Commodities Daily Report

Thursday| January 10, 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 10, 2013

Agricultural Commodities
News in brief
Govt plans to make wheat cheaper for bulk buyers
After its plan to offload foodgrain from state warehouses saw lukewarm response, the government plans to lower the price of wheat sold to bulk consumers and flour mills. The move would help liquidate wheat stored in state warehouses, ahead of the new procurement season, starting April 1. Officials said of the allocated 6.5 million tonnes (mt), so far, the government had managed to sell about 1.5 mt in the domestic market. They added the food ministry was considering absorbing the taxes and duties levied by states on wheat purchased by the Food Corporation of India. There was another proposal to reduce the price by Rs. 100- 115 a quintal to about Rs. 1,170 a quintal. But it might not be considered, said an official. (Source: Business Standard)

Market Highlights (% change)

Last Prev. day

as on Jan 9, 2013
WoW MoM YoY

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

19667 5972 54.81 93.1 1655

-0.38 -0.50 -0.28 -0.05 -0.40

-0.24 -0.36 1.05 -0.02 -1.96

1.44 1.23 1.23 7.30 -3.60

21.66 23.14 5.84 -7.70 0.95

.Source: Reuters

USDA declares drought disaster in much of Wheat Belt

The government declared much of the central and southern U.S. Wheat Belt a natural disaster area on Wednesday due to persistent drought that imperils this year's winter wheat harvest. In its first disaster declaration of the new year, the Agriculture Department made growers in large portions of four major wheat-growing states - Kansas, Colorado, Oklahoma and Texas - eligible for low-interest emergency loans. The four states grew one-third of the U.S. wheat crop last year. Kansas was the No. 1 state at 382 million bushels. In all, USDA listed 597 counties in 14 states as natural disaster areas. They suffered from at least severe to in some instances extraordinary drought for eight weeks in a row to qualify for the designation. (Source: Reuters)

Maharashtra drought to severely hit distilleries

Distilleries in Maharashtra face a severe cutback in operations and ethanol output due to the states severe water shortage. Vijaysinh Mohite- Patil, president of the All India Ethanol Manufacturers Association, told Business Standard: Of the 90 distilleries, a large number are located in drought- hit Sangli, Satara, Ahmadnagar, Pune and Solapur districts. Maharashtras ethanol production during the current fiscal year is estimated at 52 crore litres, compared to 54 crore in 201112 and 68 crore in 2010- 11. Of the 148 distilleries in the country with annual production capacity of 1,760 million litres, Maharashtras is 920 mn litres. However, says R G Mane, secretary of the Association, production has never touched this peak; it hovers between 540 mn and 720 mn litres. (Source: Business Standard)

China buys U.S.wheat as domestic prices hit record

Wheat mills in China, the world's top consumer and producer of the staple, have resumed imports from the United States and Canada, spurred by record domestic prices and falling global prices of the grain, industry sources said on Wednesday. China has bought several cargoes of high-protein wheat from the U.S. and Canada over the past few days and import orders are expected to increase as local supplies stay tight until May, when the new harvest hits the market, trade sources said. (Source:
Reuters)

Cold wave brightens wheat output prospects

The prevailing cold wave in North India will help wheat crop, raising the prospects of yet another bumper harvest this year. The planting of wheat is almost over and the acreage is set to exceed last years 290 lakh hectares (lh). Encouraged by a Rs 65 a quintal hike in minimum support price at Rs 1,350, farmers in major wheat growing areas of Punjab, Haryana Madhya Pradesh and Uttar Pradesh have planted more wheat this year, even though the acreage dropped in Maharashtra over the last year. The cold condition is helping wheat crop, which is in the tillering stage. The tillering is good and there are high number of effective tillers, that yield more grains, said Indu Sharma, Director of the Karnal-based Directorate of Wheat Research. If there is no drastic variation in temperatures during the grain formation stages, we could possibly see yet another good harvest, Sharma said. (Source: Business Line)

US corn crop seen slashed to a 6-year low

The U.S. Department of Agriculture (USDA) on Friday, in its final report on 2012 crop production, is expected to estimate last year's droughtdecimated corn crop at a six-year low, analysts said. And despite high prices that have trimmed demand, the outlook for the current 2012/13 U.S. corn ending stockpile will fall to the lowest in 17 years while the corn inventory in the U.S. on Dec. 1 shrank to nearly a decade low. (Source:
Reuters)

China Dec soy imports at 2nd highest ever, 2012 imports at record -Customs
China imported a record 58.38 million tonnes of soybeans in 2012, up 11.2 percent from the previous year, as growing demand for livestock products supported imports into the world's largest buyer of the oilseed, official figures showed on Thursday. Imports in December were 5.89 million tonnes, the second-highest monthly total after June 2010, as crushers stepped up imports ahead of the Lunar New Year holiday in February, figures from the General Administration of Customs showed. "China's demand for soybeans will continue to grow as well as its crushing capacity, but the growth will not be at the same pace as that in the previous year," said one analyst with the National Grain and Oils Information Centre. China's soy imports in 2013 are expected to rise as more soy crushing capacity comes onstream to cater for the population's growing appetite for livestock and poultry. Soymeal is a key ingredient in animal feed. China's edible oil imports in 2012 grew 28.7 percent to 8.45 million tonnes, customs figures showed. Imports in December were 1.12 million tonnes, up 21.7 percent from 2011. China imports mainly palm oil. (Source: Reuters)

Brazil expects largest 'off-year' coffee crop ever

World top coffee grower Brazil will harvest its largest ever off-year coffee crop in the 2013/14 season, the government said on Wednesday in its first estimate for the season, forecasting output that could be almost as big as the record 2012 on-year harvest. Brazil will grow 47 million to 50.2 million 60-kg bags of coffee in the 2013/14 harvest, the government crop supply agency Conab said on Wednesday, a whisker off the 50.8 million bags produced in 2012 if output reaches the upper limit. (Source: Reuters)

Brazil says 2012/13 soy crop seen at 82.7 mln tonnes

Brazil will produce 82.7 million tonnes of soybeans this season, the government said on Wednesday, raising its forecast by a slight 0.12 percent from the 82.6 million tonnes it forecast in December. Brazil has been the world's No. 2 soybean grower in recent years but could surpass the United States in production of the oilseed this season with an expected rebound from a disappointing 66.4 million tonne crop in 2011/12. In its fourth official forecast, Conab, Brazil's government food supply agency, also said it expected a corn crop of 72.2 million tonnes, compared with the outlook of 71.9 million tonnes in December. (Source:
Reuters)

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Commodities Daily Report

Thursday| January 10, 2013

Agricultural Commodities
Chana
Chana prices which gained sharply during the early part of the session on Wednesday, declined and settled marginally higher by 0.11%. Higher output expectations and arrival pressure in the far months is exerting downward pressure on the far month contract. While near month January contract and spot settled 1% and 0.9% higher respectively. Although chana prices witnessed 17% gains in 2012 on the back of lower availability, sentiments have turned negative in the month of December 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 4043 4104 Prev day 0.90 0.98

as on Jan 9, 2013 % change WoW MoM 1.07 -3.74 4.61 -1.27 YoY 17.75 19.72

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

Source: Reuters

Technical Chart - Chana

NCDEX April contract

Sowing progress
Total pulses acreage as on 4th Jan 2013 stood at 136.05 lakh ha, down by 0.44% yoy. As on 28th Dec, pulses acreage was down by 1.2%. Chana sowing is almost complete and acreage so far stood at 89.4 lakh ha, up by 3.5% as on 4th Jan. Chana acreage is marginally higher by 3% this year in Rajasthan at 14.80 th lakh ha, In Maharashtra Chana acreage is up at 10.8 lakh ha as on 4 Jan 2013 vs normal area of 10.6 lakh ha and 2012 area of 6.8 lakh ha. While in AP it is up at 6.99 lakh ha as on 19th Dec, up by 20%. (Source: State farm dept)

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 10, 2013 Resistance 3600-3630

3540-3560

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 April contract may remain under downside pressure due to higher shipments and expectations of better output next season. However, demand at lower levels may restrict sharp fall in the prices. Any adverse report with respect to weather may bring a rebound in the prices and thus a close watch on weather is crucial at this point of time.

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Commodities Daily Report

Thursday| January 10, 2013

Agricultural Commodities
Sugar
Sugar futures extended the losses of the previous session and settled 0.06% lower on Wednesday on the back of higher domestic production figures in the first quarter of the current marketing season as released by ISMA. However, spot settled higher by 0.4% as demand was seen emerging at lower levels. Higher availability in the domestic markets and subdued demand has exerted downward pressure and thus prices had plunged 2.26% in December 2012. 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 0.24% and 0.27% higher on Wednesday on account of short coverings. Prices have corrected 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.
Sugar No 5- LiffeMar'13 Futures Sugar No 11-ICE Mar '13 Futures

Market Highlights
Unit Sugar Spot- NCDEX (Kolhapur) Sugar M- NCDEX Jan'13 Futures Rs/qtl Last 3250

as on Jan 9, 2013 % Change Prev. day WoW 0.48 0.07 MoM -2.91 YoY 11.82

Rs/qtl

3208

-0.06

-0.99

-2.05

14.41

Source: Reuters

International Prices
Unit $/tonne $/tonne Last 507 416.00

as on Jan 9, 2013 % Change Prev day WoW 0.24 0.27 -4.05 -4.93 MoM -2.59 -4.34 YoY -17.99 -20.98

.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 10, 2013 Resistance 3265-3270

3240-3250

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 may trade with a negative bias today as sufficient supplies in both the domestic as well as global markets may keep prices under check. However, expectations government may remove quantitative restrictions on sugar import/export may support prices and limit the downside.

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Commodities Daily Report

Thursday| January 10, 2013

Agricultural Commodities
Oilseeds
Soybean: soybean futures as well as spot gained 0.44% and 1.11% respectively on Wednesday on account of dwindling supplies in the domestic markets.
Arrivals in the domestic markets declined to 1.8-2 lakh bags, while demand is comparatively lower amid subdued overseas demand for soy meal. According to first advance estimates, Soybean output is pegged at 126.2 lakh tn for 2012-13. Soy meal exports fell by 34% in December to 5.10 lakh tn, according to SOPA. The country had exported 7,78,382 tn in December 2011. During the first three months of the current oil year (Oct-Sep), exports declined by 27% to 10.78 lakh tn as against 14.69 lakh tn in the yearago period. (Source: Business line)

Market Highlights
Unit Soybean Spot- NCDEX (Indore) Soybean- NCDEX Jan '13 Futures Ref Soy oil SpotNCDEX(Indore) Ref Soy oil- NCDEX Jan '13 Futures Rs/qtl Rs/qtl Rs/10 kgs Rs/10 kgs Last 3208 3139 726.2 717.3

as on Jan 9, 2013 % Change Prev day 0.44 0.87 1.34 1.15 WoW -3.17 -3.07 2.67 2.27 MoM -1.66 -3.96 -0.26 -0.28 YoY 29.98 25.48 0.70 -1.40

Source: Reuters

as on Jan 9, 2013 International Prices Soybean- CBOTJan'13 Futures Soybean Oil - CBOTJan'13 Futures Unit USc/ Bushel USc/lbs Last 1420 49.24 Prev day 0.42 0.20 WoW 1.01 -2.53 MoM -3.57 -3.11
Source: Reuters

International Markets
Soybean futures on the Chicago Board of Trade traded on a positive note on account of short coverings and settled 0.42% higher on Wednesday. Brazil will produce a record 82.7 mn tn of soybeans in 2012-13 due to hefty expansion in acreage. With the harvest just beginning in some areas, Brazil's planted area will likely increase by 9.2 percent to 27.34 mn ha. China has canceled another 315,000 tn of soybeans purchased from the United States. 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.

YoY 18.56 -4.56

Crude Palm Oil

as on Jan 9, 2013 % Change Prev day WoW 0.09 -0.02 -3.65 -0.23

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

Last 2295 442.2

MoM 8.51 6.89

YoY -28.73 -18.43

MYR/Tonne Rs/10 kg

Refined Soy Oil: Ref soy oil prices gained sharply on account of
lower supplies in the domestic markets. While CPO settled marginally lower by 0.02% due to short coverings ahead of Malaysian palm oil board official data scheduled to be released on Jan 10. Palm oil Stockpiles used in food and biofuel were 2.53 million tons in December compared to an all-time high of 2.56 million tons a month earlier, according to the Bloomberg survey. Output probably fell 7.9 percent to 1.74 million tons, while exports dropped 3.6% to 1.6 mn tn in December, the survey showed. Rape/mustard Seed: Mustard seed April Futures settled 1.41% higher on reports that existing cold wave condition in North India, especially major mustard producing state, Rajasthan, may lead to crop damages. Further ongoing supply crunch in the domestic markets till the fresh crop arrivals commences in February also acted as supportive factor for the upside in mustard seed prices. Rabi oilseeds sowing which was up by 1.3% as on Dec 28, is now up by 1.99% at 8.1 mn ha as of Jan. 4. Indian farmers have cultivated rapeseed on 6.62 million hectares as of Jan. 4, compared with 6.44 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.

Source: Reuters

RM Seed
Unit RM Seed SpotNCDEX (Jaipur) RM Seed- NCDEX Jan'13 Futures Rs/100 kgs Rs/100 kgs Last 4250 4247 Prev day 0.24 1.41

as on Jan 9, 2013 WoW 0.59 0.14 MoM 0.00 3.08

Source: Reuters

YoY 19.68 14.78

Technical Chart Soybean

NCDEX Feb contract

Outlook
Soybean complex may trade on a psotive note today due to dwindling stocks in the domestic markets. Mustard seed prices may trade with a positive bias in the intraday. Supply tightness in the domestic markets may support restrict sharp fall while good sowing figures of the mustard crop may cap the upside. Palm oil prices may take cues from the Malaysian palm Oil Board data to be released today.
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 10, 2013 Support 687-693 3100-3145 3520-3535 435-437 Resistance 702-706 3210-3240 3570-3600 447-450

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Commodities Daily Report

Thursday| January 10, 2013

Agricultural Commodities
Black Pepper
Pepper Futures traded on a positive note yesterday due to winter demand. Demand from Tamil Nadu ahead of Pongal may also support prices. Prices have increased over the last few days due to arrivals of good quality pepper from Kerala. Earlier, prices had 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. Harvesting of the fresh crop has commenced and is expected to gain momentum in the coming days. 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. Exports demand for Indian pepper in the international markets is also weak due to price parity. The Spot as well as the Futures settled 0.68% and 1.05% higher respectively on Wednesday. Spices Board has announced plans to import high yielding Madagascar variety that was behind the record productivity in Vietnam. It could raise productivity of Indian pepper from 2,000 kg/ha to 7,000 kg/ha. Pepper prices in the international market are being quoted at $7,250/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 38269 35105 % Change Prev day 0.68 1.05

as on Jan 9, 2013 WoW 0.93 1.87 MoM -0.55 -9.60 YoY 18.21 12.70

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 10, 2013 Support 34560-34840 Resistance 35290-35460

Production and Arrivals

The arrivals in the spot market were reported at 12 tonnes while off takes were reported at 12 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 trade on a positive note due to demand from Tamil Nadu ahead of Pongal. Winter buying coupled with arrivals of good quality crop in the domestic market may support prices. However, increasing supplies coupled with higher output expectations may cap sharp gains. FSSAI has sealed huge quantity of pepper and FMCs probe into complaints against price movement may also pressurise the prices.

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Commodities Daily Report

Thursday| January 10, 2013

Agricultural Commodities
Jeera
Jeera Futures corrected sharply yesterday hitting a new contract low tracking higher sowing as well as conducive weather in the main jeera belt of Gujarat. Demand from masala millers had boosted the prices last month. About 95% of sowing is completed and is in its final stage. According to Gujarat State Agri Dept. sowing in Gujarat is reported at st 3.074 lakh ha as on 31 Dec, 2012 compared with 2.822 lakh ha last year. In Rajasthan, sowing is expected to increase by 10-15%. The spot as well as the Futures settled 0.48% and 2.76% 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 $2,850-2,875 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 14527 14118 Prev day -0.48 -2.76

as on Jan 9, 2013 % Change WoW -1.28 -3.62 MoM -2.37 -1.48 YoY -8.15 -8.27

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 -1.16 -3.49

as on Jan 9, 2013 % Change

Outlook
Higher sowing figures, thereby higher output expectations in Gujarat may pressurize Jeera prices today. However, fresh export enquiries may limit a sharp downside. In the medium term, prices are likely to stay firm as there are limited stocks with Syria and Turkey.
Turmeric SpotNCDEX (N'zmbad) Turmeric- NCDEX Apr '13 Futures

Unit Rs/qtl Rs/qtl

Last 5686 6638

WoW 0.21 -0.87

MoM 10.31 22.97

YoY 9.40 41.78

Turmeric
Turmeric Futures corrected sharply yesterday on account of profit taking. Huge carryover stocks also pressurized the prices. Prices have gained sharply over the last few weeks due to demand from the stockists as well as North India. Turmeric growing regions may receive rainfall in the coming days which can damage the standing crop also led to a sharp rise. 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 3.4% lower on Wednesday.

Technical Chart Turmeric

NCDEX April contract

Source: Telequote

Production, Arrivals and Exports

Arrivals in Nizamabad and Erode mandi stood at 1,000 bags and 8,000 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 open lower extending yesterdays correction. Higher carryover stocks and weak overseas demand may also pressurize prices. However, demand from stockists coupled with lower production expectations and weather concerns may support prices.

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

Valid for Jan 10, 2013

Support 13830-13970 6520-6610 Resistance 14350-14490 6760-6860

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Commodities Daily Report

Thursday| January 10, 2013

Agricultural Commodities
Kapas
Kapas prices declined further on account of estimated higher output coupled with weak exports. 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. ICE Cotton corrected yesterday and settled 0.44% lower on Wednesday on account of long liquidation.

Market Highlights
Unit Rs/20 kgs Rs/Bale Last 942 16430

as on Jan 9, 2013 % Change Prev. day WoW -0.21 -2.89 -0.12 -0.67 MoM -4.66 -0.67 YoY #N/A -10.12

NCDEX Kapas Futures MCX Cotton Futures

Source: Reuters

International Prices
ICE Cotton Cot look A Index Unit USc/Lbs Last 74.79 81.35

as on Jan 9, 2013 % Change Prev day WoW -0.44 -0.76 0.00 0.00 MoM 3.82 0.00 YoY -22.79 -29.20

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: Reuters

Technical Chart - Kapas

NCDEX April contract

Global Cotton Updates

China, the world's biggest cotton consumer and importer, is studying a proposal to issue extra import quotas for textile mills which have been pushing the government to boost the amount of cheaper overseas cotton they can buy. If approved, the quotas will require mills to buy three tonnes of cotton from state reserves for every tonne they import. 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 Chart - Cotton

MCX Jan contract

Outlook
Cotton prices may recover today due to short coverings. Higher output expectations by Cotton Association of India have turned the sentiments negative for the cotton prices. However, downside may be limited as farmers may not sell their stocks at lower prices. Reports that the Government may purchase cotton from farmers to avoid distress sales may also support prices. Also demand remains strong at low prices.
Source: Telequote

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

valid for Jan 10, 2013 Support 930-938 16240-16320 Resistance 950-960 16500-16600

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