Commodities Daily Report

Monday| December 3, 2012

Agricultural Commodities

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

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

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Commodities Daily Report

Monday| December 3, 2012

Agricultural Commodities
News in brief
Mustard sowing outpaces 2011 as winter advances
As winter gradually sets in over most of north and central India, the sowing of rabi oilseeds, particularly mustard, has surpassed last years. According to the latest data, mustard had been sown on 5.71 million hectares till Thursday, marginally more than the 5.64 million hectares during the corresponding period last year. Mustard seed is the biggest oilseed crop during the rabi season and its production is critical to determine the extent of edible oil import needed every year. In 2011- 12, the country produced 6.7 million tonnes of mustard seed. The government has fixed a target of 8.19 million tonnes in 2012- 13. Mustard sowing in Rajasthan, the biggest producer, was 2.58 million hectares till Thursday, up 2.8 per cent from last year, the data showed. Among other crops, the data showed wheat, the biggest foodgrain grown during rabi, was planted on 15.78 million hectares till Thursday, 2.9 per cent less than last years corresponding period. A week before, it was 4.6 per cent less than in the same period of 2011. Wheat and mustard sowing have gathered momentum as the winters have progressed in north and central India. It will further pick up in the coming weeks, a senior official said. (Source: Business Standard)

Market Highlights (% change)

Last Prev. day

as on Nov 30, 2012

WoW MoM YoY

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

19340 5880 54.27 88.91 1711

0.88 0.94 -0.83 0.95 -0.94

4.44 4.48 -1.56 1.75 -0.98

4.51 4.63 0.85 3.10 -0.38

17.33 19.10 5.64 -11.27 -1.41

.Source: Reuters

New US Farm Credit chief sees farm bill extension; eyes drought
Jill Long Thompson, new chief of the Farm Credit Administration, the regulator of the largest lender to U.S. agriculture, said she expects a deal by year end to extend the expired U.S. farm bill and then a comprehensive new 5-year law to be in place by spring planting. Thompson, an Indiana farmer who was named by President Obama this week to succeed retiring FCA chief executive Leland Strom, also said that volatile weather and climate change will have a higher profile for farm bankers in future lending decisions. The farm economy remains strong, she said, but weather and climate risks are growing. Thompson said that crop insurance programs, which covered 85 percent of corn and 75 percent of soybeans in this summers historic drought, are vital and legislators know it. Even though there will be challenges, I think the farm economy will overall remain strong in the future, she said. The drought, which cut crop yields and affected two-thirds of U.S. land mass this summer, continues to stress winter-seeded crops like hard red winter wheat and livestock and dairy producers slammed by soaring feed costs. Thompson said that farm bankers and policy planners would have to take climate change as a bigger factor in their lending decisions going forward as part of prudent policy. (Source: Reuters)

Major crop production expected to fall by 2.8% in FY13: CMIE

Production of major crops is likely to fall by 2.8 per cent in 2012-13 due to lower acreage, economic think tank CMIE has said. "Production of major crops is projected to fall by 2.8 per cent in 2012-13. We have revised our production projections downwards from our earlier estimate of 2.3 per cent decline," Centre for Monitoring Indian Economy said in monthly report. As the kharif sowing came to an end by October, acreage turned out to be lower than expectations. Production of rice is projected to fall by 3.4 per cent in FY13 as its acreage declined by 4.1 per cent to 375 lakh hectares as on November 2. "As sowing failed to pick pace, we now expect rice production to be limited to 100.8 million tonne in 201213," it said. (Source: Financial Express)

Global coffee exports up 17.3 pct in October - ICO

World coffee exports rose to 8.88 million 60-kg bags in October, up 17.3 percent from 7.57 million in the same month last year, the International Coffee Organization said on Friday. Robusta exports showed the steepest advance, climbing 52.7 percent to 3.54 million bags, while arabica exports rose just 1.6 percent to 5.33 million bags. October is the first month of the coffee year. (Source: Reuters)

Wheat exports may help check rising global prices

After rice, it is now the turn of Indian wheat to possibly stabilise rising global prices. Indias recent move to continue with additional wheat exports could help keep rising global prices under check, analysts said. In July, the Government had allowed exports of 2 million tonnes (mt) and last week, the Cabinet approved additional exports of up to 2.5 mt. India, which resumed wheat exports in September 2011, has emerged as one of the major wheat exporter this year, after supplies from multiple origins including Black Sea, Australia and the European Union dwindled on drought slashing the output in these regions. The International Grains Council expects the global output to decline to 654 mt in 2012-13, down from 695 mt the previous year. (Source: Business Line)

China 2012 soy output to decline 11.6 pct on year

China is expected to have produced 12.8 million tonnes of soybeans in 2012, down 11.6 percent from the previous year, with the planting area falling for the third year in a row, a government think-tank said on Monday. As China focuses on boosting output of corn, wheat and rice, it has become increasingly dependent on foreign soy supplies, and now buys 60 percent of globally traded soybeans. Imports are expected to reach a record 57.5 million tonnes this year. China's total soybean planting area fell 9 percent this year to 7.177 million hectares, the National Bureau of Statistics (NBS) said last week. (Source: Reuters)

Rain heads for southern Brazil grains belt after dry November
Rains are expected in Brazil's southern grain belt over the weekend, forecaster Somar said on Friday, after the main corn and soy region received far less rain than usual in November. Parts of No. 2 soy state Parana and No. 3 state Rio Grande do Sul received up to 60 percent less monthly rainfall than they did in previous years, although parts of top soy state Mato Grosso received 50 percent more moisture, helping recently planted soybeans to germinate. As a cold front in southeastern Brazil moves on, humidity from the Amazon should be able to reach the southern producing regions, bringing rainfall in the coming days, Somar said. "December will start with more concentrated rains over Brazil's center and south," Somar said in a daily report.Dryness in the south has so far not prompted analysts to cut forecasts for what is expected to be a record 81-million-tonne soy crop and a strong 70-million-tonne corn crop in a year that South American grains are needed to offset losses caused by drought in the United States grain belt. (Source: Reuters)

Brazil sugar mills to crush cane until Christmas - Somar

Favorable weather will allow Brazil's sugar and ethanol mills to crush cane until Christmas before they shut down later than usual for the rainy season, forecaster Somar said on Friday. Somar meteorologist Celso Oliveira said December rainfall patterns would mimic those of November over the center-south cane belt, which accounts for 90 percent of Brazil's sugar production. "Mills will see short periods of rain, which will force them to stop crushing for a day, but they won't see a series of days of rain that would likely force them to shut down for the season," Oliveira said. He said that extremely heavy rains in cane growing regions of Minas Gerais and Goias had forced some mills in those states to shut down until April next season. (Source: Reuters)

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Commodities Daily Report

Monday| December 3, 2012

Agricultural Commodities
Chana
Chana spot as well as futures declined by 2.18% and 3% on Saturday on improved sowing of rabi pulses. Higher import expectations also supported the weak market sentiments. Total pulses acreage as on 30th November is down by 6.4% to 102.49 lakh ha from 109.56 lakh ha last season. Acreage was down by almost 17% till the week ended 16th Nov and by 7% till the previous week thus showing marginal recovery in the sowing. In Maharashtra Chana acreage is up by 31% at 7.03 lakh ha as on 30th th Nov 2012. While in AP it is up by 22.8% at 5.22 lakh ha as on 28 Nov. However, in Rajasthan, sowing is down by 19.2% at 12.18 lakh ha as on th 30 Nov. Except for Wheat, minimum support price of all other Rabi crops has been increased by CCEA for 2012-13 season. MSP of Chana/Gram is raised by Rs 400 per qtl for 2012-13 season to Rs 3200. Higher returns and favorable soil condition will definitely boost acreage in the coming season. 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.

Market Highlights
Unit Rs/qtl Rs/qtl Last 4304 4094 Prev day -2.18 -2.99

as on Dec 1, 2012 % change WoW MoM -2.85 -6.43 -3.78 -11.63 YoY 36.64 35.83

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

Source: Reuters

Technical Chart - Chana

NCDEX Dec contract

Sowing progress and demand supply fundamentals

Improved rains towards the end of monsoon season coupled with hike in MSP have raised prospects of Chana sowing in the 2012-13 season. Also, farm ministry has targeted 7.9 mn tn chana output for 2012-13 season, higher compared to 7.58 mn tn in 2011-12. According to the Ministry of Agriculture 99.81 Lakh hectare area has been planted under Kharif pulses in 2012-13 compared to 108.28 lakh hectare (ha) in the previous year. According to the first advance estimates of 2012-13 season, kharif pulses output is estimated lower by 14.6% at 5.26 million tonnes compared with 6.16 mn tn last year. Kharif pulses harvesting would commence from next month. Assocham estimates, 21 mn tn of pulses demand in 2012-13 and is likely to reach at 21.42 mn tn in 2013-14 and 21.91 MT in 2014-15. (Source: Agriwatch)

Source: Telequote

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

valid for Dec 3, 2012 Resistance 4180-4260

4010-4050

Outlook
Expectations of ease in supplies amid higher shipments coupled with subdued demand will keep bearishness intact. Prices may also take cues from sowing progress of Rabi pulses which is expected to gain momentum in the coming days.

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Commodities Daily Report

Monday| December 3, 2012

Agricultural Commodities
Sugar
Sugar futures traded on a positive note in the initial part of the week on delayed cane crushing in UP and expectations of hike in import duty. However, prices corrected towards the end amid higher quota released for the next four months. Sugar production has marginally declined to 23.30 lakh tn in the first two months of the 2012-13 marketing year that started in October against 23.92 lakh tonnes in the year-ago period, industry body ISMA said. In a move to curb any further spike in sugar prices considering lower sugar production for the marketing year 2012-13, Government has allocated total 70 lac tons of non-levy sugar quota for Dec-March 201213 period which is higher from 59.5 lac tons sugar quota allocated by government last year same period . Out of total 70 lac tons, Government released 66 lakh tn non-levy sugar quota and 2 lakh tn levy conversion sugar quota. Also, there is an extension of around 2 lakh tn from Oct, 2012 - Nov, 2012 which the millers have to release upto 10th December, 2012. Liffe white sugar settled higher by 0.55% in line with firm commodity markets on U.S budget deal optimism. Prices have traded on a weak note over the last couple of days on account of higher pace of crushing in Brazil coupled with higher sugar surplus forecast for fourth straight year, which has led to a sharp decline in international sugar prices.

Market Highlights
Unit Sugar Spot- NCDEX (Kolhapur) Sugar M- NCDEX Dec '12 Futures Rs/qtl Last 3426

as on Dec 1, 2012 % Change Prev. day WoW -0.38 -0.36 MoM -1.83 YoY 9.70

Rs/qtl

3291

-0.66

-0.51

-3.03

9.96

Source: Reuters

International Prices
Unit Sugar No 5- LiffeMar'13 Futures Sugar No 11-ICE Mar '13 Futures $/tonne $/tonne Last 516.1 429.78

as on Nov 30, 2012 % Change Prev day WoW 0.55 0.00 1.08 1.04 MoM -4.74 -0.62 YoY -15.89 -17.53

.Source: Reuters

Technical Chart - Sugar

NCDEX Dec contract

Domestic Production and Exports

According to the first advance estimates by agriculture ministry, Sugarcane output is pegged at 335.3 mn tn, down by 6.2% compared to 357.6 mn tn last year. Despite of higher acreage, the producers body has estimated next years sugar output lower at 24 mn tn, down by 2mn tn compared to the current year. Industry body ISMA has estimated 6 mn tn stocks for the new season beginning October 01, 2012 compared to 5.5 mn tn year ago. India may export 2.5-3 mn tn sugar in 2012-13. With the opening stocks of 6 mn tn, domestic Sugar supplies are estimated at 30mn tn against the domestic consumption of around 22.523 mln tn for 2012-13.

Source: Telequote

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

valid for Dec 3, 2012 Resistance 3310-3330

Global Sugar Updates

Thailand, the world's second-largest exporter after Brazil, has slashed its output forecast in the year to October 2013 to 9.4 million tonnes from 10 million due to poor rain. About 1 mn tn of cane have been crushed in Thailand as the harvest progresses, producing up to 56,000 tn of sugar so far, a 28% increase from the same year-ago period. Sugar output in brazil which was lower compared to last year since the beginning of the crushing season in May, is now up marginally by 0.1% at 29.3 mn tn. The International Sugar Organization said it expected a global sugar surplus of 5.86 million tonnes in the season running from October 2012 to September 2013, up from the prior season's surplus of 5.19 million tonnes. The ISO said the stocks/consumption ratio could rise to around 40 percent in 2012/13, from 37.6 percent in 2011/12. (Source: Reuters)

3260-3275

Outlook
Sugar prices may remain range bound as sufficient supplies available may offset the positive markets sentiments caused by delay in cane crushing in UP. International markets may continue to trade with downward bias on account of global supply glut.

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Commodities Daily Report

Monday| December 3, 2012

Agricultural Commodities
Oilseeds
Soybean: Soybean December futures declined sharply on account
of favorable prospects for sowing in South American nations, higher sowing prospects of Rabi oilseeds in India along with bleak palm oil outlook by the leading industry analyst at palm oil conference in Indonesia. Dorab Mistry, head of edible oils trading, Godrej is predicting CPO futures on BMD to trade in a range of 2300 and 2600 from now until February 2013. This will ensure high stock levels in both countries but particularly in Malaysia. Prices may plunge further if India imposes a 10% import duty on CPO and a 20% import duty on Refined Palm products. Arrivals improved to 4.25 lakh bags on Friday. However, demand from solvent extractors also remained strong. According to first advance estimates, Soybean output is pegged at 126.2 lakh tn for 2012-13.

Market Highlights
Unit Soybean Spot- NCDEX (Indore) Soybean- NCDEX Dec '12 Futures Ref Soy oil SpotNCDEX(Indore) Ref Soy oil- NCDEX Dec '12 Futures Rs/qtl Rs/qtl Rs/10 kgs Rs/10 kgs Last 3213 3106 735 710.4

as on Dec 1, 2012 % Change Prev day -1.26 -3.22 -0.88 -1.37 WoW -1.47 -5.10 -0.12 -2.11 MoM -4.23 -7.81 4.03 2.39 YoY 45.71 39.60 16.92 13.27

Source: Reuters

as on Nov 30, 2012 International Prices Soybean- CBOTJan'13 Futures Soybean Oil - CBOTDec'12 Futures Unit USc/ Bushel USc/lbs Last 1439 49.41 Prev day -0.64 -0.72 WoW 1.41 0.75 MoM -6.19 -1.36
Source: Reuters

International Markets
CBOT soybean settled lower by 0.6% on Friday on long liquidation and profit-taking at the end of the month, along with forecasts for welcome rains in crop areas of Brazil. Net sales of 319,100 MT for the 2012/2013 marketing year were down 41 percent from the previous week and 37 percent from the prior 4-week average. Beneficial rains are expected in Brazil's southern grain belt over the weekend, boosting crop prospects after the main corn and soy region received far less rain than usual in November. December will start with more concentrated rains over Brazil's center and south. Growers advanced seedings by 11% points during the week through Thursday, covering 58% of the 19.4 mn ha expected to be sown this season. Although, the rate of planting picked up as the weather moderated after the Pampas was lashed by harsh August-October storms, it is still 8% below last years level. The Argentine could produce 55 million to 58 mn tn of soybeans this th season if the weather cooperates. Brazil's government on 8 Nov 2012 edged up its forecast for a record 2012-13 soybean crop to between 80.1 and 83 mn tn.

YoY 27.55 -0.22

Crude Palm Oil

as on Dec 1, 2012 % Change Prev day WoW -1.15 -0.43 -5.38 -2.91

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

Last 2145 420.8

MoM -11.55 -3.64

YoY -29.44 -16.77

MYR/Tonne Rs/10 kg

Source: Reuters

RM Seed
Unit RM Seed SpotNCDEX (Jaipur) RM Seed- NCDEX Dec'12 Futures Rs/100 kgs Rs/100 kgs Last 4325 4117 Prev day 3.04 -1.72

as on Dec 1, 2012 WoW 0.87 -1.06 MoM 1.76 -2.09

Source: Reuters

YoY 41.17 33.06

Refined Soy Oil: Ref soy oil as well as CPO declined sharply after
the top analysts warned that record high stocks would weigh on prices in the New Year. But losses were limited by a surprise increase in Malaysian exports that rose to 1.66 mn tn in November from October's 1.61 mn, cargo surveyor Intertek Testing Services said on Friday. Malaysian will announce details of its proposed cut to crude palm oil export taxes by the end of December which will come into effect from Jan 01, making their exports competitive. Palm oil output in the world's biggest producer Indonesia is expected to climb 7% next year to 27 mn tn.

Technical Chart Soybean

NCDEX Dec contract

Rape/mustard Seed: RM seed futures declined sharply over the

last two trading sessions on higher sowing. So far, mustard has been covered on 57.1 lakh ha up from last seasons 56.42. MSP for Mustard seed is increased to Rs 3000/qtl. Indias rapeseed output is expected to rise by 5% to 6.5 mn tn from 6 mn tn last year.

Outlook
Soybean complex may extend the losses on forecasts of welcome rains in Brazilian soy belt. Higher sowing prospects of rabi oilseeds may also pressurize prices. Mustard prices may remain under downside pressure on prospects of higher sowing and thereby better output next year. Palm oil may trade on a negative note on account of weak outlook given by the top industry analyst amid higher stocks.

Source: Telequote

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

valid for Dec 3, 2012 Support 700-705 3020-3060 4010-4060 413-417 Resistance 718-725 3180-3245 4190-4260 425-430

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Commodities Daily Report

Monday| December 3, 2012

Agricultural Commodities
Black Pepper
Pepper futures traded on a negative note last week over reports that FMC is probing into complaints against movement in the pepper market. Better output expectations in the domestic as well as the international markets have also pressurized prices. Farmers are trying to liquidate their stocks ahead of the commencement of harvesting of the fresh crop. Exports demand for Indian pepper in the international markets is also weak due to price parity. However, festive as well as winter demand has supported prices at lower levels. Stocks are also reported to be low. The Spot as well as the Futures settled 2.48% and 1.45% lower w-o-w. Pepper prices in the international market are being quoted at $7,550/tn(C&F) while Vietnam was offering Austa at $7,000/tn, Brazil Austa at $6,700/tn, and Indonesia Austa at $6,500/tn (FOB).

Market Highlights
Unit Pepper SpotNCDEX (Kochi) Pepper- NCDEX Dec '12 Futures Rs/qtl Rs/qtl Last 37732 37800 % Change Prev day 0.02 1.19

as on Dec 1, 2012 WoW -2.48 -1.45 MoM -10.21 -11.69 YoY 7.42 6.79

Source: Reuters

Technical Chart Black Pepper

NCDEX Dec 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 black pepper in 2012 are forecasted at around 1,25,000 tonnes. Exports of Pepper from Vietnam during January till September 2012 is estimated around 80,433 mt, higher by 4.3% in volume and 31.7% in value compared to corresponding year last year. Exports of Pepper from Brazil during January till May 2012 are estimated around 13369 mt. (Source: Peppertradeboard). Pepper imports by U.S. the largest consumer of the spice declined 26% during January-September 2012 period to 41,923 tn as compared to 52,489 tn in the same period previous year. Exports from Indonesia posted significant decrease of 42% as compared to previous year. Exports stood at 36,500 tonnes as compared to 62,599 tonnes in the last year. During May 2012 Brazil exported 1,705 tonnes of pepper as against 1600 tn in May 2011.

Source: Telequote

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

valid for Dec 3, 2012 Support 36700-37250 Resistance 38150-38500

Production and Arrivals

The arrivals in the spot market were reported at 20 tonnes while no offtakes were reported on Thursday. As per IPC, Global pepper production in 2012 is projected at 3.24 lk tn, up compared with 3.18 lk tn in 2011. 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 1.35 lakh tonne as compared to 1.10 lakh tonne estimated early in the beginning of year (2012). Brazil is also expected to produce 22,000 tn this year. Domestic consumption of Pepper in the world is expected to grow by 3.03% to 1.25 lakh tonnes while exports are likely to grow by 1.48% to 2.46 lakh tonnes in 2012. (Source: Pepper trade board) Pepper production in 2012-13 is expected around 60,000-63,000 tonnes. Currently, pepper is in the fruit formation stage in Kerala.

Outlook
Pepper is expected to trade on a sideways to positive note today. Festive demand coupled with winter buying may support prices at lower levels. However, higher output expectations as well as reports that FMC is probing into complaints against price movement may cap sharp gains. Liquidation pressure from farmers as well as low export demand may pressurize prices.

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Commodities Daily Report

Monday| December 3, 2012

Agricultural Commodities
Jeera
Jeera Futures traded on a negative note last week due to sluggish demand in the domestic market. Sowing in Gujarat is lower by 25-30%, but it is expected to gain momentum in the coming days. Sluggish demand coupled with higher stocks for delivery on the exchange warehouses has pressurized prices. However, regular export demand has supported prices in the spot markets. Exporters are buying due to tensions between Syria and Turkey as they are not offering. The spot as well as the Futures settled 1.48% and 3.26% lower w-o-w. 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 $2,825 tn (c&f) while Syria and Turkey are not offering. Carryover stocks of Jeera in the domestic market is expected to be around 6-7 lakh bags compared with 5-6 lakh bags last year.

Market Highlights
Unit Jeera SpotNCDEX(Unjha) Jeera- NCDEX Dec '12 Futures Rs/qtl Rs/qtl Last 14920 14108 Prev day -0.65 -0.70

as on Dec 1, 2012 % Change WoW -1.48 -3.26 MoM -0.16 0.23 YoY 4.95 7.37

Source: Reuters

Technical Chart Jeera

NCDEX Dec contract

Production, Arrivals and Exports

Unjha markets witnessed arrivals of 5,000 bags, while off-takes stood at 5,000 bags on Saturday. Production of Jeera in 2011-12 is expected around 40 lakh bags as against 29 lakh bags in 2010-11 (each bag weighs 55 kgs). (Source: spot market traders). According to Spices Board of India, exports of Jeera in April 2012 stood at 2,500 tonnes as compared to 2,369 tonnes in April 2011, an increase of 6%.
Source: Telequote

Market Highlights
Prev day 0.00 -0.37

as on Dec 1, 2012 % Change

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

Last 4998 4878

WoW -2.01 -4.58

MoM 0.73 -4.61

YoY -6.08 11.07

Outlook
Jeera futures are expected to continue to trade downwards. Higher stocks for delivery on the exchange warehouses may pressurize prices. However, sharp downside may be capped due to export demand. In the medium term (December-January 2012), prices are likely to stay firm as there are limited stocks with Syria and Turkey.

Turmeric
Turmeric Futures corrected sharply last week as market sources expect Turmeric production to increase to 64-65 lakh bags from their earlier estimates of 61-62 lakh bags. Improved weather conditions in Andhra Pradesh and Karnataka has led to the revision in the production estimates. The upcountry as well as overseas demand is reported to be weak, further pressurizing prices. Stockists also have good carryover stocks with them. 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 Minimum Support price of Rs.10000/qtl. The Spot as well as the Futures settled 2.01% & 4.58% lower w-o-w. Production, Arrivals and Exports Arrivals in Nizamabad mandi stood at 200 bags while Erode mandi remained closed due to local festival on Friday. Turmeric production in 2012-13 is expected around 64-65 lakh bags. Production in 2011-12 is projected at historical high of 10.62 lakh tns. According to Spices Board of India, exports of Turmeric in April 2012 increased by 1% at 7,300 tn as compared to 7,230 tn in April 2011. Outlook Turmeric prices are expected to continue to trade downwards today. Higher production estimates and weak upcountry demand may pressurize prices. However, prices may find support at lower levels expecting orders from North India. Also, Turmeric Farmers Association of India has decided to fix their own MSP at Rs.10000/qtl.

Technical Chart Turmeric

NCDEX Dec contract

Source: Telequote

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

Valid for Dec 3, 2012

Support 14000-14050 4800-4840 Resistance 14180-14260 4930-4970

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Commodities Daily Report

Monday| December 3, 2012

Agricultural Commodities
Kapas
NCDEX Kapas settled higher by 0.41% on account strong buying by the millers. However, arrival pressure is seen capping the upside. As on 18th Nov 2012, 22.66 lakh bales of Cotton has arrived so far, down by 29% compared to last year 31.97 lakh bales during the same period. Cotton export registrations for the 2012-13 season stood at 4.5 lakh bales as of November 5, 2012. Cotton exports are currently on Open General License subject to a prescribed procedure of registration. U.S. cotton futures closed higher on Friday, ending the month up 3.5 percent as bargain hunting by mills helped offset speculative short selling on expectations of a record global surplus. End-user interest re-emerged after prices dipped below 70 cents earlier in the month. With local prices in China, the world's largest producer and consumer, at almost double that level.

Market Highlights
Unit Rs/20 kgs Rs/Bale Last 977 16420

as on Dec 1, 2012 % Change Prev. day WoW 0.41 1.88 1.80 1.86 MoM 0.05 1.86 YoY #N/A -2.20

NCDEX Kapas Futures MCX Cotton Futures

Source: Reuters

International Prices
ICE Cotton Cot look A Index Unit Usc/Lbs Last 72.65 81.35

as on Nov 30, 2012 % Change Prev day WoW 1.25 4.04 0.00 0.00 MoM 3.68 0.00 YoY -20.47 -29.20

Domestic Production and Consumption

According to Cotton Advisory Boards (CAB) latest estimates for 2012-13 season that commenced in October, domestic cotton production is pegged 334 lakh bales, down 5.6% from the previous years estimates of 353 lakh bales. Lower opening stocks coupled with estimated lower output will result in lower supplies this season at 374 lakh bales, a decline of 8.7% compared with last years 410.77 lakh bales. On the consumption front, domestic consumption is estimated higher at 270 lakh bales on the back of higher mill consumption. However, after witnessing record exports in 2011-12 season, Indian exports could witness significant fall this season on the back of lower availability along with unattractive domestic cotton prices. CAB estimates cotton exports at 70 lakh bales this season, compared with 128.8 lakh bales last year.
Source: Reuters

Technical Chart - Kapas

NCDEX April contract

Global Cotton Updates

Higher global ending stocks are seen capping the upside in the cotton prices this year too. However, downside is also limited as prices are again nearing its 12 year average price of 65 cents per pound. Markets will now take cues from the Chinese demand for cotton and trade policies of India with respect to cotton exports. 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. According to USDA attach report, forecast of Australias 2012-13 cotton crop has been revised downward (nearly 6 percent) to 4 mn bales. Planting of the 2012-13 cotton crop is largely complete with total area expected to be down by as much as 25-30 percent compared to last year. 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) In its monthly crop report, the U.S. Department of Agriculture increased its estimate for 2012/13 ending stocks for a fourth straight month to a new all-time high of 80.27 million bales.
Source: Telequote

Technical Chart - Cotton

MCX Dec contract

Source: Telequote

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

valid for Dec 3, 2012 Support 965-970 15900-16000 Resistance 980-990 16250-16350

Outlook
Domestic cotton prices are expected to recover taking cues from the international markets. Downside is limited in the domestic markets as farmers will not sell their stocks at very low prices. Also, CCI procurement at MSP levels may support prices from falling sharply.

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