Base metals, crude oil decline, weak dollar limits fall
European leaders have planned to channel around 200bn Euros ($267bn) to the International Monetary Fund (IMF) and will agree to the European Central Bank’s demands of tight anti-deficit rules.
The European Central Bank (ECB) President Mario Draghi stated that the leaders have laid out a new “fiscal compact” in order to control further debt crisis and have initiated the startup of a planned permanent 500bn Euros rescue fund.
Moody’s Investors Service downgraded three largest banks in France. The long-term debt ratings for BNP Paribas and Credit Agricole were downgraded by one notch to Aa3 and ratings for Societe Generale’s was cut to A1 today.
Inflation in China witnessed the slowest pace of increase in November by 4.2 percent as rise in food costs moderated. This slowdown in inflation may lead to a loosening of monetary policy by the People’s Bank of China.
Spot gold touched an intra-day low of $1702/oz but recovered from its losses to trade higher by 0.3 percent till 4.30 pm IST today. The yellow metal received support from a weaker dollar today.
On the MCX, Gold February contract rose around 0.2 percent and was trading at Rs29,149/10 gms till 4.30 pm IST. Silver also gained by 0.6 percent today and hit a high of $31.88/oz till 4.30 pm IST and was hovering around $31.78/oz.
The base metals complex traded lower on the LME today, with copper being an exception. Mixed sentiments in the global markets coupled with rising worries over global economies exerted pressure on metals. However, dollar weakness cushioned sharp decline in prices.
Depreciation in the Indian Rupee led base metals to trade higher on the domestic bourses today.
Weekly copper inventories in warehouses monitored by the Shanghai Futures Exchange rose a whopping 26 percent to 72,712 tonnes this week.
Nymex crude oil declined by 0.1 percent today, taking cues from mixed sentiments in the global markets. However, a weaker dollar cushioned sharp decline in prices. Crude oil is trading around $98.22/bbl and have touched an intra-day low of $97.55/bbl till 4:45pm IST.
Outlook
We expect gold and silver prices to trade higher as risk sentiments in the global markets are expected to revive on account of expectations that European policymakers will provide measures to deal with the ongoing debt crisis.
Base metals are also expected to trade with a positive bias today on hopes of measures and actions by the European leaders.
Fundamentals in case of crude oil are not supportive on the back of rising supplies, increasing production and above-normal temperatures that could lead to slowdown in demand growth in the US. On account of this, we expect oil prices to trade with a negative bias.
Courtesy: Angel Commodities
Base metals edge lower on global economic concerns
Base metals came under pressure in yesterday’s trade as mixed cues from the European Central bank led to downside pressure in late trade.
Copper, the leader of the base metals pack succumbed to downside pressure in the last hour of trade after touching an intra-day high of $7919/tonne. On the LME, prices declined more than 1 percent and closed at $7706/tonne.
Zinc prices declined sharply, losing around 1.5 percent on the LME, taking cues from macroeconomic concerns coupled with sharp increase in inventories which jumped around 2.7 percent to 758,200 tonnes on Thursday.
The global zinc market is expected to witness a surplus in this year and a rise inventories amid rising economic uncertainty acted as a negative factor on prices.
Courtesy: Angel Commodities
Crude oil declines on firm US dollar
Nymex crude oil prices declined by more than 2 percent yesterday as signal by the European Central bank that it won’t increase government bond purchases led to re-emergence of concerns on the economic front. Additionally, it is expected that Saudi Arabia will not agree at the Organization of Petroleum Exporting Countries (OPEC) meeting for new production quotas along with Iran facing European sanctions.
A stronger dollar also added downside pressure to oil prices yesterday. Crude Oil touched an intra-day low of $97.71/bbl and closed at $98.3/bbl, biggest weekly decline since September. On the MCX, prices decreased by 1.4 percent and closed at Rs.5155/bbl after touching an intra-day low of Rs.5127/bbl on Thursday.
Natural Gas
Nymex natural gas prices increased by more than 0.5 percent on Thursday, taking cues from more than expected fall in natural gas inventories. Prices touched an intra-day high of $3.55/mmbtu and closed at $3.443/mmbtu in yesterday’s trading session. On the MCX, prices increased by 2.4 percent on account of Rupee depreciation and closed at Rs.182.4/mmbtu on Thursday.
EIA Natural Gas Inventories Data
US Energy Information Administration (EIA) released its weekly inventories and indicated that inventories declined by 20 billion cubic feet (bcf) to 3.831 trillion cubic feet for the week ending on 2nd December 2011.
Courtesy: Angel Commodities
Precious metals settle lower on Euro debt concerns
Escalating worries over Euro zone debt crisis led to rise in risk aversion in the markets on Thursday. This boosted safe-haven demand for gold and it hit a high of 1754/oz yesterday.
But, prices retreated in the later part of the trade and declined sharply by almost 2 percent on the back of selling pressure in the metal. Additionally, a stronger dollar also acted as a negative factor. The yellow metal closed at the level of $1708/oz on Thursday.
MCX Gold February contract hit an all time-high of Rs29,433/10 gms yesterday. However, the yellow metal witnessed selling pressure at the higher levels and it declined around 0.5 percent in late trade on Thursday. But, depreciation in the Indian Rupee resisted sharp decline on the domestic bourses.
Silver
Spot silver declined sharply by almost 3 percent on Thursday, taking cues from fall in gold prices along with a stronger dollar. Silver also took cues from downside in base metals which led to further decline.
Prices touched an intra-day low $31.39/oz and closed at $31.6/oz in yesterday’s trading session.
On the MCX, Silver March contract declined around 1.7 percent on Thursday as further decline was cushioned on account of Rupee depreciation and touched an intra-day low of Rs55,951/kg.
Courtesy: Angel Commodities
India soy complex settles higher on firm spot demand
Soybean prices extended gains on Thursday as firm spot prices and fresh meal export consignments supported prices to gain substantially.
Arrivals also declined to 1.5 lakh bags compared to 3 lakh bags during beginning of the week which helped the prices to gain a tad.
CBOT soybean prices ended steady as the weekly export sales data increased while fears of projection of higher stock piles of soybean in WASDE report limited upside and resulted in profit taking.
Soy oil prices declined yesterday as the peak crushing season of soybean is resulting in production of ample soy oil while the demand front is reported very weak. Good demand for meal is also reported to keep soy oil prices under pressure as it is resulting in higher crushing demand.
Mustard seed prices declined in line with soy oil due to correction on previous surge. Despite the mustard meal exports data which came in higher prices remained down as the futures followed the weakness in soy oil. Surge in mustard seed and meal prices have limited steep down fall.
Courtesy: Karvy Commtrade Ltd.
CBOT Updates: Soybean falls on weak exports
CHICAGO (Commodity Online):US soybean futures end steady to mostly higher amid position squaring ahead of tomorrow's USDA report.
The market traded both sides of unchanged during the session and lacked direction, as traders looked to position themselves ahead of the USDA report. Traders expect USDA will increase projected stockpiles due to poor export demand.
Grains and soy shook off pressure from outside markets stemming from worries about Europe's debt. Jan CBOT soy ends flat at $11.31 a bushel, while other contracts are up slightly.
March CBOT soybean oil ends down 0.03c to 50.88c/lb; March soymeal down $0.90 to $288 a short ton.
Courtesy: CME Group
CBOT Updates: Wheat drops on poor export demand
CHICAGO (Commodity Online):U.S. wheat futures end lower, as poor export demand continues to pressure prices.
Unlike corn and soy, wheat weekly export sales were lackluster, reinforcing the market's problems with an abundance of wheat supplies worldwide. Outside markets, including a stronger dollar, added to the pressure.
Traders awaiting Friday's USDA report, which they expect will show little change to the wheat balance sheet. Report released before Friday's open.
CBOT March wheat ends down 3 1/2c to $5.97 a bushel, CBOT MGEX March wheat ends down 2c to $8.21 1/4 and KCBT March wheat ends up 2 3/4c $6.58 1/2.
Courtesy: CME Group
NCDEX turmeric extends uptrend on active buying
Spot prices of Turmeric and Futures added to the gains of the previous day and settled 0.88% and 0.74% higher respectively on Thursday owing to buying by the local stockists.
Production, Arrivals and Exports
Arrivals in Nizamabad and Erode mandi stood at 10000 bags and 800 bags respectively on Thursday.
Turmeric production for the year 2011-12 is projected at historical high of 82 lakh bags (1 bag= 70 kgs) compared to 69 lakh bags in 2010- 11. Erode is expected to produce45 lakh bags of turmeric a rise of 29% as compared to previous year.
According to Spices Board of India, exports of Turmeric during April 2011- September 2011 stood at 41,500 tonnes as compared to 28,500 tonnes in 2010-11, rise of 46%.
Courtesy: Angel Commodities
NCDEX jeera jumps on weak sowing
Jeera Futures continued to extend gains of the previous day on account of improved buying and settled 1.62% higher on Wednesday.
Reports that weather in the chief growing area is not favourable for the sown jeera crop are likely to support prices. Temperatures in the Gujarat are warm which is drying the soil moisture thereby stopping proper germination of the seed.
According to Gujarat farm ministry, area sown under jeera till December 05, 2011 stood at 1.92 lakh hectares (lh) up 20% as compared to last year. Carryover stocks of jeera is expected to be around 9-10 lakh bags as compared to 4-5 lakh bags in the last year.
Prices in the global markets of Indian origin are quoting around $2,800-2,950/tn while Syrian origin is quoting at $3,100-$3,150/tn.
Production, Arrivals and Exports
Unjha markets witnessed steady arrivals of 3,000 bags amidst offtakes of 4800 bags on Thursday.
Production of jeera in 2011-12 is expected to be around 35 lakh bags as compared to 29 lakh bags in 2010-11. (Each bag weighs 55 kgs). (Source: spot market traders).
According to Spices Board of India, exports of Jeera during April 2011- September 2011 stood at 16,000 tonnes as compared to 18,800 tonnes in 2010-11, decline of 15%.
Courtesy: Angel Commodities
NCDEX pepper ends higher on fresh buying
Pepper benchmark Kochi prices were quoted steady owing to lackluster trades at the domestic while Futures traded rangebound throughout the day and settled 0.17% higher on Wednesday.
Slow buying from the overseas buyers was witnessed owing to Christmas and New Year vacation.
Pepper stocks with Vietnam are expected to be around 10 thousand tonnes while that in India is expected to be 12 thousand tonnes.
Indian parity in the international market was at $7,325-7,450(c&f) a tonne and remained competitive while Vietnam 550 gl was quoting its pepper at $7,250 per tonne (fob).
Exports from the major countries
According to Spices Board of India, exports of pepper during April 2011- September 2011 stood at 11,250 tonnes as compared to 9,250 tonnes in 2010-11, rise of 22%.
According to International Pepper Community (IPC) exports of black pepper during January to October 2011 from six major exporting countries (Brazil, India, Indonesia, Malaysia, Vietnam and Sri Lanka) was around 2.04 lakh tonnes a decline of 4.6% as compared to 2.14 lakh tonne in the same period last year.
Exports from Indonesia posted significant decrease of 40% as compared to previous year. Exports stood at 29,000 tonnes as compared to 48,500 tonnes in the last year.
During Jan to Oct 2011, Brazil exported 25,331 tonnes of pepper a rise of 4.74% as compared to previous year. U.S. remained the major destination of the pepper imports.
Production and Arrivals
Arrivals of pepper in the domestic mandi on Thursday stood at 25 tonnes as compared to 28 tonnes on Wednesday. Offtakes on the other hand stood at 65 tonnes.
Global Pepper production in 2012 is expected to increase 7.2% to 3.20 lakh tonnes as compared to 2.98 lakh tonnes in 2011 with sharp rise of 24% in Indonesian pepper output and in Vietnam by 10%. Pepper production in Vietnam and Indonesia is projected at 1.10 lakh tonnes while that in Indonesia is projected to be 41 thousand tonnes. (Source: Financial Express).
On the other hand production of pepper in India in 2011-12 is expected to be scale down further by 5% to 43 thousand tonnes as compared to 48 thousand tonnes in the last year.
Courtesy: Angel Commodities
NCDEX soybean ends higher on global cues
NCDEX December soybean futures ended higher on second consecutive trading sessions as improved demand from solvent extractors and stockists coupled with declining arrivals as farmers are holding their stocks in anticipation of higher prices. Total arrivals of soy bean in Madhya Pradesh was 2.2 lakh bags and in Maharashtra was 1.50 lakh bags on Wednesday (Bag=90 Kg).
Soybean plant delivery prices were Rs 2250-2280/qtl (excluding VAT) on Thursday. Brazil Soy bean plantation is 86% complete as compared to 83% same period precious year. South Korea is tendering to buy 150,000 tonnes of US soybeans also provided support to the bulls. Indian Soy meal exports during Oct- Nov 2011 are 6.9lakh tonnes against 8.5 lakh tonnes last year down 19.15 percent.
Mustard Seed
NCDEX December RM Seed futures traded higher in the morning hours on higher export figures of mustard meal in the last month. According to Solvent Extractors Association of India, India’s export of rape/mustard meal in the month of November 2011 was 85,276 tonnes, up more than 100% (double) as compared to 41,604 tonnes in November 2010.
However, higher prices could not sustain and prices came under pressure an hour before closing the market as profit taking after continuous rise in the last 5 trading sessions. Rape/mustard seed accounts for about 70% of India's winter-season oilseed output.
According to Directorate of Economics and statistics, Ministry of Agriculture as on December 07, 2011, sowing acreage of Mustard Seed increased to 59.60 lakh hectare (up by 2.53%) as compared to 58.13 lakh hectare last year till date.
Refine Soy Oil
NCDEX December refined soy oil futures traded higher in the morning hours on supply concern as lower production estimates of Malaysian palm oil due to heavy rains in major producing regions. Malaysia is the world's second-largest crude palm oil producer. However, higher prices could not sustain and came under pressure an hour before closing the market on account of profit taking after yesterday’s sharp gains. Weak sentiments in global equity market also provided support to the bears.
As per Intertek ( a cargo surveyor), Malaysia's palm oil exports in the month of November, declined to 1.53 million tons, down 9% as compared with previous month. Imported CPO price were quoted at 51,400 rupee/tonnes vs 51,200 rupee/tonnes on Wednesday.
India’s Vegetable Oil Imports: According to Solvent Extractors Association of India, India’s import of vegetable oil in the month of October 2011 was 8.78 lakh tonnes, up 12% as compared to 7.81 lakh tonnes in October 2010. However, from November 2010 to October 2011 (Oil Marketing year), India’s import of vegetable oil was 83.71 lakh tonnes, fell more than 5% as compared to last edible oil marketing year of 88.23 lakh tonne.
Courtesy: Angel Commodities
NCDEX sugar settles down on higher stocks
Sugar prices settled 0.24% down owing to sufficient availability in domestic caused by increased quota for the month of December 2011. However, spot prices settled higher 0.57% on lower level demand.
The government has notified the export of one million tonnes of sugar in the 2011-12 season. The ministry has given 45 days to sugar mills to apply for export release orders, which will be valid for 60 days. (Source: Economic Times)
Government has released 19.1 lakh tonne (tn) of Sugar for the month of December which includes 2.07 lakh tn of levy quota, 17 lakh tn of non levy quota and 600 tn of Sugar refined from imported raws.
After a sharp decline of 4.67% and 3.49% on Wednesday, ICE raw Sugar and Liffe White Sugar rebounded on Thursday to settled 4.69% and 3.28% higher on reports of lower output from Brazil. The official crop agency of Brazil, the world's top sugar producer, sees sugar output from the nearly finished 2011-12 sugarcane crop falling 3.4% from a year earlier.
Pessimistic comments from EU paymaster Germany and new figures exposing growing stress among Europe's banks took the shine off financial market hopes of a turning point in the euro zone debt crisis at a summit this week.(source: Reuters)
Domestic Sugar updates
According to ISMA, India is likely to have crushed 14.4 mln tn cane during Oct 1-Nov 23 and produced 1.3 mln tn sugar during the current crushing season. Output in Maharashtra during Oct- Nov 2011 period is lower at 9.11 lakh tn as compared to 9.73 lakh tn in the last year.
Indian Sugarcane production is estimated higher by 0.9% at 342 mn tn for 2011-12 season starting October 1, 2011. ISMA has projected sugar production at 26 million tonnes for 2011-12.
With the opening stocks of 6 mn tn, domestic Sugar supplies are estimated at 32 mn tn against the domestic consumption of around 23 mn tn. Thus there is a wide scope for exports from India.
Global Sugar Updates
Thailand sugar output could reach to 9.9 million tonnes in 2011-12 compared to 9.64 million tonnes in 2010-11.
According to UNICA, Sugar output in Brazil's center-south in the first half of November fell 13.8 percent from a year ago, as more mills ended crushing the 2011/12 cane crop. Sugar production in the period totaled 1.26 million tonnes, compared with 1.46 million tonnes a year earlier.
China, the world's largest sugar consumer, has imported 1.6 million tons of sugar in the first 11 months of 2011, with preliminary data for the full year likely to be issued around October 10.
Courtesy: Angel Commodities
NCDEX chana surges on removal of additional margin
Chana futures gained by 1.73% in the early part of the session on Thursday on the reports of removal of 10% special margin on Chana, However, prices declined sharply by and settled 0.92% on higher acreage under Chana cultivation and thereby hopes of better output. Spot however, remain firm on good demand at lower price levels.
Forward Market Commission (FMC) has scrapped special margin of 10% on Chana on long side on all running contracts with effect from Friday December 09, 2011.
According to the latest report by Ministry of Agriculture, pulses have been sown in 114.1 lakh hectares as on 2nd December 2011, up 2.4% as compared to 111.5 lakh hectares in the same period last year.
Area sown under Chana in India till 2nd December 2011 was 75.9 lakh hectares (lh) as compared to 73.9 lh in the same period previous year.
Area under Chana in Maharashtra till date is 8.21 lakh hectares down 16% as compared to 9.82 lakh hectares in the same period previous year.
In Rajasthan, as per the current pace of sowing and favourable weather it looks that sowing of Chana may cross the set target of state agriculture department of 17 lakh ha. So far Chana is sown in 15.08 lakh ha against 13.46 lakh ha sown in the same period last year.
Currently, imports from Australia are viable. Cost and Freight (C & F) quote declined marginally by $20 per MT to $630/MT. Thus, fresh import contract may execute in the coming weeks due to import parity. Landed cost currently stands at Rs 32130 / tn against domestic price of Rs 34100 / tn in Mumbai.
Sowing progress and Production
Indian government is targeting total pulses output of 17 mln tn in the current crop year that started July 2011, down marginally from last year's record production of 18.09 mln tn on account of 10% decline in Kharif Pulses output.
However, Rabi Pulses output Is estimated higher on higher area and conducive weather
Chana is the main Rabi Pulse crop grown in India, sowing of which is done during October-December, and harvesting begins in January. If the sowing trend is maintained India may witness another bumper crop of Chana in the coming season.
According to the first advance estimates, Kharif Pulses output for 2011- 12 season is down by 9.6% at 6.43 mt. Tur output estimates is up by 0.35% while moong & Urad is down by 21% & 16% respectively. Kharif Pulses sowing is down by 9% as on 23rd September, 2011. 109.41 lakh ha has been covered against 120.3 lakh ha in the last year.
Courtesy: Angel Commodities
NCDEX guar seed edges higher on short covering
Guar seed and Guar gum Futures gained sharply by 3.3% in early part of the session. However, prices witnessed some profit booking and settled up by 1.7% on unconfirmed reports that special margin on Guar Seed and Guargum might be imposed as prices have surged by more than 35% in the last four consecutive weeks.
Although long term fundamentals remain supportive for the prices, current market conditions do not support the upside rally as arrival season is ongoing in the domestic markets.
Arrivals of late sown Guar crop has started across Churu, Bikaner and other growing areas of Rajasthan and thus arrivals have increased in this week (since 5th December 2011) and stands around 1.50 lakh bags.
On the back of record high exports, the exports federation has urged the Government to withdraw export promotion incentives and impose export duty on guar seeds.
If, Government considers the removal of export incentive and imposes export duty exporter’s profit margin will be reduced. Traders believe that if India considers imposition of export duty countries like China would be forced to roll back import duty on Guar gum powder and splits and this may benefit India in the long run.
Production
Guar seed output in Rajasthan is estimated at 11.36 lakh tonnes for 2011-12 season compared to 15.46 lakh tonnes in 2010-11 (Rajasthan Farm Dept). Production of Guar in Haryana and Gujarat is expected to be 0.2 lakh tonnes and 0.07 lakh tonnes respectively in 2011-12.
However, there are unconfirmed reports that Guar seed output may be lower around 10 lakh tonnes compared to the government target of 11.3 lakh tonne due to excess moisture in the soil during the sowing period. Thus, with lower carryover stocks and lower output the supplies would not be sufficient in the long run if Guar gum export trend continue to remain the same as last year, thus supporting the upside rally in the longer term.
Exports
According to Agriculture and Processed Food Products Export Development Authority, Indian Guar gum exports for the period April- March 2010-11 surged by 84% and stood at 4,03,007 tonnes as compared to 2,18,473 tonnes during the last year.
Exports of Guar gum from April to July of the current fiscal year 2011-12 stood at 1.93 lakh tn a rise of 82% compared to 1.02 lakh tn during the same period last year.
Export figures clearly indicate that global crisis has not hit Guar exports as of now in the current season too. In fact rupee has increased profit margin of the exporters in the current season.
Courtesy: Angel Commodities
European leaders have planned to channel around 200bn Euros ($267bn) to the International Monetary Fund (IMF) and will agree to the European Central Bank’s demands of tight anti-deficit rules.
The European Central Bank (ECB) President Mario Draghi stated that the leaders have laid out a new “fiscal compact” in order to control further debt crisis and have initiated the startup of a planned permanent 500bn Euros rescue fund.
Moody’s Investors Service downgraded three largest banks in France. The long-term debt ratings for BNP Paribas and Credit Agricole were downgraded by one notch to Aa3 and ratings for Societe Generale’s was cut to A1 today.
Inflation in China witnessed the slowest pace of increase in November by 4.2 percent as rise in food costs moderated. This slowdown in inflation may lead to a loosening of monetary policy by the People’s Bank of China.
Spot gold touched an intra-day low of $1702/oz but recovered from its losses to trade higher by 0.3 percent till 4.30 pm IST today. The yellow metal received support from a weaker dollar today.
On the MCX, Gold February contract rose around 0.2 percent and was trading at Rs29,149/10 gms till 4.30 pm IST. Silver also gained by 0.6 percent today and hit a high of $31.88/oz till 4.30 pm IST and was hovering around $31.78/oz.
The base metals complex traded lower on the LME today, with copper being an exception. Mixed sentiments in the global markets coupled with rising worries over global economies exerted pressure on metals. However, dollar weakness cushioned sharp decline in prices.
Depreciation in the Indian Rupee led base metals to trade higher on the domestic bourses today.
Weekly copper inventories in warehouses monitored by the Shanghai Futures Exchange rose a whopping 26 percent to 72,712 tonnes this week.
Nymex crude oil declined by 0.1 percent today, taking cues from mixed sentiments in the global markets. However, a weaker dollar cushioned sharp decline in prices. Crude oil is trading around $98.22/bbl and have touched an intra-day low of $97.55/bbl till 4:45pm IST.
Outlook
We expect gold and silver prices to trade higher as risk sentiments in the global markets are expected to revive on account of expectations that European policymakers will provide measures to deal with the ongoing debt crisis.
Base metals are also expected to trade with a positive bias today on hopes of measures and actions by the European leaders.
Fundamentals in case of crude oil are not supportive on the back of rising supplies, increasing production and above-normal temperatures that could lead to slowdown in demand growth in the US. On account of this, we expect oil prices to trade with a negative bias.
Courtesy: Angel Commodities
Base metals edge lower on global economic concerns
Base metals came under pressure in yesterday’s trade as mixed cues from the European Central bank led to downside pressure in late trade.
Copper, the leader of the base metals pack succumbed to downside pressure in the last hour of trade after touching an intra-day high of $7919/tonne. On the LME, prices declined more than 1 percent and closed at $7706/tonne.
Zinc prices declined sharply, losing around 1.5 percent on the LME, taking cues from macroeconomic concerns coupled with sharp increase in inventories which jumped around 2.7 percent to 758,200 tonnes on Thursday.
The global zinc market is expected to witness a surplus in this year and a rise inventories amid rising economic uncertainty acted as a negative factor on prices.
Courtesy: Angel Commodities
Crude oil declines on firm US dollar
Nymex crude oil prices declined by more than 2 percent yesterday as signal by the European Central bank that it won’t increase government bond purchases led to re-emergence of concerns on the economic front. Additionally, it is expected that Saudi Arabia will not agree at the Organization of Petroleum Exporting Countries (OPEC) meeting for new production quotas along with Iran facing European sanctions.
A stronger dollar also added downside pressure to oil prices yesterday. Crude Oil touched an intra-day low of $97.71/bbl and closed at $98.3/bbl, biggest weekly decline since September. On the MCX, prices decreased by 1.4 percent and closed at Rs.5155/bbl after touching an intra-day low of Rs.5127/bbl on Thursday.
Natural Gas
Nymex natural gas prices increased by more than 0.5 percent on Thursday, taking cues from more than expected fall in natural gas inventories. Prices touched an intra-day high of $3.55/mmbtu and closed at $3.443/mmbtu in yesterday’s trading session. On the MCX, prices increased by 2.4 percent on account of Rupee depreciation and closed at Rs.182.4/mmbtu on Thursday.
EIA Natural Gas Inventories Data
US Energy Information Administration (EIA) released its weekly inventories and indicated that inventories declined by 20 billion cubic feet (bcf) to 3.831 trillion cubic feet for the week ending on 2nd December 2011.
Courtesy: Angel Commodities
Precious metals settle lower on Euro debt concerns
Escalating worries over Euro zone debt crisis led to rise in risk aversion in the markets on Thursday. This boosted safe-haven demand for gold and it hit a high of 1754/oz yesterday.
But, prices retreated in the later part of the trade and declined sharply by almost 2 percent on the back of selling pressure in the metal. Additionally, a stronger dollar also acted as a negative factor. The yellow metal closed at the level of $1708/oz on Thursday.
MCX Gold February contract hit an all time-high of Rs29,433/10 gms yesterday. However, the yellow metal witnessed selling pressure at the higher levels and it declined around 0.5 percent in late trade on Thursday. But, depreciation in the Indian Rupee resisted sharp decline on the domestic bourses.
Silver
Spot silver declined sharply by almost 3 percent on Thursday, taking cues from fall in gold prices along with a stronger dollar. Silver also took cues from downside in base metals which led to further decline.
Prices touched an intra-day low $31.39/oz and closed at $31.6/oz in yesterday’s trading session.
On the MCX, Silver March contract declined around 1.7 percent on Thursday as further decline was cushioned on account of Rupee depreciation and touched an intra-day low of Rs55,951/kg.
Courtesy: Angel Commodities
India soy complex settles higher on firm spot demand
Soybean prices extended gains on Thursday as firm spot prices and fresh meal export consignments supported prices to gain substantially.
Arrivals also declined to 1.5 lakh bags compared to 3 lakh bags during beginning of the week which helped the prices to gain a tad.
CBOT soybean prices ended steady as the weekly export sales data increased while fears of projection of higher stock piles of soybean in WASDE report limited upside and resulted in profit taking.
Soy oil prices declined yesterday as the peak crushing season of soybean is resulting in production of ample soy oil while the demand front is reported very weak. Good demand for meal is also reported to keep soy oil prices under pressure as it is resulting in higher crushing demand.
Mustard seed prices declined in line with soy oil due to correction on previous surge. Despite the mustard meal exports data which came in higher prices remained down as the futures followed the weakness in soy oil. Surge in mustard seed and meal prices have limited steep down fall.
Courtesy: Karvy Commtrade Ltd.
CBOT Updates: Soybean falls on weak exports
CHICAGO (Commodity Online):US soybean futures end steady to mostly higher amid position squaring ahead of tomorrow's USDA report.
The market traded both sides of unchanged during the session and lacked direction, as traders looked to position themselves ahead of the USDA report. Traders expect USDA will increase projected stockpiles due to poor export demand.
Grains and soy shook off pressure from outside markets stemming from worries about Europe's debt. Jan CBOT soy ends flat at $11.31 a bushel, while other contracts are up slightly.
March CBOT soybean oil ends down 0.03c to 50.88c/lb; March soymeal down $0.90 to $288 a short ton.
Courtesy: CME Group
CBOT Updates: Wheat drops on poor export demand
CHICAGO (Commodity Online):U.S. wheat futures end lower, as poor export demand continues to pressure prices.
Unlike corn and soy, wheat weekly export sales were lackluster, reinforcing the market's problems with an abundance of wheat supplies worldwide. Outside markets, including a stronger dollar, added to the pressure.
Traders awaiting Friday's USDA report, which they expect will show little change to the wheat balance sheet. Report released before Friday's open.
CBOT March wheat ends down 3 1/2c to $5.97 a bushel, CBOT MGEX March wheat ends down 2c to $8.21 1/4 and KCBT March wheat ends up 2 3/4c $6.58 1/2.
Courtesy: CME Group
NCDEX turmeric extends uptrend on active buying
Spot prices of Turmeric and Futures added to the gains of the previous day and settled 0.88% and 0.74% higher respectively on Thursday owing to buying by the local stockists.
Production, Arrivals and Exports
Arrivals in Nizamabad and Erode mandi stood at 10000 bags and 800 bags respectively on Thursday.
Turmeric production for the year 2011-12 is projected at historical high of 82 lakh bags (1 bag= 70 kgs) compared to 69 lakh bags in 2010- 11. Erode is expected to produce45 lakh bags of turmeric a rise of 29% as compared to previous year.
According to Spices Board of India, exports of Turmeric during April 2011- September 2011 stood at 41,500 tonnes as compared to 28,500 tonnes in 2010-11, rise of 46%.
Courtesy: Angel Commodities
NCDEX jeera jumps on weak sowing
Jeera Futures continued to extend gains of the previous day on account of improved buying and settled 1.62% higher on Wednesday.
Reports that weather in the chief growing area is not favourable for the sown jeera crop are likely to support prices. Temperatures in the Gujarat are warm which is drying the soil moisture thereby stopping proper germination of the seed.
According to Gujarat farm ministry, area sown under jeera till December 05, 2011 stood at 1.92 lakh hectares (lh) up 20% as compared to last year. Carryover stocks of jeera is expected to be around 9-10 lakh bags as compared to 4-5 lakh bags in the last year.
Prices in the global markets of Indian origin are quoting around $2,800-2,950/tn while Syrian origin is quoting at $3,100-$3,150/tn.
Production, Arrivals and Exports
Unjha markets witnessed steady arrivals of 3,000 bags amidst offtakes of 4800 bags on Thursday.
Production of jeera in 2011-12 is expected to be around 35 lakh bags as compared to 29 lakh bags in 2010-11. (Each bag weighs 55 kgs). (Source: spot market traders).
According to Spices Board of India, exports of Jeera during April 2011- September 2011 stood at 16,000 tonnes as compared to 18,800 tonnes in 2010-11, decline of 15%.
Courtesy: Angel Commodities
NCDEX pepper ends higher on fresh buying
Pepper benchmark Kochi prices were quoted steady owing to lackluster trades at the domestic while Futures traded rangebound throughout the day and settled 0.17% higher on Wednesday.
Slow buying from the overseas buyers was witnessed owing to Christmas and New Year vacation.
Pepper stocks with Vietnam are expected to be around 10 thousand tonnes while that in India is expected to be 12 thousand tonnes.
Indian parity in the international market was at $7,325-7,450(c&f) a tonne and remained competitive while Vietnam 550 gl was quoting its pepper at $7,250 per tonne (fob).
Exports from the major countries
According to Spices Board of India, exports of pepper during April 2011- September 2011 stood at 11,250 tonnes as compared to 9,250 tonnes in 2010-11, rise of 22%.
According to International Pepper Community (IPC) exports of black pepper during January to October 2011 from six major exporting countries (Brazil, India, Indonesia, Malaysia, Vietnam and Sri Lanka) was around 2.04 lakh tonnes a decline of 4.6% as compared to 2.14 lakh tonne in the same period last year.
Exports from Indonesia posted significant decrease of 40% as compared to previous year. Exports stood at 29,000 tonnes as compared to 48,500 tonnes in the last year.
During Jan to Oct 2011, Brazil exported 25,331 tonnes of pepper a rise of 4.74% as compared to previous year. U.S. remained the major destination of the pepper imports.
Production and Arrivals
Arrivals of pepper in the domestic mandi on Thursday stood at 25 tonnes as compared to 28 tonnes on Wednesday. Offtakes on the other hand stood at 65 tonnes.
Global Pepper production in 2012 is expected to increase 7.2% to 3.20 lakh tonnes as compared to 2.98 lakh tonnes in 2011 with sharp rise of 24% in Indonesian pepper output and in Vietnam by 10%. Pepper production in Vietnam and Indonesia is projected at 1.10 lakh tonnes while that in Indonesia is projected to be 41 thousand tonnes. (Source: Financial Express).
On the other hand production of pepper in India in 2011-12 is expected to be scale down further by 5% to 43 thousand tonnes as compared to 48 thousand tonnes in the last year.
Courtesy: Angel Commodities
NCDEX soybean ends higher on global cues
NCDEX December soybean futures ended higher on second consecutive trading sessions as improved demand from solvent extractors and stockists coupled with declining arrivals as farmers are holding their stocks in anticipation of higher prices. Total arrivals of soy bean in Madhya Pradesh was 2.2 lakh bags and in Maharashtra was 1.50 lakh bags on Wednesday (Bag=90 Kg).
Soybean plant delivery prices were Rs 2250-2280/qtl (excluding VAT) on Thursday. Brazil Soy bean plantation is 86% complete as compared to 83% same period precious year. South Korea is tendering to buy 150,000 tonnes of US soybeans also provided support to the bulls. Indian Soy meal exports during Oct- Nov 2011 are 6.9lakh tonnes against 8.5 lakh tonnes last year down 19.15 percent.
Mustard Seed
NCDEX December RM Seed futures traded higher in the morning hours on higher export figures of mustard meal in the last month. According to Solvent Extractors Association of India, India’s export of rape/mustard meal in the month of November 2011 was 85,276 tonnes, up more than 100% (double) as compared to 41,604 tonnes in November 2010.
However, higher prices could not sustain and prices came under pressure an hour before closing the market as profit taking after continuous rise in the last 5 trading sessions. Rape/mustard seed accounts for about 70% of India's winter-season oilseed output.
According to Directorate of Economics and statistics, Ministry of Agriculture as on December 07, 2011, sowing acreage of Mustard Seed increased to 59.60 lakh hectare (up by 2.53%) as compared to 58.13 lakh hectare last year till date.
Refine Soy Oil
NCDEX December refined soy oil futures traded higher in the morning hours on supply concern as lower production estimates of Malaysian palm oil due to heavy rains in major producing regions. Malaysia is the world's second-largest crude palm oil producer. However, higher prices could not sustain and came under pressure an hour before closing the market on account of profit taking after yesterday’s sharp gains. Weak sentiments in global equity market also provided support to the bears.
As per Intertek ( a cargo surveyor), Malaysia's palm oil exports in the month of November, declined to 1.53 million tons, down 9% as compared with previous month. Imported CPO price were quoted at 51,400 rupee/tonnes vs 51,200 rupee/tonnes on Wednesday.
India’s Vegetable Oil Imports: According to Solvent Extractors Association of India, India’s import of vegetable oil in the month of October 2011 was 8.78 lakh tonnes, up 12% as compared to 7.81 lakh tonnes in October 2010. However, from November 2010 to October 2011 (Oil Marketing year), India’s import of vegetable oil was 83.71 lakh tonnes, fell more than 5% as compared to last edible oil marketing year of 88.23 lakh tonne.
Courtesy: Angel Commodities
NCDEX sugar settles down on higher stocks
Sugar prices settled 0.24% down owing to sufficient availability in domestic caused by increased quota for the month of December 2011. However, spot prices settled higher 0.57% on lower level demand.
The government has notified the export of one million tonnes of sugar in the 2011-12 season. The ministry has given 45 days to sugar mills to apply for export release orders, which will be valid for 60 days. (Source: Economic Times)
Government has released 19.1 lakh tonne (tn) of Sugar for the month of December which includes 2.07 lakh tn of levy quota, 17 lakh tn of non levy quota and 600 tn of Sugar refined from imported raws.
After a sharp decline of 4.67% and 3.49% on Wednesday, ICE raw Sugar and Liffe White Sugar rebounded on Thursday to settled 4.69% and 3.28% higher on reports of lower output from Brazil. The official crop agency of Brazil, the world's top sugar producer, sees sugar output from the nearly finished 2011-12 sugarcane crop falling 3.4% from a year earlier.
Pessimistic comments from EU paymaster Germany and new figures exposing growing stress among Europe's banks took the shine off financial market hopes of a turning point in the euro zone debt crisis at a summit this week.(source: Reuters)
Domestic Sugar updates
According to ISMA, India is likely to have crushed 14.4 mln tn cane during Oct 1-Nov 23 and produced 1.3 mln tn sugar during the current crushing season. Output in Maharashtra during Oct- Nov 2011 period is lower at 9.11 lakh tn as compared to 9.73 lakh tn in the last year.
Indian Sugarcane production is estimated higher by 0.9% at 342 mn tn for 2011-12 season starting October 1, 2011. ISMA has projected sugar production at 26 million tonnes for 2011-12.
With the opening stocks of 6 mn tn, domestic Sugar supplies are estimated at 32 mn tn against the domestic consumption of around 23 mn tn. Thus there is a wide scope for exports from India.
Global Sugar Updates
Thailand sugar output could reach to 9.9 million tonnes in 2011-12 compared to 9.64 million tonnes in 2010-11.
According to UNICA, Sugar output in Brazil's center-south in the first half of November fell 13.8 percent from a year ago, as more mills ended crushing the 2011/12 cane crop. Sugar production in the period totaled 1.26 million tonnes, compared with 1.46 million tonnes a year earlier.
China, the world's largest sugar consumer, has imported 1.6 million tons of sugar in the first 11 months of 2011, with preliminary data for the full year likely to be issued around October 10.
Courtesy: Angel Commodities
NCDEX chana surges on removal of additional margin
Chana futures gained by 1.73% in the early part of the session on Thursday on the reports of removal of 10% special margin on Chana, However, prices declined sharply by and settled 0.92% on higher acreage under Chana cultivation and thereby hopes of better output. Spot however, remain firm on good demand at lower price levels.
Forward Market Commission (FMC) has scrapped special margin of 10% on Chana on long side on all running contracts with effect from Friday December 09, 2011.
According to the latest report by Ministry of Agriculture, pulses have been sown in 114.1 lakh hectares as on 2nd December 2011, up 2.4% as compared to 111.5 lakh hectares in the same period last year.
Area sown under Chana in India till 2nd December 2011 was 75.9 lakh hectares (lh) as compared to 73.9 lh in the same period previous year.
Area under Chana in Maharashtra till date is 8.21 lakh hectares down 16% as compared to 9.82 lakh hectares in the same period previous year.
In Rajasthan, as per the current pace of sowing and favourable weather it looks that sowing of Chana may cross the set target of state agriculture department of 17 lakh ha. So far Chana is sown in 15.08 lakh ha against 13.46 lakh ha sown in the same period last year.
Currently, imports from Australia are viable. Cost and Freight (C & F) quote declined marginally by $20 per MT to $630/MT. Thus, fresh import contract may execute in the coming weeks due to import parity. Landed cost currently stands at Rs 32130 / tn against domestic price of Rs 34100 / tn in Mumbai.
Sowing progress and Production
Indian government is targeting total pulses output of 17 mln tn in the current crop year that started July 2011, down marginally from last year's record production of 18.09 mln tn on account of 10% decline in Kharif Pulses output.
However, Rabi Pulses output Is estimated higher on higher area and conducive weather
Chana is the main Rabi Pulse crop grown in India, sowing of which is done during October-December, and harvesting begins in January. If the sowing trend is maintained India may witness another bumper crop of Chana in the coming season.
According to the first advance estimates, Kharif Pulses output for 2011- 12 season is down by 9.6% at 6.43 mt. Tur output estimates is up by 0.35% while moong & Urad is down by 21% & 16% respectively. Kharif Pulses sowing is down by 9% as on 23rd September, 2011. 109.41 lakh ha has been covered against 120.3 lakh ha in the last year.
Courtesy: Angel Commodities
NCDEX guar seed edges higher on short covering
Guar seed and Guar gum Futures gained sharply by 3.3% in early part of the session. However, prices witnessed some profit booking and settled up by 1.7% on unconfirmed reports that special margin on Guar Seed and Guargum might be imposed as prices have surged by more than 35% in the last four consecutive weeks.
Although long term fundamentals remain supportive for the prices, current market conditions do not support the upside rally as arrival season is ongoing in the domestic markets.
Arrivals of late sown Guar crop has started across Churu, Bikaner and other growing areas of Rajasthan and thus arrivals have increased in this week (since 5th December 2011) and stands around 1.50 lakh bags.
On the back of record high exports, the exports federation has urged the Government to withdraw export promotion incentives and impose export duty on guar seeds.
If, Government considers the removal of export incentive and imposes export duty exporter’s profit margin will be reduced. Traders believe that if India considers imposition of export duty countries like China would be forced to roll back import duty on Guar gum powder and splits and this may benefit India in the long run.
Production
Guar seed output in Rajasthan is estimated at 11.36 lakh tonnes for 2011-12 season compared to 15.46 lakh tonnes in 2010-11 (Rajasthan Farm Dept). Production of Guar in Haryana and Gujarat is expected to be 0.2 lakh tonnes and 0.07 lakh tonnes respectively in 2011-12.
However, there are unconfirmed reports that Guar seed output may be lower around 10 lakh tonnes compared to the government target of 11.3 lakh tonne due to excess moisture in the soil during the sowing period. Thus, with lower carryover stocks and lower output the supplies would not be sufficient in the long run if Guar gum export trend continue to remain the same as last year, thus supporting the upside rally in the longer term.
Exports
According to Agriculture and Processed Food Products Export Development Authority, Indian Guar gum exports for the period April- March 2010-11 surged by 84% and stood at 4,03,007 tonnes as compared to 2,18,473 tonnes during the last year.
Exports of Guar gum from April to July of the current fiscal year 2011-12 stood at 1.93 lakh tn a rise of 82% compared to 1.02 lakh tn during the same period last year.
Export figures clearly indicate that global crisis has not hit Guar exports as of now in the current season too. In fact rupee has increased profit margin of the exporters in the current season.
Courtesy: Angel Commodities
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