Commodities Daily Report

Thursday| January 03, 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

Thursday| January 03, 2013

Agricultural Commodities
News in brief
Rise in wheat MSP increases food ministrys cost by 5%
The food ministrys economic cost of wheat the amount incurred in procuring and storing the grain is set to rise by 5% to Rs. 19,147 a tonne, with the increase in the MSP of the grain, an official said. Last month, the government had raised wheat MSP by Rs. 65 to Rs. 1,350 a quintal for the 2013- 14 marketing year ( April- March). The hike in wheat MSP will also lead to a rise in the economic cost of procuring and storing the grain. It will now rise to Rs. 19,147 a tonne in 2013- 14 marketing year from Rs. 18,225 a tonne in the 2012- 13 marketing year, a ministry official said. The Centre had procured 38.15 million tonnes of wheat in 2012- 13 rabi marketing year 10 million tonnes more than the procurement made in the 2011- 12 marketing year. (Source: Business Standard)

Market Highlights (% change)

Last Prev. day

as on Jan 2, 2013
WoW MoM YoY

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

19714 5993 54.24 93.12 1688

0.68 0.71 -0.81 1.42 0.78

1.53 1.48 -1.10 2.35 1.69

1.89 1.77 -0.92 5.22 -0.38

23.68 25.77 2.15 -9.56 5.51

.Source: Reuters

Sugar output up 2.5% at 7.9 mt during Oct-Dec

Sugar production in the first three months of the 2012-13 sugar year was up 2.5% at 7.96 million tonnes over the corresponding period last year. The overall increase in output was bolstered by higher production in Karnataka and Maharashtra. During Oct-Dec, 496 mills across the country have crushed 83 million tonnes of sugarcane, ISMA said. In UP, where the mills started crushing in late November, the output was 11% lower at 1.92 mt over last year. Sugar recovery stood at 8.74%, same as that of last year. Till date, about 121 sugar mills were operational in the State. Maharashtra produced 2.90 mt of sugar, about 4% more than last year. The higher output has been attributed to the early commencement of crushing season and better operational utilisation. About 161 sugar mills were operational till date against 167 in the corresponding period last year. Sugar recovery in Maharashtra stood at 10.46%, almost the same as that of last year. The reason for slowing pace in recovery revival is due to partially dry cane arrival to sugar mills. ISMA has projected a sugar output of 6.5 mt in Maharashtra in the current year. In Karnataka, the output was higher by 17% at 1.55 mt with a slightly better recovery at 9.87%. Tamil Nadu has produced 3 lakh tonnes so far, while Andhra Pradesh has registered a 12% increase at 3.28 lakh tonnes. ISMA has reiterated its earlier projections of 24 mt for the year. The Government has pegged the 2012-13 output at 23 mt. The industry body is expected to review the situation by mid-January.. (Source: Business Line)

Pre- Budget meet: Agriculturalists seek direct cash transfer of food, fertiliser subsidies
Finance Minister P Chidambaram today kicked off the customary preBudget consultations. In a meeting with the finance minister, agriculturalists shared concerns on the governments widening fiscal deficit. They also suggested direct cash transfer of fertiliser and food subsidies, which they claimed would save the government Rs. 70,00085,000 crore directly. To protect the interests of farmers, they also urged the finance minister and his team to set up a regulator on FDI in the retail segment. Representatives from the farming community and agricultural economists said the regulator should analyse the investments and the terms of trade to ensure farmers benefited the most from the entry of foreign chains in India. The agriculturalists asked the government to start a system of direct cash transfer to beneficiaries to rationalise food and fertiliser subsidies, which could rise to Rs. 2,00,000 crore next financial year. The direct benefit transfer scheme, which started on January 1 on a pilot basis, doesnt include these two subsidies. They said if these were included, the government, struggling to keep its fiscal deficit under check, could save up to Rs. 70,000 crore. (Source: Business Standard)

Maharashtra seeks central aid of Rs.5,000 crore to tackle drought

Reeling under drought conditions in 145 out of a total 353 talukas of Maharashtra, the state government is taking several measures including seeking central assistance and requesting neighboring state Karnataka to release water, to tackle the crisis. The state has sought a central assistance of Rs. 5,000 crore, including Rs. 2,270 crore for relief measures. Last week, Agriculture Minister Sharad Pawar, who heads the group of ministers that decides on relief measures for drought- hit states, said he had received report from a Central team that recommended a financial assistance of Rs. 778 crore to Maharashtra for water and related programmes. Pawar assured the state of further increasing the aid after the group of ministers meeting. (Source: Business Standard)

Centre likely to up ante on cotton procurement

The government is considering more steps to facilitate greater purchases of cotton from farmers to prevent any distress sales, and wont slow down procurement despite a looming storage crisis, sources said on Wednesday. Excess cotton stocks from Andhra Pradesh, where a storage crisis is fast approaching, will be kept in other states, especially Tamil Nadu, where the facility is available, sources told FE. Officials from the Cotton Corporation Of India (CCI) the governments biggest fibre procurement agency will soon meet bankers to enhance its credit limit for procurement to R8,000 crore so that purchases from farmers dont get affected, sources added. Currently, CCIs borrowings stand at R1,600 crore, with outstanding payment liabilities of R1,100 crore. (Source: Indian
Express)

Declining sugar prices hit industry hard

Even as high inflation has drawn the attention of policymakers, declining prices of sugar, owing to excess supply, have hit the industry. Sugar prices in most parts of the country, primarily north India, are now lower than production costs. According to sugar industry representatives, the ex- mill sale price of sugar stands at about Rs. 33/kg in the North, against the cost of production of Rs. 34- 36. In Maharashtra and Karnataka, at Rs. 31/kg, the price is just higher than the production cost of Rs. 30/kg. To address this, millers have urged the Union government to allow them to sell sugar under the allocated non- levy sugar quota till May. Currently, they are allowed to sell the sugar until March. In a letter to Food Minister K V Thomas, the Isma has urged the government just as it had allowed mills to sell non- levy sugar for October and November till December, a similar exercise should be carried out for sugar allocated for sale in December- March. (Source: Business Standard)

Good weather seen for last leg of Argentine soy, corn sowing
Dry weather that has allowed Argentine farmers to speed soy and corn planing over recent weeks is expected to last until mid-January, setting the stage for big harvests as early-season flooding gives way to a blazing Southern Hemisphere summer sun. Weak crops in fellow breadbaskets Russia and the United States stoked world food prices last year, putting the onus on Argentina and neighboring Brazil to supply the market and provide affordable staples for poor consumer nations. growers in most of the main crop belt have stepped up the pace of planting over the last two weeks and analysts say the acreage lost to flooding should be offset by wider seedings made possible by the rains. "The first half of January will be dry, with normal levels of rainfall expected in the second half," said Anthony Deane, head of consultancy Weather Wise Argentina.
(Source: Reuters)

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Commodities Daily Report

Thursday| January 03, 2013

Agricultural Commodities
Chana
Chana prices extended the gains of the previous session, expecting demand to emerge at lower levels. NCDEX Spot as well as Futures settled 1.59% and 1.16% higher on Wednesday. Although chana prices witnessed 17% gains in 2012 on the back of lower availability, sentiments have turned negative during the last one month on account of continuous supplies of imported chana from Australia coupled with higher output expectations. As a result, prices in the month of December 2012 declined 8.8%.

Market Highlights
Unit Rs/qtl Rs/qtl Last 4000 3923 Prev day 1.59 1.16

as on Jan 2, 2013 % change WoW MoM 0.00 -3.14 0.44 -2.63 YoY 20.20 17.42

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

Source: Reuters

Sowing progress
Total pulses acreage as on 28th Dec 2012 stood at 132.52 lakh ha, down by 1.2% yoy. As on 21st Dec, pulses acreage was down by 0.9%. Chana sowing is nearing its end and is expected to be marginally higher compared to last year. As per the Agriwatch report, Chana sowing is up 3.7% at 86.63 lakh ha. Overall Pulses sowing might decline marginally. Chana acreage is marginally higher by 1.6 this year in Rajasthan at 14.57 lakh ha, In Maharashtra Chana acreage is up at 10.7 lakh ha as on 28th Dec, 2012 vs 6.8 lakh ha year ago. While in AP it is up at 6.64 lakh ha as on 19th Dec. (Source: State farm dept)

Technical Chart - Chana

NCDEX April contract

Demand supply fundamentals

Chana fresh crop arrival has started in Karnataka & Andhra Pradesh and would commence soon in Maharashtra too. However, arrival pressure will built up February onwards when harvesting commence in MP. 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. 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 Apr Futures Unit Rs./qtl Support

valid for Jan 3, 2013 Resistance 3600-3620

3530-3550

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
Chana prices may extend the gains of the previous session on Thursday. However, sufficient supplies amid higher shipments and expectations of better output next season may cap sharp gains in the prices.

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Commodities Daily Report

Thursday| January 03, 2013

Agricultural Commodities
Sugar
Sugar futures declined 0.25% on Wednesday on account of higher supplies in the domestic markets. Higher availability in the domestic markets and subdued demand has exerted downward pressure and thus prices plunged 2.26% in December 2012. While in the year 2012 sugar futures have gained 11.81% on the back of expected lower output in the domestic markets. 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. The government is planning to remove quantitative restrictions on sugar exports and imports and will use tariffs to regulate trade. Raw sugar futures on ICE as well as Liffe white sugar settled 0.9% and 0.92% higher on Wednesday on account of short coverings. Prices have corrected over due to 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.

Market Highlights
Unit Sugar Spot- NCDEX (Kolhapur) Sugar M- NCDEX Jan'13 Futures Rs/qtl Last 3248

as on Jan 2, 2013 % Change Prev. day WoW -0.17 -0.75 MoM -5.08 YoY 9.52

Rs/qtl

3240

-0.25

-0.80

-1.22

12.46

Source: Reuters

International Prices
Unit Sugar No 5- LiffeMar'13 Futures Sugar No 11-ICE Mar '13 Futures $/tonne $/tonne Last 528.4 437.56

as on Jan 2, 2013 % Change Prev day WoW 0.90 0.92 2.30 3.52 MoM 3.69 2.77 YoY -16.42 -19.37

.Source: Reuters

Domestic Production and Exports

Mills in the country have produced 7.96 mln tn sugar in the first three months of the season, up nearly 2.5% 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 Feb contract

Source: Telequote

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

valid for Jan 3, 2013 Resistance 3290-3305

3250-3265

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

Thursday| January 03, 2013

Agricultural Commodities
Oilseeds
Soybean: After remaining weak in the early part of the session on Wednesday, Soybean futures settled higher 0.53%,
while spot continued to trade lower by 0.12%. Arrivals in the domestic markets declined to 1.6 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.
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 3313 3239 707.3 701.4 Prev day -0.12 0.53 -0.06 0.15 WoW 1.31 0.67 -0.59 0.54 MoM 4.68 2.79 -3.59 -2.64 YoY 32.79 26.45 -4.11 -6.48

Market Highlights

as on Jan 2, 2013 % Change

International Markets
Soybean futures on the Chicago Board of Trade fell around 0.93% Wednesday as favorable crop weather in South America fueled expectations for large harvests. 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 Jan 2, 2013 International Prices Soybean- CBOTJan'13 Futures Soybean Oil - CBOTJan'13 Futures Unit USc/ Bushel USc/lbs Last 1406 50.52 Prev day -0.93 2.77 WoW -1.33 4.62 MoM -2.31 2.25
Source: Reuters

YoY 15.06 -4.19

Crude Palm Oil

as on Jan 2, 2013 % Change Prev day WoW 2.67 1.14 3.61 9.14

Refined Soy Oil: Ref soy oil and MCX CPO futures gained 0.15%
and 1.14% respectively on Wednesday on fears of supply disruptions in Malaysia. 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. Malaysian palm oil product exports during December fell 5.7 percent to 1,568,510 tonnes from 1,663,092 tonnes in November. (Source: ITS)

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

Last 2382 443.2

MoM 9.77 5.37

YoY -26.09 -19.84

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 4225 4241 Prev day -0.59 0.35

as on Jan 2, 2013 WoW -1.05 1.65 MoM 0.00 2.59

Source: Reuters

YoY 19.43 11.81

Rape/mustard Seed: Mustard seed prices settled higher by 0.35%

on Wednesday on account of supply tightness till the fresh crop arrives. Low stocks in the domestic market have supported the prices. Rabi oilseeds sowing which was up by 4.9% as on Dec 14, is now up by 1.3% at 7.9 mn ha. The sowing of major rabi oilseed, i.e. mustard seed, is up with acreage in largest producing state Rajasthan at 26.63 lakh ha vs to 24.41 lakh ha. Indian farmers have cultivated rapeseed on 6.5 million hectares as of Dec. 28, compared with 6.38 million hectares during the same period last year. Rapeseed output is expected to rise by 5% to 6.5 mn tn from 6 mn tn last year.

Technical Chart Soybean

NCDEX Feb 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 are expected to 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 Feb NCDEX Futures Soybean NCDEX Feb Futures RM Seed NCDEX Apr Futures CPO MCX Jan Futures Unit Rs./qtl Rs./qtl Rs./qtl Rs./qtl

valid for Jan 3, 2013 Support 680-685 3250-3280 3490-3510 435-439 Resistance 693-698 3315-3335 3555-3580 445-450

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Commodities Daily Report

Thursday| January 03, 2013

Agricultural Commodities
Black Pepper
Pepper Futures opened on a negative note yesterday, but recovered sharply from lower levels towards the later part of the session on account of short coverings. 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 higher by 0.08% while the Futures settled 0.83% higher on Wednesday. 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 37918 34460 % Change Prev day 0.08 0.83

as on Jan 2, 2013 WoW 0.61 1.12 MoM -0.60 -10.31 YoY 13.16 3.84

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 Jan 3, 2013 Support 33630-34070 Resistance 34860-35210

Production and Arrivals

The arrivals in the spot market were reported at 17 tonnes while off takes were reported at 19 tonnes on Wednesday. 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 may recover from lower levels today on reports of arrivals of good quality crop coupled with winter buying in the domestic market. However, reports that FSSAI has sealed huge quantity of pepper are expected to maintain pressure on the prices. Higher output expectations, as well as reports that FMC is probing into complaints against price movement may cap a sharp upside.

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Commodities Daily Report

Thursday| January 03, 2013

Agricultural Commodities
Jeera
Jeera Futures corrected again yesterday tracking higher sowing as well as conducive weather in the main jeera belt of Gujarat. Fresh export enquiries coupled with demand from stockists and masala millers had boosted the prices over the last couple of days. 85% of sowing is completed. According to Gujarat State Agri Dept. sowing in Gujarat is th reported at 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 1015%. The spot settled marginally higher by 0.07% while the Futures settled 0.9% lower on Wednesday. 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 $2,800-2,825 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 14715 14648 Prev day 0.07 -0.90

as on Jan 2, 2013 % Change WoW -1.09 -1.46 MoM -1.05 4.42 YoY -5.34 -11.29

Source: Reuters

Technical Chart Jeera

NCDEX March contract

Production, Arrivals and Exports

Arrivals in Unjha were reported at 3,000 tn on Wednesday. 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 -0.10 -0.42

as on Jan 2, 2013 % Change

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

Last 5674 6696

WoW 7.92 3.78

MoM 14.74 35.99

YoY 10.43 39.62

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

Turmeric
Turmeric Futures opened higher hitting a new contract high yesterday, but corrected from higher levels due to profit booking at higher levels. Prices have risen sharply over the last couple of days due to demand from the stockists. Lower production estimates have supported the prices. Also, arrivals of good quality crop have supported prices. There are reports of some crop damage in Erode region. 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 as well as the Futures settled 0.10% and 0.42% lower on Wednesday.

Technical Chart Turmeric

NCDEX April contract

Source: Telequote

Production, Arrivals and Exports

Arrivals in Nizamabad and Erode mandi stood at 1,200 bags and 4,000 bags respectively on Wednesday. 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 positive bias. The prices may recover from lower levels today as demand from stockists as well as lower production expectations may support prices. However, gains may be limited as higher carryover stocks and weak overseas demand can pressurize prices.

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

Valid for Jan 3, 2013

Support 14510-14575 6510-6614 Resistance 15750-15860 6830-6960

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Commodities Daily Report

Thursday| January 03, 2013

Agricultural Commodities
Kapas
Kapas prices declined sharply by 2.3% on Wednesday on the back of estimated higher output. 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 higher by 0.29% on Wednesday. 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 970 16540

as on Jan 2, 2013 % Change Prev. day WoW -2.37 -2.66 -0.72 1.22 MoM 0.10 1.22 YoY #N/A -3.67

NCDEX Kapas Futures MCX Cotton Futures

Source: Reuters

International Prices
ICE Cotton Cot look A Index Unit USc/Lbs Last 75.36 81.35

as on Jan 2, 2013 % Change Prev day WoW 0.29 -1.36 0.00 0.00 MoM 5.80 0.00 YoY -21.43 -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 283,300 running bales for the 2012/2013 marketing th Year was down 15 percent from the previous week. (Dated 28 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 Jan 3, 2013 Support 950-960 16380-16460 Resistance 985-1000 16670-16800

Outlook
Cotton prices may open remain firm in the early part of the session. However, prices may again come under downside pressure as higher output expectations by Cotton Association of India has turned the sentiments negative for the cotton prices. In the coming weeks, sharp downside in the domestic markets is also limited as farmers will not sell their stocks at very low prices. Also demand remains strong at low prices.

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