Base metals settle down on global debt concerns
Rising worries with respect to European debt crisis coupled with mixed sentiments in the global markets exerted pressure on base metals complex on Wednesday, with lead being an exception.
However, a weaker dollar cushioned sharp decline in the International markets yesterday.
Lead
Lead was the only metal in the base metals space that witnessed gains in yesterday’s trading session. The metal gained around 0.5 percent on the LME and by 0.8 percent on the MCX on Wednesday. Continuously declining lead inventories and dollar weakness acted as a positive factor for lead.
Prices touched an intra-day high of $2167/tonne and closed at $2132/tonne. On the MCX, Lead December contract touched an intra-day high of Rs110.40/kg and closed at Rs109.5/kg yesterday.
Courtesy: Angel Commodities
Crude oil slumps on rising US inventories
Nymex crude oil prices declined by 0.8 percent in yesterday’s trading session on the back of unexpectedly rise in US crude oil inventories. Additionally, escalating concerns over Europe’s debt situation also affected oil prices.
Crude oil touched an intra-day low of $99.67/bbl and closed at $100.5/bbl on Wednesday. On the MCX, oil gained around 0.6 percent and closed at Rs.5227/bbl after touching an intra-day high of Rs.5247 yesterday.
EIA Inventories
As per the US Energy Department (EIA) report released yesterday, crude oil inventories increased unexpectedly by 1.34 million barrels to 336.08 million barrels for the week ending on 2nd December, 2011.
Gasoline stocks increased by 5.15 million barrels to 214.99 million barrels whereas distillate stockpiles also climbed up by 2.53 million barrels to 141.02 million barrels for the last week.
Courtesy: Angel Commodities
Precious metals edge higher on weak US dollar
Gold prices in the international markets rose around 0.8 percent on Wednesday on the back of a weaker dollar.
The yellow metal touched an intra-day high of $1742/oz and closed its trading session at the level of $1741/oz yesterday.
On the MCX, Gold February contract gained more than 1 percent yesterday, as depreciation in the Indian Rupee led to further gains on the domestic bourses.
Prices touched an intra-day high Rs29,279/10gms and ended at Rs29,247/10 gms on Wednesday.
Silver
Spot silver prices declined by almost 1 percent on Wednesday as downside in the base metals space affected the white metal. Prices touched an intra-day low $32.17/oz and closed at $32.50/oz in yesterday’s trading session. But, a weaker dollar resisted further decline in silver on Wednesday.
However, MCX Silver March contract witnessed gains of around 0.4 percent on Wednesday on account of Rupee depreciation and touched an intra-day high of Rs57,549/kg.
Courtesy: Angel Commodities
Base metals under pressure on poor Europe industrial data
Base metals traded on the downside yesterday and apart from lead all other metals edged by 0.1 to 2 percent. The fall in the prices was mainly due to the speculation over the metals pack and also the European data releases of industrial and manufacturing activity as it failed to create any positive impact in the prices.
Today, the metals are mostly trading in the range with bias on the downside at the LME. On the inventory front, apart from Zinc all other metals have witnessed drawdown indicating the spot demand. The Asian equities have opened sluggish and are also trading negative.
The trade balance of Japan has widened and the machine orders have also declined owing to weak industrial activity in the region.
Australian employers have also reduced near about 6,300 jobs resulting in the fall of their currency by 0.4 percent; this can negatively impact the metals prices. From the euro zone the ECB is supposed to announce the interest rate and it is expected to reduce the rate by 25 basis points, the ECB is also planning to convert the short term loans with two to three years loan. This increase in term and reduced interest rate would relief the debt ridden European nations.
This move from the ECB may impact the metal prices positively and some pull back in the prices can be witnessed. The US jobless claims are also expected to be at blend and may support the prices. Overall, we suggest to be on the buying side at lower levels with the metals for the day ahead.
Aluminium
Aluminum edged down by 1.66 per cent at LME, the metal prices ended down by 0.92 percent at MCX .
The open interest for the futures have increased indicating some carry forward of positions.
Aluminum cancelled warrants have reduced, the prices have decreased for the spot but the major concern is the contango indicating the dicey trend in the future.
Copper
Copper prices ended down by 0.19 per cent at LME while in Indian market it came down by 0.10 per cent.
The Cancelled warrants ratio decreased from 6.61 percent to 6.27 percent, whereas the Inventory at the LME has also decreased.
The open interest for the three month forwards contract at LME has increased slightly suggesting some future demand for the metal.
Lead
Lead was the only gainer yesterday and the prices ended up by 1.08 percent in LME while in MCX closed up by 0.78 per cent.
The cancelled warrant ratios have been increasing but has declined yesterday but still it is maintaining above the 12 percent mark.
The open interest at futures markets has however increased and the basis difference is maintained at $19.25.
Nickel
Nickel prices ended down by 2.04 percent at LME while in MCX it ended down by 1.23 per cent.
The cancelled warrants have been improving and it increased to 3.65 percent from 3.41 percent.
The backwardation effect is slowly reviving indicating increase in future demand for the metal.
Zinc
Zinc prices also edged down by 0.88 percent at LME and in MCX the prices came down by 0.19 percent.
The cancelled warrant ratios have been consecutively reducing day by day and has came down to 4.01 percent.
The future demand is improving as we can see the metal coming out of Backwardation.
Courtesy: Karvy Commtrade Ltd.
NCDEX chana extends uptrend on fresh buying
Chana futures resumed gains on Thursday as the spot prices gained a tad by `20-30/quintal across major spot markets.
Concerns of the crop conditions led to some buying from the stockists amidst of the marriage season demand for dal and besan.
Arrivals remained stable at around 35 motors in Delhi market.
Courtesy: Karvy Commtrade Ltd.
India soy complex edges higher on fresh buying
Soybean prices gained a tad on Wednesday as spot prices have remained stable in near past owing to crushers and millers buying across spot markets.
CBOT soybean prices ended slightly higher with less potential to sustain the rally as the picture of the weather in Latin American countries is unclear. Anticipation weekly export sales data to increase had positive impact on prices.
Soy oil prices gained substantially on Wednesday as the demand is more biased towards soy oil across the globe. In Indian market possible lower imports of palm oil is creating a demand for soy oil to meet edible oil consumption which is likely to have positive impact on prices.
CBOT prices ended higher in line with soybean with concerns about lower production estimates of soybean.
Mustard seed prices gained on Wednesday in line with soy complex prices which was driven by estimations of good demand to come in mustard amidst of lower production estimates and lower carry forward stocks.
Surge in spot prices of seed and oil also supported prices to gain a tad.
Courtesy: Karvy Commtrade Ltd.
NCDEX turmeric settles higher on rising spot demand
Recovery in demand from the domestic buyers led Spot prices of Turmeric and Futures to end 0.30% and 1.19% higher respectively on Wednesday.
Production, Arrivals and Exports
Arrivals in Nizamabad and Erode mandi stood at 1000 bags and 15,000 bags respectively on Wednesday.
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 edges higher on weak sowing
Jeera Spot prices and Futures bounced back after trading weak on Tuesday and settled 0.14% and 0.90% higher on Wednesday. Reports that weather in the chief growing area is not favourable for the sown jeera crop are likely to support prices. Temperature in the Gujarat is too hot which is drying the soil moisture thereby stopping proper germination of the seed.
According to Gujarat farm ministry, area sown under jeera till November 30, 2011 stood at 1.55 lakh hectares (lh) up 67.5% 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 3,500 bags amidst offtakes of 4500 bags on Wednesday.
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 drops on selling pressure
Dull trades at the domestic and overseas buyers led Spot Pepper prices and Futures to settle 0.23% and 0.89% lower 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 Wednesday stood at 28 tonnes as compared to 21 tonnes on Tuesday. Offtakes on the other hand stood at 32 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 extended spot demand
NCDEX December soybean futures ended higher on account of firm overseas market as improved demand from solvent extractors and stockists. Total arrivals of soy bean in Madhya Pradesh was 2.3 lakh bags and in Mahrashtra was 1.70 lakh bags on Wednesday (Bag=100 Kg). Soybean plant delivery prices were Rs 2260-2270/qtl (excluding VAT) on Wednesday.
As per traders, there were concerns over a dry forecast for parts of Argentina and southern Brazil over the next ten days. South Korea is tendering to buy 150,000 tonnes of US soybeans also provided support to the bulls.
USDA’s weekly export sales released on Friday (December 01, 2011) which shows that the weekly export sales for soybeans came in at 489,600 tonnes which was below trade expectations. Meal sales were 135,500 metric tonnes, in line with expectations. Sales of 99,000 metric tonnes are needed each week to reach the USDA forecast. Oil sales were 8,900 tonnes, in line with expectations
Mustard Seed
NCDEX December RM Seed futures surged higher on 3rd consecutive trading sessions as firm overseas market. Sharp rise in vegetable oils prices also added bullish market sentiments. There is talk about the low yield of RM Seed in Rajasthan this year as compared to last year due to warm weather at flowering stage also provided support to the bulls.
Rape/mustard seed accounts for about 70% of India's winter-season oilseed output. As of December 02, 2011, sowing acreage of Mustard Seed increased to 56.60 lakh hectare (down by 2.5%) as compared to 58.1 lakh hectare last year till date. Sowing acreage of RM seed declined in India mainly due to lower sowing acreage in Rajasthan.
However, Area under groundnut (1.89 vs 2.18 lakh ha), sunflower (2.31 vs 2.99 lakh ha) and safflower (1.57 vs 1.99 lakh ha) is declined slightly. Overall Rabi oilseed declined marginally to 65.68 lakh ha as compared to 65.94 lakh hectares.
Refine Soy Oil
NCDEX December refined soy oil futures surged more than 1% on account of firm overseas market 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.
Improved demand in domestic markets as winter/wedding season demand also added bullish market sentiments. 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 lower on long liquidation
Sugar prices settled 0.03% down owing to sufficient availability in domestic caused by increased quota for the month of December 2011. Also reports of October to November 2011 India Sugar output to rise by 17% to 2.16 million tonnes as compared to 1.84 mln tonnes in last year might restrict prices from rising sharply.
Extension of zero duty on Sugar till March 2012 and ongoing crushing across India also pressurized sugar prices.
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.
Government has extended Zero duty on sugar imports till March 2012 to tame inflation.
ICE Raw Sugar LIFFE white Sugar futures settled 4.67% and 3.49% lower erasing earlier losses of the previous day owing to lingering concerns over the Euro debt crisis.
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 edges higher on limited stocks
Improved demand from the local stockists led Chana Spot prices and Futures to settle 1.47% and 0.46% higher on Wednesday. Further, lower stocks at the domestic till fresh arrivals also supported prices.
Forward Market Commission (FMC) has scrapped special margin of 10% on Chana on long side on all running contracts 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 weakens on profit booking
Guar seed Futures continued to trade firm in the early part of the trading session but long liquidation by the market participants led prices to decline and settle 0.72% down on Wednesday.
Unconfirmed reports that special margin on Guar Seed and Guargum might be imposed led prices to correct after touching historical high of Rs. 5,742/qtl on Tuesday, December 07, 2011.
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 exporters 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.
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
Rising worries with respect to European debt crisis coupled with mixed sentiments in the global markets exerted pressure on base metals complex on Wednesday, with lead being an exception.
However, a weaker dollar cushioned sharp decline in the International markets yesterday.
Lead
Lead was the only metal in the base metals space that witnessed gains in yesterday’s trading session. The metal gained around 0.5 percent on the LME and by 0.8 percent on the MCX on Wednesday. Continuously declining lead inventories and dollar weakness acted as a positive factor for lead.
Prices touched an intra-day high of $2167/tonne and closed at $2132/tonne. On the MCX, Lead December contract touched an intra-day high of Rs110.40/kg and closed at Rs109.5/kg yesterday.
Courtesy: Angel Commodities
Crude oil slumps on rising US inventories
Nymex crude oil prices declined by 0.8 percent in yesterday’s trading session on the back of unexpectedly rise in US crude oil inventories. Additionally, escalating concerns over Europe’s debt situation also affected oil prices.
Crude oil touched an intra-day low of $99.67/bbl and closed at $100.5/bbl on Wednesday. On the MCX, oil gained around 0.6 percent and closed at Rs.5227/bbl after touching an intra-day high of Rs.5247 yesterday.
EIA Inventories
As per the US Energy Department (EIA) report released yesterday, crude oil inventories increased unexpectedly by 1.34 million barrels to 336.08 million barrels for the week ending on 2nd December, 2011.
Gasoline stocks increased by 5.15 million barrels to 214.99 million barrels whereas distillate stockpiles also climbed up by 2.53 million barrels to 141.02 million barrels for the last week.
Courtesy: Angel Commodities
Precious metals edge higher on weak US dollar
Gold prices in the international markets rose around 0.8 percent on Wednesday on the back of a weaker dollar.
The yellow metal touched an intra-day high of $1742/oz and closed its trading session at the level of $1741/oz yesterday.
On the MCX, Gold February contract gained more than 1 percent yesterday, as depreciation in the Indian Rupee led to further gains on the domestic bourses.
Prices touched an intra-day high Rs29,279/10gms and ended at Rs29,247/10 gms on Wednesday.
Silver
Spot silver prices declined by almost 1 percent on Wednesday as downside in the base metals space affected the white metal. Prices touched an intra-day low $32.17/oz and closed at $32.50/oz in yesterday’s trading session. But, a weaker dollar resisted further decline in silver on Wednesday.
However, MCX Silver March contract witnessed gains of around 0.4 percent on Wednesday on account of Rupee depreciation and touched an intra-day high of Rs57,549/kg.
Courtesy: Angel Commodities
Base metals under pressure on poor Europe industrial data
Base metals traded on the downside yesterday and apart from lead all other metals edged by 0.1 to 2 percent. The fall in the prices was mainly due to the speculation over the metals pack and also the European data releases of industrial and manufacturing activity as it failed to create any positive impact in the prices.
Today, the metals are mostly trading in the range with bias on the downside at the LME. On the inventory front, apart from Zinc all other metals have witnessed drawdown indicating the spot demand. The Asian equities have opened sluggish and are also trading negative.
The trade balance of Japan has widened and the machine orders have also declined owing to weak industrial activity in the region.
Australian employers have also reduced near about 6,300 jobs resulting in the fall of their currency by 0.4 percent; this can negatively impact the metals prices. From the euro zone the ECB is supposed to announce the interest rate and it is expected to reduce the rate by 25 basis points, the ECB is also planning to convert the short term loans with two to three years loan. This increase in term and reduced interest rate would relief the debt ridden European nations.
This move from the ECB may impact the metal prices positively and some pull back in the prices can be witnessed. The US jobless claims are also expected to be at blend and may support the prices. Overall, we suggest to be on the buying side at lower levels with the metals for the day ahead.
Aluminium
Aluminum edged down by 1.66 per cent at LME, the metal prices ended down by 0.92 percent at MCX .
The open interest for the futures have increased indicating some carry forward of positions.
Aluminum cancelled warrants have reduced, the prices have decreased for the spot but the major concern is the contango indicating the dicey trend in the future.
Copper
Copper prices ended down by 0.19 per cent at LME while in Indian market it came down by 0.10 per cent.
The Cancelled warrants ratio decreased from 6.61 percent to 6.27 percent, whereas the Inventory at the LME has also decreased.
The open interest for the three month forwards contract at LME has increased slightly suggesting some future demand for the metal.
Lead
Lead was the only gainer yesterday and the prices ended up by 1.08 percent in LME while in MCX closed up by 0.78 per cent.
The cancelled warrant ratios have been increasing but has declined yesterday but still it is maintaining above the 12 percent mark.
The open interest at futures markets has however increased and the basis difference is maintained at $19.25.
Nickel
Nickel prices ended down by 2.04 percent at LME while in MCX it ended down by 1.23 per cent.
The cancelled warrants have been improving and it increased to 3.65 percent from 3.41 percent.
The backwardation effect is slowly reviving indicating increase in future demand for the metal.
Zinc
Zinc prices also edged down by 0.88 percent at LME and in MCX the prices came down by 0.19 percent.
The cancelled warrant ratios have been consecutively reducing day by day and has came down to 4.01 percent.
The future demand is improving as we can see the metal coming out of Backwardation.
Courtesy: Karvy Commtrade Ltd.
NCDEX chana extends uptrend on fresh buying
Chana futures resumed gains on Thursday as the spot prices gained a tad by `20-30/quintal across major spot markets.
Concerns of the crop conditions led to some buying from the stockists amidst of the marriage season demand for dal and besan.
Arrivals remained stable at around 35 motors in Delhi market.
Courtesy: Karvy Commtrade Ltd.
India soy complex edges higher on fresh buying
Soybean prices gained a tad on Wednesday as spot prices have remained stable in near past owing to crushers and millers buying across spot markets.
CBOT soybean prices ended slightly higher with less potential to sustain the rally as the picture of the weather in Latin American countries is unclear. Anticipation weekly export sales data to increase had positive impact on prices.
Soy oil prices gained substantially on Wednesday as the demand is more biased towards soy oil across the globe. In Indian market possible lower imports of palm oil is creating a demand for soy oil to meet edible oil consumption which is likely to have positive impact on prices.
CBOT prices ended higher in line with soybean with concerns about lower production estimates of soybean.
Mustard seed prices gained on Wednesday in line with soy complex prices which was driven by estimations of good demand to come in mustard amidst of lower production estimates and lower carry forward stocks.
Surge in spot prices of seed and oil also supported prices to gain a tad.
Courtesy: Karvy Commtrade Ltd.
NCDEX turmeric settles higher on rising spot demand
Recovery in demand from the domestic buyers led Spot prices of Turmeric and Futures to end 0.30% and 1.19% higher respectively on Wednesday.
Production, Arrivals and Exports
Arrivals in Nizamabad and Erode mandi stood at 1000 bags and 15,000 bags respectively on Wednesday.
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 edges higher on weak sowing
Jeera Spot prices and Futures bounced back after trading weak on Tuesday and settled 0.14% and 0.90% higher on Wednesday. Reports that weather in the chief growing area is not favourable for the sown jeera crop are likely to support prices. Temperature in the Gujarat is too hot which is drying the soil moisture thereby stopping proper germination of the seed.
According to Gujarat farm ministry, area sown under jeera till November 30, 2011 stood at 1.55 lakh hectares (lh) up 67.5% 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 3,500 bags amidst offtakes of 4500 bags on Wednesday.
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 drops on selling pressure
Dull trades at the domestic and overseas buyers led Spot Pepper prices and Futures to settle 0.23% and 0.89% lower 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 Wednesday stood at 28 tonnes as compared to 21 tonnes on Tuesday. Offtakes on the other hand stood at 32 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 extended spot demand
NCDEX December soybean futures ended higher on account of firm overseas market as improved demand from solvent extractors and stockists. Total arrivals of soy bean in Madhya Pradesh was 2.3 lakh bags and in Mahrashtra was 1.70 lakh bags on Wednesday (Bag=100 Kg). Soybean plant delivery prices were Rs 2260-2270/qtl (excluding VAT) on Wednesday.
As per traders, there were concerns over a dry forecast for parts of Argentina and southern Brazil over the next ten days. South Korea is tendering to buy 150,000 tonnes of US soybeans also provided support to the bulls.
USDA’s weekly export sales released on Friday (December 01, 2011) which shows that the weekly export sales for soybeans came in at 489,600 tonnes which was below trade expectations. Meal sales were 135,500 metric tonnes, in line with expectations. Sales of 99,000 metric tonnes are needed each week to reach the USDA forecast. Oil sales were 8,900 tonnes, in line with expectations
Mustard Seed
NCDEX December RM Seed futures surged higher on 3rd consecutive trading sessions as firm overseas market. Sharp rise in vegetable oils prices also added bullish market sentiments. There is talk about the low yield of RM Seed in Rajasthan this year as compared to last year due to warm weather at flowering stage also provided support to the bulls.
Rape/mustard seed accounts for about 70% of India's winter-season oilseed output. As of December 02, 2011, sowing acreage of Mustard Seed increased to 56.60 lakh hectare (down by 2.5%) as compared to 58.1 lakh hectare last year till date. Sowing acreage of RM seed declined in India mainly due to lower sowing acreage in Rajasthan.
However, Area under groundnut (1.89 vs 2.18 lakh ha), sunflower (2.31 vs 2.99 lakh ha) and safflower (1.57 vs 1.99 lakh ha) is declined slightly. Overall Rabi oilseed declined marginally to 65.68 lakh ha as compared to 65.94 lakh hectares.
Refine Soy Oil
NCDEX December refined soy oil futures surged more than 1% on account of firm overseas market 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.
Improved demand in domestic markets as winter/wedding season demand also added bullish market sentiments. 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 lower on long liquidation
Sugar prices settled 0.03% down owing to sufficient availability in domestic caused by increased quota for the month of December 2011. Also reports of October to November 2011 India Sugar output to rise by 17% to 2.16 million tonnes as compared to 1.84 mln tonnes in last year might restrict prices from rising sharply.
Extension of zero duty on Sugar till March 2012 and ongoing crushing across India also pressurized sugar prices.
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.
Government has extended Zero duty on sugar imports till March 2012 to tame inflation.
ICE Raw Sugar LIFFE white Sugar futures settled 4.67% and 3.49% lower erasing earlier losses of the previous day owing to lingering concerns over the Euro debt crisis.
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 edges higher on limited stocks
Improved demand from the local stockists led Chana Spot prices and Futures to settle 1.47% and 0.46% higher on Wednesday. Further, lower stocks at the domestic till fresh arrivals also supported prices.
Forward Market Commission (FMC) has scrapped special margin of 10% on Chana on long side on all running contracts 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 weakens on profit booking
Guar seed Futures continued to trade firm in the early part of the trading session but long liquidation by the market participants led prices to decline and settle 0.72% down on Wednesday.
Unconfirmed reports that special margin on Guar Seed and Guargum might be imposed led prices to correct after touching historical high of Rs. 5,742/qtl on Tuesday, December 07, 2011.
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 exporters 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.
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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