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Commodities Daily Report

Friday| October 12, 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


Friday| October 12, 2012

Agricultural Commodities
News in brief
MSP unchanged for Wheat, government may offer 10% bonus
The government may offer a bonus of 10% for wheat as an incentive to farmers in the coming winter while holding down the minimum support price on the recommendation of the Commission for Agricultural costs and prices (CACP). The CACP, which advises the government on the floor price for major crops, has suggested retaining last year's MSP of Rs 1,285/tonne to discourage excess production for the second consecutive year. However, agriculture ministry is looking at ways to incentivise farmers and encourage them for record output this year also. "CACP has suggested 10% bonus for wheat farmers if exports are banned next year. But we may give bonus unconditionally to offset rise in input costs including prices of fertiliser, seeds and irrigation. We will soon announce the floor prices of rabi crops, said an agriculture department official. However, any rise in the purchase price would upset the budget of food ministry which buys wheat from farmers. (Source: The economic Times)

Market Highlights (% change)


Last Prev. day

as on Oct 11, 2012


WoW MoM YoY

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

18805 5708 52.65 92.07 1769

0.93 0.99 -0.68 0.90 0.32

-1.33 -1.37 1.76 0.39 -1.41

5.84 6.42 -5.03 -4.63 2.32

13.72 14.75 6.72 7.30 6.57

Source: Reuters

World corn stocks tighten on smaller U.S., EU crops - RTRS


U.S. and world corn stocks will be tighter than expected well into 2013 and drought has slashed the wheat crop in leading exporter Australia, the U.S. government forecast on Thursday, fueling a surge in futures prices. The USDA's estimates of the U.S. corn and soybean crops were slightly larger than traders had expected but its estimates of 2012/13 ending stocks were smaller than forecast. Corn end stocks, forecast at 619 million bushels, would be a scant three-week supply. It would be a 5.5 percent stocks-to-use ratio, nearly emptying the supply pipeline. Larger U.S. exports and domestic crushing would boost soybean use by 9 percent from the USDA's September estimate and limit end stocks to 130 million bushels, overwhelming the impact of higher yields. World corn stocks would drop by 11 percent from their 2011/12 level, for the smallest total in six years, chiefly due to the drought-hit U.S. crop. The USDA also cut its estimate of the European Union crop by 2.6 percent. Drought will reduce Australia's wheat crop to 23 mln tonnes, down 12 % from a month ago, the USDA said. Harsh weather, including summer droughts and early frosts, cut an additional 3 percent from Russia's wheat crop, it said. With Australian exports down by 3 mln tonnes, wheat consumption will drop in Vietnam and Thailand, the USDA said. While U.S. soybean stocks will shrink to bare-bones levels, world stocks will rise, boosted by huge crops in Brazil and Argentina. (Source: Reuters)

Direct fertiliser subsidy to farmers in pilot plan


The UPA government has decided to work towards direct payment of the fertiliser subsidy This decision, taken by the cabinet committee on economic affairs on Thursday, will enable crediting the subsidy, totalling over Rs 1,00,000 crore a year, to dedicated accounts of over 50 million farmers. To begin with, in a pilot project covering a million farmers in 10 districts, the subsidy on urea and ad hoc fiscal concessions on phosphates and potash will be transferred directly to the farmer through his kisan card account or bank account. This is targetted to be achieved in three months. Based on its success, the government will widen the scheme to cover the entire country. It will take a year or two to implement the whole scheme, said Satish Chander, director-general of the Fertilisers Association of India (FAI). The idea is to reduce transaction costs, streamline subsidy payments and eliminate middlemen. CCEA accepted the proposal of the fertiliser department, marking the first step towards reforms in subsidy payments. (Source: financial Express)

Soybean prices in free-fall, farmers take to the streets


Irked by the free-fall in soybean prices this harvesting season, farmers in Madhya Pradesh have started a mild protest across spot mandis, demanding a hike in purchase price from the state authorities. Soybean prices have fallen by a massive 35 per cent in the last three months. The major concern of the protesting farmers is the squeeze in their income due to a huge spurt in raw material prices, including labour, fertilisers and other inputs. The major concern of the protesting farmers is the squeeze in their income due to a huge spurt in raw material prices, including labour, fertilisers and other inputs. Although, the price has increased a bit since then due to lower supplies as a result of the ongoing inauspicious shraddh period, experts believe the commodity will decline in the coming days with farmers intensifying harvesting of the standing crop after a week. Labour costs have also increased along with the cost of fertilisers and transportation, adding to the overall input costs by at least by 30-40 per cent. (Source: Business Standard)

Renegotiation of maize export deals likely as global prices slide


A nearly 15 per cent drop in global corn (maize) prices in the last few weeks is leading to renegotiation of export contracts of the coarse grain from the country. Prices have dropped sharply after running to record highs in the global market. This is forcing renegotiations, said A. Rajkumar of Alagendran Group of companies that exports agricultural produce. Corn prices are dropping in view of the crop being harvested in the US. Though US suffered from the worst drought seen in five decades, the crop is now estimated to be higher than what it was initially estimated. The drop in corn prices is leading to another problem of fall in demand for Indian wheat in the global market. Indian wheat was in demand, especially for feed purpose, as corn prices ran to a record high.
(Source: Business lIne)

Changing subsidy payment mode, Centre hikes urea price


Farmers will have to pay more for urea, as the Government has raised the maximum retail price (MRP) to implement a changed system for the payment subsidy. The Cabinet Committee on Economic Affairs (CCEA) approved the changes on Thursday as a precursor to direct cash subsidy to the farmers. Through this, the Government aims to plug diversion of urea for industrial use and accordingly, reduce the overall fertiliser subsidy by at least 20 per cent. Now, farmers will have to pay Rs 2.50 for a 50-kg urea bag. The CCEAs decision to increase the MRP by Rs 50/tonne is to provide an incentive to the retailer for acknowledging receipt of fertilisers from the manufacturer/importer or wholesale trader. (Source: Business Line)

Sikkim bites the sugar bullet


In a first, the Sikkim government has gone ahead with an increase in the price of levy sugar, meant for the Public Distribution System (PDS), even as the Centre continues to mull such a measure. According to central government officials, Sikkim has raised the price of levy sugar to Rs 26 a kg as against the central government rate of Rs 13.50. This could set a precedent for others on partial deregulation of levy sugar pricing. The state procures from mills in Uttar Pradesh and transports it by trucks, as there is no rail link. To cut the subsidy under PDS for sugar to the states, the central government had asked states to raise the price of sugar for the PDS without waiting for its own decision. Only Sikkim has done so.
(Source: Business Line)

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Commodities Daily Report


Friday| October 12, 2012

Agricultural Commodities
Chana
Chana spot prices on Thursday traded on a positive note and closed up by 2.28% ahead of tight supplies. Also sentiments have turned positive in the past one week on account of improved festive season demand at lower price levels. Prices had declined in the month September on improved rains and reports of expected higher output in Australia, the largest supplier of chickpeas to India. In Australia, chana production rose by 70.5 percent to 8.27 lakh tonnes from 4.85 lakh tonnes in previous year. CACP has recommended a hike in minimum support price (MSP) of gram by Rs.200 to Rs.3000 a quintal and Masoor by Rs.100 to Rs.2900 a quintal for upcoming 212-13 Rabi season to boost the production of pulses. As per the statement of Finance Minister P. Chidambaram, India has raised the subsidy on imported pulses to Rs. 20/kg from the earlier Rs. 10/kg, this move is expected to increase pulses imports. As per the NCDEX circular dated 1 October, Special Margin of 10% (in cash) on the Long Side on all the running contracts and yet to be launched contracts in Chana have been withdrawn with effect from beginning of day Thursday, October 04, 2012. Good rains in the month of August and September has raise prospects of Rabi pulses sowing in the coming days that would commence soon. Monsoon has recovered across India, especially in Rajasthan, one of the major chana growing states, and may prove beneficial for the chana sowing.
st

Market Highlights
Unit Rs/qtl Rs/qtl Last 4593 4686 Prev day 2.28 0.51

as on Oct 11, 2012 % change WoW MoM 3.20 0.93 3.28 3.97 YoY 31.21 37.95

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

Source: Reuters

Technical Chart - Chana

NCDEX Nov contract

Source: Telequote

Technical Outlook

valid for Oct 12, 2012 Unit Rs./qtl Support 4450-4493 Resistance 4585-4615

Sowing progress and demand supply fundamentals


According to the Ministry of Agriculture 99.81 Lakh hectare area has been planted under Kharif pulses as on 21th September, 2012 compared to 108.28 lakh hectare (ha) same period last 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. According to the Fourth advance estimates of 2011-12 season, 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. 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)

Contract Chana Oct Futures

Outlook
Chana futures are expected to gain further ahead of festive season demand and tight supplies. However, reports of higher sowing of Rabi pulses this season might pressurize the prices in the medium term. Also, higher imports from Australia may cap the sharp upside in the prices.

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Commodities Daily Report


Friday| October 12, 2012

Agricultural Commodities
Sugar
Sugar Futures on Thursday settled lower by 0.41% ahead of higher supplies due to release of non levy sugar quota. The Government has decided to make available a quantity of 40 lakh tons of non-levy quota, for the months of October and November 2012. Indian mills have signed deals to buy up to 450,000 tonnes of Brazilian raw sugar for delivery from October to December as a gap between domestic and overseas prices widens, making room for the first imports in more than two years, five dealers told Reuters. Millers based in western and southern India and global trading firms bought sugar at around $500/ton a CIF basis, as the price in the domestic market has jumped more than 23% to $680/ tn in the past three months. ICE raw sugar and Liffe white sugar extended further losses and settled 3.81% and 3.73% lower respectively on Thursday taking cues from the September Monthly USDA report which showed increase in supplies. Also, higher output and lower imports expectations for the 2012-13 season from China.

Market Highlights
Unit Sugar Spot- NCDEX (Kolkata) Sugar M- NCDEX Oct '12 Futures Rs/qtl Last 3727

as on Oct 11, 2012 % Change Prev. day WoW 0.34 -2.08 MoM -0.18 YoY 21.80

Rs/qtl

3376

-0.41

-0.91

-4.74

22.32

Source: Reuters

International Prices
Unit Sugar No 5- LiffeOct'12 Futures Sugar No 11-ICE Oct '12 Futures $/tonne $/tonne Last 568.4 454.44

as on Oct 11, 2012 % Change Prev day WoW -3.73 -3.81 -4.84 -5.06 MoM 2.14 5.20 YoY -20.09 #N/A

Domestic Production and Exports


The area under sugarcane is estimated at 52.88 lakh ha for 2012-13 crop season, up from 50.99 lakh ha on same period a year ago. According to the first advance estimates by agriculture ministry, Sugarcane output is pegged at 335.3 mn tn, down by 6.2% compared to 357.6 mn tn last year. Despite of higher acreage, the producers body has estimated next years sugar output lower at 24 mn tn, down by 2mn tn compared to the current year. Sugar production in India the worlds second-biggest producer touched 26 million tonne since October 1, 2011. Industry body ISMA has estimated 6 mn tn stocks for the new season beginning October 01, 2012 compared to 5.5 mn tn year ago. India may export 2.5-3 mn tn sugar in 2012-13. With the opening stocks of 6 mn tn, domestic Sugar supplies are estimated at 30mn tn against the domestic consumption of around 22.523 mln tn for 2012-13. Thus, no curbs on exports are seen as of now.

Source: Reuters

Technical Chart - Sugar

NCDEX Nov contract

Source: Telequote

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. The International Sugar Organization said it expected a global sugar surplus of 5.86 million tonnes in the season running from October 2012 to September 2013, up from the prior season's surplus of 5.19 million tonnes. The ISO said the stocks/consumption ratio could rise to around 40 percent in 2012/13, from 37.6 percent in 2011/12. (Source: Reuters)

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

valid for Oct 12, 2012 Support 3290-3305 Resistance 3348-3366

Outlook
Sugar prices may trade sideways with a negative bias taking cues from weaker international markets as well as higher Quota for the month of October and November. However, festive demand might support prices at lower levels.

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Commodities Daily Report


Friday| October 12, 2012

Agricultural Commodities
Oilseeds
Soybean: Soybean Futures as well as spot extended the gains
taking cues from the international oilseed market. Also, demand for edible oil ahead of ongoing festive season supported the upside. The Futures settled 1.10% higher while the spot closed up by 0.84%. As per NCDEX, Special Margin of 20% (in cash) on the Long Side on Soya bean October 2012 expiry contract will be withdrawn with effect from beginning of day Monday, October 08, 2012. Special margin on soy meal has also been withdrawn w.e.f October 12 2012. CBOT Soybean settled 1.66% higher on Thursday taking cues from the monthly USDA report which showed lower ending stocks. USDA estimates 2012/13 u.s. soybean crop 2.860 bln bu (above trade 2.764), yield 37.8 bu/ac (above trade 37.006), harvest acres 75.7 mln (above trade 74.579). Ending stocks are seen down from 169 million bushels in 2011-12 to 115 million bushels in 2012-13 season. In Brazil planting has started 10 days earlier amid good rains. If rains continue in the coming weeks as forecast, Brazil could churn out 81 million tonnes of oilseed and replace the drought-stricken US as the world's top soybean producer, according to the USDA. Brazils grain Association expects the number 2 producers of soybean to produce record 81.3 mn tn in 2012-13. In the domestic markets, as on 20 September, 2012, Oilseeds have been sown in 174.39 lakh ha so far, compared with 178.16 lakh ha same period last year. Soybean area is higher at 106.9 lakh ha. According to first advance estimates, Soybean output is pegged at at 126.2 lk tn for 2012-13. However, drop in area under groundnut, sunflower & castor seed may lead to lower output of these oilseeds in 2012-13 which is estimated 9.6% lower at 187.8 lakh tn.
th

Market Highlights
Unit Soybean Spot- NCDEX (Indore) Soybean- NCDEX Oct '12 Futures Ref Soy oil SpotNCDEX(Indore) Ref Soy oil- NCDEX Oct'12 Futures Rs/qtl Rs/qtl Rs/10 kgs Rs/10 kgs Last 3229 3256 672 669 Prev day 0.84 1.10 0.36 1.83

as on Oct 11, 2012 % Change WoW 11.08 10.11 3.48 7.49 MoM -28.55 -15.29 -16.02 -16.32
Source: Reuters

YoY 48.26 50.27 6.52 8.64

as on Oct 11, 2012 International Prices Soybean- CBOTNov'12 Futures Soybean Oil - CBOTOct '12 Futures Unit USc/ Bushel USc/lbs Last 1549 50.88 Prev day 1.66 1.42 WoW 1.09 1.09 MoM -12.56 -11.62 YoY 12.25 -11.20

Source: Reuters

Crude Palm Oil

as on Oct 11, 2012 % Change Prev day WoW 4.43 2.87 8.73 8.81

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

Last 2380 430

MoM -15.72 -19.72

YoY -30.00 -9.66

MYR/Tonne Rs/10 kg

Refined Soy Oil: Ref soy oil settled higher taking cues from the
international market, while MCX CPO also settled higher due to approval of export cut for crude palm oil in Malaysia. According Malaysian Palm Oil Board, the ending stocks for palm oil increased by 17.24% for September. Also, Malaysia has approved a plan to cut crude palm oil (CPO) export taxes from 23 percent per tonne Although, exports are high the overall stocks of Malaysian palm oil are higher on the back of seasonally higher yield. Exports of Malaysian palm oil products for Sept. 1-25 rose 8 percent to 1,170,720 tonnes from 1,084,343 tonnes shipped during Aug. 1-25. Indias edible oil imports should rise 5.4 percent to a record 10.31 million tonnes in 2012/13, with the entire increase met by palm oil. 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).

Source: Reuters

RM Seed
Unit RM Seed SpotNCDEX (Jaipur) RM Seed- NCDEX Oct '12 Futures Rs/100 kgs Rs/100 kgs Last 4200 4043 Prev day -1.18 -0.59

as on Oct 11, 2012 WoW 2.44 8.13 MoM -1.18 -3.05


Source: Reuters

YoY 40.00 33.30

Technical Chart Soybean

NCDEX Nov contract

Rape/mustard Seed: Mustard futures settled down by 0.59% on


account of profit booking. Mustard output was lower in 2011-12. However, on the back of higher returns and improved rains, next years output is expected to be better.
Source: Telequote

Outlook Edible oil complex is expected to trade sideways with a upper bias taking cues from the firm international Oilseed market ahead of supportive monthly demand supply USDA report for September. However due to good quantity new crop arrivals of soybean hitting the market, sharp upside might be capped for short term.

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

valid for Oct 12, 2012 Support 641-646 3150-3190 4020-4050 420-425 Resistance 658-665 3265-3305 4150-4195 435-440

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Commodities Daily Report


Friday| October 12, 2012

Agricultural Commodities
Black Pepper
Pepper futures continued to trade on a positive note for the fourth consecutive session yesterday due to low supplies in the domestic markets as well as festive demand. Farmers are also unwilling to sell their stocks at lower levels. However, expectations of improvement in weather conditions as well as better output in Indonesia have capped sharp gains. Traders are buying pepper directly from the farmers. Exports demand for Indian pepper in the international markets remains weak due to huge price parity. The Spot settled lower by 0.5% while the Futures settled 0.14% higher on Thursday. 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 $8,500/tonne(C&F) while Indonesia Austa is quoted at $6,750/tonne (FOB). Vietnam was offering 550GL at $6,900/tonne. 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
Unit Pepper SpotNCDEX (Kochi) Pepper- NCDEX Oct '12 Futures Rs/qtl Rs/qtl Last 42315 43940 % Change Prev day -0.50 0.08

as on Oct 11, 2012 WoW 0.36 1.37 MoM 1.75 4.06 YoY 22.30 28.35

Source: Reuters

Technical Chart Black Pepper

NCDEX Nov 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 Oct 12, 2012 Support 43400-43700 Resistance 44250-44620

Production and Arrivals


The arrivals in the spot market were reported at 36 tonnes while offtakes were 36 tonnes on Thursday. 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 is expected to continue to trade on a positive note today. Low supplies in the domestic markets as well as festive season demand are expected to support prices. However, reports that FMC has asked NCDEX to find out any irregularities in pepper trade may cap sharp upside.

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Commodities Daily Report


Friday| October 12, 2012

Agricultural Commodities
Jeera
Jeera prices traded corrected yesterday on account of profit booking at higher levels. Also, arrivals improved as prices increased. Expectations of better export figures have also supported the prices at lower levels. However, reports of higher carryover stocks as compared to last year restricted sharp gains. Good rains in Gujarat, thereby expectations of better sowing prospects ahead of the rabi sowing have also pressurized the prices in the spot market. The spot as well as the Futures settled 0.54% and 1.06% lower on Thursday. According to markets sources about 75% exports target has already been achieved due to a supply crunch in the global markets. Around 10 lakh bags of Jeera are reported across India. 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 $2,650 tn (c&f) while Syria and Turkey are not offering. 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 Oct'12 Futures Rs/qtl Rs/qtl Last 14622 14278 Prev day -0.54 -1.06

as on Oct 11, 2012 % Change WoW 1.07 4.75 MoM -0.87 3.18 YoY -1.38 -0.17

Source: Reuters

Technical Chart Jeera

NCDEX Nov contract

Production, Arrivals and Exports


Unjha markets witnessed arrivals of 6,000 bags, while off-takes stood at 6,000 bags on Thursday. 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

Market Highlights
Prev day -0.94 0.70

as on Oct 11, 2012 % Change

Outlook
Jeera futures are expected to continue to trade upwards today. Prices may find support at lower levels on expectations of higher export figures. However, good rains in Gujarat and higher carryover stocks may cap any sharp gains. In the medium term (October-November 2012), prices are likely to witness a bounce back as there are limited stocks with Syria and Turkey.
Turmeric SpotNCDEX (N'zmbad) Turmeric- NCDEX Oct '12 Futures

Unit Rs/qtl Rs/qtl

Last 5218 5498

WoW -3.37 -0.22

MoM -7.83 -8.64

YoY -8.21 9.30

Turmeric
Turmeric Futures extended previous days gain after prices have corrected sharply. Higher stocks with the stockists also pressurized the prices. However, a reduction in the special cash margin on the long side supported the prices. Turmeric has been sown in 0.57 lakh hectares in A.P as on 03/10/2012. Sowing is also reported 30-35% lower during the sowing period. The Spot settled 0.94% lower while the Futures settled 0.7% higher on Thursday. Special Cash Margin of 40% on the Long side shall be reduced to 20% (cash) on all the running contracts and yet to be launched contracts in Turmeric w.e.f. beginning of day Wednesday, September 26, 2012.

Technical Chart Turmeric

NCDEX Nov contract

Production, Arrivals and Exports


Arrivals in Erode and Nizamabad mandi stood at 3,000 bags and 5000 bags respectively on Thursday. 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 Oct 12, 2012 Support 14130-14300 5450-5506 Resistance 14600-14780 5618-5674

Outlook
Turmeric prices are expected to trade sideways today. Stockists are not buying actively, which may pressurize prices. However, a reduction in the special cash margin, lower sowing figures and lower arrivals may support prices.

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Commodities Daily Report


Friday| October 12, 2012

Agricultural Commodities
Kapas
NCDEX Kapas traded lower in the intraday but closed marginally higher on Thursday as traders covered their short positions towards the end of day. Also, ongoing harvesting pressure in the key producing states provided resistance to the prices. ICE cotton Futures closed up by 2.28% as investors are awaiting for the Monthly demand supply report of USDA that is going to be issued today . Cotton harvesting has commenced in US, in all 14% is harvested as compared to 10% a week ago, versus 15% same period a year ago. Cotton crop condition is 42% in Good/Excellent state as compared to 43% a week ago, and 29% same period a year ago.

Market Highlights
Unit Rs/20 kgs Rs/Bale Last 945.5 16130

as on Oct 11, 2012 % Change Prev. day WoW 0.37 5.00 -0.19 2.02 MoM -5.97 2.02 YoY -11.37

NCDEX Kapas Futures MCX Cotton Futures

Source: Reuters

International Prices
ICE Cotton Cot look A Index Unit Usc/Lbs Last 70.71 81.35

as on Oct 11, 2012 % Change Prev day WoW -1.93 1.30 0.00 0.00 MoM -4.81 0.00 YoY -30.64 -29.20

Domestic Production and Consumption


As on 28 September, 2012, Cotton is being planted on 114 lakh hectares, down, as compared to the last years 119.6 lakh hectares. However, the acreage so far is at par with its normal area of 111.8 lakh hectares. According to the First Advance Estimates, Cotton production for 2012-13 seasons is revised upward to 334 lakh bales compared with 352 lakh bales in 2011-12 season. Also, on account of cheaper cotton available in the global markets, imports have more than double from 5 lakh bales to 12 lakh bales. According to the latest CAB report as on 04 October 2012, exports have dipped sharply by 46% to 7 million bales in the 2012/13 marketing year that began on Oct. 1 compared to 12.7 million bales estimated for 201112 season. The ending stocks figure, has been revised further upward to 3.4 million bales as compared to 2.8 million bales estimated for August 2011-12 season
st

Source: Reuters

Technical Chart - Kapas

NCDEX April contract

Global Cotton Updates


Global cotton prices are mainly influenced by China, US and India. USDA estimated US Cotton planting for the season 2012-13 at 12.64 mln acres as compared to 14.74 mln acres last season (2011-12). Ending stocks were at 4.8 mln bales (480 pounds/bales) with Production of 17.65 mln bales and exports of 12.1 mln bales were pegged for the season 2012-13. In its September monthly demand supply report on Wednesday, the Agriculture Department (USDA) raised its estimate for the global cotton surplus by next July to a record of 76.5 million 480-pound bales, nearly a two-million bale increase from last month's estimate. China's 2012 cotton output is estimated at 6.97 million tns, down 4.2 percent from last year. China's cotton imports in August rose 48 percent on the year to 305,600 tns. Total imports in the first eight months of the year were 3.77 million tns, up 123% from the same period last year, according to the report by the China National Cotton Reserves Corp.

Source: Telequote

Technical Chart - Cotton

MCX Oct contract

Outlook
Kapas futures in intraday is expected to trade on a bearish note taking cues from the weaker international markets. Prices might take support at lower levels as farmers are not willing to sell their produce at lower levels. Besides, prices in spot market are nearing its MSP, which would restrict any major fall. In the international front, cotton harvesting has begun globally which might cap a sharp upside in medium term. Also, prices might have taken cues from the USDA monthly demand supply report which showed higher ending stocks for 2012-13 season.

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 Oct 12, 2012 Support 916-932 913-929 15880-16000 Resistance 962-978 958-975 16280-16420

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