Precious metals, crude oil under pressure on Euro economic concerns
European markets are trading on a positive note today on expectations that European leaders will come up with some strong measures this week in order to tackle with the region’s debt crisis.
Additionally, expectations that the International Monetary Fund (IMF) was preparing a rescue plan worth up to 600 billion Euros for Italy also led to rise in risk appetite in the global markets.
But according to the latest news, the IMF stated that it did not plan any rescue package with Italy. Japan also stated that no such topic occurred within the Group of Seven. This may spread the wave of risk aversion in the global markets which will add downside pressure on the equities.
Although clarity over IMF’s role in Italy’s bailout was cleared, markets continued to remain upbeat on account of recent data which indicated that US retail sales during Thanksgiving increased a whopping 16 percent to a record.
Spot Gold prices are trading higher by more than 2 percent at $1714.70/oz till 4.45 pm IST today, as a weaker dollar acted as a supportive factor for the yellow metal.
Taking cues from rise in gold and upside in base metals, Spot Silver traded higher by almost 3.8 percent at $32.11 till 4.45 pm IST today. In addition to this, dollar weakness also provided further support.
Copper is trading higher by 2.3 percent today (till 4.45 pm IST) on the back of rise in risk appetite in the global markets coupled with a weaker dollar. Additionally, US retail sales after Thanksgiving increased to a record high by 16 percent to $52.4 billion according to the National Retail Federation which also acted as a positive factor for prices.
Currently, crude oil prices are trading in the positive territory and have gained around 2.7 percent to $99.38/bbl till 4.45 pm IST, on account of signs of improvement in the US economic scenario coupled with sanctions on Syria which led to concerns that supplies from the Middle East could get affected.
The Arab League has imposed sanctions on Syria as the country refused to halt a crackdown on protesters. According to the International Energy Agency (IEA), the country produced 332,000 barrels of crude oil a day in August. Crude oil prices also rose as Mexico shut its three largest oil export terminals on account of bad weather.
Outlook
As uncertainty over Europe continues, we expect risk aversion to re-emerge in the markets, thus supporting upside in the US Dollar Index.
On account of this, gold and silver prices are expected to come under pressure in the later part of trade today.
Taking cues from uncertainty over Europe, economic risks are expected to re-emerge and this will lead to pressure on base metal prices today.
Oil prices are also expected to witness downside pressure during today’s trade on account of economic uncertainties. But the cushion to the downside for crude oil is the building supply worries.
Courtesy: Angel Commodities
European markets are trading on a positive note today on expectations that European leaders will come up with some strong measures this week in order to tackle with the region’s debt crisis.
Additionally, expectations that the International Monetary Fund (IMF) was preparing a rescue plan worth up to 600 billion Euros for Italy also led to rise in risk appetite in the global markets.
But according to the latest news, the IMF stated that it did not plan any rescue package with Italy. Japan also stated that no such topic occurred within the Group of Seven. This may spread the wave of risk aversion in the global markets which will add downside pressure on the equities.
Although clarity over IMF’s role in Italy’s bailout was cleared, markets continued to remain upbeat on account of recent data which indicated that US retail sales during Thanksgiving increased a whopping 16 percent to a record.
Spot Gold prices are trading higher by more than 2 percent at $1714.70/oz till 4.45 pm IST today, as a weaker dollar acted as a supportive factor for the yellow metal.
Taking cues from rise in gold and upside in base metals, Spot Silver traded higher by almost 3.8 percent at $32.11 till 4.45 pm IST today. In addition to this, dollar weakness also provided further support.
Copper is trading higher by 2.3 percent today (till 4.45 pm IST) on the back of rise in risk appetite in the global markets coupled with a weaker dollar. Additionally, US retail sales after Thanksgiving increased to a record high by 16 percent to $52.4 billion according to the National Retail Federation which also acted as a positive factor for prices.
Currently, crude oil prices are trading in the positive territory and have gained around 2.7 percent to $99.38/bbl till 4.45 pm IST, on account of signs of improvement in the US economic scenario coupled with sanctions on Syria which led to concerns that supplies from the Middle East could get affected.
The Arab League has imposed sanctions on Syria as the country refused to halt a crackdown on protesters. According to the International Energy Agency (IEA), the country produced 332,000 barrels of crude oil a day in August. Crude oil prices also rose as Mexico shut its three largest oil export terminals on account of bad weather.
Outlook
As uncertainty over Europe continues, we expect risk aversion to re-emerge in the markets, thus supporting upside in the US Dollar Index.
On account of this, gold and silver prices are expected to come under pressure in the later part of trade today.
Taking cues from uncertainty over Europe, economic risks are expected to re-emerge and this will lead to pressure on base metal prices today.
Oil prices are also expected to witness downside pressure during today’s trade on account of economic uncertainties. But the cushion to the downside for crude oil is the building supply worries.
Courtesy: Angel Commodities
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Base metals settle lower on global demand concerns
On a weekly basis, the base metals complex delivered poor performance on the LME. Mounting worries with respect to Euro Zone debt crisis created demand concerns for the metals which affected prices.
Additionally, a stronger dollar coupled with weak sentiments in the global markets also acted as a negative factor for base metals. However, Rupee depreciation cushioned further losses on the domestic bourses last week.
Aluminium
Aluminium was the top loser in the last week, as the metal declined sharply by 6.5 percent on the LME and around 4 percent on the MCX.
Dollar strength and global demand concerns due to rising global economic uncertainty exerted downside pressure on prices.
Additionally, aluminium production is an energy-consuming process, hence fall in crude oil prices also made production less expensive which further affected the metal prices last week.
Nickel
Following aluminium, nickel declined by almost 5 percent on the LME and more than 3 percent on the MCX to become the second worst performer last week.
Sharp rise in the metal inventories acted as a negative factor for prices. On a weekly basis, nickel inventories increased around 4.6 percent to 88,668 tonnes on the LME warehouse.
The metal touched a low of $16,825/tonne and closed its trading session below the level of $17,000/tonne last week.
Courtesy: Angel Commodities
Crude oil edges lower on firm US dollar
Nymex crude oil prices declined by 0.7 percent last week and touched a low of $94.99/bbl on Friday.
A stronger dollar and weak global market sentiments due to rising worries over Euro Zone debt crisis exerted pressure on crude oil.
But, further decline was cushioned on account of expected supply concerns due to political turmoil in the Middle East region.
Additionally, geo-political tensions over Iran’s nuclear program also limited losses in oil prices. On the MCX, Crude oil December contract gained by 0.7 percent on account of Rupee depreciation and touched a high of Rs5156/bbl last week.
Natural Gas
On a weekly basis, Nymex natural gas prices gained more than 2.2 percent mainly on the back of expected demand for the commodity from the colder regions for heating purposes and less than expected fall in US inventories.
On the MCX, gas prices rose around 2 percent and touched a high of Rs 184.1/mmBtu last week.
Additionally, supply concerns in the Middle East will also act as a positive factor for prices.
Courtesy: Angel Commodities
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Precious metals decline on Euro economic concerns
Despite deepening concerns over the European economies, gold prices declined sharply by 2.5 percent last week mainly due to strength in the US dollar.
Gold touched a low of $1665/oz and closed at $1679/oz last week. However, depreciation in the Indian Rupee resisted further decline on the domestic bourses.
On the MCX, Gold December contract declined around 1 percent last week and touched a low of Rs28,303/10gm.
Holdings in the SPDR Gold Trust, world's largest gold-backed exchange traded- fund (ETF), rose 0.3 percent to 1297.32tonnes on 25th November 2011 from the previous 1293.09 tonnes on 18th November 2011.
Silver
On a weekly basis, spot silver prices declined sharply by more than 4 percent, taking cues from fall in gold prices coupled with downside in base metals. Additionally, strength in the US dollar also exerted further downside pressure on the white metal prices.
On the MCX, Silver December contract slipped around 2 percent as a weaker Rupee resisted further fall on the domestic bourses and touched a low of Rs53,880/kg last week.
Holdings in the iShares Silver Trust, the world's largest silver-backed exchange-traded fund, declined around 0.9 percent to 9,627.88 tonnes by 25th November from the previous 9,715.63 tonnes on 18th November 2011.
Courtesy: Angel Commodities
NCDEX turmeric plunges on higher arrivals
Turmeric Futures continued to trade lower and settled 2.5% lower ww on account of lacklustre trades at the domestic mandis. Continued good arrivals in Erode amidst lacklustre demand led prices to fall yesterday. Nizamabad mandi however remained closed on the occasion of Amavasya.
Production, Arrivals and Exports
Arrivals in Erode remained steady at 10,000 bags on Friday.
Turmeric production for the year 2011-12 is projected at 82 lakh bags (1 bag= 70 kgs) compared to 69 lakh bags in 2010-11. However, area covered under turmeric till 21st September 2011 stood at 0.67 lakh ha 2.9% lower as compared to 0.69 lakh ha in the 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
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NCDEX jeera jumps on extended buying
Jeera prices continued to trade firm and settled 0.6% higher w-w on account of improved buying by the market participants. Spot prices also ended 1.21% higher due to slight recovery in demand from the local buyers.
Sowing of jeera in Rajasthan has gained momentum due to favorable weather condition. Sowing of Jeera has also commenced in some parts of Gujarat but it is on slow pace. 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 while offtakes improved to 6,500 bags on Friday.
Production of jeera in Gujarat and Rajasthan in 2011 was around 22 lakh bags and 7-8 lakh bags respectively. (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 edges higher on limited stocks
Black pepper prices witnessed mixed trades throughout the week and settled 0.3% higher w-w. Spot prices also remained firm owing to better offtakes at the domestic and settled 0.84% higher w-w. Pepper prices however, witnessed profit booking on Saturday.
Lower stocks with Vietnam and Indonesia, the major suppliers of pepper till fresh arrivals commence next year (April and July respectively) will also support prices.
Indian parity in the international market was at $7,150 a tonne and remained competitive and was attracting overseas orders while Vietnam 550 gl was quoting its pepper at $7,500 per tonne.
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 September 2011 exports of pepper from six major exporting countries (Brazil, India, Indonesia, Malaysia, Vietnam and Sri Lanka) was around 188,000 mt, 4% lower from the corresponding period of 195,000 mt. Vietnam has reportedly sold 1.12 lakh tonnes of pepper from January to September 2011 a rise of 14% as compared to previous year.
Sharp fall of 38% in pepper exports was witnessed in Indonesia during above period. Exports stood at 26,300 tonnes as compared to 42,082 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.
39thsession and meeting of IPC scheduled on 22nd-26th November 2011 in Lombok Island, Indonesia
39th session of the IPC meet is scheduled on 22nd – 26th November 2011 in Indonesia and theme of the session is “Global Strategy and Innovation for Sustainable Pepper production, price and Quality”.
Production and Arrivals
Arrivals of pepper in the domestic mandi on Saturday stood at 8 tonnes as compared to 23 tonnes on Friday. Offtakes on the other hand stood at 10 tonnes.
Global Pepper production in 2012 is expected to increase 4% to 2.70 lakh tonnes with Vietnam the largest producer producing around 1.40-1.50 tonnes. Carryover stocks are projected at 50,000 tonnes as compared to 60,000 tonnes in 2011. (Source: Peppertradeboard). While, production of pepper in India in 2011-12 is expected to be 43 thousand tonnes according to the market sources a decline of 5% as compared to 48 thousand tonnes in the last year.
Courtesy: Angel Commodities
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NCDEX soybean weakens on global cues
NCDEX December soybean futures traded lower on account of weak overseas market as lower demand of oilseeds from china which is the largest importer and consumer in the world and bad economic news in China for their manufactures index.
Arrivals of soybean in Madhya Pradesh were around 3 lakh bags (bag=100 kg). USDA’s weekly export sales released on Friday (November 25, 2011) which shows that the Weekly export sales for soybeans came in at 921,600 metric tonnes which was well above trade expectations.
China was a net buyer of 936,000 tonnes for the week. As of November 17th, cumulative soybean sales stand at 57.7% of the USDA forecast for 2011/2012 (current) marketing year versus a 5 year average of 62.1%. Sales of 370,000 metric tonnes are needed each week to reach the USDA forecast.
Meal sales reached 184,900 tonnes for the current marketing year and 700 for the next marketing year for a total of 185,600 which was near the high end of expectations. Sales of 100,000 metric tonnes are needed each week to reach the USDA forecast. Net oil sales came in at 2,700 metric tonnes as compared with sales of 12,000 tonnes needed each week to reach the USDA forecast.
Mustard Seed
NCDEX December RM Seed futures ended lower on account of profit taking at the weekend. Weakness in other oilseeds and vegetable oil also provided support to the bears.
As of November 25, 2011, sowing acreage of Mustard Seed increased to 56.54 lakh hectare (up by 1%) as compared to 55.51 lakh hectare last year till date. Sowing acreage of RM seed increased mainly higher sowing acreage in West Bengal, Haryana and Rajasthan due to 35% hike in RM Seed MSP (Current Rs 2500/qtl).
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 ended lower on account of profit taking ahead of weekend and global demand concern as weak sentiments of global market due to deepening euro zone debt worries.
China has cancelled orders for up to 300,000 tonnes of refined palm oil over the past month as some traders had over-booked cargoes and domestic prices remain lower than that of imports also added bearish market sentiments.
India won't hike the base price of imported refined edible oils immediately to prevent any price rise in the local market. India levies a 7.5% import tax on refined oil, but the duty is calculated on the basis of base prices fixed by the government and not the market price. Imports of crude edible oil are tax-free.
As per SGS ( a cargo surveyor), Malaysia's palm oil exports during the November 1-25, declined to 1.34 million tons, down 1.7% as compared with 1.37 million tonnes during the October 1-25.
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
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NCDEX sugar jumps on firm domestic demand
Sugar Futures gained for the fourth consecutive session and settled 0.87% marginally higher w-w on the reports that the notification for the recently allowed 1 mln tn sugar exports is likely to be issued by Monday and the entire quantity will be in a single tranche.
Sharp gains in the prices were capped on reports that food minister will consider more sugar exports (over and above the already allowed 1 mn tn) during 2011-12 season only after 2-3 months after reviewing international prices and the cane crushing situation in major growing regions. Further, crushing gaining pace also controlled prices from trading higher.
India has extended the deadline for mills to seek export permits for around 30,000 metric tons of unsold sugar from the marketing year ended Sept. 30 until Dec. 6, 2011.
ICE Raw Sugar futures and LIFFE continued to trade weak and touched 6 month low owing to lingering concerns of Euro debt crisis. Approval of exports of sugar from India of 1 million tonnes and global economic worries is also keeping prices weak.
The Brazil white Sugar prices have declined to $ 630 /tn as on 23rd Nov, 2011 compared to $657 per tonne (FOB), in the 19th Nov. Current offer prices stands at Rs 32770 per ton in rupee terms compared to current domestic price of Rs 30500 / tn.
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.
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 10.2 to 10.3 million tonnes in 2011- 12 compared to 9.64 million tonnes in 2010-11.
According to UNICA, Sugar production in Brazil's center-south in the second half of Oct dipped 23.5 percent from a year ago, as more mills ended crushing the 2011/12 cane crop. Sugar output totaled 1.47 million tonnes, down from 1.92 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
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NCDEX chana weakens on sluggish demand
Chana Spot prices and futures witnessed bearish trend and settled 5.18% and 8.79% down w-w owing to fragile demand from the local buyers. Reports of better area covered under pulses till date is also seen pressurizing prices.
However, there are reports that supplies in the global markets are tight. This will make imports costlier which is likely to provide support to the prices.
According to the Ministry of Agriculture, pulses have been sown in 61.30 lakh hectares as on November 24th 2011 as compared to 57.29 lakh hectares in the same period last year.
Sowing to Chana in Maharashtra was up by 64.6% to 3.4 lakh hectares as compared to 2.06 lakh hectares in the same period previous year.
Area sown under Chana in Rajasthan till 22nd November 2011 was 14.59 lakh hectares (lh) as compared to 11.81 lh in the same period previous year.
There are reports of decline in the output of dry peas and Chickpeas in Canada for 2011. Chickpeas output is expected to fall by 58% to 54 MT while that of peas will fall by 33% to 2 MT (Source: Agriwatch)
Pulses Imports
Imports have declined dramatically in the current FY 2011-12 with India's state-owned trading agencies having contracted imports of only 121,660 tn pulses since the beginning of the current financial year till September 12, 2011 compared with 596,700 tn during the same period last year.
Imports have been weak because domestic pulses output in 2010-11 (Jul- Jun) was at an all time high of 18.09 mln tn, up 23percent from a year ago. Also, the Centre has abolished one of the reimbursement schemes for the state-owned importing agencies.
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.
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
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NCDEX guar seed edges higher on firm export demand
Guar complex witnessed spectacular gains in the previous week on account of robust export demand and expectations that production might fall below 11 lakh tonnes.
Arrivals of late sown Guar crop has started across Churu, Bikaner and other growing areas of Rajasthan and thus arrivals have increased in the last 2-3 days and stands around 1 lakh bags. However, arrivals are not expected to cross 1.2 lakh tonnes as harvesting of early sown Guar crop (Guari) is almost completed.
Weaker rupee is seen gearing up exporter’s profit margin. However, export demand may hit to some extent amidst higher prices and weaker rupee.
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. But, overall India being the major exporter of the gum, exports will not be curtailed sharply.
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% as compared to 1.02 lakh tn during the same period last year.
Exporters believe that exports which had crossed over 4 lakh tn last year, may hit this year due on financial crisis in U.S & Europe along with shift in demand. Further weaker rupee may also affect export volumes.
However the export figures clearly indicates that global crisis has not hit Guar exports as of now in the current season too is robust.
Courtesy: Angel Commodities
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