Gold, base metals, crude oil in uptrend
European markets traded higher today, as slowdown in China's trade in more than two years in December has increased expectations that the country may go for monetary easing in order to boost the recovery in the world's second largest economy.
Spot gold prices rose more than 1 percent today mainly on the back of weakness in the US dollar. The yellow metal hit an intra-day high of $1628/oz and was trading at the same levels till 4.30 pm IST. On the MCX, Gold February contract slipped around 0.2 percent on account of appreciation in the Indian Rupee and touched an intra-day low of Rs27,476/10 gms till 4.30 pm IST today.
Taking cues from rise in gold prices coupled with a weaker dollar, spot silver prices also witnessed gains of around 2.9 percent today. Silver being an industrial metal also took cues from upside in base metals.
The white metal hit an intra-day high of $29.78/oz and was hovering around $29.75/oz till 4.30 pm IST today. MCX Silver March contract rose by 1.2 percent and touched an intra-day high of Rs52,481/kg till 4.30 pm IST.
The base metals pack traded higher on the LME today on the back of a weaker dollar coupled with upbeat sentiments in the global markets.
Mounting expectations that China may take steps in order to boost the economy also helped rise in the base metals today. However, appreciation in the Indian currency capped sharp gains on the domestic bourses.
Nymex crude oil prices increased by 1.5 percent today on the back of re-emergence of supply concerns of crude oil from Iran coupled with general strike in Nigeria which is the Africa’s biggest oil producer.
Nigeria pumped in an average 2.2 million barrels a day of crude in December which is the fifth largest oil supplier to US. Additionally, a weaker dollar also acted as a positive factor for the commodity.
Prices were trading around $102.84/bbl after touching an intra-day high of $102.87/bbl till 4:30pm today. On the MCX, prices increased by almost 1 percent and were hovering around Rs5345/bbl after touching an intra-day high of Rs5369/bbl till 4:30pm today.
The American Petroleum Institute (API) is scheduled to release its weekly inventories today and crude oil inventories are expected to increase by 0.2 million barrels for the week ending on 6th January 2012.
Gasoline stocks are expected to rise by 2.2 million barrels and distillate inventories are also expected to shoot up by 1.8 million barrels for the last week.
Outlook
Slowdown in China's trade has increased expectations that the country may go for monetary easing to accelerate the economy. This may lead to upbeat sentiments in the global markets today.
On account of this coupled with a weaker dollar, we expect precious metals, base metals and crude oil prices to trade higher today.
In case of crude oil, expected rise in US crude oil inventories may cap sharp gains in prices.
However, any negative news or developments from the Euro Zone may lead to reversal in the markets.
Courtesy: Angel Commodities
Base metals end on mixed trend, copper falls on demand concerns
The base metals complex traded on a mixed note on Monday with copper and lead ended in the red while aluminium, nickel and zinc closed in the green.
In case of copper and lead sharp decline was cushioned on account of a weaker dollar.
Copper
Copper prices declined around 0.8 percent on the LME on Monday, as worries over Euro Zone debt crisis created demand concerns for the commodity.
But, dollar weakness cushioned sharp fall in the red metal prices. Copper touched an intra-day low of $7445/tonne and closed at $7511/tonne yesterday. On the MCX, Copper February contract declined by 0.8 percent and touched an intra-day low of Rs397/kg on Monday.
China’s copper imports stood at 508,942 tonnes in December According to the data from the General Administration of Customs, China's copper imports increased sharply by 12.6 percent to 508,942 tonnes in December as against 452,022 tonnes in November.
Copper imports to China, the world's leading copper consumer, include anode, refined, alloy and semi-finished copper products.
Courtesy: Angel Commodities
Crude oil slumps on Euro debt concerns
Nymex crude oil prices declined by 0.2 percent yesterday taking cues from ease in concerns over Iran closing the Strait of Hormuz coupled with mixed market sentiments. However, sharp decline in prices was cushioned on account of a weaker dollar.
Oil prices touched an intra-day low of $100.10/bbl and closed at $101.3/bbl on Monday. On the MCX, prices declined by 0.9 percent and closed at Rs.5295/bbl after touching an intra-day low of Rs.5275/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 increase by 0.2 million barrels for the week ending on 6th January 2012.
Gasoline stocks are expected to rise by 2.2 million barrels and distillate inventories are also expected to shoot up by 1.8 million barrels for the last week.
Courtesy: Angel Commodities
Precious metals decline on poor safe haven demand
Spot gold prices declined around 0.3 percent on Monday and touched an intra-day low of $1604/oz. Decline in crude oil prices affected the inflation-led demand for gold yesterday.
However, sharp decline was not witnessed on account of dollar weakness. The yellow metal closed its trading session at the level of $1610/oz on Monday.
On the MCX, Gold February contract dropped around 0.6 percent on Monday and touched an intra-day low of Rs27,551/10 gms.
Appreciation in the Indian Rupee led to further decline on the domestic platform and ended at the level of Rs27,578/10 gms yesterday.
Holdings in the SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, remained unchanged for the tenth straight session at 1,254.57 tonnes on 9th January 2012.
Silver
Spot silver prices traded higher by 1 percent in yesterday’s trading session on the back of a weaker dollar. The metal touched an intraday high of $29.22/oz and closed at the level of $29/oz on Monday.
On the MCX, Silver March contract dropped around 0.2 percent on account of Rupee appreciation and touched an intra-day low of Rs51,366/kg yesterday.
Courtesy: Angel Commodities
India soy complex finishes up on strong spot demand
Soybean prices have increased yesterday due to good revival in demand across spot markets and bad crop stages in soybean in Brazil and Argentina.
On the same cues CBOT prices also closed steeply higher. Temperatures in Latin American regions are affecting the pod setting and flowering stages raising concerns of yields and supporting the prices.
Soy oil prices resumed the uptrend on Monday owing to supply bottle neck prevailing in edible oil prices. Estimations of edible oil imports to decline in December and January supported the prices. Spot prices declined marginally by Rs.3/10kg as buyers were still sluggish.
Mustard seed price remained on gaining note as the production estimates are currently lower and acreage is lagging by 4 lakh hectares. Despite drop in spot prices of oil and meal increase in soybean prices also supported the rally in mustard prices.
Courtesy: Karvy Comtrade Ltd.
NCDEX turmeric settlers down on extended selling
Depleting arrivals amidst dull demand in the domestic mandi kept Turmeric Spot prices steady to weak on Monday. Futures however, witnessed selling pressure and settled 1.60% lower yesterday.
Production, Arrivals and Exports
Arrivals in Nizamabad and Erode mandi stood around 1,000 bags on Friday.
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 declines on selling pressure
Reports of increased area covered under Jeera and thereby possibility of better output led jeera prices weak on the first day of the week.
Prices at the Spot and Futures settled 1.11% and 2.12% lower respectively on Monday.
According to Gujarat farm ministry, area sown under jeera till January 2, 2012 stood at 2.82 lakh hectares (lh) up 18.5% as compared to last year while area covered in Rajasthan till date is expected to be 3.03 lakh hectares as compared to 3.30 lakh hectares in the same period 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 3,000 bags while offtakes stood at 3,500 bags on Saturday.
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 tumbles on weak spot demand
Black Pepper Spot prices and Futures continued to trade weak and settled 0.17% and 2.55% lower on Monday. Fragile demand from the overseas and domestic buyers led prices to remain bearish.
Demand from the overseas and domestic buyers remains dull as buyers remain absent from the market due to New Year holidays. Fresh arrivals from the domestic will gain momentum at the end of the month (January 2012).
Indian parity in the international market is being offered at $6,500/tone while Vietnam is offering its ASTA pepper at $6,775/qtl.
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 Kochi market stood at 5 tonnes while offtakes stood at 15 tonnes on Saturday.
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).
Domestic consumption of Pepper in the world is expected to grow by 3.03% to 1.25 lakh tonnes while exports are likely to grow by 1.48% to 2.46 lakh tonnes in 2012. (Source: Peppertradeboard)
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 finishes up on extended buying
NCDEX January soybean futures ended higher (up by 2%) on Monday on account of short covering after continuous fall in the last 4 trading sessions and fresh buying was also witnessed at lower levels.
Lower arrivals of soybean coupled with improved demand from stockists also provided support to the bulls.Total arrivals of soybean in Madhya Pradesh were 1.25 lakh bags on Monday as compared to 1.75 lakh bags on Saturday, Maharashtra was 1 lakh bags and Rajasthan was 40,000 bags as compared to 60,000 bags (Bag=100 Kg).
Soybean prices in Indore were at Rs 2360-2400/qtl (auctions in Mandi) and plant delivery was quoted Rs 2450- 2500/quintal. Lower production estimate of global soybean is expected to decline in the USDA’s monthly supply and demand report which is scheduled to release on January 12, 2012 also added bullish market sentiment.
As per Solvent Extractors’ Association (SEA) show oil meal exports jumped to 953,526 tonnes in December 2011, up by 24.48% as compared to 765,954 tonnes in the corresponding month last year. During the first nine months of the current financial year, Indian traders managed to ship 38,68,831 tonnes of oil-meals — a rise of 23 per cent from 31,47,512 tonnes during the same period of last year.
During the last quarter of 2011 ending December, total shipment was recorded at 18,34,714 tonnes, as compared to 17,71,303 tonnes in the corresponding quarter of the previous year. The major destinations for Indian soy oil meal exports were Japan, Vietnam, Indonesia, China and Thailand.
Rape/mustard Seed
NCDEX January RM Seed futures ended higher on account of short covering on Monday after sharp fall on Saturday. Gains in other oilseeds and vegetable oil also provided support to the bulls. The country's mustard rabi sowing has totaled 6.46 million hectares as of Thursday, down 5.4% from 6.82 million hectares in the year-ago period. Mustard seed accounts for about 70% of India's winterseason oilseed output.
Refined Soy Oil
NCDEX January refined soy oil futures higher on account of short covering on Monday after sharp fall (down 3%) on Saturday. Some fresh buying was also witnessed at lower levels as value buying. In 2011-12 season, Indian edible oil imports are estimated to reach 90 lakh tonnes, up by 7.5 lakh tonnes compared to the previous year on the back of rise in consumption by 5% to 170 lakh tonnes.
Indian vegetable oil output is expected to rise by 2-2.5%. Imports in 2011- 12 are expected to turn costlier as Indonesia hiked export duty on crude palm oil (CPO) by 1.5% to 16.5% and lowered duty on refined Palmolein (RBD) from 15% to 8%.
Imported crude soy-oil price quoted Rs 66,500 /tonnes on Monday as compared to Rs 67,000/tonne on Friday. Imported crude palm oil price quoted lower at Rs 54,200 /tonnes on Monday as compared to Rs 54,600/tonnes on Friday (source: SEA).
Courtesy: Angel Commodities
NCDEX sugar ends higher on short covering
Sugar Futures witnessed mixed sentiment throughout the day and settled 0.50% higher on Monday. Reports that government might discuss on decontrol of sugar and levy sugar also supported prices in the last few hours of the trading session yesterday. Discussion on the same is scheduled on January 16, 2012. However, sufficient supplies at the domestic market led prices to remain weak in the spot.
Sugar recovery in Maharashtra during October 2011-December 2011 stood at 10.35% as compared to 9.80% in the same period previous year.
However, Sugar recovery in U.P. is lesser at 8.47% till 3rd January 2012 as compared to 8.73% in the same period previous year.
The government has released lower monthly quota for the month of January at 17.16 lakh tonnes which includes 2.16 lakh tonnes of levy quota and 15 lakh tonnes of non levy quota. The quota for January is much lower compared to January 2011 monthly quota of 19.18 lakh tonnes and last month’s quota of 19.07 lakh tonnes.
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.
Liffe white sugar and ICE Raw sugar witnessed mixed trades on account of lacklustre demand and settled 0.17% and 0.21% higher respectively on Monday.
Domestic Sugar updates
Sugar output in Maharashtra rose 18.8% between Oct 01 and Dec 31, 2011 to 27.5 lakh tonnes. The output was earlier down by 6%. Output increased on account of higher recovery rate and number of mills that are operational this year. According to ISMA, India is likely to have crushed 14.4 mln tn cane during Oct 1-Nov 23 and produced 7.58 mln tn sugar vs 6.46 mil tn 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 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 settles lower on profit booking
Chana futures settled traded firm in most part of the trading session but witnessed profit booking at the end of the day and settled 0.35% lower on Monday. However, lower area covered under Chana led Spot to remain firm and settled 0.24% higher yesterday. As the Rabi sowing season is almost nearing its end, area covered under the Pulses and Chana are probably to miss the target.
According to the Farm Ministry area sown under Rabi pulses as on 5th January 2012 is down by 1.20% to 14.066 million hectares as compared to 14.238 million hectares in the same period previous year.
Chana sowing till January 5th 2012 is 5.23% down at 8.72 million hectares as compared to 9.22 million hectares in the same period previous year.
Highest decline in area is witnessed in Maharashtra where sowing is down 23%, while in Karnataka it is down by 19%.
Crop 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 and thus acreage has declined drastically.
Further, unfavorable weather in Central and Southern India may lower Chana yield in the coming season. Except in Rajasthan, all other major producing states i.e MP, Maharashtra, Karnataka and AP are likely to witness a fall in output in the coming season harvesting of which would begin after mid January.
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 surges on firm export demand
Guar futures continued to remain firm on Monday tasting new highs and settled at the upper freeze of 4% on expectations of tight supplies in the long run if exports continue to remain firm.
FMC issued show cause notice to 5 brokers in Rajasthan and sought additional information from 50 others following a preliminary investigation, which found irregularities in trade in guar gum and guar seed futures trade. (Source: Reuters & Newswire)
Despite imposition of 30% special margin bulls continued to build fresh long positions on expectations of robust exports and lower output. Total margin on long positions on the Complex has risen to 40%.
In addition to this FMC is mulling a last resort to cool Guargum and Guar seed prices through introduction of “trade to trade” for the first time in commodities derivatives market (Source: Business standard).
Production
After harvesting a record 15 lakh tonnes of Guar crop in Rajasthan in 2010-11season (Oct 10- Sep 11), output in the current season has declined to around 11 lakh tonnes.
Despite higher production prices had touched record levels of Rs 4770 per qtl in2010-11 on the back of robust exports which doubled from 2.1 lakh tonnes to 4.03 lakh tonnes in 2010-11.
In the current season 2011-12, which started in October 2011, output is estimated 25% lower than previous year, while exports continue to remain firm registering 68% growth during the first 6 months of FY 2011- 12 (Apr 11-Mar -12). Further. Carryover stocks of Guar in the current season is at lowest levels around 1.5-2 lakh tonnes against normal 4-4.5 lakh tonnes.
Thus, with lower carryover stocks and drop in 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 September 2011 stood at 2.86 lakh tn a rise of 68 % compared to 1.70 lakh tn during the same period last year.
In 2010-11 fiscal, Guar gum exports were almost doubled to 4.03 lakh tonnes.
Courtesy: Angel Commodities