Commodities Daily Report

Tuesday| May 14, 2013

Agricultural Commodities

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

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

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Commodities Daily Report

Tuesday| May 14, 2013

Agricultural Commodities
News in brief
FMC allows resumption of Guar futures trading
Forward Market Commission (FMC) has allowed commodity exchanges to resume futures trading in guar seed and guar cum contracts from May 14. Guar seeds and gum futures were banned a year ago following a sharp surge in prices. FMC has given approval to Multi Commodity Exchange and National Commodity and Derivatives exchange Ltd (NCDEX) for trading in guar seed and guar gum contracts in order to facilitate price discovery and price risk management in the guar complex. The trading unit of the guar seed and guar gum is one tonne each and price quote for the contracts is ex-warehouse Jodhpur, inclusive of sales tax/VAT. These are compulsory delivery contracts with staggered delivery tender period for the last 15 days. The physical delivery would be available in multiples of one tonne for both guar seed and guar gum. The basis delivery centre for both the contracts is Jodhpur and additional delivery centers include Bikaner, Nokha, Sri Ganganagar, Hanumangarh and Barmer in Rajasthan, Deesa in Gujarat, and Adampur and Sirsa in Haryana. The futures trade in guar was banned in March last year after a ten-fold surge in prices on speculation. (Source: Indian Express)

Market Highlights (% change)

Last Prev. day

as on May 13, 2013

WoW MoM YoY

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

19692 5980 54.84 95.17 1435

-1.95 -1.88 0.05 -0.91 -0.16

0.09 0.16 1.29 -1.03 -2.29

7.94 8.17 0.58 4.25 -4.43

20.86 21.33 2.24 -1.00 -9.42

.Source: Reuters

Turmeric not to rise till month-end

Going by the current trend and the rising temperature levels, there will not be any upcountry orders for turmeric till the month end. R.K.V. Ravishankar, President, Erode Turmeric Merchants Association, said that there is no possibility of increase in turmeric price till the end of this month. After the summer he hoped that some North Indian orders may be received by them. Spot turmeric declined further in Erode on Monday. At the Erode Turmeric Merchants Association sales yard, the finger variety was sold at Rs 5,011-7,511; the root variety Rs 5,019-6,406 a quintal.(Source: Business Line)

Monsoon set to break over Andamans under Mahasen effect

Conditions are now favourable for advance of South-West monsoon over Andaman Sea and adjoining seas during the next two to three days. Andaman and Nicobar Islands is the countrys farthest outpost in extreme South-East Bay of Bengal and receives the annual monsoon between May 15 and 20. Going by this, the onset of the rains is expected to be normal this year, with raging cyclone Mahasen having played a big role facilitating it. It has churned up the seas and is trailed by strong band of southwesterly flows from South of the Equator and heading straight into the Bay of Bengal. The Thailand Met Department, which is the nearest to Andaman Sea, estimated that southwesterly winds were clocking between 20 and 35 km/hr on Monday. The skies continued to be very cloudy out there with scattered thunder showers, it said. But wind speeds could slow down by the weekend as cyclone Mahasen spun away and died out. (Source: Business Line)

U.S. corn seeding pace slowest on record amid chilly, wet spring
After a cold and wet spring in most of the U.S. crop belt, farmers have seeded 28 percent of their intended corn acres, up from 12 percent a week earlier but far behind the five-year average of 65 percent, the U.S. Department of Agriculture said in a weekly report on Monday. The planting pace for corn was the slowest for this point in the year in USDA records dating back to the 1980s, lagging 1984, when farmers had seeded 29 percent of their corn. The United States is the world's biggest exporter of corn. (Source: Reuters)

India's 2013/14 soybean acreage seen rising 7 pct on firm price

Indian farmers are expected to increase soybean planting in 2013/14, encouraged by a rally in prices and the need to cultivate a sturdy crop to prepare for the possibility of an unhelpful monsoon season, industry officials told Reuters. The increase would help the world's top importer of edible oils to cap expensive overseas purchases and boost oilmeal exports to Asian countries. "Farmers in Maharashtra and southern states like Andhra Pradesh, Karnataka and Tamil Nadu are likely to increase (their) soybean area," said Rajesh Agrawal, chief co-ordinator at the Soybean Processors Association of India. The overall rise in the acreage would be about 7 percent over last year's 10.7 million hectares, Agrawal said. That could bring a corresponding rise rise in production, though actual figures will depend on this year's monsoon. (Source: Reuters)

Potato prices decline to Rs. 50/quintal in Bangal

Potato prices in West Bengal dipped by nearly Rs 50 a quintal last week on the back of improved supplies from cold storages coming into the market. Prices are likely to hover around current levels backed by a steady demand for Bengal potatoes in other states. According to Patit Paban De, member of West Bengal Cold Storage Association, more than half of the 400-odd cold storages in the State have started unloading their potatoes. With the State government approving a rental hike of Rs 19 a quintal, cold storages started opening their outfits for unloading potatoes in the first week of May. The present hike, which comes after almost three years, is still inadequate to make good for the 50 per cent rise in input costs, De said. The 400-odd storage units in the State can hold up to 60 lakh tonnes of potatoes. (Source: Business Line)

UP sugar output shy of target

Sugar output in Uttar Pradesh, in the just concluded crushing season, has fallen shy of 7.5 million tns (mt), which however, is still half a million tns below the target set for 2012-13. The crushing season in UP concluded with 121 mills producing nearly 7.47 MT of the sweetener - seven per cent higher than last year's seven mt. Earlier, industry body the Indian Sugar Mills Association (Isma) had pegged the state sugar output target at eight mt on account of lesser diversion of cane to local sweeteners and better recovery rates. However, the target could not be achieved due to lower-than-expected aggregate sugar recovery of 9.19 per cent. "We had expected sugar recovery in UP to touch 9.50 per cent. However, unfavourable weather conditions, including late rainfall, followed by heavy downpour in September last year, coupled with extended winters, have resulted in lower recoveries and consequently lower sugar output," UP Sugar Mills Association (UPSMA) President C B Patodia said. (source:
Business Standard)

Govt Urged to immediately announce cotton MSP

The Cotton Association of India has urged the Government to announce the minimum support price (MSP) for cotton immediately. CAI President Dhiren N. Sheth said that the average daily arrivals in the market yards were around 60,000 bales. Sowing has already commenced in the north zone. In such a situation, the Government should intervene and fix the MSP for cotton to facilitate farmers take an early decision, he said.Meanwhile, the association has released its April estimates of cotton crop for the 2012-13 season. It has placed the crop at 352 lakh bales and the estimated total supply at 420.21 lakh bales. Domestic consumption is expected at 278 lakh bales. (Source: Business Line)

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Commodities Daily Report

Tuesday| May 14, 2013

Agricultural Commodities
Chana
Chana June futures recovered from lower levels yesterday on account of short coverings and settled 0.35% higher on Monday. Prices have decline sharply on account of higher supplies of the new crop coupled with higher output estimates and settled 3.59% lower w-o-w. However, demand from stockists at lower levels has cushioned sharp downside in the prices. Lower yield in MP due to unseasonal rainfall in February have also supported prices at lower levels. The supplies are expected to slow down towards the end of the month. Higher supplies of the new crop from the major producing states such as Madhya Pradesh, Rajasthan and Maharashtra is seen pressurizing prices in the physical markets. Concerns over the yield in Madhya Pradesh, the largest chana producing state, due to unfavorable weather conditions has been seen supporting prices at lower levels. Chana prices may find support at lower levels as stockists will build inventories at lower levels to meet the demand for the entire season.

Market Highlights
Unit Rs/qtl Rs/qtl Last 3336 3323 Prev day -1.17 0.30

as on May 13, 2013 % change WoW MoM -1.89 -8.03 -1.48 -8.51 YoY -19.86 -20.50

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

Source: Reuters

Technical Chart - Chana

NCDEX June contract

Demand supply scenario

Higher returns earned in 2012, coupled with a hike in minimum support prices (MSP), have helped expand overall acreage in 2012-13 season. The Centre has hiked the MSP by 14 per cent to Rs 3,200 a quintal for chana and as part of its strategy to encourage farmers to grow more pulses to reduce import dependence. Chana sowing in the current season is 5.65% higher at 95.17 lakh ha compared to previous year. Acreage is up in Rajasthan, Maharashtra, MP and AP at 15.7 lakh ha, 12.53 lakh ha, 32.99 lakh ha and 7.33 lakh ha respectively. According to third advance Estimates released on 3 May 2013, Total pulses output for 2012-13 season has been pegged at 18 mn tn, up 5.76% compared to previous year. The target for 2012-13 pulses crop output was set at 18.24 million tonne during the year. Out of the total pulses output, kharif output is estimated at 4.03% lower at 5.95 mn tn while rabi pulses output is pegged 9.25% higher at 12.05 mn tn compared with the final estimates of 2011-12. Chana output is pegged marginally lower to 8.49 mn tn compared with its second advance estimates of 8.57 million tonnes. However, chana output is expected to breach its 2010-11 record of 8.2 mn tn in 2012-13. Erratic weather in M.P. lowered the yield. 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).
rd

Source: Telequote

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

valid for May 14, 2013 Resistance 3420-3440

3345-3375

Trade Scenario
According to IBIS, imports of chana in the month of February declined to 0.46 lakh metric tonnes compared to 2.31 lakh metric tonnes during the previous month. 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. In Australia, total chickpea production in 201213 is estimated to have increased to a record 713000 tones as compared with 485000.

Outlook
Chana is expected to trade lower today as higher supplies of the new crop are expected to mount pressure on the prices. However, value buying may emerge at lower levels. Improvement in demand from stockists may also support prices at lower levels. Overall output in the current season is comparatively higher and thus no major upside is expected over a medium term.

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Commodities Daily Report

Tuesday| May 14, 2013

Agricultural Commodities
Sugar
Sugar futures declined marginally from higher levels on account of profit taking coupled with revision of the minimum initial margin and settled 0.36% lower on Monday. Prices have gained after the government notified the cabinet committee on economic affairs (CCEA) decision to remove two key controls on sugar sector. Improving demand from bulk consumers and expected lower output next season in Maharashtra also supported an upside in the prices. However, huge supplies have capped sharp gains. The Minimum Initial Margin has been revised to 5% of the value of the contract or VaR based margin whichever is higher and will be imposed on all running contracts and yet to be launched contracts wef beginning of trading day Monday, May 13, 2013. Sugar prices in the domestic markets have consolidated at lower levels over the past couple of weeks as higher supplies was offsetting summer season demand in the physical markets. The Government has cleared the partial decontrol of sugar on April 4, 2013, however, notified the same after almost a month. According to this, the government will now have to buy sugar from the mills at open market prices. Also the release mechanism will be done away with, after September 2013. States will decide on the FRP of cane. India's sugar output is set to decline 10-15 per cent in the 2013-14 crushing season due to lower cane availability from drought-hit Maharashtra districts, where sowing could not be finished or crops were damaged due to lack of monsoon showers in 2012. (Source: Business Standard.

Market Highlights
Unit Sugar Spot- NCDEX (Kolhapur) Sugar M- NCDEX May '13 Futures Rs/qtl Last 3068

as on May 13, 2013 % Change Prev. day WoW 0.11 0.82 MoM 0.12 YoY 3.37

Rs/qtl

3049

0.03

4.63

4.53

3.32

Source: Reuters

International Prices
Unit Sugar No 5- LiffeMay'13 Futures Sugar No 11-ICE May '13 Futures $/tonne $/tonne Last 485.1 383.33

as on May 13, 2013 % Change Prev day WoW -0.84 -1.03 -1.80 -2.21 MoM -7.10 -4.33 YoY -12.72 -14.69

.Source: Reuters

Technical Chart - Sugar

NCDEX June contract

Domestic Production and Exports

According to ISMA, Indias Sugar production between October April stood at 24.52 mn tn, lower by 3% during the same period last year. Maharashtras production dipped 10% to 8 mn tn while production in Uttar Pradesh increased by 7% to 7.43 mn tn.
India is likely to produce 24.6 mn tn of sugar in 2012-13 year ending on Sept. 30, higher than the previous estimate of 24.3 mn tn, the Indian Sugar Mills Association (ISMA) said last week. With the opening stocks of 6.5 mn tn, domestic Sugar supplies are estimated at 30.8 mn tn against the domestic consumption of around 22. 5 mln tn for 2012-13. Exports are not viable as international prices have also declined significantly. A severe drought in top sugar producing Maharashtra state has been affecting new plantation and is likely to affect on sugar production in the year starting from Oct. 1, 2013.

Source: Telequote

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

valid for May 14, 2013 Resistance 3045-3060

Global Sugar Updates

Liffe Sugar as well as ICE sugar declined 0.84% and 1.03% on Monday as Unica said that Brazils sugar production in April surged to 1.69 mn tn from 0.54 mn tn last year, by 210 percent. Cool, dry weather in Brazil has boosted cane crushing and will allow uninterrupted exports. Sugar prices in the international markets are trading at their lowest levels in since July 2010 on account of a surplus situation for the third consecutive year. According to Unica, South-Central Brazil cane crush projected at 589.60 million tons for 2013/2014. Main center-south sugar cane crop will produce a record 35.5 mn tn of sugar in the 2013/14 season, higher by 4.1% compared to 34.1 mn tn last year. Expectations of abundant supplies from the 2013-14 harvest in the other leading producers, such as Thailand, Mexico and the United States have kept prices under pressure. Sugar prices are trading around 2 year lows.

3000-3020

Outlook
Sugar prices are expected to gain on account of improvement in demand from the bulk manufacturers. Sentiments are expected to remain positive as government has notified cabinets decision to remove two key controls on sugar sector. However, weak international prices and higher supplies may cap sharp gains.

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Commodities Daily Report

Tuesday| May 14, 2013

Agricultural Commodities
Oilseeds
Soybean: soybean futures gained yesterday as poor supplies in the
domestic markets continue to support prices at lower levels. However, weak meal export demand coupled with IMDs prediction of a normal monsoon capped sharp upside. According to the 3rd advance estimates, Soybean output is pegged at 14.14 mn tonnes. The spot as well as the June Futures settled 0.77% and 0.85% higher on Monday. Special Margin (in Cash) of 10% on the Long side has be imposed in Soyabean May 2013, June 2013 & July 2013 expiry contracts with effect from beginning of day Tuesday, April 30, 2013. Indias soy meal exports in April are likely to fall to 200,000 tonnes, down 36 percent from a year ago, unless buying from Iran improves. Exports of Soybean meal during March, 2013 was 3,20,265 tonnes as compared to 4,61,892 tonnes in March, 2012 lower by 30.66% y-o-y.

Market Highlights
% Change Unit Soybean Spot- NCDEX (Indore) Soybean- NCDEX May '13 Futures Ref Soy oil SpotNCDEX(Indore) Ref Soy oil- NCDEX May '13 Futures Rs/qtl Rs/qtl Rs/10 kgs Rs/10 kgs Last 4055 4097 725.8 722 Prev day 0.77 1.97 0.14 0.51

as on May 13, 2013

WoW 0.60 2.25 -1.09 0.47

MoM -1.48 0.68 0.18 -0.15

YoY 19.23 21.54 -0.67 -1.26

Source: Reuters

as on May 13, 2013 International Prices Soybean- CBOTMay'13 Futures Soybean Oil - CBOTMay'13 Futures Unit USc/ Bushel USc/lbs Last 1521 49.61 Prev day 2.20 0.89 WoW 5.30 1.89 MoM 7.64 0.77
Source: Reuters

International Markets
Soybean gained sharply by 2.2% on Monday on account of firm cash markets coupled with tight supplies in the US. According to the weekly crop progress report, only 6% has been planting as against 43% last year and five year average of 24%. There are delays in planting in the Midwest. However, large South American crop coupled with forecasts for US weather to improve in the coming week have capped sharp gains. According to the Rosario Grains Exchange, Argentinas 2012-13 soybean production is estimated at 48.3 mn tn. Chinas soybean imports were reported at 3.98 mn tonnes in April, lower by 18.4% in April last year, but marginally higher compared to 3.84 mn tonnes in March. The decline is attributed to delays in shipment from Brazil coupled with weak demand on the back of outbreak of the bird flu. Brazil's government lowered its forecast for the 2012/13 soybean crop from 82.1mn tn to 81.9 mn tn.

YoY 8.33 -4.41

Crude Palm Oil

as on May 13, 2013 % Change Prev day WoW -0.39 -0.49 2.33 2.73

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

Last 2281 469.8

MoM -2.44 1.40

YoY -27.70 -20.96

MYR/Tonne Rs/10 kg

Source: Reuters

Refined Soy Oil: Ref soy oil settled 0.37% higher tracking positive
bean prices while MCX CPO settled 0.49% lower due to profit taking. Indian government increased the base import price on crude soybean oil by US $9/tn to US $1103. Besides, base import price on crude palm oil set at US $ 824 and reduced base import price on palmolein crude as well as refined to US $ 864/tn and US $861/tn. Imports of all vegetable oils, including non-edible oils, fell 7.5 per cent to 896,714 tn in March, pulled down by the drop in palm oil imports. Palm oil imports dropped 12% to 708,262 tn in March. Malaysia, the world's No.2 palm oil producer, set its crude palm oil export tax for May at 4.5%, unchanged from April. Exports of Malaysian palm oil products from May 1-10 declined 18.4% to 377,193 tn from 462276 tn shipped during April 1- 10.

RM Seed
Unit RM Seed SpotNCDEX (Jaipur) RM Seed- NCDEX May '13 Futures Rs/100 kgs Rs/100 kgs Last 3487 3491 Prev day 1.59 0.46 WoW 2.52 3.04

as on May 13, 2013 MoM -2.73 -2.40

Source: Reuters

YoY -8.77 -6.68

Technical Chart Soybean

NCDEX June contract

Rape/mustard Seed: Mustard Futures extending its previous

days gains and settled 0.51% higher on Monday on account value buying emerging at lower levels. Higher supplies of the new crop coupled with higher output expectations led to a sharp decline in the prices earlier. Sowing of Mustard seed is up by 2.2% at 67.23 lakh ha. Agriculture ministry in its third advance estimates, pegged mustard output at 7.36 mn tn, up by 11.5%.

Outlook
Soybean prices are expected to trade with a positive bias on account of poor supplies in the domestic markets coupled with positive international markets. However, forecast of a normal monsoon coupled with weak meal export demand may cap sharp gains. Soy oil as well as CPO may gain due to higher international prices as well as lower yield period. However, comfortable stock levels may cap sharp upside.

Source: Telequote

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

valid for May 14, 2013 Support 690.50-695 3865-3895 3490-3510 464-467 Resistance 702-705 3945-3970 3540-3560 473-475

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Commodities Daily Report

Tuesday| May 14, 2013

Jeera Agricultural Commodities

Jeera futures traded on a bullish note yesterday on reports of some from overseas enquiries in the spot markets. Demand from stockists and exporters also emerged at lower levels. The spot settled as well as the June Futures settled 0.34% and 2.51% higher on Monday. Jodhpur mandi remained closed on the occasion of Akshaya Tritiya. Prices have declined sharply on account of higher production estimates Domestic as well as overseas demand is expected to improve in the coming days. According to Gujarat State Agri Dept. sowing in Gujarat is reported at 3.352 lakh ha in 2013 compared with 3.719 lakh ha last year. According to the Rajasthan State Budget 2013-14, it has exempted jeera from VAT. 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 $2,425 tn (FOB Mumbai) while Syria and Turkey are not offering. Carryover stocks of Jeera in the domestic market is expected to be around 8-9 lakh bags.

Market Highlights
Unit Jeera Spot- NCDEX (Unjha) Jeera- NCDEX May '13 Futures Rs/qtl Rs/qtl Last 13506 13253 Prev day 0.34 2.40

as on May 13, 2013 % Change WoW 0.57 3.84 MoM -2.04 -3.98 YoY 0.40 1.11

Source: Reuters

Technical Chart Jeera

NCDEX June contract

Production, Arrivals and Exports

Arrivals in Unjha were reported at 13,000 lakh bags on Monday. Production of Jeera in 2012-13 is expected around 38-40 lakh bags (55 kgs each), same as last year. Exports of Jeera between Apr 2012- Jan 2013 stood at 64,400 tn, an increase of up 86%. (Source: Factiva)
Source: Telequote

Market Highlights
Prev day -1.20 -0.62

as on May 13, 2013 % Change

Outlook
Jeera Futures is expected to trade higher today extending previous days gains. Improvement in overseas as well as domestic demand may support prices. However, higher output may pressurize prices at higher levels.. Overall trend remain positive for the Jeera prices as they are likely to stay firm as Syria & Turkey have stopped shipments.
Unit Turmeric SpotNCDEX (N'zmbad) Turmeric- NCDEX May '13 Futures Rs/qtl Rs/qtl Last 5987 5798

WoW -2.17 -4.51

MoM -12.05 -16.24

YoY 64.09 50.21

Turmeric
Turmeric June Futures recovered marginally from lower levels on account of short coverings and settled 0.45% higher on Monday. Prices have declined sharply on account of higher supplies and huge carryover stocks. Domestic as well as overseas demand is also reported to be weak. However, there are expectations of improvement in overseas demand in June. Unseasonal rains in Andhra Pradesh have damaged about 9240 tonnes of turmeric earlier.

Technical Chart Turmeric

NCDEX June contract

Production, Arrivals and Exports

Arrivals in Erode and Nizamabad mandi were reported at 5,000 and 7,000 bags respectively on Monday. Expectations are that production may be lower by 40-50%. There are reports of some crop damage in Erode region. Turmeric production in 2012-13 is expected around 45 lakh bags. Production in Nizamabad is expected around 12 lakh bags. Production in 2011-12 is projected at historical high of 10.62 lakh tn. It is estimated that next years carryover stocks would be around 10 lakh bags. 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 is expected to trade with a negative bias today. Weak exports data coupled with higher supplies of the fresh crop and huge carryover stocks may pressurize prices at higher levels. However, expectations of improvement in export demand coupled as well as demand from stockists may support prices at lower levels. Crop damage and output concerns may also support prices at lower levels.

Source: Telequote

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

Valid for May 14, 2013

Support 13150-13280 5660-5780 Resistance 13500-13630 5980-6060

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Commodities Daily Report

Tuesday| May 14, 2013

Agricultural Commodities
Kapas
NCDEX Kapas as well as MCX Cotton settled lower 1.01% and 0.78% on Monday as CCI is offloading stocks in the open markets. Prices are also taking cues from the weak global markets which declined after USDA released its monthly crop report which revealed that excess supplies would continue in the next year too. Emergence of fresh demand at lower price levels cushioned sharp downside in the domestic markets. The Cotton Corporation of India (CCI) and the National Agricultural Cooperative Marketing Federation of India (NAFED) are expected to offload over 8 lakh cotton bales (a bale weighs 170 kg) in the domestic market this month and the asking price may be lower by Rs 1,000 per candy than the previous price. In April, the government had offered a price of Rs 39,500 per candy, which received lukewarm response from the textile industry. (Source:
Economic Times dated 6th May 2013)

Market Highlights
Unit Rs/20 kgs Rs/Bale Last 1024 17900

as on May 13, 2013 % Change Prev. day WoW -1.01 -2.34 -0.78 -1.65 MoM YoY 11.12 2.81 -1.65 7.51

NCDEX Kapas Apr Futures MCX Cotton May Futures

Source: Reuters

International Prices
ICE Cotton Cot look A Index Unit USc/Lbs Last 86.04 93.65

as on May 13, 2013 % Change Prev day WoW -0.51 0.03 -1.52 -1.21 MoM 0.54 1.57 YoY 8.95 4.58

India's imports of cotton this year could reach 1.5 mn bales, missing earlier estimates of more than 2 mn as the govt may to start selling its stockpiles. Cotton supplies since the beginning of the year in October 2012 until February 10, 2013 were down at 183.4 lakh bales, down from 189.27 lakh bales a year earlier.

Source: Reuters

Technical Chart - Kapas

NCDEX April contract

Domestic Production and Consumption

CAB in its latest meet has projected cotton crop at 34 mn bales for 201213 season compared to the previous estimates of 33 mn bales. Mill consumption is expected to go up from 22.3 million bales last year to 23.5 million bales. Exports are estimated at 8.1 mn bales. While Import are estimated 2.5 mn bales.

Global Cotton Updates

ICE Cotton futures declined 0.51% on Monday tracking improvement in the US plantings coupled with weak China imports data. China cotton imports declined 18.5% in April compared to March. The USDA monthly crop report forecast a sharp rise in the in the cotton stockpiles by almost 10%. The U.S. Department of Agriculture has forecast global cotton stockpiles will rise almost 10 percent to a record high in 2013/14, pushing prices lower and reinforcing concerns about stagnating demand in China, the world's No. 1 textile market. U.S. plantings delays which prompted worry over upcoming supplies had boosted prices in the earlier part of the last week According to the USDA report, planting intentions for the 2013-14 season are said to be at a 4 year low. Also, there are expectations of good export demand from China. Reports of India and China releasing stocks from the state reserve led to a decline in the prices.

Source: Telequote

Technical Chart - Cotton

MCX May contract

Source: Telequote

USDA has initially forecasted US Cotton acreage for 2013-14 season, at smallest in 20 yrs, however, with recent surge in prices, farmers may decide to plant more cotton. The planting intention data is schedule to be released on 28th march 2013.

Technical Outlook
Contract Kapas NCDEX April 14 Fut Cotton MCX May Futures Unit Rs/20 kgs Rs/bale

valid for May 14, 2013 Support 990-1000 17740-17820 Resistance 1030-1050 18020-18150

Outlook
We expect Cotton prices to trade on a negative note today. Prices may decline as offloading from the state reserves may ease supplies in the short term. Weak international markets may also pressurize prices. However, improving demand at lower levels may support prices. US cotton planting intentions were reported at a 4 year low. China will continue its stockpiling policy, may also support prices.

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