Base Metals Settle Lower on Euro Debt Concerns

The London Metal Exchange (LME) was closed on Tuesday on account of Christmas Day holiday and this led to less volatility in base metals trading on the MCX in yesterday trading session.

The base metals complex traded lower on the MCX on Tuesday.

Copper

Copper was the worst performer in yesterday’s trade, as the metal declined around 1 percent on the MCX. However, on a month-onmonth basis, MCX copper prices rose more than 4 percent mainly taking cues from sharp depreciation in the Indian Rupee (INR).

On a month-on-month basis, the INR depreciated sharply by 1.9 percent to closed at 52.91 on Tuesday.

Japan zinc exports up 64 percent (y-o-y) in November According to the data from the Ministry of Finance, Japan's exports of refined zinc rose 64 percent (y-o-y) to 11,712 tonnes in November mainly increased by a three-fold rise in exports to China.

Exports to China rose to 3,578 tonnes as compared to 1,191 tonnes a year ago. The country replaced Taiwan as the top importer of Japan's refined zinc which accounts for about 30 percent of total exports.

Almost 70 percent of Japan's zinc smelters output capacity was affected by the massive earthquake in March’11 due to damage to facilities, but production has since recovered.

Courtesy: Angel Commodities

Crude oil edge higher on weak inventories

Nymex crude oil prices gained by more than 1.5 percent in yesterday’s trading session which is the longest rally in prices since 2010.

Prices increased taking cues from Iran threatening to block the transportation of crude oil through Strait of Hormuz if sanctions are imposed on Iranian crude oil exports.

Additionally, US consumer confidence increased better than expected which also helped upside in prices. Oil touched an intra-day high of $101.77/bbl and closed at $101.3/bbl on Tuesday.

On the MCX, prices increased by 1.6 percent and closed at Rs.5374/bbl after touching an intra-day high of Rs.5380/bbl yesterday.

API Inventories Forecast

The American Petroleum Institute (API) is scheduled to release its weekly inventories today and crude oil inventories are expected to decline by 1.6 million barrels for the week ending on 23rd December 2011.

Gasoline stocks are expected to remain unchanged and distillate inventories are expected to decline by 0.4 million barrels.

Courtesy: Angel Commodities

Precious metals decline on global debt concerns

Gold prices dropped around 0.8 percent on Tuesday on the back of thin trading on account of Christmas holidays and touched an intra-day low of $1588/oz.

However, weakness in the US dollar cushioned further decline in the yellow metal prices yesterday. It ended its trading session at the level of $1592/oz on Tuesday.

MCX Gold February contract declined by 0.5 percent yesterday and touched an intra-day low of Rs27,534/10 gms. The yellow metal closed its trading session at Rs27,651/10 gms on Tuesday.

According to the Gold Industrialists' Union industry lobby, Russian gold companies produced 193.8 tonnes of gold in the period between January–November of 2011. The output increased by 4.5 percent as compared to the output in the same period of 2010.

The country is expected to produce 211 tonnes of gold in the current year of which 185 tonnes will be mined. Mined output increased by 60.2 percent (yo-y) to 171.95 tonnes in the first 11 months of 2011.

Silver

Taking cues from fall in gold prices, spot silver traded lower by 1.4 percent on Tuesday. The white metal touched an intra-day low of $28.5/oz and closed its trading session at $28.6/oz yesterday.

On the MCX, Silver March contract declined around 0.8 percent as further fall was cushioned on account of Rupee depreciation and touched an intraday low of Rs52,588/kg on Tuesday.

Courtesy: Angel Commodities


India soy complex ends higher on firm spot demand

Soybean prices extended gains on Tuesday on back of modest surge in spot prices by 10-15/quintal. Arrivals have also remained on declining note as peak arrival season has come to an end across major markets.

Meal demand was very sluggish due to Christmas and New Year holidays across the globe which limited and steep gains.

Soy oil prices gained on Tuesday as the spot prices drove the rally in prices. Spot prices increased by Rs.5-10/10kg which supported the prices at futures. Despite meal demand being lower and crushing was weak price rallied on estimation of traders that imports of edible oils during December and January might be lower.

Mustard seed prices gained marginally at futures as the spot prices gained by '50/quintal across major markets. Good demand for edible oil also resulted in rise in spot prices of oil which supported seed prices both at spot and also futures.

Courtesy:Karvy Comtrade Ltd.


NCDEX turmeric extends uptrend on firm spot demand

Turmeric Futures extended gains of the previous day and settled 0.71% marginally higher on Tuesday. However, spot prices settled 3.83% down on account of better arrivals amidst lower offtakes yesterday.

Production, Arrivals and Exports

Arrivals in Nizamabad and Erode mandi stood around 1,000 bags and 12,000 bags respectively on Tuesday.

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- October 2011 stood at 50,000 tonnes as compared to 32,000 tonnes in 2010-11, rise of 56%. Targets set by the Spices Board have already been met till October 2011.

Exports are expected to touch new historical levels in 2011-12.

Courtesy: Angel Commodities

NCDEX jeera gains on weak arrivals

Despite increase in area under jeera in Gujarat Spot prices remained firm on account of demand from the local stockists amidst declining arrivals and settled 1.28% higher on Tuesday. While Futures witnessed profit booking at higher levels and settled 2.155 down yesterday.

According to Gujarat farm ministry, area sown under jeera till December 26, 2011 stood at 2.78 lakh hectares (lh) up 21.5% 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 arrivals of 5,500 bags 3,000 bags higher as compared to Monday amidst off takes of 6,500 bags on Tuesday.

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-Ocotber 2011 stood at 20500 tonnes as compared to 19,800 tonnes in 2010-11, an increase of 3.5%.

Courtesy: Angel Commodities


NCDEX pepper settles lower on weak exports

Dull trades at the domestic coupled fragile demand from the overseas led prices to remain weak and settled 0.37% and 0.55% lower on Tuesday. Further, buyers are following a wait and watch stance anticipating fresh arrivals to improve in the coming weeks thereby softening prices.

Indian parity in the international market is being offered at $6,950/tonne.

Exports

According to Spices Board of India, exports of pepper during April 2011- October 2011 stood at 13,750 tonnes as compared to 10350 tonnes in 2010-11, rise of 32.8%.

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 Tuesday stood at 11 MT as compared to 8 MT on Monday while offtakes on the other hand stood at 16 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 rises on global cues

NCDEX January soybean futures traded higher on second consecutive trading sessions on account improved demand from crushers/stockists coupled with thin arrivals as farmers are holding back their stocks.

Dry weather concern of South America (Brazil and Argentina) also provided support to the prices. South America contributes about 50% of total global production of soybean. Total arrivals of soybean in Madhya Pradesh were 1.30 lakh bags on Tuesday, Maharashtra was 90,000 bags and Rajasthan was 55,000 bags (Bag=90-100 Kg) on Tuesday. Soybean prices in Indore were at Rs 2330-2370/qtl (auctions in Mandi) and plant delivery was quoted Rs 2420-2460/quintal.

USDA’s weekly export figures released on December 22, 2011, which shows that the net weekly export sales for soybeans came in above trade expectations at 653,400 metric tonnes for the current marketing year and 75,000 for the next marketing year for a total of 728,400.

Meal sales came in at 142,000 metric tonnes as compared with 97,000 metric tonnes. Net oil sales came in at 14,800 metric tonnes which was higher than expected and compares with 11,000 tonnes.

Rape/mustard Seed

NCDEX January RM Seed futures traded higher on account of strong gains in edible oils and lower sowing acreage of Rape/mustard seed this year as compared to last year.

Sowing acreage of Rabi oilseeds in India was 7.8 million hectare as compared to 8.31 million hectare a year ago on 23/12/2011. Sowing acreage of rape/mustard seed in India was 6.38 million hectare as compared to 6.77 million hectare a year ago.

Sowing acreage of Rabi oilseeds in Rajasthan was 2.63 million hectare as compared to 3 million hectare a year ago on 23/12/2011. Sowing acreage of rape/mustard seed in Rajasthan was 2.52 million hectare as compared to 2.49 million hectare a year ago.

Mustard seed accounts for about 70% of India's winter-season oilseed output.

Refined Soy Oil

NCDEX January refined soy oil futures posted sharp gains on account of improved demand in domestic market as winter season demand.

Delayed harvesting of Malaysian palm oil due to heavy rains in Malaysia are also in favour of the bulls. La Nina-driven dry weather in Argentina and Brazil could cause heat stress and sap soybean crop yields.

Production (of palm oil) in key producing areas (Malaysia) is expected to decline due to continuous heavy rains. As per SGS (cargo surveyor), Malaysian Palm Oil exports from 1-25 December fell by 12% to 1.18 million tonnes as compared to the same period last month. Imported crude palm oil quoted Rs 54000/tonnes on Tuesday as compare to Rs 53800/tonnes on Monday.

As per Solvent Extractors Association of India, India imported 827,684 tonnes of vegetable oils in the first month of oil marketing year (November to October), up 27 percent from 652,262 tonnes a year ago. Marker share of palm oil imports was about 90% of total vegetable oil imports.

Courtesy: Angel Commodities


NCDEX sugar drops on profit booking

Revival in demand from the local stockists led prices to settle 1.95% higher on Tuesday. However, Futures traded firm on account of profit booking and settled 0.07% lower marginally. Prices are likely to bounce back on expectation of lower quota to be released for the month of January 2012.

According to the Food Minister, Ministry is planning to discuss with States, the Finance and Agriculture Ministries on removing some of the controls such as doing away with the mandatory obligation to offer sugar for the public distribution system (PDS) in the New Year(Source: Hindu Business Line.

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 raw.

The Food Ministry has issued permits for the export of nearly 37,000 tonnes of sugar so far out of the one million tonnes that the government has allowed for overseas shipment in the ongoing 2011-12 marketing year.

Liffe white sugar & ICE Raw settled 0.39% and 0.64% marginally higher on Tuesday owing to thin trades as buyers are away from the market on Christmas and New Year holidays.

Domestic Sugar updates

Sugar output in Maharashtra rose 9% between Oct 01 and Dec 15 to 18.6 lakh tonnes compared with the 17 lakh tonnes same period last year. The output was earlier down by 6%. Recovery rate also increased to 10.07% from 9.70% a year ago.

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. Maharashtra Oct 1-Dec 8 sugar output is up at 1.45 mln tn vs 1.31 mln yr ago due to higher recovery at 9.8% from 9.344% 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 has crushed 9.4 mn tn cane this season against 3.3 mn tn a year ago. 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.

Swiss sugar consultancy Kingsman lowered its global 2011-12 sugar surplus estimate by 940,000 tn to 8.22 mln tn.

Courtesy: Angel Commodities


NCDEX chana rises on low production concerns

Chana Spot prices continued to trade firm on account of decline in the acreage of Rabi pulses and Chana this year and possibility of lower production as compared to last year and settled 0.92% higher. However, Futures witnessed long liquidation and settled 0.21% down yesterday.

According to the Farm Ministry area sown under Rabi pulses is down by 1% to 134.18 lakh hectares as compared to 135.21 lakh hectares in the same period previous year. Chana sowing till December 23rd 2011 is 4.35% down at 85.7 lakh hectares as compared to 89.6 lakh hectares in the same period previous year.

According to Gujarat farm Ministry, Chana acreage in the state is down 4.9% to 1.84 lakh hectares as con December 26th 2011.

Rajasthan, rabi pulses area is 1.60 mln hectares as compared to 1.56 mln hectares as on 16th December 2011. Area covered under Chana stands around 1.56 mln hectares as compared to 1.54 mln hectares in the same period previous year(State Farm Ministry)

However concerns over unfavorable weather in Ap and Karnataka still persist and lower area under Chana in these states may restrict sharp downside in the prices.

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.

Sowing progress and Production

Chana is the main Rabi Pulse crop grown in India, sowing of which is done during October-December, and harvesting begins in January. Sowing of Chana began on a brisk note; however, the progress was not satisfactory in Maharashtra, Karnataka, UP, Bihar and AP.

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. Although government has targeted higher Rabi Pulses output, it is difficult to achieve the same taking into consideration the sowing progress and prevailing weather conditions.

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 traded weak in the early part of the trading session and hit the lower freeze of 4% but bounced back in the later part on account of short coverings and settled 1.17% and 1.73% higher respectively on Tuesday. With total special margin on long positions on the Complex to rise to 30% from 20% led prices to dip yesterday.

Further, special margin of 10% is being imposed on long side of all running contracts with effect from December 27th 2011. Thus, from tomorrow total margin on long side of Guarseed and Guargum would be around 40% which includes special margin of 30%.

FMC is mulling to put Guar Futures in trade to trade segment. (Source: Newswire 18).If this is imposed market participants may not be allowed to square off their intraday positions.

Reports of discrepancies in the latest export figures released by the APEDA (Agricultural & Processed Food Products Export Development Authority) coupled with talks of high manipulation has led to high volatility in the Guar prices.

Indian Guar gum Association has sought the FMC’s intervention so as to curb rising Guar seed and Gum prices. They clarified that the price surge is not only defeating the futures trade, but also hurting the export prospects. (Newswire 18).

Although long term fundamentals remain supportive for the prices, such rise was not expected at the time when arrivals are at its peak.

Arrivals of late sown Guar crop is ongoing in Rajasthan. Arrivals currently in Rajasthan and Haryana stand around 1.35 lakh bags (Newswire 18).

Production

Guar seed output in Rajasthan is estimated at 11.36 lakh tonnes for 2011-12 season, down by 25% 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.

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

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. However, the latest figures from April to August are 5% lower than the April – July number published last month. This has created panic in the markets.

Courtesy: Angel Commodities


CBOT Updates: Soybean surges on weather concerns

HICAGO (Commodity Online):US soy futures climb to 6-week highs like others in the grain complex as traders grow increasingly nervous about hot, dry weather in South America.

After a 3-day break, traders returned to work to find weekend rains were disappointing in Argentina and southern Brazil.

Meanwhile, forecasts remain hot and dry, which is a growing threat to crops there. The market surged above its 50-day moving average in early action, which added to the upward momentum, traders say.

Soy got added support from crude oil and fresh export sales to China. CBOT January soybeans end up 3.2% at $11.99 3/4 per bushel.

March soyoil climbs 0.86c to 52.53c/pound and March soymeal rises $10.90 to $311.70/short ton.

Courtesy: CME Group