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Commodities & Currencies

Weekly Tracker

Commodities Weekly Tracker

ContentsReturns

• Non Agri Commodities

• Currencies

• Agri Commodities

Non-Agri Commodities

• Gold

• Silver

• Copper

• Crude Oil

Monday | June 18, 2012

Currencies – DX, Euro, INR

Agri Commodities

• Chana

• Black Pepper

• Turmeric

• Jeera

• Mentha Oil

• Soybean

• Refine Soy Oil & CPO

• Sugar

• Kapas

Commodities Weekly TrackerMonday | June 18, 2012

1.6 1.5 1.5

1.0 0.9

0.5

1.0

1.5

2.0

Currencies Weekly Performance

(0.1)

(1.0) (1.0)

(1.5)

(1.0)

(0.5)

0.0

0.5

Commodities Weekly TrackerMonday | June 18 , 2012

7.0

3.6

2.0 3.0

4.0

5.0

6.0

7.0

Non-Agri Commodities Weekly Performance

2.0 1.6 1.4

0.8 0.2

(0.4)

(2.6)(3.0)

(2.0)

(1.0)

0.0

1.0

2.0

3.0


*Weekly Performance for July contract; Kapas – April 2013


GoldWeekly Price Performance

• On a weekly basis, gold prices gained around 2 percent in the international

markets and around 1.8 percent on the MCX.

ETF Performance

• Holdings in the SPDR Gold Trust, the world's largest gold-backed exchange-

traded fund, increased around 0.2 percent to 1,277.39 tonnes on 15th June

2012 from the previous level of 1,274.78 tonnes on 8th June 2012.

Factors that influenced gold prices

• Upbeat global market sentiments coupled with weakness in the DX. The

yellow metal touched a high of $1633/oz and closed at $1626/oz in the last

trading session of the week.

• On the MCX, Gold August contract increased by 1.8 percent and closed at

1,5301,5501,5701,5901,6101,6301,6501,6701,6901,7101,7301,7501,7701,790

27,200

27,500

27,800

28,100

28,400

28,700

29,000

29,300

MCX and Comex Gold Price Performance

• On the MCX, Gold August contract increased by 1.8 percent and closed at

Rs.30,122/10 gm after touching a high of Rs.30,236/10 gm in last week.

However, appreciation in the Indian Rupee cap further gains in prices.

Outlook

• We expect gold prices to trade higher during the week on account of ease in

European debt concerns, expectations of quantitative easing in the Fed

policy meeting in the week. Additionally, upbeat global market sentiments

along with weakness in the DX will also help upside in prices.

Weekly Technical Levels

• Buy MCX Gold August between 29,970-29950, SL-29640, Target -

30400/30700.(CMP: 30,064)

• Spot Gold : Support 1614/1594 Resistance 1646/1666. (CMP: 1622.40)

MCX- Near Month Gold Futures (1 kg)- Rs/10 gms Comex Gold Futures - $/oz

78.0

79.0

80.0

81.0

82.0

83.0

84.0

1,530

1,550

1,570

1,590

1,610

1,630

1,650

1,670

1,690

1,710

1,730

1,750

1,770

1,790

Spot Gold Vs US Dollar Index

Spot Gold -$/oz US Dollar Index

Commodities Weekly TrackerMonday | June 18 , 2012

Silver

Weekly Price Performance

• Spot silver declined around 0.8 percent and touched a high of $29.12/oz

last week.

• On the MCX, the Silver July contract traded higher by 0.5 percent and

closed at Rs. 54,554/kg in the last week.

Factors that influenced silver prices

• Rise in the gold prices.

• Upside in the base metals pack.

• Weakness in the DX.

ETF performance

• On a weekly basis, holdings in the iShares Silver Trust, the world's largest

27

29

31

33

35

37

50,000

52,000

54,000

56,000

58,000

60,000

MCX and Comex Silver Price Performance

• On a weekly basis, holdings in the iShares Silver Trust, the world's largest

silver-backed exchange-traded fund, increased around 0.3 percent to

9,696.23 tonnes on 15th June 2012 from the previous level of 9,669.08

tonnes on 8th June 2012.

Outlook

• We expect silver prices to trade on a positive note on the back of positive

global market sentiments coupled with weakness in the DX. Silver prices

will also take cues from rise in gold prices and upside in base metals.


• MCX Silver: Support 53870/53190 Resistance 55280/56034. (CMP:

54,369)

• Spot Silver : Support 28.15/27.68 Resistance 29.11/29.60 (CMP: 28.60)

MCX- Near Month Silver Futures (30 kg)- Rs/ kg Comex Silver Futures - $/oz

78.0

79.0

80.0

81.0

82.0

83.0

84.0

26.5

28.0

29.5

31.0

32.5

34.0

35.5

37.0

Spot Silver Vs US Dollar Index

Spot Silver -$/oz US Dollar Index


Copper


• On a weekly basis, copper prices declined around 3.5 percent on the LME and

gained by 3.4 percent on the MCX.

Copper Inventories

• The red metal’s inventories on the LME warehouses increased around 8.6

percent to 249,450 tonnes on 15th June 2012 from the previous level of

229,675 tonnes on 8th June 2012.

• Weekly copper inventories at warehouses monitored by the Shanghai Futures

Exchange decreased around 1.7 percent to 130,143 tonnes last week.

Factors that influenced copper prices

385390395400405410415420425430435440445450

7,100

7,300

7,500

7,700

7,900

8,100

8,300

8,500

8,700

8,900

LME and MCX Copper Price Performance

• Rise in risk appetite in the global markets.

• Weakness in the DX

• However, further upside in prices was capped on the back of rise in LME

Copper inventories more than 8.5 percent in last week.

Outlook

• In this week, we expect copper prices to trade on a positive note taking cues

from expectations of Fed’s quantitative easing, positive global market

sentiments along with weakness in the DX.


• Buy MCX Copper June between 414-413, SL-408, Target-422/427.(CMP:

419.40).

• LME Copper: Support 7480/7400 Resistance 7640/7720. (CMP: 7572.50)

LME Copper Future ($/tonne) MCX Near Month Copper Contract (Rs/kg)

7,200

7,400

7,600

7,800

8,000

8,200

8,400

8,600

8,800

210,000

230,000

250,000

270,000

290,000

310,000

330,000

350,000

370,000

LME Copper Price Movement Vs Inventory

Copper LME Inventory (tonnes) LME Copper Future ($/tonne)


Crude Oil


• On a w-o-w basis, Nymex crude oil prices declined around 0.4 percent.

• On the MCX, the crude oil June contract rose by 0.9 percent.

US Energy Department Inventory

• As per the US Energy Department (EIA) report released last week, US crude oil

inventories declined less than expected by 0.2 million barrels to 384.40 million

barrels which for the week ending on 8th June 2012.

• Gasoline stocks fell 1.7 million barrels to 201.80 million barrels and whereas

distillate stockpiles also dropped by 0.1 million barrels to 120.0 million barrels for

the last week.

Factors that influenced crude oil prices

• Less than expected decline in US crude oil inventories.

82.084.086.088.090.092.094.096.098.0100.0102.0104.0106.0108.0110.0

4500

4600

4700

4800

4900

5000

5100

5200

5300

5400

5500

5600

Nymex and MCX Crude Oil Price Performance

MCX crude oil (Rs/bbl) NYMEX Crude Oil ($/bbl)

• Less than expected decline in US crude oil inventories.

• Organization of Petroleum Exporting Countries (OPEC) decision to keep production

levels unchanged at 30 million barrels a day.

• However, weakness in the DX cushioned further fall in crude oil prices.

News

• As per the International Energy Agency (IEA), OPEC pumped in 31.86 million barrels

a day in May. The agency forecasted that demand for OPEC’s crude will increase to

30.9 million barrels a day in second half of the year from 29.8 million barrels a day

for the period of January to June.

Outlook

• Crude oil prices are expected to trade with upside bias during the week on account

of revival in global market sentiments coupled with weakness in DX. Additionally,

IEA expectations of rise in the demand will also help upside in prices.


• Buy MCX Crude July Between 4670-4650, SL-4550, Target -4810/4860.(CMP: 4716)

• Nymex Crude Oil: Support: 82.95/81.20 Resistance 86.85/89.50 (CMP: 84.86)

320

330

340

350

360

370

380

390

Crude Oil Inventories (mn barrels)


DX/ INRWeekly Price Performance

• On a week-on-week basis, the US Dollar Index (DX) fell around 1 percent .

• The Indian Rupee (INR) appreciated around 0.1 percent in the last week.

Factors that influenced movement in the DX

• On a weekly basis, the US Dollar Index (DX) declined around 1 percent on the

back of rise in risk appetite in the global markets which led to fall in demand for

the low yielding currency.

• US markets also ended on a positive note by around 1.4 percent in last week.

• This factor also exerted downside pressure on the currency. It touched a low of

81.26 during the week and closed at 81.61 on Friday.

Factors that influenced movement in the Rupee

• The Indian Rupee appreciated around 0.1 percent and swung between gains and

76.5

77.0

77.5

78.0

78.5

79.0

79.5

80.0

80.5

81.0

81.5

82.0

82.5

83.0

US Dollar Index

• The Indian Rupee appreciated around 0.1 percent and swung between gains and

losses in the last week.

• The currency appreciated taking cues from expectations of cut in repo rates by

the Reserve Bank of India (RBI) in the policy meeting to be held today.

Additionally, weakness in the DX also helped upside in the currency.

FII Inflows

• For the current month, FII outflows totaled at Rs 186.30 crores till 15th June

2012. While on a year to date basis, net capital inflows stood at Rs 42,308.10

crores till 15th June 2012.

Outlook

• Sentiments in the global markets are expected to remain upbeat and global

economy will also lead to positive sentiments in the markets, thus supporting

appreciation in the Rupee during the week.


• USD/INR MCX June: Support 55.17/54.68 Resistance 56.17/ 56.68 (CMP:55.72)

• US Dollar Index: Support 81.10/80.65 Resistance 82.40/ 83.20 (CMP:81.50 )

48.0

49.0

50.0

51.0

52.0

53.0

54.0

55.0

56.0

57.0

$/INR - Spot


EuroWeekly Price Performance

• On a weekly basis, the Euro traded higher around 1 percent.

Factors that influenced movement in the Euro

• Euro appreciated around 1 percent during the last week taking cues from

upbeat global market sentiment. Additionally, a weaker DX also supported

upside in the currency.

• The currency touched a high of 1.2668 in the last week and closed at 1.2636 on

Friday.

News

• Italian Trade Balance was at a deficit of 0.2 billion Euros in April from previous

surplus of 2.07 billion Euros a month ago.

1.23

1.25

1.27

1.29

1.31

1.33

1.35

Euro/$ - Spot

surplus of 2.07 billion Euros a month ago.

• European Employment Change declined by 0.2 percent in Q1 of 2012compared

to previous decline of 0.3 percent in Q4 of 2011.

• European Trade Balance at surplus of 6.2 billion Euros in April with respect to

previous surplus of 3.7 billion Euros a month ago.

Outlook

• We expect the Euro to appreciate during the week as market sentiments move

towards the positive territory coupled with weakness in the DX.


• EURO/USD SPOT : Support 1.2495/1.2358 Resistance 1.2722/1.2805

(CMP:1.2685 )63.5

64.5

65.5

66.5

67.5

68.5

69.5

70.5

EURO/INR - Spot

Chana



• Chana futures that declined sharply on expectations of higher sowing, recovered

towards the week end on concerns of slow progress of monsoon. NCDEX July

contract settled 1.9% lower w-o-w.

Government deferred decision on Tur and Moong MSP

• For 2012-13 season, the MSP of urad has been increased by 30 percent to Rs

4,300 per qtl, against Rs 3,300 per qtl previous year. The decision on MSPs of key

pulses i.e. Tur and Moong -- were deferred.

• As on 8th June, Pulses have been sown in 15.11 lakh hectares so far in the current

sowing season as against target of 17.49 lakh hectares. Under a government

initiative, India is growing pulses in summer season, apart from it’s typically

followed two crop cycles, Kharif and Rabi.

Southwest monsoon progressSouthwest monsoon progress

• With some delay in its progress, southwest monsoon has further advanced into

remaining parts of central Arabian Sea, Konkan, interior Karnataka, Andhra

Pradesh and Bay of Bengal, some more parts of West Bengal & Sikkim, most parts

of interior Maharashtra and extreme south Gujarat, Chhattisgarh and Orissa.

Chickpeas Imports up 99 percent between Apr 2011 – Feb 2012

• As per the latest release of Department of commerce, during April11- February 12

imports of chickpea rose by 99% to 1,93, 248 tonnes.

Outlook

• Chana prices may witness some downside correction if monsoon advancement is

timely and well distributed. However, overall fundamentals for Chana remain

supportive from the medium term prospective due to tight supplies of the same

amid lower output.

Weekly Strategy

• Sell NCDEX July Chana between 4150-4200, SL-4300, target 3900 / 3850.

Black Pepper



• Limited arrivals in the domestic market led prices to bounce back and settled

around 2% higher w-o-w. Futures traced the spot prices and ended 1.3% higher

w-o-w.

• Pepper prices in India are being offered at $7,500/tn while Vietnam is offering its

550 GL at $6750/tn and Brazil at $6900/tn. (source: Agri watch)

Decline in Pepper imports by U.S.

• Pepper imports by U.S. the largest consumer of the spice declined 14.8% in the

first 2 months of the year 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.

Global updates

Exports from Vietnam are expected to witness a rise of 22% year on year

Source :Peppertradeboard

• Exports from Vietnam are expected to witness a rise of 22% year on year

according to Ministry of Agriculture and development Vietnam. Exports of Pepper

for 2012 are forecasted at 1.235 lakh tn.

• Exports of Pepper from Vietnam during Jan 2012 to March, 2012 stood at 30800

tn up 49.5 percent as compared to corresponding period last year. Exports of

Pepper from Malaysia during Jan – March 2012 remained lower at 1511 tn 52%

down as compared to 3155 tn last year.

• Exports of Pepper from Brazil during the same period stood at 6238 tn, a decline

of 21% as compared to last year.

Outlook

• Pepper prices are expected to trade sideways to up as arrivals in the domestic

market are limited with increased offtakes. However, fresh arrivals from Malaysia

and Indonesia have commenced and that might cap sharp gains.

Weekly Strategy• Buy NCDEX July Pepper between 39150-39250, SL-37800, Target 40800/41200

Turmeric



• Reports of government procuring Turmeric in Erode at Rs.4000/qtl led Spot prices

and Futures to reverse earlier losses of the previous week and settled 0.46% and

6.5% higher w-o-w.

• There were also reports of expectation of lower area covered under the spice this

season eyeing lower prices prevailing currently.

Expectation of lower area under Turmeric this season

• Area covered under Turmeric in A.P. in 2011 season was 0.68 lakh hectares. This

year area is expected to decline eyeing steep fall in the prices in the last few

months.

Turmeric production to touch historical high in 2012

• Production of Turmeric is expected to touch historical level of 90 lakh bags in

2011-12 season. Production of turmeric in Erode in 2011-12 is expected to rise

Source: Spot market sources

2011-12 season. Production of turmeric in Erode in 2011-12 is expected to rise

57% to 55 lakh bags as compared to 35 lakh bags in 2010-11.

Exports of Turmeric at historical high of 67,000 tonnes

• Exports of turmeric during April 2011 to January 2012 rose 69% to 67,000 tonnes

as compared to 39,600 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 67,000 tonnes during Apr 2011 to Jan 2012.

Outlook

• Turmeric prices in the coming week is likely to trade sideways due to ample

supplies in the domestic market on one hand and lower area covered this spice

this season is expected to cushion prices. However, technically prices might

witness selling pressure in the coming week.

Weekly Strategy• Sell NCDEX July Turmeric between 3800-3850, SL-4000 Target 3500/3550

Jeera



• After trading weak in the previous 2 weeks jeera prices recovered earlier losses

and bounced back owing to expectation of revival in the overseas demand eyeing

lower crop in Syria, Turkey and Afghanistan. Also, tensions in Syria have made

them incapable of supplying in the global markets led prices to find support and

strengthen. Prices in the Spot and Futures settled 1.5% and 3.6% higher w-o-w.

Harvesting of jeera in Syria and Turkey

• Harvesting of jeera in Syria is complete and fresh arrivals are expected to

commence shortly while Turkey are expected from first week of July. Carry over

stocks of jeera are lower with the above nations.

• Prices of jeera in the international market of Syrian origin are being offered at

$2900/tonne while Indian jeera is being offered at $2600/tonne.

Domestic updates

Source: Spices Board of India

Domestic updates

• Arrivals in the domestic market are now witnessing a decline and are currently

around 8,000 bags daily as compared to 12000 bags in the beginning of the

month.

• Production of jeera in India this season is expected to touch 40 lakh bags

according to the spot market sources a rise of 37.9%as compared to 29 lakh bags

in 2011 (each bag weighs 55kgs).

• Exports of Jeera during April 2011 to January 2012 rose by 54% to 34,500 tonnes

as compared to 22,450 tonnes in the same period previous year. Exports for the

month of January 2012 however witnessed a decline of 40% month and month to

3,000 tonnes.

Outlook

• Jeera prices are likely to trade sideways to up on account of demand from the

overseas buyers ahead of Ramzan. Lower output of jeera and carryover stocks in

Syria and Turkey is also expected to support prices in short term.

Weekly Strategy• Buy NCDEX July Jeera between 12950-13000, SL-12750, Target 13500/13600

Mentha Oil



• Mentha prices which remained firm in the early part of the week witnessed selling

pressure towards the end anticipating arrivals in the domestic to swell in the coming

days. Prices in the Spot and Futures declined and settled 3% and 4.5% lower w-o-w.

Sowing progress of Mentha and crop prospects

• Production of Mentha is expected to be around 42-45 thousand tonnes. Fresh

arrivals of the crop have commenced from the last week of May. Peak arrivals will

be witnessed from June mid onwards.

• Fresh arrivals of Mentha are in the range of around 1200 drum per day. (1 drum is

equal to 180 kgs)

• According to market sources acreage under Mentha is forecasted to 2.10 lakh

hectares as compared to 1.75 lakh hectares in the last year. Sowing of Mentha in

western U.P. is expected to be more by 30 percent as compared to last year.

Source: Spices Board of India

western U.P. is expected to be more by 30 percent as compared to last year.

Exports of Mentha declined by 6% during Apr 2011 to Jan 2012

• Exports of Mentha during April 2011 to January 2012 witnessed a decline of 6% to

12,850 tonnes as compared to 13,550 tonnes in the same period last year.

• Month on month exports also declined by 40 percent to 950 tonnes in January 2012

as compared to 1,600 tonnes in the month of December 2011.

Outlook

• Mentha prices are expected to trade bearish on account of selling by the market

participants anticipating fresh arrivals to improve in the coming days.

• With south-west monsoon making a slow advancement into the interior parts, it

would be crucial to monitor its progress towards the northern parts in the coming

days.

Weekly Strategy

• Sell MCX June Mentha between 1400-1420, SL- 1510, Target 1250/1200

Soybean


Weekly price performance

• Lingering concerns of Euro debt crisis and possible showers in southern mid west

of U.S. easing stress of Soybean sown crop there led prices to witness bearish

trend and settled 3.5% lower w-o-w.

• Delay in the advancement of monsoon into the interior parts of India along with

lower availability of Soybean led prices to remain supported and settle 1.5%

higher w-o-w.

Lower area covered under Kharif Oilseeds & 30% rise in MSP of Soybean

• According to Ministry of Agriculture sowing of Kharif Oilseeds till June 15 is

around 1.72 lakh hectares down 30% as compared to last year. Area covered

under Soybean stood at 6000 ha as compared to 39000 ha last year.

• The Cabinet Committee on Economic Affairs on June 14 raised the Minimum

Support Price (MSP) of Soybean to Rs.2,200/qtl in 2012-13 season a rise of 30%Support Price (MSP) of Soybean to Rs.2,200/qtl in 2012-13 season a rise of 30%

from Rs.1690/qtl in the last year.

Global Updates

• As per US Crop weekly progress report, soybean plantation is almost complete

but dry weather in the key growing areas might cause decline in the yield .

• U.S. weekly exports of Soybean improved to 4.25 lakh tn a rise of 93% compared

to 2.20 lakh tonnes previous week.

• Imports of Soybean by China in the month of May rose 8% to 5.28 mln tn as

compared to April 2012 and 16% year on year.

Outlook

• Soybean prices in the coming week is likely to trade sideways with upward bias as

slow progress of monsoon into the interior parts of India is hampering the sowing

activity coupled with lower stocks of Soybean. Also, Soybean seed demand is

expected to improve in the coming days which might support prices.

Strategy

• Buy NCDEX July Soybean between 3380-3390, SL-3320, target 3500/3550.Source: Ministry of Agriculture

Refine Soy Oil and Crude Palm Oil


Weekly price performance

• CBOT Soy Oil Futures ended on bearish note with no relief from global economic

worries sluggishness in the Soybean Futures and settled 2.1% lower w-o-w.

However, NCDEX Refined Soy oil Futures witnessed mixed trend throughout the

week and settled 0.12% higher w-o-w. Excessive import of Edible oil into India also

capped sharp gains in the domestic market.

• BMD Palm Oil prices and MCX CPO Futures traded on bearish note and settled 4.6%

and 2% lower respectively w-o-w.

Global Scenario

• According to SGS exports of Palm Oil from Malaysia during 1-15th June 2012 surged

by 28% to 7.22 lakh tn as compared to 5.65 lakh tn during 1st -15th May 2012. China

and EU remained as the major buyers of the Oil followed by U.S. and India.

• As per MPOB latest report, Malaysian palm oil output is lower by 20% at 138 lakh tn• As per MPOB latest report, Malaysian palm oil output is lower by 20% at 138 lakh tn

in May compared to last year, while for May ending stock are at 13 month low and

down by 8.4% to 176 lakh tn compared to May 2011. Due to global economic crisis,

exports are also down by 6% to 140 lakh tn.

Domestic Scenario

• The import of vegetable oils during May 2012 stood at 8.96 lakh tn as compared to

6.64 lakh tn in May 2011. Import of Soybean Oil in the month of May 2012 and

stood at 62500 tonnes as compared to 60600 tn in the same period previous year.

The overall import of vegetable oils during Nov 11 – May 12 stood at 56.12 lakh tn a

rise of 31.5% as against last year.

• Despite a considerable fall in the CPO prices, import cost would continue to remain

at elevated levels making it costlier for the consumers thereby pushing up inflation

Strategy: Refine Soy Oil

• Buy NCDEX July Refined Soy Oil between 714-718, SL-708, target 730/735

Strategy : Crude palm Oil (CPO)

• Sell MCX July CPO between 550-555, SL-565, target 530/520. Source: Reuters

Sugar



• Domestic Sugar prices settled 2.1% higher on account of slow advancement of

monsoon coupled with firmness in the international markets. Liffe sugar settled

higher on account of strong demand for sugar ahead of Ramadan coupled with

unfavorable weather conditions in Brazil.

Monsoon 42% below normal during the 1-13 June

• Monsoon has hit Kerala coast on 5th June, a delay by 5 days. Also, further

advancement is very slow due to which sowing might get delayed.

• According to IMD , India has so far received 42% below normal rains since the

beginning of June.

Sugarcane acreage up 4.7percent as on 15th June

• As on 15th June, 2012, the area under sugarcane is estimated at 51.76 lakh ha,

up, than 49.4 lakh ha a year ago. Lower acreage is reported mainly inup, than 49.4 lakh ha a year ago. Lower acreage is reported mainly in

Maharashtra by 10%, Karnataka 11.6% and Uttarakhand, by 8% while higher area

is reported in the states of Bihar, Punjab, Tamil Nadu, UP and Andhra Pradesh.

Indian Sugar output up 8 percent between Oct 2011- May 2012

• India produced 25.5 million tonnes of sugar between Oct. 1 and May 31, up 8

percent from the year-ago period, the Indian Sugar Mills Association said.

International prices to recover in the short term

• There are reports that the strong appetite for sugar ahead of Muslim festival

Ramadan could combine with bad weather in Brazil and a possible return of the El

Nino weather pattern may support the upside in the global sugar prices.

Outlook

• Taking into consideration the recovery in the international Sugar prices, we

expect prices to gain in the domestic markets too, as this would make export

profitable. Further monsoon advancement needs to be watched carefully.

Strategy

• Buy NCDEX sugar July between 2850 to 2860, Sl – 2790, target – 2950 / 2980

Kapas/Cotton



• Kapas prices settled 2.9% higher w-o-w owing to slow advancement of monsoon

and expectations of lower sowing under cotton this season in the domestic

markets. ICE Cotton futures also settled also settled higher ahead of July Expiry.

Government declares higher MSP for Cotton

• The Cabinet Committee on Economic Affairs (CCEA) last week hiked MSP of

medium staple cotton and Long staple Cotton by 28.57% and 18.18% to Rs 3600

and Rs 3900 per qtl to boost output.

Monsoon 42% below normal during the 1-13 June

• Monsoon has hit Kerala coast on 5th June, a delay by 5 days. Also, further

advancement is very slow due to which sowing might get delayed.

• However, the advancement is very slow and thus according to IMD , India has so

far received 42% below normal rains since the beginning of June.far received 42% below normal rains since the beginning of June.

Rising MSP amid below normal rains to hamper sowing acreage

• Cotton area may decline by more than 10-15% if rainfall continue to remain

below normal for next 1-2 week. Also, farmers may opt for more remunerative

crops like Guar in Rajasthan, Soybean in Maharashtra, & groundnut in Gujarat.

Record Cotton 2012-13 global stocks -USDA

• World 2012/13 cotton ending stocks at a record 73.75 million (480-lb) bales, up

over 10 percent from the 2011/12 level. Stocks-to-use ratio is projected to rise to

32 percent well above the last three seasons, but only slightly above the 10-year

average of 30 percent.

Outlook

• Domestic Kapas prices may remain firm in the current week on account of

estimated lower end stocks in India coupled with recovery in the international

cotton markets.

Strategy

• Buy NCDEX Kapas April between 950 – 955, Sl – 930, target -1000 / 1020

Thank You!

Commodities Weekly TrackerMonday June 18, 2012

Angel Commodities Broking Pvt. Ltd.

Registered Office: G-1, Ackruti Trade Centre, Rd. No. 7, MIDC, Andheri (E), Mumbai - 400 093. Tel: (022) 3083 7700

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