Commodities Daily Report

Thursday| December 20, 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

Thursday| December 20, 2012

Agricultural Commodities
News in brief
Agriculture Minister Sharad Pawar favours higher MSP for wheat
Agriculture Minister Sharad Pawar is trying to ensure higher price for wheat farmers next season either by higher MSP or through bonus. The government had rejected the recommendation of the CACP to freeze the MSP of wheat at last year's level of Rs 1,285/qtl. Resultantly, the CACP had revised its recommendation and suggested a bonus of Rs/40 qtl subject to liquidation of 15 mn tn of wheat by April 2013. Concerned ministry with some others M.P's think that MSP should be above Rs 1500/qtl, considering the enhanced cost of wheat production. However, the states have given the input cost and government has to analyze it.
(Source: Agriwatch)

Market Highlights (% change)

Last Prev. day

as on Dec 19, 2012

WoW MoM YoY

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

19476 5930 54.69 89.51 1667

0.57 0.56 -0.46 1.80 -0.18

0.62 0.71 1.00 3.16 -2.92

6.26 6.43 -0.76 3.18 -3.29

24.17 26.35 4.36 -9.28 3.39

.Source: Reuters

Natural rubber import up 32% in April- Nov

Import of natural rubber rose 32.5% to 153,855 tn during AprilNovember from 115,885 tn in the corresponding period last year, thanks to poor local production and the lower price tag in the global markets. In November alone, 22,748 tn were imported against 16,125 tn in the yearago period. Imports will be on the rise in the coming months as the SMR20 grade rubber, which is almost equivalent to the local RSS- 4 grade, is much cheaper in the Bangkok and Kuala Lumpur markets. The global market is now in abearish mode as demand is sluggish across the world. Imports of China, the worlds largest consumer of natural rubber, are likely to be lower by 15- 20 per cent this year. (Source: Business Standard)

CCI procured 7.14 lakh bales of cotton

7.14 lakh bales of cotton worth Rs 1,534.45 crore has been procured by CCI till 9 Dec 2012, Textiles and Commerce Minister Anand Sharma told the Lok Sabha on Monday. He also added that Cotton prices are above the minimum support price (MSP) levels in Gujarat, Rajasthan, Punjab, Haryana, Madhya Pradesh and majority areas in Maharashtra. In Andhra Pradesh, the prices has touched MSP levels. (Source: Agriwatch)

Rice stock in central pool kitty reached at 13.4 million tonnes this year so far
Indias rice procurement from the ongoing Kharif marketing season (October to September) has reached almost 13.4mn tn as of December 12, 2012. Punjab and Haryana are the major contributors followed by eastern and southern India. The government is targeting to procure 40 mn tn of rice in 2012-13, up about 14.3% from 35 mn tn procured in 2011-12. Meanwhile, rice stocks in the countrys central pool stand at a record 30.6 mn tn, the highest in at least a decade and up about 13% from last year. (Source: Agriwatch)

India is worlds biggest rice exporter in 2012: FAO

India has emerged as the worlds biggest exporter of rice piping traditional leader Thailand by exporting almost nine million tonnes of rice in 2012, a latest report by the Food and Agriculture Organisation ( FAO) said. However, going forward in 2013, the trend might be difficult to sustain as Thailand is once again pushing to expand its exports by lowering rates in the international markets. India allowed its private traders to export rice in 2011 lifting a more than two yearlong ban on exports. The move enabled private traders to push Indian rice in traditional as well as new markets at a price which was much lower than the prevailing rates, thereby leading to a surge in exports. FAO also said India would have record exportable cereal surplus of almost 15.7 million tonnes in 2012- 13, which will include 7.7 million tonnes of rice, about five million tonnes of wheat and three million tonnes of corn. FAO said that planting of wheat and rice for the rabi season spring harvest is almost completed. Rainfall has been deficient to scanty in the producing states of Uttar Pradesh, Punjab and Haryana in the north west, Bihar and West Bengal in the north east and Karnataka in the south, the agency wrote. (Source: Business Standard)

Malaysia tax move alarms edible oil industry

Palm oil import from Malaysia is set to surge, with the worlds second largest producer cutting the export tax effective January 1. Import of crude palm oil (CPO) for blending with other edible oils and its use for making soaps and detergents is likely to hit a record in the next two months, say observers. The Malaysian government has abolished the duty- free export quota for CPO and introduced a revised tax structure. This lowers the CPO export tax rate to between 4.5 per cent and 8.5 per cent, depending on the average price during the previous two months. This will have a serious repercussion on the Indian edible oil industry, considering the ongoing marketing of kharif oilseed crops like soybean, groundnut and castorseed. Also, the rabi harvesting season would be disappointing for refiners and farmers due to expectations of a dip in prices in local markets due to cheap import. (Source: Business Standard)

Indigenous Bt cotton can no more be used for cultivation

An indigenous Bt cotton variety Bt Bikaneri Narma developed through a collaborative effort can no more be used for cultivation. A probe conducted by a five-member team, headed by Jawaharlal Nehru University Vice-Chancellor S.K. Sopory has termed the development of the strain invalid. The indigenous cotton variety was jointly developed by the National Research Centre on Plant Biotechnology, New Delhi; the Central Institute for Cotton Research, Nagpur and the University of Agricultural Sciences, Dharwad. (Source: Business Line)

Government to reduce unsold levy sugar carryover to 6 months

In a relief to the sugar industry, the government will soon reduce the carryover period for unsold levy sugar to six months from the current 24 months. This can then be sold by mills in the open market. Union Food Minister K V Thomas said a notification on this would be issued soon. Levy sugar is the portion of total sugar production which mills are required to sell to the government at a fixed price for the PDS. At present, sugar mills have to sell 10% of their produce at Rs. 1,900/qtl as levy obligation. The open market price is Rs. 3,200/qtl. While mills are required to sell 10% as levy every year, the data shows the government fails to lift even half this entitlement. Vinay Kumar, managing director of NFCSF, said, Carrying forward of previous years levy obligation is a financial burden for mills, as they have to supply it at the previous years price. The shortening of this period to six months will bring major relief to the industry. It will improve realisation and cash flows, while helping in timely payment to sugarcane farmers. (Source: Business Standard)

Castor increased on heavy export buying

Castor price was continued to gain on export demand on Wednesday. Moreover arrivals slightly declined in Gujarat. Farmers are not selling their stocks on expectation of higher return as castor sowing has decreased in India. On Rajkot Commodity Exchange, castor March contract was increased Rs 68 to Rs 4,122 per quintal, spot castor price was gained Rs 7.50 to Rs 3,697.50 per quintal. Till October in 2012-13, India had exported 2.79 lakh tonne of castor oil, more than 2.63 lakh tonne during the same period last year. The trade body now estimates castor seed acreage at 11.81 lakh ha, down by 11.6%, while 2012-13 castor seed output is pegged at 10.7 lakh tonne, down almost 33.9%.
(Source: Business Line)

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Commodities Daily Report

Thursday| December 20, 2012

Agricultural Commodities
Chana
Chana January Futures settled higher by 1.08% on Wednesday on account of bargain buying. Spot also settled marginally higher on as buying was seen emerging at lower levels. Total pulses acreage as on 14 December 2012 stood at 121.22 lakh hectares, up marginally by 0.5% yoy. As on 7th December, pulses acreage was down by 0.9 percent. Chana sowing picked pace mainly in Rajasthan, where it is up by 4% at 14.54 lakh hectares compared to last week when acreage was up by 1%. th In Maharashtra Chana acreage is up by 43% at 9.28 lakh ha as on 14 th Dec, 2012. While in AP it is up by 22% at 6.25 lakh ha as on 5 Dec. In Australia, total chickpea production in 201213 is estimated to have increased to a record of around 746000 tones as compared with 485000 tones 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. Australian Chana is quoted at lower rates -USD 625-635 per MT. 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.
th

Market Highlights
Unit Rs/qtl Rs/qtl Last 4083 4157 Prev day 0.32 0.87

as on Dec 19, 2012 % change WoW MoM -1.61 -10.34 0.85 -10.20 YoY 19.67 25.74

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

Source: Reuters

Technical Chart - Chana

NCDEX Jan contract

Sowing progress and demand supply fundamentals

Chana fresh crop arrival started in Karnataka & Andhra Pradesh and about 200 bags new chana arrivals reported on a daily basis. Furthermore, the new crop was traded at Rs.4100-4200 per quintal. Farm ministry has targeted 7.9 mn tn chana output for 2012-13 season, higher compared to 7.58 mn tn in 2011-12. 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. 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 Jan Futures Unit Rs./qtl Support

valid for Dec 20, 2012 Resistance 4040-4075

3950-3985

Outlook
Lower level demand may support the upside in the chana prices during the intraday. However, sufficient supplies amid higher shipments and expectations of better output next season may exert downside pressure on chana price in the short term. Harvesting of new crop have commenced in AP and Karnataka. In Maharashtra arrivals would commence in January and gradually increase February onwards once the arrivals from MP begin.

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Commodities Daily Report

Thursday| December 20, 2012

Agricultural Commodities
Sugar
Sugar spot as well as futures settled 0.32% and 0.72% lower w-o-w amid higher supplies in the domestic markets. The government extended the deadline for sale of unsold Oct-Nov nonlevy sugar quota till Dec 31. The initial deadline for sale of around 200,000 tn of the Oct-Nov quota was Dec 10. 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. With lower sales realization and higher sugarcane payment to farmers, ISMA has already requested government to increase the import duties on raw sugar from current level to the normal rate of 60%, so as to avoid cane price arrears during the season The government is likely to take a decision on sugar exports in January after assessing the final cane crop and the estimated sugar output. Liffe white sugar as well as ICE sugar settled 0.6% and 0.83% lower on Wednesday on supply surplus. Czarnikow, a sugar consultant widened its forecast for a global sugar surplus in 2012/13 to 7.8 mn tn, raw value, from its previous projection of 7.1 mn tn in September.

Market Highlights
Unit Sugar Spot- NCDEX (Kolhapur) Sugar M- NCDEX Dec '12 Futures Rs/qtl Last 3306

as on Dec 19, 2012 % Change Prev. day WoW -0.32 -0.88 MoM -4.76 YoY 11.92

Rs/qtl

3174

-0.72

-2.64

-10.24

11.41

Source: Reuters

International Prices
Unit Sugar No 5- LiffeMar'13 Futures Sugar No 11-ICE Mar '13 Futures $/tonne $/tonne Last 517.8 427.33

as on Dec 19, 2012 % Change Prev day WoW -0.60 -0.83 3.52 3.72 MoM -1.62 -3.56 YoY -14.23 -17.54

.Source: Reuters

Domestic Production and Exports

Mills in the country have produced 4.91 mln tn sugar in the current sugar season till Dec 15, up nearly 2% from 4.82 mln tn produced 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 Jan contract

Source: Telequote

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

valid for Dec 20, 2012 Resistance 3275-3285

3250-3260

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, and up from 2011/12 output of 175.4 million tonnes. (Source: Reuters) 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.

Outlook
Sugar prices may trade range bound with downward bias on account of sufficient supplies in both the domestic as well as global markets.

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Commodities Daily Report

Thursday| December 20, 2012

Agricultural Commodities
Oilseeds
Soybean: Soybean January contract extended the losses of the
previous day during the opening session; however, prices recovered from lower levels and settled higher by 0.01% on Wednesday. Total soybean arrivals declined sharply to 1.9 lakh bags compared with 3.1 lakh bags on Saturday last week, while demand from solvent extractors remained strong. 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 November from 397,659 tonnes a year ago. Overall oil meal exports in the first eight months of the year beginning April fell to 2.4 million tonnes from 3 million tonnes in the previous year.

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 3348 3343 720.4 723.1

as on Dec 19, 2012 % Change Prev day -0.74 0.04 -0.81 -0.06 WoW 1.61 2.11 -0.57 1.37 MoM 1.12 2.12 0.26 1.27 YoY 38.69 41.39 6.03 7.02

International Markets
CBOT soybean corrected sharply over the last two days and settled 2% lower on Wednesday on reports of softening of export demand. Brazil's vegetable oils association Abiove raised its soy crop forecast slightly to a record 81.6 mn tn from 81.3 mn tn in November. NOPA reported the November U.S. soybean crush at 157.3 million bushels, the largest monthly total in nearly three years, due to strong demand for soy meal. According to the USDA monthly crop report, U.S. soybean end stocks are forecasted at 130 mn bsh, below its November estimate of 140 mn. Also, global soybean end stocks were forecast to 59.93 mn tn from 60.02 mn in November. Output estimates for Brazil and Argentina were unchanged at 81 mn tn and 55 mn tn respectively. China, the world's largest soy buyer, imported 4.16 mn tn of soybeans in November, up 3.2% from October with crushing margins improving from a month ago. Imports for the first 11 months stood at 52.49 mn tn, up 11.4% on the year.

Source: Reuters

as on Dec 19, 2012 International Prices Soybean- CBOTJan'13 Futures Soybean Oil - CBOTJan'12 Futures Unit USc/ Bushel USc/lbs Last 1437 48.41 Prev day -1.98 -1.55 WoW -2.48 -1.57 MoM 3.03 1.09
Source: Reuters

YoY 24.55 -2.10

Crude Palm Oil

as on Dec 19, 2012 % Change Prev day WoW -0.27 0.05 7.30 0.85

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

Last 2191 404.4

MoM -8.17 -7.03

YoY -28.72 -20.92

MYR/Tonne Rs/10 kg

Refined Soy Oil: Ref soy oil January contract as well as MCX CPO
traded on a negative note on Wednesday. However, they settled almost flat amid short coverings. A cut in export duty on Malaysian palm oil will boost exports and reduce palm oil stock piles. Malaysia, the world's No.2 palm oil producer, will set its crude palm oil export tax for January at zero percent, a government circular showed on Monday. (Source: Reuters). However, Indian importers will buy cheaper edible oil from overseas. India's cooking oil imports fell by a third in November from the previous month largely due to a drop in purchases of palm oil. Exports of Malaysian palm oil products for Dec. 1-20 fell 1.9 percent to 1,004,159 tn from 1,023,517 tn for the Nov. 1-20 period. Malaysia's November palm oil stocks rose 2.3 percent to a record high of 2,562,900 tonnes from a revised 2,505,713 tonnes in October. 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. Palm oil output in the world's biggest producer Indonesia is expected to climb 7% next year to 27 mn tn.

Source: Reuters

RM Seed
Unit RM Seed SpotNCDEX (Jaipur) RM Seed- NCDEX Dec'12 Futures Rs/100 kgs Rs/100 kgs Last 4225 4148 Prev day -0.06 1.29

as on Dec 19, 2012 WoW 0.00 2.39 MoM -1.74 -1.21

Source: Reuters

YoY 25.60 16.65

Technical Chart Soybean

NCDEX Jan contract

Rape/mustard Seed: RM seed futures witnessed short coverings

and settled higher 2.4% on yesterday. The agriculture ministry data showed higher mustard seed planting figures. Mustard has been planted over 63.6 LH so far, 3.3% higher compared with a year ago. 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.
Source: Telequote

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

valid for Dec 20, 2012 Support 690-698 3275-3320 4110-4180 401-406 Resistance 705-708 3400-3435 4285-4330 413.5-418.5

Outlook
Soybean complex trade on a negative note during the intraday tracking weaker international markets. Mustard seed prices may trade with negative bias on higher planting figures while, Palm oil may trade lower tracking weaker international markets.

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Commodities Daily Report

Thursday| December 20, 2012

Agricultural Commodities
Black Pepper
Pepper February Futures traded on a positive note for the sixth consecutive session yesterday. Winter demand coupled with low stocks in the domestic markets supported prices. However, higher output expectations capped sharp upside. FMC is probing into complaints against movement in the pepper market which has capped a sharp upside. Better output expectations in the domestic as well as the international markets have also pressurized prices over the last couple of weeks. 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. The Spot settled as well as the February Futures settled 0.35% and 0.28% higher on Wednesday. Pepper prices in the international market are being quoted at $7,750/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 38830 39310 % Change Prev day 0.35 0.15

as on Dec 19, 2012 WoW 0.02 0.03 MoM -2.11 -0.04 YoY 7.39 4.49

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. Exports of Pepper from Brazil during January till May 2012 are estimated around 13369 mt. 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 Dec 20, 2012 Support 35310-35560 Resistance 36160-36500

Production and Arrivals

The arrivals in the spot market were reported at 80 tonnes while offtakes were reported at 60 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 is expected to continue to trade on a positive note today extending yesterdays gains in the February contract. 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 upside.

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Commodities Daily Report

Thursday| December 20, 2012

Agricultural Commodities
Jeera
Jeera March Futures traded on a mixed note yesterday. Fresh export enquiries coupled with demand from stockists and masala millers supported prices while the ongoing sowing capped the upside. Spot market remained closed due to Gujarat State Assembly elections. rd According to Gujarat State Agri Dept. sowing in Gujarat as on 3 Dec is reported at 2.219 lakh ha compared with 1.926 lakh ha in the same period last year. About 50-55% sowing is completed in Gujarat. Higher stocks for delivery on the exchange warehouse were pressurizing prices during the last one month. Exporters are buying due to tensions between Syria and Turkey as they are not offering. The spot as well as the March Futures settled 0.61% and 0.29% higher 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 $2,775 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 Dec '12 Futures Rs/qtl Rs/qtl Last 15147 14895 Prev day 0.61 0.73

as on Dec 19, 2012 % Change WoW 0.82 2.71 MoM 0.55 2.92 YoY 4.55 #N/A

Source: Reuters

Technical Chart Jeera

NCDEX March contract

Production, Arrivals and Exports

Unjha markets remained closed due to elections. Production of Jeera in 2011-12 is expected around 40 lakh bags as against 29 lakh bags in 2010-11 (55 kgs each). (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 1.31 -0.18

as on Dec 19, 2012 % Change

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

Last 5367 5418

WoW 3.57 4.07

MoM 6.64 5.04

YoY 1.30 22.86

Outlook
Jeera futures are expected to trade on positive note due to good local/ export demand at lower levels. However, higher stocks for delivery on the exchange warehouses coupled with improvement in sowing in Gujarat may pressurize prices. In the medium term (Dec-Jan), prices are likely to stay firm as there are limited stocks with Syria and Turkey.

Technical Chart Turmeric

NCDEX April contract

Turmeric
Turmeric April Futures opened higher yesterday due to demand from the upcountry markets and reports of some crop damage in Erode region due to lack of water. However, prices corrected sharply from higher levels on account of profit taking. Also, good quality arrivals kept the prices firm. Buyers are looking for turmeric with higher curcumin level at 5% which is unavailable, thereby supporting prices. 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 settled 1.31% higher while the April Futures settled marginally lower by 0.24% on Wednesday.

Source: Telequote

Production, Arrivals and Exports

Arrivals in Nizamabad and Erode mandi stood at 1,000 bags and 6,000 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 prices are expected to trade on a positive to bullish note today on good demand from the stockists. Also, traders expect upcountry demand to improve in the coming days. However, improved production estimates, higher carryover stocks and weak overseas demand might cap sharp gains.

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

Valid for Dec 20, 2012

Support 15555-15680 6350-6500 Resistance 15910-16005 6700-6800

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Commodities Daily Report

Thursday| December 20, 2012

Agricultural Commodities
Kapas
NCDEX Kapas Futures declined due to profit booking and settled lower by 1.06% on Wednesday while MCX Cotton settled 0.7% higher taking cues from the firm international markets. The USDA monthly report cuts cotton stocks estimate to 79.64 million bales, from last month's forecast of 80.27 million. 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. The government has procured 20.74 lakh quintals of cotton at the minimum support price (MSP) so far in the 2012-13. As per the DGFT notification dated 30 Nov 2012, the government has eased quantitative restrictions on exporters applying for permits to sell cotton in the overseas market and set the cap at 30,000 bales from 10,000 bales per exporter before. An exporter can apply for RC (registration certificate) for a maximum quantity of 30,000 bales (1 bale=170kg) or actual quantity exported in the previous cotton season, whichever is less. (DGFT) ICE Cotton futures traded on a negative note yesterday and settled 0.08% higher on Wednesday on account of profit taking. ICE has reduced Cotton No. 2 maintenance margin requirements by 14.3 percent to $1,500 per contract from $1,750 w.e.f Friday, 14/12/2012
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Market Highlights
Unit Rs/20 kgs Rs/Bale Last 1030 16510

as on Dec 19, 2012 % Change Prev. day WoW -1.06 1.98 -0.72 -0.42 MoM 5.00 -0.42 YoY #N/A -0.54

NCDEX Kapas Futures MCX Cotton Futures

Source: Reuters

International Prices
ICE Cotton Cot look A Index Unit Usc/Lbs Last 75.89 81.35

as on Dec 19, 2012 % Change Prev day WoW -0.08 1.03 0.00 0.00 MoM 5.33 0.00 YoY -12.61 -29.20

Source: Reuters

Technical Chart - Kapas

NCDEX April contract

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: Telequote

Technical Chart - Cotton

MCX Dec contract

Global Cotton Updates

Net Upland sales of 283,900 running bales for the 2012/2013 marketing year were down 32 percent from the previous week and 24 percent th from the prior 4-week average. (dated 13 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 Dec 20, 2012 Support 1010-1018 16640-16700 Resistance 1038-1052 16860-16960

Outlook
Domestic cotton prices are expected to trade sideways with a positive bias on account of lower arrivals in the domestic markets. Downside is expected to be limited in the domestic markets as farmers will not sell their stocks at very low prices. Also demand remains strong at such low prices.

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