Mixed trend in base metals on global debt worries
The base metals pack delivered a mixed performance on the LME in the last week with copper, nickel and aluminium ended in the red while lead and zinc closed higher.
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. But, Rupee depreciation led gains on the domestic bourses last week.
Lead
Lead prices witnessed gains of around 2.4 percent on the LME and by more than 5 percent on the MCX in the last week.
Despite strength in the US dollar, lead prices gained mainly on the back of rise in demand for lead-acid batteries from colder regions. Lead-acid batteries are used in cars and other vehicles and are more susceptible to get damaged very fast in extreme cold temperature.
Around 80 percent of the total world consumption of lead is towards lead batteries. On the MCX, lead touched a high of Rs105.20/kg and closed at Rs104.90/kg last week.
In addition to this, weekly lead inventories in warehouses monitored by the Shanghai Futures Exchange dropped almost 7 percent to 49,016 tonnes last week, which also acted as a supportive factor for lead prices.
Courtesy: Angel Commodities
Crude oil slumps on surplus inventories
Nymex crude oil prices declined by 1.6 percent in the last week taking cues from expectations that reversal in Seaway pipeline will not reduce a surplus in the US crude oil inventories.
Additionally, a stronger dollar and poor market sentiments also acted as a negative factor for the commodity.
Oil prices touched a low of $96.64/bbl during the week and closed at the level of $97.41/bbl on Friday. On the MCX, crude oil prices gained by 1.8 percent on the back of Rupee depreciation and closed at Rs.5008/bbl on Friday after touching a high of Rs.5244/bbl during the week.
Natural Gas
On a weekly basis, Nymex natural gas declined around 7 percent on the back of a stronger dollar, rise in inventories and mild winter weather forecast which affected demand for the commodity. Prices closed at $3.32/mmbtu which is at a year low after touching a low of $3.285/mmbtu during the week.
On the MCX, prices declined by 5.5 percent and closed at Rs.171.9/mmbtu on Friday.
Courtesy: Angel Commodities
Precious metals decline on firm US dollar
Despite rising concerns with respect to the European economies, gold prices declined sharply by 3.7 percent last week mainly due to strength in the US dollar.
Uncertainty in the global markets led to selling pressure in gold which also acted as a negative factor for the yellow metal prices. Gold touched a low of $1709/oz and closed at $1722/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 Rs28,272/10gm.
Holdings in the SPDR Gold Trust, world's largest gold-backed exchange traded- fund (ETF), rose 1.9 percent to 1293.09 tonnes on 18th November 2011 from the previous 1,268.67 tonnes on 11th November 2011.
Silver
On a weekly basis, spot silver prices declined sharply by almost 7 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 4.2 percent as a weaker Rupee resisted further fall on the domestic bourses and touched a low of Rs53,728/kg last week.
Holdings in the iShares Silver Trust, the world's largest silver-backed exchange-traded fund, decreased around 0.7 percent to 9,715.63 tonnes by 18th November from the previous 9,783.71 tonnes on 11th November 2011.
Courtesy: Angel Commodities
India wheat rises on short covering
Wheat futures traded slightly positive on Saturday.
Sowing prospects affected price movement in wheat as the production estimates are driving price movements. Lean season for arrivals also influenced the positive movement of prices.
Prices across the physical markets had gained from Rs.1210 to Rs.1220 per quintal.
Courtesy: Karvy Commtrade Ltd.
India maize finishes steady on weak arrivals
Maize futures closed unchanged on Saturday.
Sluggish spot market activities kept the prices unchanged.
Arrivals in Nizamabad physical markets had declined from 2000 bags to 1000 bags which supported the gains.
Prices across the physical markets gained from Rs.1045 to Rs.1050 per quintal.
Courtesy: Karvy Commtrade Ltd.
India guar seed surges on fresh buying
Guar seed and gum futures hit the upper circuit levels on Saturday as the traders were interested in buying at lower prices levels.
Spot arrivals were lower as farmers were unwilling to sell at lower prices while millers remained active in accumulating.
Courtesy: Karvy Commtrade Ltd.
India chana declines on higher acreage
Chana futures decline don Saturday as the acreage prospects were reported better in the rajasthan regions.
Despite the lower acreage in Southern India acreage figures of rajasthan has major impact on prices as the theses regions contribute most to the final production.
Courtesy: Karvy Commtrade Ltd.
India soy complex edges higher on firm demand
Soybean prices gained a tad during the closing of the week as good Chinese demand kept the prices higher at CBOT and domestic crushers demand kept the prices higher in Indian markets. Fresh export enquiries from china helped prices at CBOT to gain.
Soy oil prices erased gains on Saturday due to corrections on previous rally. Weakness in crude oil prices in the international markets kept the soy oil prices lower at CBOT. Declining demand for exports of Malaysian palm oil kept prices under pressure.
Mustard seed prices gained on Saturday as weakened sowing prospects were reported across major growing regions in India Delayed cotton harvesting in major regions of rajasthan has affected area of mustard in the current crop year.
Courtesy: Karvy Commtrade Ltd.
India turmeric jumps on seasonal demand
Winter season demand from the north Indian stockists led Spot and Futures to settle 1.70% and 2.65% higher w-w.
There are some reports of crop damage in A.P due to in adequate rainfall in the month of October. Crop damage would be around 10%. This is likely to provide support to the prices.
Sharp gains may however be capped on account of sufficient availability of Turmeric in the major mandis.
Production, Arrivals and Exports
Arrivals in Nizamabad stood at 1,000 bags while Erode market witnessed arrivals of 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
NCDEX jeera weakens on subdued demand
Lacklustre trades at the domestic led Spot prices to settle 0.28% down w-w. Futures however ended 2.51% higher owing to improved buying at the support levels.
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 amidst offtakes of 2,800 bags on Saturday.
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
India pepper gains on weak arrivals
Lower arrivals at the domestic led Pepper Futures to settle 1.98% higher w-w. Prices in Spot also settled 0.15% higher. Reports that pepper crop in India 2011-12 might fall below last year level of 48,000 tonnes is expected to support pepper prices. It expected to be in the range of 42- 44 thousand tonnes.
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 $7,450 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 January to October 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.
39th session 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 10 tonnes as compared to 8 tonnes on Friday. Offtakes on the other hand stood at 8 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)
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
India soybean rises on rising demand
NCDEX December soybean futures traded higher on Saturday on account of improved demand from stockiest and solvent extractors due to firm overseas market sentiments as improved demand from China due to easing monetary policies to spur economic growth. China is planning to more US soybean to increase their stock reserve. According to executives with a state grain processing and trading company, China bought six cargoes (500,000 metric tonnes) of soybeans from the U.S.
The move is part of its plan to buy 2 million tons of soybeans. USDA’s weekly export sales released on Thursday (November 17, 2011) which shows that the Weekly export sales for soybeans came in at 746,100 metric tonnes for the current marketing year and 5,100 for the next marketing year for a total of 751,200. This was higher than expected and included sales to China of 517,100 tonnes. Meal sales came in at 201,500 tonnes which was also higher than expected. Oil sales were just 2,100 tonnes which was well below expectations.
USDA’s monthly S& D report released on Wednesday (November 09, 2011) which shows slightly higher global oilseeds production estimates and higher ending stocks. Global oilseed production for 2011/12 is projected at 454.8 million tons, up 1.3 million tons from last month.
Brazil soybean production is increased 1.5 million tons to 75 million. Total U.S. oilseed production for 2011/12 is projected at 91.2 million tons, down 0.5 million from last month due to lower soybean and cottonseed production. The soybean yield is forecast at 41.3 bushels per acre, down 0.2 bushels from last month.
Mustard Seed
NCDEX December RM Seed futures ended higher due to improved demand of RM seed from millers as higher prices of vegetable oil and other oilseeds. Area under Mustard seed in the last year stood around 7.2 million ha compared to 6.4 million ha in 2009-10 season. Rajasthan government has targeted mustard acreage in 2011-12 season at 30 lakh hectares compared to 24.9 lakh ha in 2010-11 season. As on 15th November, sowing has been completed on 78 percent of the area with total area covered so far standing around 23.55 lakh ha compare to 22.10 lakh ha same period last year.
Refine Soy Oil
NCDEX December Refined Soy oil futures traded higher in the morning hours as improved demand of edible oil due to wedding/winter season demand coupled with supply concern of palm oil due to continuous and heavy rains in Indonesia and Malaysia (la Nina weather). Better export figures of palm oil during the first 15 days of this month also provided support to the prices. As per SGS ( a cargo surveyor), Malaysia's palm oil exports during the November 1-15 rose 11.6% from a month earlier to 802,917 metric tons. However, prices could not sustain higher levels and slipped slightly from higher levels on account of profit taking and finally managed to close in red.
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
India sugar rises on firm export demand
Sugar futures settled 0.03% higher w-w on reports of positive decision to be taken regarding sugar exports. Further, as Sugar mills in Uttar Pradesh have not started crushing in full swing, farmers are supplying canes to the jaggery manufacturers. This is also supporting sugar prices. Decision on the sugar exports has been deferred till November 21, 2011.
So far 116 mills in Maharatsra are operating out of over 160 expected to produce, and have churned out 311,000 tonnes of sugar compared with 390,000 tonnes a year ago.(source: Reuters)
Further, reports that the Empowered Group of ministers may consider fresh Sugar exports on 21st November are likely to provide support to the prices.
ICE Raw Sugar futures and LIFFE settled 0.29% and 0.95% down on Friday with sustained concerns of Euro debt crisis. Possibility of decision on exports of sugar from India is also weighing on the prices. However, buying by Malaysia coupled with issuance of import quota by Mexico may lend support to the international prices.
Brazil sugar exports down 17% Y-Y in October 2011. Brazil exported 2.55 million tonnes of sugar in the month of October 2011 on account of less cane and sugar output.
Domestic Sugar updates
Cane output in Maharashtra is expected to rise to 82.5 mn tn during 2011-12 from 80.3 mn tn last year, while sugar output is likely to increase about 2.5% to 9.3 mn tn.
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
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. Eighty-nine out of the 310 existing mills in the region had concluded crushing by Nov. 1. 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
India chana settles higher on rising demand
Chana futures settled 6.04% higher w-w. Spot prices also ended 3.48% higher w-w owing recovery in demand from the local stockists. However, long liquidation by the market participants in the later part of the trading session led prices to settle 0.75% lower on Saturday.
There are reports that supplies in the global markets are tight. This will make imports costlier. Further, reports of lower sowing under pulses in A.P. and Karnataka due to dry spell are providing support to the prices. According to the Ministry of Agriculture, pulses have been sown in 49.75 lakh hectares as on November 18th 2011 as compared to 46.33 lakh hectares in the last year same period.
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 18th November 2011 was 13.96 lakh hectares (lh) as compared to 10.06 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
India guar seed edges higher on weak arrivals
Lower arrivals at the domestic amidst demand from the local stockists led Guar complex in green in the previous week. Spot prices and Futures settled 5.96% and 8.55% higher w-w. Expectation of revision in the Guar output is also providing support to the prices.
Arrivals remained steady at 60,000 bags on Saturday as compared to 70000-75000 bags in the beginning of the month.
Despite of lower output estimates in the current season arrivals are much higher. This is because farmers this season are not holding back their stocks due to record high prices.
Record Average daily arrivals are hovering around 90 thousand to 1 lakh bags compared to 55-60 thousand bags in the previous year.
There are reports that higher prices of Guar gum have made users to think for other alternative cheaper sources of gum for Oil exploration. However, no confirm reports are available as of now.
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 June of the current fiscal year 2011-12 stood at 1.45 lakh tn compared to 0.71 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.
However the export figures clearly indicates that global crisis has not hit Guar exports as of now in the current season too.
Courtesy: Angel Commodities