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Commodities Daily Report

Monday| May 20, 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


Monday| May 20, 2013

Agricultural Commodities
News in brief
Modification in tick size and lot size
Trading and Clearing Members are requested to note that the circular no. NCDEX/TRADING-047/2013/161 dated May 15, 2013 on modification in Tick Size and Lot Size in Coriander, Soyabean, Refined Soya Oil and Turmeric has been kept in abeyance till further notice. (Source: NCDEX)

Market Highlights (% change)


Last Prev. day

as on May 17, 2013


WoW MoM YoY

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

20286 6187 54.9 96.02 1365

0.19 0.28 0.20 0.90 -1.60

1.01 1.52 0.16 -0.02 -5.00

8.30 8.76 1.32 10.78 -1.25

26.23 27.04 0.98 3.74 -13.31

Rice Sown in 2.4 Lakh Hectare so Far


As per data available from different States, rice has so far been planted in 2.4 lakh hectare. This is 52 thousand hectare more than that reported a week ago (1.88 lakh ha). The sown area this week is less as compared to rice planting at this time last year (2.53 lakh), mainly because of late sowing in Assam and Orissa. Sugarcane has been planted in 40.74 lakh hectare as compared to 45.74 lakh hectare at this time last year. Less area is reported mainly in Karnataka, Maharashtra and Tamil Nadu Jute and mesta have been planted in 7.75 lakh hectare as compared to 7.42 lakh hectare last year. Cotton is reported to have been planted in 7.13 lakh hectare as compared to 7.22 lakh hectare at this time last year.
(Source: PIB, GOI)

.Source: Reuters

China to stockpile 300,000 tonnes of domestic sugar


The Chinese government will start stockpiling 300,000 tonnes of sugar from the domestic market to try to shore up domestic prices and help farmers, the country's top planning body said on Monday. This is the second round of China's sugar stockpiling programme this year, which has pushed domestic sugar prices high above international prices and has driven up imports. The National Development and Reform Commission (NDRC) said the latest round of stockpiling will start on May 24 at a price of 6,100 yuan ($990) per tonne. ($1 = 6.1419 yuan) (Source: Reuters)

More Than 243 Lakh Tonne Wheat Procured


During ongoing Rabi Marketing Season, the Government agencies have procured more than 243 lakh tonne wheat. As per data available from the fields till 17 May, 2013, total wheat procured during the season in various states is 243,57,056 tonnes. So far Punjab has led the procurement with 107, 98,688 tonne followed by Madhya Pradesh with 59,89,800 tonne and Haryana with 58,54,104 tonne. Rajasthan and UP also made significant procurement during the season with 10, 96,078 tonne 6, 05,253 tonne respectively. (Source: PIB, GOI)

Thailand: Sweet outlook for cane


Sugar cane output in Thailand, the world's second-largest sugar exporter, could hit 150 million tonnes by 2020, up from 100 million now, provided sugar prices continue to be attractive, says trader Siam Brit Co, the Bangkok Post reports. The cane output in the 2012-13 crushing season reached a record high of 100 million tonnes, up from almost 98 million in the previous season. Sugar output, however, has remained unchanged at 10 million tonnes, as the amount of commercially recoverable sugar fell from the previous season. Cane planting areas increased by 1 million rai, up from 9 million last year. From 2011-20, global sugar consumption is expected to grow by 30-35 million tonnes, with 21 million in Asia. In 2011, Thailand exported 4.1 million tonnes of raw sugar and 2.5 million tonnes of white sugar. Asean accounts for 47% of Thai sugar exports, with East Asia consuming 27%. (Source: Reuters)

Pre-monsoon heating of north-west, central India begins


Pre-monsoon heating has started in right earnest over north-west and adjoining Central India, though slightly behind schedule this year. Heating of the landmass is required to set up the temperature and therefore pressure gradient linking Kerala with Rajasthan for monsoon winds to fan upcountry and bring rains along. Rajasthan and adjoining region should get heated up to the maximum, and this process may have just about started, India Met Department observations revealed. It was held back by low-pressure western disturbances criss-crossing the region, bringing rain, thunderstorms or dust storms in their wake. On Saturday, heat wave conditions prevailed over parts of Jammu and Kashmir, Himachal Pradesh, Punjab, Haryana, Delhi, Rajasthan, East Uttar Pradesh, Vidarbha and north Madhya Pradesh. The maximum temperatures recorded were in the order of 48.5 deg Celsius at Churu; 48.3 deg Celsius at Allahabad; 47.2 deg Celsius at Bikaner; and 47.0 deg Celsius at Nagpur. (Source: Business
Line)

Wheat Buying by Cos Gathers Pace


Wheat buying by private traders continues at a fast pace across the country with ITC becoming the largest private wheat procurer followed by Olam, Louis Dreyfus and Glencore during this season. According to industry estimates, over 30-35 million tonne wheat is expected to be bought by private players for exports and the production of maida, flour, dalia, rawa and suji which are used in making breads, biscuits and pasta. Rajasthan, Madhya Pradesh and Uttar Pradesh continue to be the major buying regions. ITC is the largest private wheat procurer and annually buys over one million tonne wheat across 14-15 different varieties for its branded flour 'Aashirvad'."Major buying will continue till June. There has been a slight delay in arrivals, but the crop is good and prices ruling at support price," said Rajnikant Rai, chief operatiing officer (COO), agribusiness division, ITC. Wheat prices have firmed up by.50 a quintal in the past one week with reports of a drop in wheat production in the country. (Source: Economic Times)

Seed industry opposes AP Bill; says it conflicts with Central laws


The seed industry has opposed the proposed Seed Bill in Andhra Pradesh and the State Government has got no powers to regulate royalty. Cottonseed firms pay royalty (or trait value) to Mahyco-Monsanto for the biotechnology that gives the plant internal strength to kill bollworms. The Andhra Pradesh Government seeks to regulate this component to keep the seed price affordable to farmers. Levy of royalty falls under the provisions of Patent Act. Any provision to regulate royalty in the Bill will be without jurisdiction and in direct conflict with the Act, the Seedsmen Association, which represents 500 seed firms, said. Issues such as regulation of sale of seed, registration of kinds and varieties of seeds, export and import of seeds, were already covered in the existing Central enactment. It also seeks to levy punishments for the seed companies if they fail to deliver what they promise with regard to the seeds. Though several farmers associations, non-governmental organisations and political parties have responded by pronouncing their objections, the seed industry wanted more to react. (Source: Business Line)

Global grain body says arbitration cases have risen


Global grain body the Grain and Feed Trade Association (Gafta) has seen a jump in arbitration cases after grain prices touched record highs late last summer, its president said on Friday. "Since we reached record highs we've had increased volatility subsequently and anytime you see an increase in volatility there tends to be more commercial disputes requiring resolution," Lucien Agniel told Reuters. The average number of arbitration cases open at any one time is around 200, but at the start of the year this number had risen by around 25%, partly due to volatile market conditions, Agniel said. Usually it's for lack of performance on obligations under the contract or non-payment." (Source: Reuters)

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Commodities Daily Report


Monday| May 20, 2013

Agricultural Commodities
Chana
After gaining for the initial part of the week, chana prices corrected sharply towards the end of the week on account of profit taking coupled with higher supplies and record output expectations of the new crop. Emergence of demand at lower levels has pushed up the prices. The Spot as well as the June Futures settled 0.5% and 0.09% higher w-o-w. Higher supplies of the new crop from the major producing states such as Madhya Pradesh, Rajasthan and Maharashtra was a major reason attributed to recent fall in chana prices. However, supplies are expected to slow down towards the end of the month. Also, stockists are building inventories at lower levels to meet the demand for the entire season. Thus, tracking seasonality pattern, chana prices may start recovering gradually from June onwards.

Market Highlights
Unit Rs/qtl Rs/qtl Last 3392 3349 Prev day -1.49 -1.03

as on May 18, 2013 % change WoW MoM 0.50 -6.03 1.09 -7.31 YoY -19.11 -21.55

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 output of 8.2 mn tn in 2012-13. Erratic weather in M.P. lowered the yield.
rd

Source: Telequote

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

valid for May 20, 2013 Resistance 3407-3440

3330-3360

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 decline today extending previous days losses due to higher supplies. However, demand from stockists may limit downside and support prices at lower levels. Seasonal pattern in chana indicates that prices may generally bottom out in May when arrivals reach their peak, while they start recovering gradually June onwards with declining supply pressure. On the downside, we dont expect chana prices to go below Rs 3200 per qtl levels as this being the MSP levels farmers may hold back their stock. Considering the record output expectatations and seasonal patterns and demand side fundamentals, we expect chana prices to trade in the range of Rs 3200- Rs 3800 per qtl over the medium term (3 months).

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Commodities Daily Report


Monday| May 20, 2013

Agricultural Commodities
Sugar
Sugar prices continued to gain for the third consecutive week as sentiments have turned positive after the government notified partial sugar decontrol. However, prices corrected from higher levels towards the end of the week on account of profit booing and settled marginally higher by 0.16%. Demand from bulk consumers also supported prices. However, higher supplies are seen offsetting summer season demand. Prices recovered last week 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. 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 w.e.f beginning of trading day Monday, May 13, 2013. 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. According to the Ministry of Agriculture, Sugarcane has been planted in 40.74 lakh ha as compared to 45.74 lakh ha at this time last year. Less area is reported mainly in Karnataka, Maharashtra and Tamil Nadu.

Market Highlights
Unit Sugar Spot- NCDEX (Kolhapur) Sugar M- NCDEX May '13 Futures Rs/qtl Last 3052

as on May 18, 2013 % Change Prev. day WoW -0.56 -0.42 MoM -0.07 YoY 3.03

Rs/qtl

3053

-0.59

0.16

4.63

#N/A

Source: Reuters

International Prices
Unit Sugar No 5- LiffeAug'13 Futures Sugar No 11-ICE July '13 Futures $/tonne $/tonne Last 477.5 375.33

as on May 17, 2013 % Change Prev day WoW 0.27 0.36 -2.39 -3.10 MoM -5.01 -4.52 YoY -16.27 -17.49

.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 higher against the domestic consumption of around 22. 5 mln tn for 2012-13. Exports are not viable as international prices have also declined significantly.
Source: Telequote

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

valid for May 20, 2013 Resistance 3407-3440

Global Sugar Updates


Liffe sugar as well as Raw sugar settled marginally higher on Friday on account of short coverings and settled 0.27% and 0.36% higher on Friday. Prices have declined sharply on expectation of a record sugar cane crop in Brazil. The prices are trading at the lowest levels in 34 months. However, there are reports that demand from Brazil's resurgent biofuels industry will cut burgeoning global sugar surplus, helping cushion prices that fell below 17 cents per lb for the first time in almost three years. 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. Sugar production in Brazil's main cane belt surged in April, outpacing last year's early harvest by 210 percent, as rains cleared in the middle of last month to allow crushing.

3030-3045

Outlook
Overall sentiments for domestic sugar remain positive on account good demand from bulk manufacturers at such low levels. Also, government has notified cabinets decision to remove two key controls on sugar sector, which may keep sentiments upbeat. Wedding season demand may also support prices. However, higher supplies and weak international markets may prices at higher levels.

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Commodities Daily Report


Monday| May 20, 2013

Agricultural Commodities
Oilseeds
Soybean: Soybean traded on a flat note last week as poor supplies
of the bean supported prices while weak meal exports coupled with IMDs prediction of a normal monsoon pressured prices. The spot as well as the Futures settled 0.45% and 0.14% higher w-o-w. Indias soy meal exports for the month of April 2013 were 99.451 tonnes, lower by 68.31 percent from 313,832 tonnes a year ago. According to the 3rd advance estimates, Soybean output is pegged at 14.14 mn tonnes. IMDs forecasts of normal monsoon have raised hopes of better output next season too.

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 4042 4041 726.4 726 Prev day -0.54 1.62 0.03 0.03

as on May 18, 2013

WoW 0.45 0.57 0.23 1.06

MoM 0.17 1.43 0.23 0.45

YoY 19.13 25.64 0.99 0.45

International Markets
CBOT Soybean traded on a positive note and settled 1.47% higher on Friday drawing strength from tight U.S. stocks. According to the weekly crop progress report, only 6% of Soybean has been planted 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. NOPA reported that the soybean crush fell to 120.11 million bushels in April, from 137.08 million in March. China is forecast to import a record 66 mn tn of soy in 2013/14, 11% higher than the estimates of current season, driven by robust domestic demand and low stocks.

Source: Reuters

as on May 17, 2013 International Prices Soybean- CBOTJuly'13 Futures Soybean Oil - CBOTJuly'13 Futures Unit USc/ Bushel USc/lbs Last 1449 49.52 Prev day 1.47 0.00 WoW -2.67 0.71 MoM 1.85 0.26
Source: Reuters

YoY 0.73 -2.37

Crude Palm Oil

as on May 18, 2013 % Change Prev day WoW 0.60 -0.13 1.92 -0.30

Refined Soy Oil: Ref soy oil settled 0.5% last week higher tracking
positive edible oil prices in the international markets while MCX CPO settled marginally lower by 0.3% on account of profit taking. Palm oil futures on KLCE climbed 1.92% last week as stocks are expected to decline and demand is set to rebound ahead of Ramadan. Exports of Malaysian palm oil products from May 1 to 20 declined 9.4 percent to 799,405 tonnes from 882,469 tonnes shipped during April 1 to 20. But, it is expected that output in Malaysia, the world's second largest producer, to slow this month and help to further ease stocks that have dipped below the psychological 2 million tonne mark to 1.93 million tonnes in April. Stocks data from industry regulator the Malaysian Palm Oil Board showed inventory levels at the end of April down 11.3 percent against the previous month's 2.17 mn tn. India's palm oil imports declined for a third straight month in April. But India, the world's largest importer of edible oils, is still on track to surpass last year's record purchases of 10 million tonnes of cooking oil as demand rises.
Unit
CPO-Bursa Malaysia June '13 Contract CPO-MCX- May '13 Futures

Last 2334 470.7

MoM 2.19 1.79

YoY -24.98 -17.70

MYR/Tonne Rs/10 kg

Source: Reuters

RM Seed
Unit RM Seed SpotNCDEX (Jaipur) RM Seed- NCDEX May '13 Futures Rs/100 kgs Rs/100 kgs Last 3541 3493 Prev day 0.00 -0.43 WoW 3.15 0.52

as on May 18, 2013 MoM -0.21 0.03


Source: Reuters

YoY -7.67 -7.59

Technical Chart Soybean

NCDEX June contract

Rape/mustard Seed: Mustard Futures traded on a mixed note last


week and settled marginally higher by 0.34%. Prices gained due to lower level demand. However, correction was seen towards the end of the week on account of profit booking at higher levels. Higher supplies of the new crop coupled with higher output expectations led to a sharp decline in the prices since April. 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 may trade sideways with upward bias as poor supplies in the domestic markets and firm international markets may support prices. However, weak meal exports coupled with forecast of a normal monsoon 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 the 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 20, 2013 Support 691-695 3840-3870 3490-3505 464-467 Resistance 701.50-705 3920-3940 3540-3560 474-477

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Commodities Daily Report


Monday| May 20, 2013

Jeera Agricultural Commodities

Jeera prices traded on a positive note last week higher on reports of overseas enquiries. Declining arrivals also supported the prices. Demand from stockists and exporters also emerged at lower levels. The spot as well as the June Futures settled 0.76% and 0.65% higher w-o-w. Over the last few months, prices have declined sharply on the back of higher production estimates. 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. Due to the ongoing geo-political tensions in Syria and Turkey, supply concerns from these two major exporting countries still exist. Expectations are that export orders may continue to 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 $2,450 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 13563 13168 Prev day -0.49 -1.31

as on May 18, 2013 % Change WoW 0.76 1.74 MoM 0.46 -0.43 YoY -0.28 -0.72

Source: Reuters

Technical Chart Jeera

NCDEX June contract

Production, Arrivals and Exports


Arrivals in Unjha were reported at 13,000 lakh bags on Saturday. 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

Outlook
Jeera Futures may trade on a mixed note with a positive bias today. Improvement in overseas as well as domestic demand may support prices. However, higher output may pressurize prices. Overall trend remain positive for the Jeera prices due to overseas demand as Syria & Turkey have stopped shipments which may keep prices firm.

Market Highlights
Prev day 0.00 -1.67

as on May 18, 2013 % Change

Unit Turmeric SpotNCDEX (N'zmbad) Turmeric- NCDEX May '13 Futures Rs/qtl Rs/qtl

Last 6092 5996

WoW 0.53 2.78

MoM -10.14 -10.56

YoY 63.21 #N/A

Turmeric
After trading on a bullish note in the preceding two sessions as the regulator withdrew margins on the long side, Turmeric June Futures declined sharply on Saturday after NCDEX issued a circular saying that the earlier circular regarding modification in the tick size and lot size has been kept in abeyance. Prices have declined sharply on account of weak demand coupled with huge carryover stocks. However, there are expectations of improvement in overseas demand in June ahead of Ramadan. Unseasonal rains in Andhra Pradesh have damaged about 9240 tonnes of turmeric earlier. Special Margin of 10% on the Long Side on all the running contracts in Turmeric have been withdrawn w.e.f beginning of day Thursday, May 16, 2013.

Technical Chart Turmeric

NCDEX June contract

Production, Arrivals and Exports


Arrivals in Erode and Nizamabad mandi were reported at 4,000 and 3,000 bags respectively on Friday. Exports of Turmeric between Apr 2012- Jan 2013 stood at 66,550 tn, a decline of 4%. (Source: Factiva) 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 current years carryover stocks would be around 10 lakh bags. (1 bag= 75 kgs) Outlook Turmeric is expected to trade with a negative bias as the modification in the tick size and lot size has been put on hold. However, withdrawal of margins coupled with declining arrivals and expectations of improvement in demand in the coming weeks may support prices. However, huge carryover stocks may pressurize prices. 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 20, 2013


Support 12850-12980 5820-5900 Resistance 13200-13320 6060-6140

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Commodities Daily Report


Monday| May 20, 2013

Agricultural Commodities
Kapas
NCDEX Kapas as well as MCX Cotton declined last week as offloading of stocks by the CCI in the open markets and weak global markets is seen pressurizing domestic prices. However, emergence of fresh demand at lower price levels is restricting sharp downside in the domestic markets. Kapas prices at NCDEX as well as Cotton prices at MCX settled 0.58% and 1.05% lower last week. 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 1029 17850

as on May 18, 2013 % Change Prev. day WoW -0.15 -0.58 -0.50 -1.05 MoM YoY 18.70 #N/A -1.05 7.92

NCDEX Kapas Apr Futures MCX Cotton May Futures

Source: Reuters

International Prices
ICE Cotton Cot look A Index Unit USc/Lbs Last 86.41 93.4

as on May 17, 2013 % Change Prev day WoW 0.44 -0.08 -0.11 -1.79 MoM 2.08 1.91 YoY 12.73 9.24

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 gained 0.44% on Friday supported by positive financial markets. Prices declined earlier this week on account of weak export sales data. Net Upland sales of 74,000 running bales for 2012/2013 were down 37 percent from the previous week and 66 percent from the prior 4-week average. Planting picked up as weather improved in the Mississippi Delta and into the Southeast United States and eased concerns over delays in the regions. 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. 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 Source: Telequote

Technical Chart - Cotton

MCX May contract

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

valid for May 20, 2013 Support 1010-1020 17700-17780 Resistance 1040-1050 17950-18040

Outlook
Prices may remain under downside pressure in the near term on account of weak international markets coupled with offloading of stocks in the domestic markets from the state reserves. However, improving demand at lower levels may cushion sharp fall in the prices. US cotton planting intentions at a 4 year low coupled with China continuing with its stockpiling policy, may also support an upside in the prices over the medium term.

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