Commodities _ Currencies Weekly Tracker

					Commodities & Currencies

     Weekly Tracker

Commodities Weekly Tracker
Monday | March 19 2012

  • Non Agri Commodities
  • Currencies
  • Agri Commodities
  Non-Agri Commodities
  • Gold
  • Silver
  • Copper
  • Crude Oil
  Currencies – DX, Euro, INR
  Agri Commodities
  • Chana
  • Black Pepper
  • Turmeric
  • Jeera
  • Mentha
  • Soybean
  • Refine Soy Oil & CPO
  • Sugar
  • Potato
  • Kapas

Commodities Weekly Tracker
Monday | March 19 2012

                           Currencies Weekly Performance
 2.0           1.9

                         1.2    1.2


(0.5)                                                            (0.4)     (0.4)

Commodities Weekly Tracker
Monday | March 19 2012

                         Non-Agri Commodities Weekly Performance

 1.0          1.0
                           0.4   0.3
                                       (0.2)   (0.3)

(2.0)                                                  (1.4)   (1.4)


(5.0)                                                                            (4.8)

Commodities Weekly Tracker
Monday | March 19 2012

                             *Weekly Performance for March contract

    Commodities Weekly Tracker
     Monday | March 19 2012

Weekly Price Performance                                                                                   MCX and Comex Gold Price Performance

•   On a weekly basis, gold declined sharply by more than 3 percent, marking its       29,400                                                                                1,800
    second-biggest weekly drop during the year after the Federal Reserve               29,100                                                                                1,770

    suspended additional easing due to favourable economic data from the US.           28,800                                                                                1,740
                                                                                       28,500                                                                                1,710
•   MCX Gold April contract declined around 0.4 percent last week and sharp            28,200                                                                                1,680
    downside was not witnessed on account of a weaker Rupee                            27,900                                                                                1,650
Factors which influenced gold prices                                                   27,600                                                                                1,620
                                                                                       27,300                                                                                1,590
•   Fall in crude oil prices also affected inflation-led demand for gold in the last   27,000                                                                                1,560
    week. However, further decline was cushioned on account of weakness in             26,700                                                                                1,530
    the US dollar.
•   The yellow metal declined around 1 percent in the earlier trading session on
                                                                                                MCX- Near Month Gold Futures (1 kg)- Rs/10 gms        Comex Gold Futures - $/oz
    Friday after India, the world’s top consumer of gold stated that it will double
    the import duties on gold to 4 percent from current 2 percent.
ETF Performance                                                                                                     Spot Gold Vs US Dollar Index
•   Holdings in the SPDR Gold Trust, the world's largest gold-backed exchange-          1,790
                                                                                        1,770                                                                                     81.5
    traded fund, remained unchanged at 1,293.26 tonnes by 16th March 2012.              1,750
                                                                                        1,730                                                                                     81.0
Outlook                                                                                 1,710
•   We expect Gold to trade on a positive note in this week, taking cues from           1,650

    optimism over US economic recovery coupled with expectations of a                   1,630                                                                                     79.5
    solution towards the European debt crisis.                                          1,590                                                                                     79.0
                                                                                        1,570                                                                                     78.5
Weekly Technical Levels                                                                 1,550
                                                                                        1,530                                                                                     78.0
•   Buy MCX Gold April between 27400-27500, SL-27200, Target -28000. (CMP:
                                                                                                                   Spot Gold -$/oz         US Dollar Index
•   Spot Gold : Support 1630/1600 Resistance 1675/1705. (CMP: 1662.50)

     Commodities Weekly Tracker
     Monday | March 19 2012

Silver                                                                                             MCX and Comex Silver Price Performance
Weekly Price Performance                                                        61,500                                                                                   38.0
•    Silver prices came under sharp selling pressure in the last week and       60,500
                                                                                59,500                                                                                   36.0
     closed around 4.8 percent lower. Taking cues from fall in gold prices      58,500
     coupled with mixed performance in the base metals complex, spot silver     57,500                                                                                   34.0
     touched a low of $31.60/oz last week and ended its trading session at      55,500                                                                                   32.0
     $32.53/oz on Friday.                                                       54,500
                                                                                53,500                                                                                   30.0
•    However, depreciation in the Indian Rupee cushioned further decline on     52,500
     the domestic bourses. The MCX Silver May contract dropped around 3         51,500                                                                                   28.0
     percent and touched a low of Rs56,673/kg in the last week.                 49,500                                                                                   26.0

Factors that influenced silver prices
•    Mixed global market sentiments.
                                                                                         MCX- Near Month Silver Futures (30 kg)- Rs/ kg        Comex Silver Futures - $/oz
•    Decline in gold prices.
ETF performance                                                                                           Spot Silver Vs US Dollar Index
•    Holdings in the iShares Silver Trust, the world's largest silver-backed                                                                                           82.0
     exchange-traded fund, declined slightly by 0.1 percent to 9,752.67         37.0
     tonnes on 16th March 2012 from the previous 9763.25 tonnes on 9th          35.5
     March 2012.                                                                34.0
Outlook                                                                         32.5
•    Silver is expected to trade with a positive bias this week as market                                                                                              79.5
     sentiments improve on account of an improving US economic scenario.                                                                                               79.0

     Bullish sentiments in the markets are also backed by hopes of a solution   28.0                                                                                   78.5

     to the Euro Area’s debt woes.                                              26.5                                                                                   78.0

Weekly Technical Levels
•    MCX Silver May : Support 56200/55200 Resistance 58500/59300. (CMP:                                      Spot Silver -$/oz        US Dollar Index
•    Spot Silver: Support 31.90/31.30 Resistance 33.20/33.70 (CMP: 32.66)

     Commodities Weekly Tracker
     Monday | March 19 2012

Weekly Price Performance                                                                            LME and MCX Copper Price Performance
•    On a weekly basis, copper prices rose around 0.4 percent on the LME on
                                                                                   8,900                                                                           440
     the back of a weaker dollar coupled with sharp fall in LME inventories.                                                                                       435
     However, sharp gains were capped due to rise in Shanghai inventories                                                                                          430
     coupled with rising demand concerns from China.                                                                                                               425
                                                                                   8,300                                                                           420
•    However, Rupee depreciation led to sharp gains on the domestic bourses        8,100                                                                           415
     last week and copper prices witnessed a rise of 1.3 percent on the MCX.       7,900                                                                           410
                                                                                   7,700                                                                           405
Copper Inventories                                                                                                                                                 400
•    Weekly copper inventories at warehouses monitored by the Shanghai                                                                                             395
                                                                                   7,300                                                                           390
     Futures Exchange increased sharply by 1.1 to 227,276 tonnes on 16th           7,100                                                                           385
     March, highest level since July 2002.
•    In contrast to this, the red metal inventories on the LME warehouses
     decreased sharply by 4.4 percent to 263,825 tonnes on 16th March 2012,                LME Copper Future ($/tonne)         MCX Near Month Copper Contract (Rs/kg)
     lowest since June 2009, from the previous level of 276,025 tonnes on 9th
     March 2012.                                                                                   LME Copper Price Movement Vs Inventory
Factors that influenced copper prices                                           400,000                                                                             8,900
•    Mixed inventory scenario on the LME and the SHFE.                          380,000                                                                             8,700
                                                                                370,000                                                                             8,500
•    Prices supported by a weaker dollar.                                       360,000
                                                                                350,000                                                                             8,300
Outlook                                                                         340,000                                                                             8,100
•    During the week, we expect copper prices to trade higher on improving      320,000                                                                             7,900
     risk sentiments in the global markets. Also, optimism over US economy      310,000                                                                             7,700
     along with expectations of a solution by policymakers towards Europe’s     290,000                                                                             7,500
     debt crisis will also support upside.                                      280,000                                                                             7,300
Weekly Technical Levels                                                         260,000                                                                             7,100

•    Buy MCX Copper April between 426-427, SL-422, Target -435/439 (CMP:
                                                                                               Copper LME Inventory (tonnes)         LME Copper Future ($/tonne)
•    LME Copper: Support 8420/8320 Resistance 8660/8755. (CMP: 8506)

     Commodities Weekly Tracker
     Monday | March 19 2012

Crude Oil
Weekly Price Performance                                                                    Nymex and MCX Crude Oil Price Performance
•    On a weekly basis, Nymex crude oil prices declined by 0.3 percent.              5500                                                             110.0
•    MCX Crude oil March contract fell by 0.4 percent last week.                     5400                                                             108.0
US Energy Department Inventory                                                       5300
•    As per the US Energy Department (EIA) report released last week, crude oil                                                                       102.0
     inventories increased by 1.8 million barrels to 347.5 million barrels for the   5100
     week ending on 9th March, 2012.                                                 5000
•    Gasoline stocks fell by 1.4 million barrels to 228.1 million barrels and                                                                         96.0
                                                                                     4800                                                             94.0
     whereas distillate stockpiles also slipped by 4.7 million barrels to 134.8
                                                                                     4700                                                             92.0
     million barrels for the last week.
Factors that influenced crude oil prices
•    Rise in US crude oil inventories since past few weeks.
                                                                                               MCX crude oil (Rs/bbl)       NYMEX Crude Oil ($/bbl)
•    US President Barack Obama discussed with UK’s Prime Minister David
     Cameron for a release of reserves from US Strategic Petroleum Reserve
     which will curb the increasing fuel prices.                                                    Crude Oil Inventories (mn barrels)
•    Saudi Arabia’s pledge that it will make up for any shortfall in production
     from Iran.
•    Sentiments this week are expected to be led by positivity towards the US        350

     economic scenario along with expectations over a bailout towards Europe’s       340
     crisis. This is expected to support upside in crude oil prices during the
Weekly Technical Levels                                                              320

•    Buy MCX Crude April between 5350-5360, SL-5280, Target -5480/5550.
     (CMP: 5378)
•    Nymex Crude Oil: Support 106.20/104.20 Resistance 108.60/110.20 (CMP:

     Commodities Weekly Tracker
     Monday | March 19 2012

Weekly Price Performance
•    On a weekly basis, the US Dollar Index (DX) traded declined by 0.4 percent.               US Dollar Index

•    The Indian Rupee (INR) witnessed depreciation of around 0.8 percent last week.    82.0
Factors that influenced movement in the DX                                             80.5
•    The dollar weakened due to unfavorable inflation data from the US which           80.0
     boosted speculation that Federal Reserve policy makers will maintain economic     79.5
     stimulus.                                                                         78.5
•    Additionally, upbeat sentiments in the US markets last week also affected         78.0
     demand for the low-yielding currency.
•    On a week-on-week basis, Dow Jones and S&P gained sharply by 2.4 percent          76.5
     each. The DX ended its trading session below the crucial 80-mark on Friday.

Factors that influenced movement in the Rupee
•    Weak sentiments in domestic markets after RBI kept key interest rates                      $/INR - Spot
     unchanged in its policy review.
•    Nifty and Sensex declined around by 0.3 percent each last week. However,
     weakness in the US dollar resisted further depreciation in the Indian currency.   53.0

•    We expect the Indian Rupee to largely trade with an appreciation bias on
     account of positive global market sentiments. This along with a weaker dollar     50.0
     will also support gains in the currency .                                         49.0

Weekly Technical Levels                                                                48.0

•    USD/INR MCX Mar: Support 49.95/49.60 Resistance 50.70/ 51.0 (CMP: 50.22)
•    US Dollar Index: Support 79.35/78.95 Resistance 80.45/ 81.15(CMP: 79.80)

    Commodities Weekly Tracker
    Monday | March 19 2012

                                                                                          Euro/$ - Spot
Weekly Price Performance
•    The Euro traded higher by 0.5 percent in the last week on the back of       1.34
     a weaker dollar coupled with easing concerns over Greece’s debt             1.33
     worries.                                                                    1.32
•    Additionally, upbeat sentiments in the European markets last week           1.31
     also acted as a supportive factor for the currency.                         1.30
•    The Euro hit a high of 1.3191 during the week and ended its trading         1.29
     session at the level of 1.3173 on Friday.                                   1.28

News and Developments                                                            1.26

•    European trade balance witnessed a surplus of 5.9 billion Euros in
     January from a previous surplus of 7.4 billion Euros a month ago.
•    Italian trade balance stood at a deficit of 4.35 billion Euros in January
     as against a surplus of 1.15 billion Euros in December.                            EURO/INR - Spot
•    European finance ministers are discussing “combination possibilities”       70.5
     for a permanent rescue fund ahead of a March 30th meeting in
     Copenhagen. The Ministers may decide to raise the region’s crisis
     fund to a total capacity of 692 billion Euros ($911bn).                     68.5

Outlook                                                                          67.5

•    Optimism over a solution towards the Euro Area debt crisis by way of        66.5
     an expected combined bailout will help support upside in the Euro           65.5
     this week.
Weekly Technical Levels
•    EURO/USD SPOT : Support 1.3052/1.2931 Resistance 1.3245/1.3310
     (CMP: 1.3172)

    Commodities Weekly Tracker
     Monday | March 19 2012

Weekly Price Performance
•   Chana settled around 2.3% higher this week owing to slow pace of arrivals in the
    current season coupled on account of lower output.
Slow pace of arrivals despite commencement of Harvesting in MP
•   Arrivals of early sown Chana starts in Karnataka, Maharashtra and AP in January.
    However, Maharashtra witnessed 42% drop in output and thus prices remained
    firm in the month of February.
•   However, now with the commencement of harvesting in MP, the largest Chana
    producing state arrivals have still not picked up on account of lower output.
    Arrivals in Rajasthan would commence by mid March.
Lower domestic output and costlier imports to restrict major downside
•   Decline in area by 4.3% and unfavorable climate has led to a fall in Chana output
    by 6.8 at 7.6 mn tn compared to 8.2 mn tn in 2010-11. However, the trade
    participants Chana output to fall much below government's expectations.
•   Further, despite increase in Australian Chickpeas production in 2011-12, lower
    carryover stocks and increasing domestic use may lead to 18% fall in chickpeas
    exports from Australia in 2011-12. This may turn import costlier.
Seasonality pattern
•   Chana prices follow a seasonality pattern, wherein they decline sharply with the
    commence ment of fresh arrivals in Jan, bottom out during the peak arrival period
    (March – April) & then gradually starts rising thereafter. However, in the current
    season, demand supply fundamentals restrict major fall in the prices.
•   With commencement of fresh arrivals of Chana in major producing states, trade
    participant expects further downward revision in Chana output, thus supporting
    the upside rally in the prices.
Weekly Strategy
•   Buy NCDEX April Chana between 3770-3780, SL-3675, target 3960/4050.

    Commodities Weekly Tracker
    Monday | March 19 2012

Black Pepper
Weekly Price Performance
•   Black Pepper Spot prices and Futures extended gains of previous week and settled
    around 1.1% and 2.93% higher w-o-w. The most liquid April contract witnessed
    magnificent gains of 7% w-o-w.
•   Market participants are anticipating shortage of the Black pepper in the domestic
    market which is supporting prices to strengthen.
Global Scenario
•   According to International Pepper Community, global Pepper output is projected
    to grow by 7 % in 2012 to 3.20 lakh tonnes as against 2.98 lakh tonnes in 2011.
•   Imports of Pepper by the major producing countries in 2011 stood 37,238 tonnes
    as compared to 48,436 tonnes in 2010. Decline in the imports was on account of
    lower output in global market in 2011.
•   Among the major producing nations, imports of Pepper from India were the
    highest in 2011.
•   Exports of Pepper from Vietnam, India and Brazil improved while that of
    Indonesia and Malaysia fell in 2011. Exports from major suppliers fell owing to
    lower availability.
Domestic Scenario
•   Production in India is expected to decline by 10.4% to 43000 tonnes in 2012 from
    48000 tonnes in 2011. Output of Pepper in India is lowest in a decade .
•   Average arrivals in the domestic markets since the beginning of the month have
    improved but are still lower to cater the demand. Arrivals from 1st -17th March are
    around 21 MT while offtakes are around 36 MT.
•   Demand from the local stockists amidst lower arrivals are expected to keep
    Pepper prices firm in the week.
Weekly Strategy                                                                           Source :Peppertradeboard

•   Buy NCDEX April Pepper between 43000-43200, SL-41800, Target 45000/46500
     Commodities Weekly Tracker
     Monday | March 19 2012

Weekly Price Performance
•    Turmeric Spot prices plunged to lows of Rs.3944/qtl tracking peak arrivals in the
     domestic market and settled 8% lower w-o-w. Futures traced the Spot market and
     settled 2.69% down w-o-w.
•    Demand from the overseas and domestic buyers remained lower lending support
     to the bears in the market.
Peak arrivals of around 29, 000 bags in Erode mandi
•    Arrivals in Erode mandi are already witnessing high arrivals of 29000 bags daily .
     This figure is expected to soar further in the coming weeks owing to bumper
     production of the spice this season.
•    Nizamabad mandi is witnessing arrivals of around 18000 bags daily as compared
     to 12000 bags in the beginning of the month. (each bag weighs 70-75 kgs).
Turmeric production to touch historical high in 2012
•    Production of Turmeric is expected to touch historical level of 82 lakh bags in
     2011-12 season.
•    Production of turmeric in Erode in 2011-12 is expected to rise 29% to 45 lakh
     bags as compared to 35 lakh bags in 2010-11.

Exports of Turmeric at historical high of 62,000 tonnes
•    Exports of turmeric during April to December 2011 rose 66% to 62,000 tonnes as
     compared to 37,400 tonnes in the same period previous year.
•    The target set by the Spices board have already been achieved and has touched
     new historical high of 58,000 tonnes in the eight months of the FY 2011-12.
•    Peak arrivals in the domestic market amidst lacklustre demand from the overseas
     and domestic buyers is likely to keep Turmeric prices down in the coming week.
                                                                                          Source: Spot market sources

Weekly Strategy
•    Sell NCDEX April Turmeric between 4350-4370, SL-4510, Target 4100/4000

     Commodities Weekly Tracker
     Monday | March 19 2012

Weekly Price Performance
•    Spot and Futures prices remained in the red on account of improved fresh arrivals
     in the domestic coupled with fragile demand from the local and overseas buyers.
     Prices settled 0.66% and 2.75% down respectively w-o-w.
•    Average daily arrivals in the domestic currently have surged to average daily
     arrival of 25571 bags during 1st -17th March 2012 from 6304 bags average daily in
     the month of February 2012.
•    Prices in the Futures touched new contract low of Rs.12770/qtl.
Jeera production to touch 35 lakh bags in 2012
•    Production of jeera this season is expected to touch 35 lakh bags according to the
     spot market sources as compared to 29 lakh bags in 2011 (each bag weighs
•    Domestic consumption of jeera however hovers around 22-25 lakh bags.

Exports of Jeera rose by around 45% during April to December 2011
•    Exports of Jeera during April to December 2011 rose by 44.8% to 31,500 tonnes
     as compared to 21,750 tonnes in the same period previous year. Exports for the
     month of December 2011 however witnessed a decline of 30% month and month
     to 5,000 tonnes.
•    With fresh arrivals in the domestic market to gain momentum prices may witness
     further selling pressure in the coming week.
•    Lacklustre export and domestic buying will also keep prices down .

Weekly Strategy
•    Sell NCDEX April Jeera between 13150-13200, SL-13590, Target 12500/12000.            Source: Agri Watch & Reuters , Note: arrivals in bags (each
                                                                                          bag weighs 55 kgs)

     Commodities Weekly Tracker
     Monday | March 19 2012

    Mentha Oil
Weekly Price Performance
•    Mentha Spot prices and Futures after witnessing a modest correction bounced
     back from the support levels anticipating rise in the prices tracking lower
     availability in the domestic market.
•    Prices at the Spot and Futures settled 18.5% and 5.1% higher respectively w-o-w.
•    Arrivals are miniscule to cater the demand at the domestic market.
Mentha production is expected to remain high this season too
•    Sowing of Mentha in chief growing areas have commenced and are 50 percent
     complete . Production of Mentha is expected to cross last year’s figure of 36,000
•    Production of Mentha in 2010 stood at 28,000 tonnes.
Exports of Mentha rose by 45% month on month in December 2011
•    Exports of Mentha during April to December witnessed a decline of 4% to 11850
     tonnes as compared to 12,350 tonnes in the same period last year.
•    However, month on month exports rose by 45 percent to 1,600 tonnes as
     compared to 1,100 tonnes in the month of November 2011.
•    Hoardings by the stockists anticipating lower availability till commencement of
     fresh arrivals are expected to keep Mentha prices firm in the coming week.

Weekly Strategy
•    MCX Mentha March Support 2250/2130 and Resistance 2565/2650

                                                                                         Source: Spices Board of India

    Commodities Weekly Tracker
     Monday | March 19 2012

Weekly price performance
•   The upward rally in the Soybean prices remained intact for the 6th consecutive
    week on supply tightness of oil crops in the domestic as well as global markets.
    NCDEX soybean settled 2% higher, while CBOT soybean settled up 3.17% w-o-w.
6% drop in oilseed crop to increase vegetable oil imports
•   According to agriculture ministry, total nine oilseed output is estimated to decline
    by 6% to 305.2 lakh tn. Drop in oilseed crop and thereby lower availability of oil
    may lead to increased imports vegetable oil in India
•   However, with supply tightness of oilseeds crop globally also on account of lower
    output in Brazil and Argentina imports may turn costlier.
India crushes more than half of estimated Soybean crop- SOPA
•   India has crushed around 6.5 mn tn out of estimated 11.93 mn tn output on
    account of robust buying for soy meal exports.
•   Indian Soy meal exports during Apr 2011 to February 2012 surged 4.8% to 30.24
    MT as compared to 28.87 MT. However, m-o-m exports fell by 40.5 percent.
Weekly Export sales down 40% for week ending 8th March 2012
•   Weekly Export sales of soybean stood at 6.09 lk tn, down 40% from last week.
USDA report cuts Brazil, Argentina soy crop for 3rd straight month
•   According to the USDA Monthly demand Supply report released on Friday, World
    ending stocks for the 2011-12 season decline to 57.3 mn tn compared with 60.28
    million last month and 63.43 million in January 2012. End stocks declined on
    account of drop in output in Brazil and Argentina.
•   Although demand supply fundamentals remain supportive for soybean prices in
    the long term, we expect prices to consolidate in the short term as arrivals of
    mustard has commenced and may cap the upside in oilseed complex .
                                                                                           Source: USDA
•   Buy NCDEX April Soybean between 2885-2895, SL-2840, target 2970/3030
     Commodities Weekly Tracker
     Monday | March 19 2012

Refine Soy Oil and Crude Palm Oil
Weekly price performance
•    Edible oil complex mainly pal oil and soy oil continued to trade with upward bias in
     both international and domestic markets with NCDEX and CBOT soy oil gaining 2.2%
     and 2.8% respectively, while MCX and BMD CPO settled 1.9% and 1.7% higher w-o-w
•    Strong demand prospects for edible oil on one hand and soybean supply fears on
     other hand is providing support to price.
Global Scenario
•    Exports of Malaysian palm oil products for March 1-15 rose 41.9 percent to 701536
     tonnes from 494298 tonnes shipped during Feb 1-10.
•    In the conference at Kuala Lumpur, various speaker came at the conclusion that
     tightening supplies and robust demand will keep vegoils prices firm as China has
     become a bullish demand factor in 2012, he remarked.
•    Malaysia Palm Oil stocks rose unexpectedly in February 2012 owing to decline in
     exports outpaced by fall in the output. Malaysia February Palm oil output dropped
     7.9% to 1.19 mn tn as yields weakened.
Domestic Scenario
•    India’s Palm oil imports are expected to rise to 7 mn tn from 6.5 mn imported last
     year due to drop in rape seed output.
•    India imported 6.54 lakh tn edible oil in Dec 2011, down 20.9% from a month ago
     and 10.3% a year ago. In Nov-Dec 2011, the first two months of the current oil year,
     edible oil imports were at 14.8 lakh tn, as against 13.8 lakh tn a year ago. Nov-Dec
     CPO imports 1.05 mn tn against 1 mn tn y-o-y, while December imports stood at
     4.36 lakh tn against 5.24 lakh tn y-o-y.
Strategy: Refine Soy Oil
•    Buy NCDEX April Refined Soy Oil between 730-734, SL-718, target 755/760.
Strategy : Crude palm Oil (CPO)
•    Buy MCX April CPO between 572-574, SL-562, target 590/595.

    Commodities Weekly Tracker
     Monday | March 19 2012

Weekly Price Performance
•   NCDEX Sugar futures declined 1.6% w-o-w on account of ample supplies in the
    domestic markets coupled with subdued demand. However, Liffe Sugar settled
    6.6% higher w-o-w amidst short coverings as traders booked their profits and are
    closely watching the Brazil’s cane harvest that will begin next month.
Extended winters curtailed demand
•   Extended winters has cut the demand from bulk ice cream manufacturers in the
    current season. Thus, despite of lower monthly quota Sugar prices remained
    under downside pressure.
•   However, now with the onset of summers, we expect demand to gradually
    recover in the coming weeks.
Revision in output open doors for more exports
•   In a recent move food ministry revised up its sugar production estimates by 2% to
    25 million tons considering the latest sugar production figures m-o-m by the mills.
•   Sugar output during Oct 01 till Feb 2012 is up 15% at 18.6 mn tn.
•   Agricultural Minister opined that India might open additional 1 million tons of
    sugar export for 2011-12 crush seasons.
Global Sugar surplus seen at 5.17 mn tn
•   In Quarterly Market Outlook, the International Sugar Organization has increased
    its forecast for the global surplus in 2011/12 to 5.17 million tn , compared with its
    projection of 4.46 mn tn made in November 2012.
•   With pick up in summer season demand coupled recovery seen in the
    international markets, we expect Sugar prices to start recovering in the coming
•   Sell NCDEX April Sugar between 2825-2835, SL-2880, target 2750/2730.

    Commodities Weekly Tracker
     Monday | March 19 2012

Weekly Price performance
•   NCDEX potato futures gained sharply in the early part of the week on reports of
    lower output, However, prices declined during the later part due to arrival
    pressure and reports cold storages have stocked almost 80% of their capacity.
Cold storages stocked 80-8f5% of their capacity- Market Sources
•   Cold storages are full to the extent of 80-85% of their capacity. Last year around
    21 mn tn of Potato (420 mn packets of 50 kgs each) were stocked in the cold
    storages which is expected to increase marginally to around 21.5-22 22 mn tn in
    the current season due to increased capacity.
Output in UP and west Bengal may be revised downward
•   According to National Horticultural Research and Development Foundation
    (NHRDF), Potato output in the season 2011-12, is estimated higher at 43.6 mn tn
    compared to 40 mn tn last year.
•   However, there are reports of late blight disease which may hamper output to
    the extent of 10-15% and thus revised output may be around 36 mn tn.
•   In UP output in 2011-12 is estimated at 12.8 mn tn , less than last years 13.6 mn
    tn. While in West Bengal output is lower by 10-15% from last year’s 13.3 mn tn
•   However, even if output is lower by 10-15% it is compare to last year’s bumper
    output of 40 mn tn. Thus revised 36 mn tn output is sufficient to cater the
    domestic consumption demand.
•   Even though India witnessed bumper potato output in 2010-11 season at 40 mn
    tn , more than 20% was just thrown away .
•   Potato prices are expected to consolidate or may even start declining by the later
    part of the week as revised lower output is much higher compared to the
    consumption demand of around 28-30 mn tn.
•   Sell NCDEX April Potato between 990-1000, SL-1060, target 900/850.
•   Sell MCX April Potato between 1050-1060, SL-1115, target 950/900.
    Commodities Weekly Tracker
     Monday | March 19 2012

Weekly Price Performance
•   After witnessing a very volatile sessions during the previous week on account of
    sudden jerks given by the commerce ministry on exports of Cotton, the domestic
    market witnessed some consolidation during the week ended 18th march 2012.
    NCDEX Kapas settled 3.9% higher, while ICE Cotton settled 1.4% down w-o-w
Cotton export update- Norms out for Scrutiny of RCs
•   Government on Monday, 12th March reversed the ban on cotton exports after
    oppositions from farming groups and Industry participants. Fresh registration will
    not be accepted as of now.
•   However, due to some controversial, the already registered exports have to go
    under scrutiny for which the Group of Ministers (GoM) are expected to review
    the same after 2 weeks.
•   However, in the latest update (Source: HBL dated 18th Mar)It was decided not to
    wait for the meeting of the Group of Ministers and go ahead with the guidelines
Demand Supply Scenario
•   With higher carry over stocks coupled with record output of 43.5 mn bales in,                                   Cotton Balance sheet
    supplies are sufficient to meet the increased domestic demand of 26 mn bales,
                                                                                          Column1                         2011-12(P)             2010-11         % Chg
    however, India's cotton exporters have shipped out 9.4 mn bales since the start of
    the marketing year in October till 29th march. Thus, at the current pace of exports   Opening stock                       48.3                 40.5              19.3
    and arrivals, closing stocks at the end of the season are seen below the 5-mln-       Production                           345                  339               1.8
    bale (1 bale = 170 kg) industry norm at around 2.5-3.0 mln bales.
                                                                                          Imports                               6                    5               20.0
Outlook                                                                                   Total Supply                        399.3                384.5              3.8
•   Kapas prices are likely to remain under pressure in the short term as government
                                                                                          Consumption                          260                 267.4             (2.8)
    has hold further exports of Cotton as of now. However, long term fundamentals
    remain firm as India has exported record Cotton in the current season and thus        Exports                              115                 68.8              67.2
    carry over stocks would be much below the industry norm of 2.5 -3 mn bales.           Total Demand                         375                 336.2             11.5
Strategy                                                                                  End Stocks                          24.3                 48.3              (49.7)
•   Sell NCDEX/MCX April Kapas between 855-865, SL-900, Target 800/780                    Source: CCI    P- Provisional Figs in Lakh bales of 170 kgs as on 24th jan 2012

   Commodities Weekly Tracker
   Monday | March 19 2012

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