Commodities Daily Report

Wednesday| September 5, 2012

Agricultural Commodities

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

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

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Commodities Daily Report

Wednesday| September 5, 2012

Agricultural Commodities
News in brief
Unusual turnaround in monsoon, say Japanese scientists
Japanese researchers/scientists have admitted that the Indian monsoon is undergoing an uncharacteristic turnaround. And they attribute it to a backyard phenomenon called Indian Ocean Dipole (IOD) that nearly mimics the El Nino-La Nina event in the east equatorial Pacific. The Japanese scientists had warned from February onwards that a negative IOD could build this year, which could harm Indian monsoon prospects this year. But in a very uncharacteristic turnaround, the negative IOD has been terminated and replaced by a positive IOD, said Tokyo-based Toshio Yamagata, Director, Application Laboratory, Jamstec (Japan Agency for Marine-Earth Science and Technology), and Swadhin Behera, Team Leader, RIGC (Regional Institute for Global Change) under Jamstec. This turnaround has helped to alleviate the monsoon deficits experienced earlier in June-July, the Japanese scientists wrote to Business Line on Tuesday. The El Nino is also seen to have weakened, which gives even a better outlook for the remaining part of the Indian monsoon in September, the scientists said. We hope the seasonal rainfall for the whole monsoon season might not be as bad as we had anticipated earlier in the season, they added. (Source: Business Line)

Market Highlights (% change)

Last Prev. day

as on Sept 4, 2012
WoW MoM YoY

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

17441 5274 55.61 95.3 1693

0.32 0.39 0.14 -1.21 0.49

-1.08 -1.14 -0.07 -1.07 1.58

1.06 0.64 0.25 7.19 5.56

4.58 5.46 20.67 7.20 -7.32

Source: Reuters

Monsoon revival ups mustard hopes

The revival in monsoon since last month is unlikely to undo the damage done to oilseeds, such as groundnut and sunflower, due to dry spells in the critical sowing period. However, the current rain will brighten the prospects for the key rabi oilseed crop, mustard. Mehta said the pick-up in rain in the recent weeks has brightened Rabi oilseed prospects on improved soil moisture and reservoir storage levels. Rajasthan has witnessed flooding in several parts recently. The downpour in recent weeks has also reduced the rain deficit to 2% in the metrological subdivision of west Rajasthan, while east Rajasthan has received a surplus of 7% so far since June. (Source: Business Line)

Organic exports treble in 3 years

Exports of organic agricultural products, such as cotton, medicinal plants and food items, have more than tripled in value terms in the past three years. In a written reply to Lok Sabha, Agriculture Minister Sharad Pawar said cultivable land under organic certification, including wild collection area, had grown to 5.5 million hectares (mh) in 2011-12 from 4.5 mh in 2009-10. The Government has been providing a range of incentives under the National Horticulture Mission for promotion of organic farming. Such subsidies entail providing subsidies for adoption of organic farming, setting up vermi-compost units and certification of organic farms. Capacity building programmes on organic farming are being organised under the National Project on Organic Farming (NPOF), Pawar said. (Source: Business Line)

Withdrawal of Special Margin and Imposition of Additional margin in Mentha Oil Contracts
Bye-laws, Rules and Regulations of the Exchange, Special Margin of 5% (in cash) on the Long side is being withdrawn in Mentha oil contracts and an additional margin of 5% in the form of cash will be levied on long and short side in all running contracts and yet to be launched contracts of Mentha Oil. The revised margin will be applicable with effect from th Thursday September 6 2012. (Source: MCX)

Farm prices panel against raising MSP of wheat next year

In view of the higher wheat stocks and to promote production of nongrain crops, the Commission for Agricultural Costs and Prices (CACP) has suggested the Government keep the minimum support price of wheat unchanged at Rs 1,285/quintal for the next year starting April 2013. For the 2012-13 marketing season (April-March), the Centre had fixed the wheat MSP at Rs 1,285 per quintal and this had helped achieve a record 93.90 million tonnes of wheat output. It suggested keeping the MSP unchanged at Rs 1,285 per quintal, a senior official told PTI. The reason given was that the country had huge stocks of over 46 million tonnes of wheat and any increase would add to the food subsidy burden. The CACP recommended that only in the event of a ban on wheat exports could the Government increase its MSP by 10 per cent, the official added. (Source:
Financial Express)

Prolonged dry spell to heat up prices

Although delayed monsoon has drenched most parts of Gujarat the State is likely to lose over 90% of groundnut crop and groundnut oil in the coming months, leading to a sharp increase in prices of the widely used edible oil. But, with the cash crop of cotton slowly replacing groundnut in many areas, particularly in the Saurashtra region, things began to change until this year Gujarat finds itself facing its own edible oil crisis. Acreage wise, Gujarat should have a normal 15,88,200 ha under groundnut crop. But, with area under oilseeds dwindling every year, sowing was done only in 14,27,100 ha in the previous kharif season (2011). This year, it sharply decreased even further to 11,87,600 ha, which is only 75% of the normal acreage, a government official said. This drastic fall in oilseed and edible oil production is likely to lead to a very sharp rise in price in the coming months, he said. In Gujarat, the normal area under soyabean sowing, 85,700 ha, shrunk to 85,300 ha in 2011 and 82,800 ha this kharif season. The area under castor, which had increased to 6,81,400 ha last year, has shrunk to 3,64,200 ha this year. Overall, only 68% of the normal acreage of oilseeds has been cultivated this year in the State. This 34% shortfall may translate into an edible oil crisis. (Source: Business Line)

Cotton Glut Seen Extending Slump as Levis Costs Slide

Cotton warehouses from China to Australia are bulging with the biggestever glut, a year after record prices spurred farmers to expand output. Harvests will exceed demand for a third year, swelling stockpiles by 10 percent to 74.67 million 480-pound bales by August, the U.S. Department of Agriculture estimates. Inventories in China, the biggest user, will triple over two years to a record as domestic demand slumps to the lowest since 2005, USDA data show. (Source: Bloomberg)

Deadline for Aug sugar open sale quota extended

The Union Government has decided to extend the validity period for sale and delivery-dispatch of the unsold sugar under the open sale quota required to be sold in August up to September 10. Vashi-based traders said that extension of validity of non-levy quota lead producers to hold back on expectation of a higher price. Currently, retail demand has improved due to month beginning and will continue for next two weeks. The volume with mills was disturbed on Monday evening due to heavy rain in Mumbai. (Source: Business Line)

Guar Gum Exports From India to Drop on Halliburton Stocks

Indias exports of guar gum, a thickening agent used for oil and gas extraction, are poised to drop 20 percent this year as high inventory and a slump in prices cool demand among users including Halliburton Co. (HAL) Shipments may total 400,000 metric tons in the year that began on April 1, compared with 500,000 tons a year earlier, said P.K. Hissaria, president of the Indian Guar Gum Manufacturers Association.
(Source: Bloomberg)

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Commodities Daily Report

Wednesday| September 5, 2012

Agricultural Commodities
Chana
Chana futures declined initially as rains across major producing regions raised prospects of better sowing. However, thin supplies in spot markets ahead of festival season led prices to recover towards the end. Monsoon has recovered in the month of August in Northwest and Central India that may prove beneficial for the chana sowing, the overall fundamentals still remain supportive for the prices on account of supply tightness amid festive season demand. The Cabinet Committee on Economic Affairs approved the Minimum Support Prices (MSP) for Arhar (Tur) and Moong for 2012-13 season. The MSP for Arhar has been fixed at Rs.3850 per quintal and of Moong at Rs.4400 per quintal marking an increase of Rs.650 per quintal and Rs.900 per quintal respectively. Government released fourth advance estimates wherein it revised upward Chana output at 7.58 mn tn from 7.4 mn tonnes estimated in the third advance estimates and 8.22 mn tn in 2010-11.

Market Highlights
Unit Rs/qtl Rs/qtl Last 4784 4672 Prev day -0.78 0.00

as on Sept 4, 2012 % change WoW MoM 0.98 -3.63 0.47 -1.70 YoY 32.19 29.45

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

Source: Reuters

Technical Chart - Chana

NCDEX Oct contract

Sowing progress and demand supply fundamentals

According to the Ministry of Agriculture 97.7 Lakh hectare area has been st planted under Kharif pulses as on 31 August, 2012 compared to 104.18 lakh hectare (ha) same period last year. Sowing is reported lower mainly in Rajasthan. Rajasthan Agriculture Department states that, planted area under Kharif Pulses is down at 19.42 lakh hectares ha compared to 25.55 lakh ha same st period last year. (Dated 31 August, 2012). Sowing which was down by more than 55% has gained momentum after improvement in rainfall in the last one week and is now down by 24%. In Maharashtra, Kharif Pulses sowing is down by 6% at 18.77 lakh hectares. According to the Fourth advance estimates, Pulses output is pegged at 17.21 mn tn in 2011-12 compared with 18.24 mn tn produced in the year 2010-11. While Chana output in 2011-12 is estimated at 7.58 million tones, Tur is estimated at 2.65 million tones, Urad is estimated at 1.83 million tones, Moong is estimated at 1.71 million tones. As per the latest release, Ministry of Commerce & Industry revealed that 20.23 lakh tones of peas, 2.03 lakh tons of Chana, 4.32 lakh tons of Urad & Moong, 1.12 lakh tons of Masoor and 4.26 lakh tons of Tur has been imported by India during April11-March 12. 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) India's consumption of pulses is on the rise, while the growth in output in not consistent amid vagaries of weather, which may lead to increase in imports this year. However, rupee weakness may turn import costlier.

Source: Telequote

Technical Outlook
Contract Chana Oct Futures Unit Rs./qtl

valid for Sept 5, 2012 Support 4680-4725 Resistance 4795-4835

Outlook
Chana prices may correct initially tracking the improving rains as well as recovery in sowing of kharif pulses. However, emergence of fresh demand at lower levels may support chana prices which may recover towards the end. In the medium term to long term, the trend remains positive as supplies may not be sufficient to meet the rising demand of the commodity. Also lower sowing of kharif pulses may support chana prices.

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Commodities Daily Report

Wednesday| September 5, 2012

Agricultural Commodities
Sugar
Sugar spot as well as futures settled higher by 0.8% and 0.4% on Tuesday on expectations of good demand amid series of festival ahead. Concerns over next years output is also supporting the upside in the domestic sugar prices. Rainfall has improved significantly in Maharashtra in last few days, although it can't erase damage caused by poor rains between June to August. According to IMD there are indications that El Nino would affect the monsoon in September. However, some climate models, however, have begun to predict temperature patterns in the Indian Ocean turning favorable for the monsoon, which may negate the effect of El Nino. If the same hold true, then this may help increase cane yield. The Indian government has provided an additional 10 days to sugar mills to sell around 200,000 tonnes of unsold non-levy sugar stocks of August. In the international markets Liffe Sugar as well as ICE sugar settled 1.05% and 2.23% lower on Tuesday.

Market Highlights
Unit Sugar Spot- NCDEX (Kolkata) Sugar M- NCDEX Sept '12 Futures Rs/qtl Last 3729

as on Sept 4, 2012 % Change Prev. day WoW 0.85 2.72 MoM -4.88 YoY 26.40

Rs/qtl

3523

0.43

0.54

1.47

29.19

Source: Reuters

International Prices
Unit Sugar No 5- LiffeOct'12 Futures Sugar No 11-ICE Oct '12 Futures $/tonne $/tonne Last 557.4 429.78

as on Sept 4, 2012 % Change Prev day WoW -1.05 -2.23 0.11 -2.13 MoM -8.70 -12.25 YoY -26.23 #N/A

Domestic Production and Exports

The area under sugarcane is estimated at 52.88 lakh ha for 2012-13 crop season, up from 50.63 lakh ha on same period a year ago. Despite of higher acreage, the producers body has estimated next years output lower at 25mn tn, down by 1mn tn compared to the current year. Sugar production in India the worlds second-biggest producer touched 26 million tonne since October 1, 2011. Industry body ISMA has estimated 7 mn tn stocks for the new season beginning October 01, 2012 compared to 5.5 mn tn year ago. India may exports 2.5-3 mn tn sugar in 2012-13. India will likely produce 25 million tonne of sugar in 2012-13 factoring in dry spells in biggest producer Maharashtra as well as Karnataka. With the opening stocks of 7 mn tn, domestic Sugar supplies are estimated at 32mn tn against the domestic consumption of around 22.523 mln tn for 2012-13. Thus, no curbs on exports are seen as of now.

Source: Reuters

Technical Chart - Sugar

NCDEX Oct contract

Global Sugar Updates

Brazilian cane mills produced 3 mn tn of sugar in the first half of August thanks to dry weather. Unica in its latest report stated said that total sugar output since the start of the crushing season is still down 12 percent from the same period a year ago. Brazil exported 2.06 mn tn raw sugar in August 2012, down from 2.08 mn tn exported in July. The International Sugar Organization said on Friday 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 wider surplus reflects expectations for a record global crop of 177.39 million tonnes, raw value, up 2.25 percent from the prior season as production in top grower Brazil rises. 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)
Source: Telequote

Technical Outlook
Contract Sugar Oct NCDEX Futures Unit Rs./qtl

valid for Sept 5, 2012 Support 3600-3625 Resistance 3675-3700

Outlook
Sugar prices are expected to remain firm during the intraday on improved festive season demand and concerns over next years output. In the medium term, although sufficient supplies may keep the upside capped, sharp downside will also be restricted on the back of emergence of fresh demand at lower levels amid series of festivals ahead.

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Commodities Daily Report

Wednesday| September 5, 2012

Agricultural Commodities
Oilseeds Soybean:
Despite of record high international soybean prices, domestic soybean remained weak on Tuesday on account of higher acreage and good rains in the soybean belts of India and thereby expectations of higher output in the season beginning October 2012. NCDEX October futures settled lower by 0.34% on Tuesday. However, many parts of soybean growing areas got significantly higher rainfall on Monday and more heavy rains this week can hurt yields. CBOT Soybean on Tuesday made new high of 1789cents per bushel in the November contract as falling exports from Brazil highlighted the decline in global supplies after poor production in South America and a historic drought in the US. CBOT Soybean settled 0.30% higher on Tuesday. Soybean exports from Brazil declined from 4.13 mn tn in July to 2.4 mn tn in the month of August. (Source: Reuters) Brazils grain Association expects the number 2 producers of soybean to produce record 81.3 mn tn in 2012-13. Planting in Brazil would commence from Sept. 15 & exports may soar to 37.5 mn tn, beating the 33.8-mn tn record in 2010/11 crop. USDA released its monthly crop report on 10 August wherein its cut U.S. 2012/13 soybean production forecast to 2.692 billion bushels, from 3.05 billion in July. st In the domestic markets, as on 31 August Oilseeds have been sown in 167.15 lakh hectares so far, compared with 174 lakh hectares same period last year. Soybean area is higher at 106.9 lakh hectares. In 2011-12 season, soybean was sown under 102.9 lakh hectares area and recorded 12.28 million tonne output, down from 12.73 mn tn in 2010-11 season.
th

Market Highlights
% Change Unit Soybean Spot- NCDEX (Indore) Soybean- NCDEX Oct '12 Futures Ref Soy oil SpotNCDEX(Indore) Ref Soyoil- NCDEX Aug '12 Futures Rs/qtl Rs/qtl Rs/10 kgs Rs/10 kgs Last 4556 4011 798 807.3 Prev day 0.20 -0.19 0.66 0.45

as on Sept 4, 2012

WoW 0.00 0.28 0.55 1.16

MoM -1.47 -13.52 2.95 4.78

YoY 107.37 81.08 21.86 27.35

Source: Reuters

as on Sept 4, 2012 International Prices Soybean- CBOTSept'12 Futures Soybean Oil - CBOTSept '12 Futures Unit USc/ Bushel USc/lbs Last 1770 57.57 Prev day 0.30 2.04 WoW 2.31 2.97 MoM 6.89 11.40
Source: Reuters

YoY 28.29 0.47

Crude Palm Oil

% Change Unit
CPO-Bursa Malaysia Sept '12 Contract CPO-MCX- Aug '12 Futures

as on Sept 4, 2012

Last 2940 561.3

Prev day -0.71 -0.21

WoW -3.03 0.21

MoM -0.51 2.11

YoY -13.53 15.07

MYR/Tonne Rs/10 kg

Refined Soy Oil: NCDEX Soy Oil remained steady to firm on

improvement in edible oil demand. MCX CPO witnessed profit booking on Tuesday. Palm oil exports from Indonesia increased by 20 percent to 1.5 million tonnes in July compared to the previous month. Palm oil output is expected to be 23-25 million tonnes, and around 18 million tonnes is likely to be exported. India imported 112,611 tn of refined palm oil in July, down 9.28 percent from June. Total vegetable oil imports in July were 870,328 tn, up from 783,315 tn in the previous month (Source: Sea of India). Although, Malaysia's July palm oil stocks rose 17.6 percent to 1,998,870 tn from a revised 1,699,117 tn in June, the export demand is expected to regain momentum amid supply shortage of edible oil globally. Indonesia, the world's top palm oil producer, has lowered its earlier output forecast by 8 percent to 23.6 million tonnes this year.

Source: Reuters

RM Seed
Unit RM Seed SpotNCDEX (Jaipur) RM Seed- NCDEX Sept '12 Futures Rs/100 kgs Rs/100 kgs Last 4325 4367 Prev day -0.35 -0.57

as on Sept 4, 2012 WoW -0.57 -1.40 MoM 1.23 1.94

Source: Reuters

YoY 48.63 50.48

Technical Chart Soybean

NCDEX Oct contract

Rape/mustard Seed: Mustard seed futures settled lower on

Tuesday on account of profit booking. Mustard output was lower in 2011-12 season. However, with on the back of higher returns and improved rains, next years output is expected to be better. Rainfall deficit in Rajasthan has come down sharply due to rainfall in last 4-5 days. It will ensure higher area under rapeseed as its prices are trading near record high level. Sowing of rapeseed starts from October and north-western Rajasthan is the top producing area in the country.

Source: Telequote

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

valid for Sept 5, 2012 Support 799-804 3955-3985 4365-4395 554-558 Resistance 813-817.50 4050-4080 4470-4500 565-569

Outlook
Oilseed complex is expected to trade sideways as weak domestic fundamentals for soybean for the next season may offset the record higher international soybean prices caused by tightness in global oilseed supply.

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Commodities Daily Report

Wednesday| September 5, 2012

Agricultural Commodities
Black Pepper
Pepper Futures traded on a positive note yesterday due to no fresh arrivals in the domestic markets as farmers are unwilling to sell at lower prices. However the spot remained flat due to lower demand for Indian pepper in the international markets due to huge price parity. Low stocks in the domestic markets have supported prices at lower levels. The Spot settled marginally lower by 0.07% while the Futures settled 0.23% higher on Tuesday. th According to the circular released on June 13 2012 the existing Special margin of 10% (cash) on the long side stands withdrawn on all running contracts and yet to be launched contracts in Pepper from beginning of day Friday June 15, 2012. Pepper prices in the international market are being quoted at $8,100/tonne(C&F) while Indonesia Austa is quoted at $63006400/tonne (FOB). Vietnam was offering its produce at $6,000/tonne for 500 GL. Brazil was offering its pepper at $6,150/tonne for the B-Asta grade. As per circular dt. 29/06/2012 issued by NCDEX, Hassan will be available as an additional delivery centre for all the yet to be launched contracts. (not applicable to the currently available contracts-till Dec 2012 expiry).

Market Highlights
% Change Unit Pepper SpotNCDEX (Kochi) Pepper- NCDEX Sept '12 Futures Rs/qtl Rs/qtl Last 40795 41280 Prev day -0.07 0.23

as on Sept 4, 2012 WoW -0.71 -1.82 MoM -4.34 -5.81 YoY 17.89 18.43

Source: Reuters

Technical Chart Black Pepper

NCDEX Oct contract

Exports
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 June 2012 is estimated around 73000 mt 73,000 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 14.8% in the first 2 months of the year (2012) to 8810 tn as compared to 10344 tn in the same period previous year. Imports of Pepper in the month of February declined by 16.8% to 3999 tn as compared to 4811 tn in the month of January 2012. 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 Oct Futures Unit Rs/qtl

valid for Sept 5, 2012 Support 42480-42600 Resistance 42950-43200

Production and Arrivals

The arrivals in the spot market were reported at 15 tonnes while offtakes were 15 tonnes on Friday while no arrivals were reported on Saturday. Global Pepper production in 2012 is expected to increase 7.2% to 3.20 lakh tonnes as compared to 2.98 lakh tonnes in 2011 with sharp rise of 24% in Indonesian pepper output and in Vietnam by 10%. According to latest report 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). 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) On the other hand production of pepper in India in 2011-12 is expected to decline further by 5% to 43 thousand tonnes as compared to 48 thousand tonnes in the last year. Production is lowest in a decade.

Outlook
Pepper prices are expected to trade sideways today. Lack of supplies may support prices at lower levels. However, prices may correct due to lower demand at higher levels in the domestic as well as international markets.

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Commodities Daily Report

Wednesday| September 5, 2012

Agricultural Commodities
Jeera
Jeera Futures corrected further yesterday on account of good rains in Gujarat. Good rains are expected to improve moisture levels which may increase prospects of better yield next season. Exporters are also avoiding buying at higher levels, and waiting for the prices to correct. 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 the ongoing civil war in Syria which is hampering supplies. There are reports that there has been an increase in demand from Bangladesh for Indian Jeera. The Spot as well as the Futures settled 0.43% and 0.58% lower on Tuesday. Production in Syria and Turkey is being reported around 17,000 tonnes and around 4,000-5,000 tonnes, lesser than expectations. Jeera prices in the international market of Indian origin are being offered at $28,000-2,850 tn (c&f) while Syria and Turkey are not offering their produce. Carryover stocks of Jeera in the domestic market is expected to be around 7-8 lakh bags as compared to 4-5 lakh bags in the last year.

Market Highlights
Unit Jeera SpotNCDEX(Unjha) Jeera- NCDEX Sept '12 Futures Rs/qtl Rs/qtl Last 15383 14265 Prev day -0.43 -0.58

as on Sept 4, 2012 % Change WoW -1.34 -3.39 MoM -6.47 -8.98 YoY -0.53 -6.15

Source: Reuters

Technical Chart Jeera

NCDEX Oct contract

Production, Arrivals and Exports

Unjha markets witnessed arrivals of 4,000 bags, while off-takes stood at 4,000 bags on Tuesday. Production of Jeera in 2011-12 is expected to be around 40 lakh bags as compared to 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

Outlook
Jeera prices are expected to trade sideways as the arrivals are steady. Prices may recover due to expectation of revival in export demand. However, good rains in Gujarat may correct the prices. In the medium to long term (Aug-September 2012) prices are likely to witness a bounce back as there are limited stocks with Syria and Turkey and crop there is 30% short as compared to last year.

Market Highlights
Prev day -1.66 1.31

as on Sept 4, 2012 % Change

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

Last 5406 6048

WoW -3.57 -2.86

MoM -2.74 5.96

YoY 5.65 42.57

Turmeric
Turmeric Spot corrected yesterday on improving rains in the Southern Peninsula. Arrivals have also increased in Erode. The demand from north India is also very less. However, the Futures bounced back sharply from lower levels due to buying emerging lower levels ahead of the festive season. Rainfall in Nizamabad is 27% lower than the normal as on 29/8/2012. Turmeric has been sown in 0.53 lakh th hectares in A.P as on 29 August 2012. Sowing is also reported 30-35% lower during the sowing period. The Spot settled 1.66% lower while the Futures settled 1.31% higher on Tuesday. The pre expiry margin on Turmeric has been increased to 5% for last 7 trading days increased on a daily basis on both buy and sell side from the existing 3% on daily basis for last 5 days.

Technical Chart Turmeric

NCDEX Oct contract

Production, Arrivals and Exports

Arrivals in Erode and Nizamabad mandi stood at 5,000 bags and 1,200 bags respectively on Tuesday. Turmeric production for the year 2011-12 is projected at historical high of 90 lakh bags (1 bag= 70 kgs) compared to 69 lakh bags in 201011. Erode is expected to produce 55 lakh bags of turmeric a rise of 29% as compared to previous year. 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.

Source: Telequote

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

valid for Sept 5, 2012 Support 14430-14540 5980-6070 Resistance 14800-14980 6210-6320

Outlook
Turmeric prices are expected to continue to trade sideways taking cues from lower sowing figures as well as reports of export demand from Pakistan. Traders also expect fresh export orders in the coming days. However, improving weather conditions may cap sharp gains. In the medium term (Aug to September) prices may take cues from the sowing figures.

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Commodities Daily Report

Wednesday| September 5, 2012

Agricultural Commodities
Kapas
NCDEX Kapas April futures and MCX Cotton futures settled 0.67% and 0.86% higher respectively on Tuesday on account of short coverings by market participants. Cotton prices declined sharply during the last one week as cotton advisory board in its latest meeting has made and upward revision in the end stocks estimates. Further improved rains in August and higher imports of cheaper global cotton also supported the weak market sentiments. According to the latest report by IMD, India received 12% below normal rains during June 01- August 31. The month of August witnessed 99.7% th rainfall as on 29 August. However, the number one cotton growing state, Gujarat, is still reeling under deficient to scanty rains in the most past of the state. ICE cotton futures remained closed yesterday on account of Labor Day. In the international markets ICE Cotton futures and Cot look Index A gained last week on worries about the potential harm Tropical Storm Isaac could cause to cotton crops as it headed toward Alabama and Mississippi -- two important states in the U.S. cotton belt.

Market Highlights
Unit Rs/20 kgs Rs/Bale Last 1047 17670

as on Sept 4, 2012 % Change Prev. day WoW 0.87 -4.86 0.86 -2.91 MoM -8.52 -4.33 YoY #N/A -

NCDEX Kapas Futures MCX Cotton Futures

Source: Reuters

International Prices
ICE Cotton Cotlook A Index Unit Usc/Lbs Last 75.03 81.35

as on Sept 3, 2012 % Change Prev day WoW -1.90 -1.05 0.00 0.00 MoM 6.52 0.00 YoY -29.14 -29.20

Source: Reuters

Domestic Production and Consumption

In India Cotton harvesting commences by mid September from the North Indian irrigated states like Punjab, Haryana and Rasjthan. While, in rain fed areas its starts in October. st As on 31 August, 2012, Cotton is being planted on 112.83 lakh hectares; lower by 4.3% compared to the last years 118.37 lakh hectares. However, the acreage so far is at par with its normal area of 111.8 lakh hectares. According to Business Line area covered under cotton in Gujarat is 23.42 Lh ha as compared to 29.56 Lh ha last year, in Maharashtra 41.27 Lh ha compared to 40.95 Lh ha and in Andhra Pradesh 21.17 lh ha compared to 17.75 Lh ha same period last year According to the latest updates by Cotton Advisory Board (CAB), Cotton production for 2011-12 seasons is revised upward to 357 lakh bales compared with 347 lakh bales estimated earlier. Also, on account of cheaper cotton available in the global markets, imports have more than double from 5 lakh bales to 12 lakh bales. On the demand front, exports increased to around 127 lakh bales from the earlier estimates of 115 lakh bales taking total cotton consumption to around 382 lakh bales. Thus, the ending stocks figure for 2011-12 season, that would end in September, has been revised upward to 28 lakh bales from the previous estimates of 25 lakh bales. However, 28 lakh bales is the lowest since 2004-05 caused by robust exports.

Technical Chart - Kapas

NCDEX April contract

Source: Telequote

Technical Chart - Cotton

MCX Oct contract

Global Cotton Updates

Global cotton prices are mainly influenced by China, US and India. China is the largest producer, consumer, and importer of Cotton, While India is the second largest producer, consumer and exporter of Cotton. US is third largest producer and a largest exporter of Cotton in the world. The global cotton market surplus will total more than 3 million tonnes in 2012-13 (August- July) from growing output and falling demand in China, the world's largest textile market China's 2012 cotton output is estimated at 6.97 million tonnes, down 4.2 percent from last year. China has issued fresh import quota to textile mills to procure cotton from international markets, which are 40 percent cheaper than domestic stock. This is additional to 1 million tonne issued in May this year.

Source: Telequote

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

valid for Sept 5, 2012 Support 1020-1032 1022-1034 17320-17500 Resistance 1055-1065 1055-1064 17800-14950

Outlook
In intraday cotton prices might open down initially and may recover in the later sessions taking cues from the international market. However, no major downside is expected as international markets may start recovering from the current levels on potential harm to US cotton crop amid a tropical storm.

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