Soybean- CBOTMay'13 Futures Soybean Oil - CBOTMay'13 Futures Unit USc/ Bushel USc/lbs Last 1479 48.66 Prev day 1.06 -0.88 WoW 2.89 0.04 MoM 7.33 -1.74
Source: Reuters

International Markets
Soybean gained 1.06% on Wednesday on concerns over delays in planting in the Midwest coupled with tight supplies of the old soy crop. Farmer selling has slowed down. Expectations of lower ending stocks in USDAs Monthly crop report to be released tomorrow also supported prices. Large South American crop coupled with forecasts for US weather to improve in the coming week have capped sharp gains. Sentiments remain weak on account of smooth supplies from Brazil coupled with demand fears amid bird flu in China. Chinas soybean imports were reported at 3.98 mn tonnes in April 2013, lower by 18.4% in April last year, but marginally higher compared to 3.84 mn tonnes in March. The decline is attributed to delays in shipment from Brazil coupled with weak demand on the back of outbreak of the bird flu. Brazil's government lowered its forecast for the 2012/13 soybean crop from 82.1mn tn to 81.9 mn tn.

YoY 2.87 -8.02

Crude Palm Oil

as on May 08, 2013 % Change Prev day WoW 1.12 0.35 0.62 0.04

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

Last 2263 458.8

MoM -4.51 -1.86

YoY -32.55 -25.23

MYR/Tonne Rs/10 kg

Source: Reuters

Refined Soy Oil: Ref soy oil as well as MCX CPO settled 0.72% and
0.35% higher on Wednesday tracking positive KLCE prices. Indian government increased the base import price on crude soybean oil by US $9/tn to US $1103. Besides, base import price on crude palm oil set at US $ 824 and reduced base import price on palmolein crude as well as refined to US $ 864/tn and US $861/tn. Imports of all vegetable oils, including non-edible oils, fell 7.5 per cent to 896,714 tn in March, pulled down by the drop in palm oil imports. Palm oil imports dropped 12% to 708,262 tn in March. Malaysia, the world's No.2 palm oil producer, set its crude palm oil export tax for May at 4.5 percent, unchanged from April. Exports of Malaysian palm oil products from April 1 to 25 increased 5.2% to 1,123,129 tonnes from 1,067,140 tonnes shipped during March 1 to 25.

RM Seed
Unit RM Seed SpotNCDEX (Jaipur) RM Seed- NCDEX May '13 Futures Rs/100 kgs Rs/100 kgs Last 3409 3404 Prev day 0.62 0.74 WoW -1.65 -1.42

as on May 08, 2013 MoM -5.80 -5.18

Source: Reuters

YoY -13.78 -14.15

Technical Chart Soybean

NCDEX June contract

Rape/mustard Seed: Mustard June Futures settled 0.5% higher on

Wednesday on account of short coverings. Prices have declined sharply on account of higher supplies of the new crop coupled with higher output expectations. Sowing of Mustard seed is up by 2.2% at 67.23 lakh ha. Agriculture ministry in its third advance estimates, pegged mustard output at 7.36 mn tn, up by 11.5%.

Outlook
Soybean prices may trade on a mixed note with a positive bias. Positive international markets as well as poor supplies in the domestic markets may support prices. However, forecast of a normal monsoon coupled with weak meal export demand may pressurize prices. Soy oil may decline on expectations of higher imports. CPO may gain due to lower yield period in the producing nations. However, comfortable stock levels may cap sharp upside.

Source: Telequote

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

valid for May 09, 2013 Support 685-688 3860-3885 3410-3425 454-456 Resistance 695-700 3940-3975 3450-3465 460-462

www.angelcommodities.com

Commodities Daily Report

Thursday| May 09, 2013

Jeera Agricultural Commodities

Jeera June futures recovered from lower levels yesterday on account of shorting coverings and settled 0.76% higher. However, the spot remained in the negative and settled 0.1% lower on Wednesday as weak demand from the domestic as well as international markets continued to mount pressure on the prices. Higher production estimates have also pressurized prices. However, arrivals have started to slow down from its peak, which have supported prices at lower levels. Domestic as well as overseas demand is expected to improve in the coming days. According to Gujarat State Agri Dept. sowing in Gujarat is reported at 3.352 lakh ha in 2013 compared with 3.719 lakh ha last year. According to the Rajasthan State Budget 2013-14, it has exempted jeera from VAT. 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 $2,400-2,425 tn (FOB Mumbai) while Syria and Turkey are not offering. Carryover stocks of Jeera in the domestic market is expected to be around 8-9 lakh bags.

Market Highlights
Unit Jeera Spot- NCDEX (Unjha) Jeera- NCDEX May '13 Futures Rs/qtl Rs/qtl Last 13362 12810 Prev day -0.10 1.26

as on May 08, 2013 % Change WoW -0.02 -0.60 MoM -2.19 -6.45 YoY -0.88 -6.19

Source: Reuters

Technical Chart Jeera

NCDEX June contract

Production, Arrivals and Exports

Arrivals in Unjha were reported at 20,000 lakh bags on Wednesday. Production of Jeera in 2012-13 is expected around 38-40 lakh bags (55 kgs each), same as last year. Exports of Jeera between Apr 2012- Jan 2013 stood at 64,400 tn, an increase of up 86%. (Source: Factiva)

Source: Telequote

Market Highlights
Prev day 0.08 2.16

as on May 08, 2013 % Change

Outlook
Jeera Futures is expected to trade with a negative bias today. Higher output and weak demand may pressurize prices. However, any improvement in overseas as well as domestic demand may support prices. Overall trend remain positive for the Jeera prices as they are likely to stay firm as Syria & Turkey have stopped shipments.
Unit Turmeric SpotNCDEX (N'zmbad) Turmeric- NCDEX May '13 Futures Rs/qtl Rs/qtl Last 6014 5956

WoW -6.95 -7.14

MoM -8.21 -11.32

YoY 78.84 61.58

Turmeric
Turmeric June Futures recovered from lower levels after declining sharply over the preceding two sessions on account of short coverings, prices have declined on account of higher supplies and huge carryover stocks. Domestic as well as overseas demand is also reported to be weak. However, there are expectations of improvement in overseas demand in June. Unseasonal rains in Andhra Pradesh have damaged about 9240 tonnes of turmeric earlier. The spot as well as the Futures settled 0.08% and 1.28% higher on Wednesday.

Technical Chart Turmeric

NCDEX June contract

Production, Arrivals and Exports

Arrivals in Erode and Nizamabad stood at 35,00 bags and 7,000 bags respectively on Wednesday. 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 45 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 is expected to trade with a negative bias today. Weak exports data coupled with higher supplies of the fresh crop and huge carryover stocks may pressurize prices at higher levels. However, expectations of improvement in export demand coupled as well as demand from stockists may support prices at lower levels. Crop damage and output concerns may also support prices at lower levels.

Source: Telequote

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

Valid for May 09, 2013

Support 12690-12790 5770-5890 Resistance 12980-13060 6080-6160

www.angelcommodities.com

Commodities Daily Report

Thursday| May 09, 2013

Agricultural Commodities
Kapas
NCDEX Kapas as well as MCX Cotton traded on a mixed note and settled 0.14% and 0.11% lower respectively on Wednesday on expectations CCI and NAFED will offload stocks in May after an unsuccessful bid to offload of 2.5 lakh bales of cotton in April 2013 continued to pressurize prices. However, emergence of fresh demand at lower price levels supported prices. Also, firm international markets supported an upside in the prices. The Cotton Corporation of India (CCI) and the National Agricultural Cooperative Marketing Federation of India (NAFED) are expected to offload over 8 lakh cotton bales (a bale weighs 170 kg) in the domestic market this month and the asking price may be lower by Rs 1,000 per candy than the previous price. In April, the government had offered a price of Rs 39,500 per candy, which received lukewarm response from the textile industry. (Source:
Economic Times dated 6th May 2013)

Market Highlights
Unit Rs/20 kgs Rs/Bale Last 1038 17940

as on May 08, 2013 % Change Prev. day WoW -0.14 -1.80 -0.11 -2.13 MoM YoY 12.77 -3.49 -2.13 3.52

NCDEX Kapas Apr Futures MCX Cotton May Futures

Source: Reuters

International Prices
ICE Cotton Cot look A Index Unit USc/Lbs Last 86.2 94.6

as on May 08, 2013 % Change Prev day WoW 0.22 5.01 -0.21 -0.32 MoM 0.96 1.18 YoY 2.00 0.42

India's imports of cotton this year could reach 1.5 mn bales, missing earlier estimates of more than 2 mn as the govt may to start selling its stockpiles. Cotton supplies since the beginning of the year in October 2012 until February 10, 2013 were down at 183.4 lakh bales, down from 189.27 lakh bales a year earlier.

Source: Reuters

Technical Chart - Kapas

NCDEX April contract

Domestic Production and Consumption

CAB in its latest meet has projected cotton crop at 34 mn bales for 201213 season compared to the previous estimates of 33 mn bales. Mill consumption is expected to go up from 22.3 million bales last year to 23.5 million bales. Exports are estimated at 8.1 mn bales. While Import are estimated 2.5 mn bales.

Global Cotton Updates

ICE Cotton futures settled 0.22% on Wednesday on strong export sales data and U.S. plantings delays which prompted worry over upcoming supplies. However, reports of sales of reserves from India capped sharp upside. US export sales for the week ending April 25 reached 314,400 running bales, up 32% from previous week and most since mid-January. According to China Cotton Association, China will continue with its stockpiling policy this year which will boost imports. According to the USDA report, planting intentions for the 2013-14 season are said to be at a 4 year low. Also, there are expectations of good export demand from China. Reports of India and China releasing stocks from the state reserve led to a decline in the prices. USDA has initially forecasted US Cotton acreage for 2013-14 season, at smallest in 20 yrs, however, with recent surge in prices, farmers may decide to plant more cotton. The planting intention data is schedule to be released on 28th march 2013.

Source: Telequote

Technical Chart - Cotton

MCX May contract

Source: Telequote

Technical Outlook
Contract Kapas NCDEX April 14 Fut Cotton MCX May Futures Unit Rs/20 kgs Rs/bale

valid for May 09, 2013 Support 1020-1030 17760-17850 Resistance 1055-1065 18080-18220

Outlook
We expect Cotton prices to trade on mixed note today. Prices may gain tracking firm international markets. US cotton planting intentions were reported at a 4 year low. China will continue its stockpiling policy, may also support prices. In the domestic markets, sharp upside will be capped as offloading from the state reserves may ease supplies in the short term.

www.angelcommodities.com