Daily Agri Report Sep 14 - Angel Backoffice

Commodities Daily Report

Agricultural Commodities

Friday| September 14, 2012

www.angelcommodities.com

Content

News & Market Highlights

Chana

Sugar

Oilseed Complex

Spices Complex

Kapas/Cotton

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Market Highlights (% change) as on Sept 13, 2012 Last Prev. day WoW MoM YoY

Sensex 18021 0.12 3.89 2.64 9.21 Nifty 5435 0.08 3.76 2.16 9.88 INR/$ 55.34 0.24 -0.57 0.31 17.20 Nymex Crude Oil - $/bbl 98.31 1.34 2.91 5.30 11.48 Comex Gold - $/oz 1769 2.22 3.91 9.40 -2.25

Source: Reuters

News in brief

India's monsoon rains continue late revival India's monsoon rains were 21 percent above average in the week to Sept. 12, the weather office said on Thursday, the third straight week of heavier than normal rains, abating the threat of a widespread drought in the south Asian country. The rains, vital for the 55 percent of Indian farmland without irrigation, are still 8 percent short of average so far and the shortage has curbed planting of cereals and pulses in some drought-hit areas of west and south India, threatening output. Rains below 90 percent of long-term averages are considered deficient - a drought in layman's terms. In the previous week, rainfall across the country was 31 percent above average, as the monsoon revived in rice, cane and soybean areas of one of the world's leading food consumers and producers. India, whose huge land mass contains nearly all climates and soil types, last faced widespread drought in 2009 when the June-to-September monsoon rains were 22 percent below average and it had to import sugar, pushing global prices to 30-year highs. India's weather office still retains its forecast of at least 10 percent below average rains for the whole season despite the late revival. (Source: Reuters)

AP, monsoon's late surge may rescue cotton crop Monsoon showers in growing areas in the last few weeks and the higher acreage in Andhra Pradesh will likely help salvage the cotton crop for the season starting October. While all other crops fared poorly in Andhra Pradesh this kharif, it is cotton that has shown a growth in area. As the kharif sowing season comes to a close, the State posted a record sowing on 21.70 lakh hectares, 38 per cent more than the season’s average of 15.70 lakh hectares. Last year, the farmers had sown cotton on 18.30 lakh hectares. “Rain in Saurashtra in the last few days has changed the situation. Earlier, it looked like we will get only 20-25 per cent of what was produced this year. Now, we can expect 40-50 per cent of this year’s crop,” said Anand Poppat, Vice-President of Saurashtra Ginners Association. Saurashtra is expected to produce about 60 lakh bales (of 170 kg each) last year, while Gujarat’s production could drop to 90 lakh bales from 120 lakh bales this year. In fact, the late surge in monsoon has dispelled the fears with regard to cotton prospects for the next season. Cotton yield this year is likely to the same as last year, though parts of Saurashtra and Maharashtra, which did not get enough rains and do not have irrigation facilities, may witness lower productivity. “However, productivity in Andhra Pradesh is likely to better that last year,” said Poppat. (Source: Business Line)

Nafed to hand over its non-productive assets to reconstruction companies Hit with bad debt in excess of R1,800 crore because of failed ‘tie-ups’, the Centre has authorised its premier commodity procurement agency, National Agricultural Cooperative Marketing Federation of India (Nafed), to hand over all its 'non-productive assets' to RBI approved asset-reconstruction firms for better price realisation. Nafed has been a key player in the market intervention programme by procuring pulses, oilseeds, copra and cotton on behalf of the government when prices fell below MSP. Since most commodity prices have been ruling above MSP, Nafed has stayed off the market for a year. At present, Nafed is procuring copra in Kerala as a part of the market intervention scheme. (Source: Financial Express)

Myanmar Pulses Export in July Up By 35% Myanmar beans and pulses export in July month surged by 35 percent to 2.67 lakh tonnes from 1.99 lakh tonnes in previous year. In July, moong accounts for 52 percent of total export, followed by urad and tur with 30 percent. Year-to-date exports for July 2012 are 11.23 lakh tones ,33 per cent greater than last year’s 8.44 lakh tones. (Source: Agriwatch)

Drought area expands in U.S., now most extensive this summer Hot and dry conditions continued to plague large parts of the U.S. Plains and southern states as the worst U.S. drought in over five decades expanded its grip on some key farming states. At least "moderate" levels of drought have now enveloped more than 64 percent of the contiguous United States, up from 63.39 percent the week before, according to the Drought Monitor, a weekly compilation of data gathered by federal and academic scientists. This year's persistent high heat and lack of soil moisture have decimated the U.S. corn crop, and threaten the same to the soybean crop. Dry soils are also worrying wheat farmers who now must seed a new winter wheat crop. The U.S. Agriculture Department on Wednesday estimated that the U.S. corn crop will be the lowest in six years and soybeans the lowest in nine years due to drought losses. Some rainfall relief may be coming, particularly to areas of Texas and Oklahoma. Portions of drought stricken Colorado, Kansas and Iowa are expected to receive some modest relief, forecasters said. (Source: Reuters)

Brazil sugar ship lineup lighter despite strong mill output The lineup of ships waiting to load sugar in Brazil has dropped to 58 from 68 a week earlier as transport ran smoothly after record August mill output from the center-south cane region, Williams shipping agents said on Thursday. Favorable weather in the second half of August allowed the mills to hit their second straight record fortnight, churning out 3.34 million tonnes of sugar, up 12.4 percent from a year earlier. Vessels have been carrying shipments out of Brazil without disruption since rains cleared in early July, and a slew of strikes that have mostly ended had little effect on movement. Brazil exports about half of the world's sugar supplies, and the current harvest is expected to exceed last year's due to better yields and increased planting. The country's center-south region, now deep into the dry season, should remain uninhibited by significant rain until at least the second half of September, according to local Somar meteorologists. (Source: Reuters)

New Soybean Arrivals Have Hit the Various Cash Markets New soybean crop arrivals have commenced in various physical markets of Maharashtra and Madhya Pradesh. Though the supplies are insignificant but they are expected to gradually rise as the harvestin pace picks-up. If weather remains clear the harvesting pace will improve thus leading to higher new crop supplies in coming days. About 400 bags of new soybean crop have been report in Latur, Maharashtra, 5-6 bags in Dhar, MP and 1 bag in Indore, MP previous day. The arrivals are expected gradually rise in days ahead. (Source: Agriwatch)

Onions may be exported without agencies Onion exporters may get to export without routing it through agencies, in a move being considered by the Director General of Foreign Trade (DGFT). At present, consignments are regulated by canalysing agents or state trading agencies. This is even when exports are under the open general license (OGL) and the government has removed any cap on the export price. They said onion exports till date this year have been around 800,000 tonnes. (Source: Business Standard)





Market Highlights as on Sept 13, 2012

% change

Unit Last Prev day WoW MoM YoY

Chana Spot - NCDEX (Delhi)

Rs/qtl 4630 -0.51 -5.51 -5.99 44.06

Chana- NCDEX Sept '12 Futures

Rs/qtl 4519 -2.52 -6.26 -8.52 49.14

Source: Reuters

Technical Chart - Chana NCDEX Oct contract

Source: Telequote

Technical Outlook valid for Sept 13, 2012

Contract Unit Support Resistance

Chana Oct Futures Rs./qtl 4280-4325 4450-4495

Chana Chana spot as well as the Futures further extended losses after recovering a day prior and settled 0.51% and 2.52% lower on Thursday. Ongoing recovery in monsoon and above average rains in the past few days is showing better prospects for Rabi pulses sowing in the coming days, which is putting pressure on the prices.

India's monsoon rains were 8% below average as on 11th September, 2012. Monsoon has recovered across India, especially in Rajasthan, one of the major chana growing states, and may prove beneficial for the chana sowing. However, 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.

Sowing progress and demand supply fundamentals

According to the Ministry of Agriculture 98.2 Lakh hectare area has been planted under Kharif pulses as on 7th September, 2012 compared to 104.4 lakh hectare (ha) same period last year.

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 period last year. (Dated 31st 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%.

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.

Outlook

Chana futures are expected to remain sideways as improved rains may cap the upside. However, festive demand couple with tight supplies may restrict the downside in the prices.

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.






% Change Unit Last Prev. day WoW MoM YoY Sugar Spot- NCDEX (Kolkata) Rs/qtl 3683 0.89 -1.96 0.34 21.53

Sugar M- NCDEX Sept '12 Futures Rs/qtl 3459 0.26 -0.23 -0.43 26.94

Source: Reuters

International Prices as on Sept 13, 2012

% Change Unit Last Prev day WoW MoM YoY

Sugar No 5- Liffe- Oct'12 Futures

$/tonne 569.2 2.03 2.32 -0.84 -17.17

Sugar No 11-ICE Oct '12 Futures

$/tonne 438.00 -0.05 1.70 -3.33 #N/A

Source: Reuters

Technical Chart - Sugar NCDEX Oct contract

Source: Telequote



Sugar Oct NCDEX Futures Rs./qtl 3525-3535 3575-3590

Sugar Sugar spot as well as futures settled marginally higher on expectations of good demand ahead of festive season. However, sharp gains have been capped as improved rains may help increase cane yield which was earlier expected to be lower.

Indian Sugar Mills Association (ISMA) has forecast sugar production for 2012-13 season at 24 mn tn. This is about 8 per cent lower than 26 mt produced in 2011-12 season and from its initial forecast of 25 mn tn for 2012-13 season.

India's monsoon rains were 31 percent above average in the week to Sept. 5, the second straight week of heavier than normal rains, reducing the threat of a prolonged drought in the south Asian country.

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 steady harvesting in the centre-south of Brazil, the world's main growing region, has weighed on sugar prices with more supplies expected from northern hemisphere harvests in coming months. ICE sugar Futures settled 0.05% lower. However, Liffe Sugar bounced back after FED announced that it will continue with ‘Operation Twist’ and settled 2.03% higher on Thursday. 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 year’s output lower at 25mn tn, down by 1mn tn compared to the current year. Sugar production in India — the world’s 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 22.5-23 mln tn for 2012-13. Thus, no curbs on exports are seen as of now.

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)

Outlook Sugar prices may remain sideways as improved rains have offset the firm market sentiments led by higher festive season demand. 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.






% Change


Soybean Spot- NCDEX (Indore)

Rs/qtl 4511 0.31 -1.53 0.29 118.66

Soybean- NCDEX Oct '12 Futures

Rs/qtl 3854 1.54 -3.67 -2.13 87.61

Ref Soy oil Spot- NCDEX(Indore)

Rs/10 kgs 798 0.00 -1.37 2.29 27.06

Ref Soyoil- NCDEX Aug '12 Futures

Rs/10 kgs 799.1 1.47 -2.03 1.33 32.70

Source: Reuters

as on Sept 13, 2012

International Prices Unit Last Prev day WoW MoM YoY

Soybean- CBOT- Sept'12 Futures

USc/ Bushel 1744 0.16 -0.26 8.46 26.39

Soybean Oil - CBOT- Sept '12 Futures

USc/lbs 56.46 0.98 -1.57 9.67 -1.47

Source: Reuters

Crude Palm Oil as on Sept 13, 2012 % Change

Unit Last Prev day WoW MoM YoY CPO-Bursa Malaysia – Sept '12 Contract

MYR/Tonne 2794 -0.85 -1.62 -0.82 -17.82

CPO-MCX- Aug '12 Futures

Rs/10 kg 535.8 0.02 -2.76 -3.30 15.85

Source: Reuters

RM Seed as on Sept 13, 2012


RM Seed Spot- NCDEX (Jaipur)

Rs/100 kgs 4225 0.60 -2.03 -2.44 49.96

RM Seed- NCDEX Sept '12 Futures

Rs/100 kgs 4082 0.17 -6.23 -7.25 51.24

Source: Reuters

Technical Chart –Soybean NCDEX Oct contract

Source: Telequote



Soy Oil Oct NCDEX Futures Rs./qtl 767-771 780-785

Soybean NCDEX Oct Futures Rs./qtl 3770-3815 3885-3920

RM Seed NCDEX Oct Futures Rs./qtl 4005-4060 4170-4220

CPO MCX Sept Futures Rs./qtl 528-532 540-543

Oilseeds

Soybean: Soybean Futures traded on a positive note take cues from the higher prices in the international markets after the USDA monthly report downgraded the Soybean yield and pegged lower output. However, the spot did not gain much due to good monsoon conditions in the key soybean growing regions in MP. The spot as well as the Futures settled 0.31% and 1.54% higher.

CBOT settled higher on Thurssday after the release of USDA demand supply report which downgraded further the yield of soybean for 2012-13 crop. U.S. Department of Agriculture pegged the soybean harvest at 2.634 billion bushels, down from last month's 2.692 billion and below the analysts' average estimate of 2.657 billion. Ending stocks next summer were projected to be the lowest in nine years at 115 million, unchanged from August’s estimate.

In the domestic markets, as on 7th September, 2012, Oilseeds have been sown in 170 lakh hectares so far, compared with 175 lakh ha same period last year. Soybean area is higher at 106.9 lakh ha. 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.

Soy meal exports fell to 10,005 tn in August, from 165,610 tn a year ago. (Source: Solvent Extractors' Association of India).

Soybean exports from Brazil declined from 4.13 mn tn in July to 2.4 mn tn in the month of August. (Source: Reuters)

Brazil’s 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 10th August wherein its cut U.S. 2012/13 soybean production forecast to 2.692 billion bushels, from 3.05 billion in July.

Refined Soy Oil: NCDEX Soy Oil and MCX CPO settled higher tracking higher prices in the international markets. Malaysia's August palm oil stocks likely climbed to their highest in nine months as still-high production offset a strong rise in exports. Stocks in the world's second largest palm oil producer most probably climbed 4.5 percent to 2.09 million tonnes. Exports of Malaysian palm oil products for September 1-10 jumped 30 percent to 460,939 tonnes from 354,614 tonnes shipped during August 1-10 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). Rape/mustard Seed: Mustard seed spot as well as futures settled higher on supply tightness in the short term. Mustard output was lower in 2011-12 season. However, 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.

Outlook Edible oil complex may open higher initially taking cues from the USDA demand supply report. However, prices may witness downside correction on expectations of improved yield of domestic soybean.






% Change


Pepper Spot- NCDEX (Kochi)

Rs/qtl 41383 0.38 -0.05 -1.06 18.17

Pepper- NCDEX Sept '12 Futures

Rs/qtl 42170 0.86 -0.39 -0.38 17.66

Source: Reuters

Technical Chart – Black Pepper NCDEX Oct contract

Source: Telequote



Black Pepper NCDEX Oct Futures Rs/qtl 42740-43000 43600-43800

Black Pepper Pepper prices traded on a positive note yesterday due low stocks in the domestic markets have supported prices at lower levels. The arrivals are also reported to be very thin and there is a supply crunch. Traders are buying pepper directly from the farmers. However, the spot prices did not gain as much as the Futures due to lack of demand from the upcountry markets as well as lower demand for Indian pepper in the international markets. The Spot as well as the Futures settled 0.38% and 0.86% higher on Thursday. According to the circular released on June 13th 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 $8,050/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).

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.

Production and Arrivals The arrivals in the spot market were reported at 6 tonnes while offtakes were 4 tonnes on Saturday. No arrivals have been reported this week. 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 with a positive bias in the intraday. Low stocks and very thin arrivals may support prices. However, prices may correct due to lower demand at higher levels in the domestic as well as international markets. Also, demand from the upcountry markets is said to be weak.






% Change


Jeera Spot- NCDEX(Unjha)

Rs/qtl 14750 -0.66 -2.57 -9.72 -3.55

Jeera- NCDEX Sept '12 Futures

Rs/qtl 13753 -0.99 -1.26 -15.16 -3.40

Source: Reuters

Technical Chart – Jeera NCDEX Oct contract

Source: Telequote

Market Highlights as on Sept 13, 2012 % Change


Turmeric Spot- NCDEX (N'zmbad)

Rs/qtl 5636 0.85 0.84 3.46 5.44

Turmeric- NCDEX Sept '12 Futures

Rs/qtl 6010 -0.17 -3.78 0.23 23.26

Technical Chart – Turmeric NCDEX Oct contract

Source: Telequote


Unit Support Resistance

Jeera NCDEX Oct Futures Rs/qtl 13525-13680 13980-14200

Turmeric NCDEX Oct Futures Rs/qtl 5580-5640 ational m

Jeera Jeera Futures traded on a weak note yesterday as farmers are not selling their stocks at lower levels. Also reports of good rains have pressurized prices at lower levels. 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. The Spot as well as the Futures settled 0.66% and 0.99% lower on Thursday. 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 $2,800-2,850 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.

Production, Arrivals and Exports Unjha markets witnessed arrivals of 2,000 bags, while off-takes stood at 2,000 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%.

Outlook Jeera prices are expected to trade sideways. Prices may find support at lower levels. Good rains in Gujarat may cap any sharp gains. In the medium term (September-October 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.

Turmeric Turmeric October Futures traded on a flat to positive note yesterday as farmers are not selling stocks demanding higher floor price of Rs.9000/tn. Lower sowing figures have also supported prices at lower levels. However, there are sufficient stocks with the traders which have capped any sharp gains. Rainfall in Nizamabad is 15% lower than the normal as on 12/9/2012. Turmeric has been sown in 0.54 lakh hectares in A.P as on 12th September 2012. Sowing is also reported 30-35% lower during the sowing period. The Spot as well as the October Futures settled 0.85% and 0.42% higher on Thursday. No fresh positions will be allowed in respect of Turmeric September 20, 2012 expiry contract from September 08, 2012 till the expiry of the contract. Only squaring up of existing positions will be allowed. Production, Arrivals and Exports Arrivals in Erode and Nizamabad mandi stood at 5,000 bags and 2,000 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 2010-11. 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. Outlook Turmeric prices are expected to trade sideways taking cues from lower sowing figures and lower arrivals. The regulator’s decision to disallow creating of fresh positions in September contract has also created a fear in the minds of the traders. However, traders also expect fresh export orders in the coming days. Also, lower arrivals may support prices at lower levels. Demand for higher floor prices may also support prices. In the medium term (September) prices may take cues from the sowing figures.






% Change Unit Last Prev. day WoW MoM YoY NCDEX Kapas Futures Rs/20 kgs 1009 -0.30 -1.85 -11.30 -

MCX Cotton Futures Rs/Bale 17190 -1.38 -2.33 -3.37 -

Source: Reuters

International Prices as on Sept 13, 2012

% Change Unit Last Prev day WoW MoM YoY

ICE Cotton Usc/Lbs 72.95 0.16 -3.66 2.31 -33.12

Cotlook A Index 81.35 0.00 0.00 0.00 -29.20

Source: Reuters

Technical Chart - Kapas NCDEX April contract

Source: Telequote

Technical Chart - Cotton MCX Oct contract

Source: Telequote



Kapas NCDEX April Rs/20 kgs 980-993 1022-1030

Kapas MCX April Rs/20 kgs 978-992 1020-1030

Cotton MCX October Rs/bale 1685-17050 17300-17380

Kapas In intraday NCDEX Kapas and MCX Cotton futures closed down by 0.30% and 1.32% respectively as USDA in its monthly demand supply report showed an upward revision in the global ending stocks of cotton. Also ongoing recovery in monsoon in the key cotton states is providing resistance to the prices. Further higher imports of cheaper global cotton also supported the weak market sentiments. According to the latest report by IMD, India received 9% below normal rains during June 01- August 31. However, reports of above average rains in the past few days in Gujarat, the top producer of Cotton has provided some relief to the standing cotton crop.

ICE cotton Futures settled 0.16% higher on Thursday owing to short coverings in the market. Cotton harvesting has commenced in US, in all 4% is harvested as compared to 6% a year ago, versus 5% of 5-year average. 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. Domestic Production and Consumption As on 7th August, 2012, Cotton is being planted on 113.46 lakh hectares; lower by 4.1% compared to the last year’s 119.13 lakh hectares. However, the acreage so far is at par with its normal area of 111.8 lakh hectares. 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. 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. 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 mln bales and exports of 12.1 mln bales were pegged for the season 2012-13. China's 2012 cotton output is estimated at 6.97 million tonnes, down 4.2 percent from last year. China's cotton imports in August rose 48 percent on the year to 305,600 tonnes. Total imports in the first eight months of the year were 3.77 million tonnes, up 123 percent from the same period last year, according to the report by the China National Cotton Reserves Corp.

Outlook In intraday cotton futures may trade sideways with a downward bias taking cues from the international market. Moreover good monsoon in key cotton growing states might put pressure on the prices. Also Andhra Pradesh is reported to have above average rains, which has capped the fears of crop damage to the cotton crop in the southern region. However, reports of China stockpiling for new season might provide support to the prices in medium term.

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Daily Agri Report Sep 14 - Angel Backoffice