Crude oil declines sharply, gold falls on dollar strength
Flash Manufacturing Purchasing Managers' Index (PMI) in the Euro Zone dropped to 46.4 in November from the previous level of 47.1 in October. Euro Zone Flash Services PMI index rose to 47.8 in November as against 46.4 in the prior month. Industrial new orders declined sharply by 6.4 percent in September as against a rise of 1.4 percent in August.
German Flash Manufacturing PMI index dropped to 47.9 in the current month from the previous 49.1-mark in October. French Flash Manufacturing PMI declined to 47.6 in the current month as against 48.5 in October.
Strength in the US dollar exerted pressure on spot gold prices in today’s trading session. The yellow metal declined around 0.8 percent and touched an intra-day low of $1684/oz till 4.45 pm IST.
On the MCX, Gold December contract declined almost 1 percent and was trading around Rs28,525/10 gms till 4.45 pm IST today.
Taking cues from fall in gold prices and downside in base metals, spot silver dropped sharply by 3.4 percent today. The white metal touched an intra-day low of $31.54/oz and was hovering around $31.62/oz till 4.45 pm IST. On the MCX, Silver December contract slipped more than 3.5 percent and touched an intra-day low of Rs54,965/kg till 4.45 pm IST today.
Rising concerns with respect to the Euro Zone and US coupled with weak manufacturing data from China exerted downside pressure on base metal prices today. Additionally, a stronger dollar and rise in risk aversion in the global markets also acted as a negative factor for prices.
Crude oil prices declined sharply by 1.5 percent today mainly on the back of weak economic data from China and US coupled with rising worries over global economy which created demand concerns for oil.
Prices touched a low of $96.39/bbl and were trading at the level of $96.52/bbl till 4.45 pm IST today.
The US Energy Department (EIA) is expected to release its weekly inventory data later in the evening today. According to Reuter’s poll, crude oil inventories are expected to decrease by 0.5 million barrels for the week ended 18th November 2011.
Outlook
We expect gold and silver prices to trade with a negative bias today due to dollar strength. Silver will also take cues from downside in base metals today.
Base metals are expected to trade lower today, on the back of rising concerns with respect to Euro Zone and US and unfavorable manufacturing data from China. In addition to this, dollar strength will also act as a negative factor for metals on the LME.
We expect crude oil prices to trade on a rangebound note today, as rising uncertainty in the global markets coupled with unfavorable economic data from China and US will pull oil prices in the downward direction. While on the other hand, supply concerns from Iran and expected fall in US crude oil inventories may provide some support.
Courtesy: Angel Commodities
Base metals settle higher on US economic data
Except nickel, all other base metals traded higher on the LME on Tuesday on account of a weaker dollar.
However, further gains were capped due to weak economic data from the US and rise in risk aversion in the markets yesterday.
Lead
Lead was the top performer on Tuesday, as the metal gained more than 2 percent on the LME and around 1.3 percent on the MCX.
Prices rose mainly on the back of increasing demand for lead-acid batteries from the colder regions. Lead hit an intraday high of $2035/tonne and closed at $2034/tonne on Tuesday.
Copper
Copper prices rose around 1.2 percent on the LME and by 0.7 percent on the MCX yesterday. Rise in China’s copper imports, coupled with a deficit witnessed by the copper market supported the red metal prices.
According to the data from the International Copper Study Group (ICSG), global refined copper market experienced a deficit of 161,000 tonnes in the period between January-August of the current year as compared to a deficit of 339,000 tonnes in the same period a year earlier.
The world refined copper market stoat at a production deficit of 45,000 tonnes in the month of August.
Courtesy: Angel Commodities
Crude oil jumps on global supply concerns
Nymex crude oil increased more than 1 percent on Tuesday, as sanctions on Iran increased fears of political instability in the country and also created supply concerns.
This coupled with sharp fall in US crude oil inventories also acted as a supportive factor for oil prices yesterday.
Crude oil touched an intra-day high of $98.7/bbl and closed at $98.01/bbl yesterday. On the MCX, oil prices gained by more than 2 percent on the back of Rupee depreciation and closed at Rs.5142/bbl after touching an intra-day high of Rs.5156/bbl on Tuesday.
API Inventory Data
According to the report released by the American Petroleum Institute (API) on Tuesday, US crude oil inventories declined sharply by 5.6 million barrels for the week ending 18th November 2011. Gasoline inventories increased 5.4 million barrels, while distillate inventories decreased 886,000 barrels in the last week.
EIA Inventory Forecast
The US Energy Department (EIA) is expected to release its weekly inventory data later in the evening today. According to Reuter’s poll, crude oil inventories are expected to decrease by 0.5 million barrels for the week ended 18th November 2011.
Distillates stocks are predicted to decline by 1.5 million barrels and gasoline inventories are expected to increase by 1 million barrels in the last week.
Courtesy: Angel Commodities
Precious metals edge higher on weak dollar index
Spot gold prices rose more than 1 percent in yesterday’s trade mainly on account of a weaker dollar coupled with rise in risk aversion in the global financial markets which boosted safe-haven demand for gold.
The yellow metal touched an intra-day high of $1705/oz and closed at the level of $1698/oz on Tuesday. On the MCX, Gold December contract gained around 1.2 percent and touched an intra-day high of Rs28, 820/10 gms yesterday.
Silver
Silver prices surged 3.4 percent on Tuesday mainly taking cues from rise in gold prices and upside in base metals. Additionally, a weaker dollar also provided further support.
Silver touched an intra-day high of $33.02/oz and closed at $32.7/oz yesterday.
MCX Silver December contract rose sharply by almost 5 percent on account of Rupee depreciation and hit an intra-day high of Rs57,180/kg on Tuesday.
Courtesy: Angel Commodities
Base metals settle higher on global economic concerns
Metals although traded higher except Nickel and managed to close on a positive note. However, the gains were very limited and lead was the out performer which closed up by more than mere one per cent. The entire day was mostly sluggish as the data released were mediocre from the Euro zone.
Subentry, equities across the globe were also seen trading lower which restricted the metals gain and the data released from US were substantially negative for the economy and thereby on the metals trend. So, overall trend was unclear on last trading session.
Today morning metals at LME and Shanghai are seen trading down by around one per cent as the primary reasons being data released by China in the form of HSBC Manufacturing has turned out to be poor along with weaker Asian equity markets.
Moreover, Australia Government has approved mining tax and that might affect exports and thereby may have pressure on metals too as the country is one of the largest producer in the world. The euro currency is now seen trading lower against the greenback suggesting a bearish approach on the metals trend.
Going ahead, lot of economic data are expected from Euro zone and US and the former economic data are expected to be negative and thereby may have negative impact on metals during European session however, the latter expect positive trend on the data so metals may have some recovery in the US session.
Overall, we could see metals to have a negative trend for the day. However, at MCX metals may not decline much due to domestic currency depreciation.
Aluminium
Aluminium prices ended the day on a positive note however the gains have been very minimal and ended up by 0.17 per cent.
There is no such major activities from industry however, in the future exchange the OI and Volume is seen shrinking.
The spread between two future contracts have been hovering between 0.50-1.00.
Copper
Copper prices have managed to settle marginally higher by 0.27 per cent but the trend is still unclear.
The cancelled warrants have been improving from the pas two session and hovering above 9.50 per cent however no major impact is seen on the metals. In fact market is reacting to the events.
Lead
Lead is the out performer among the metals on yesterday and ended up by 1.33 per cent.
Cancelled warrants have been improving in this week and some support is felt on this commodity. However, market still looks dicey.
Nickel
Nickel which was the top performer on yesterday turned out to be the weaker one on yesterday’s trading session and ended down by 1.40 per cent.
Although cancelled warrants have improved in the recent time but fell on yesterday’s trading.
Zinc
Zinc prices moved higher along with peer commodity lead and ended up by 1.31 per cent.
There has been very sideways trend on this commodity and cancelled warrants are seen marginally improving.
Courtesy: Karvy Commtrade Ltd.
India soybean edges higher on extended buying
Soybean prices sustained gains on Tuesday as buying at physical markets supported uptrend in prices.
CBOT prices also closed higher yesterday as the Chinese imports of soybean are reported to be around 60 million tons.
Market arrivals currently are reported to be much lower than last year which supported the prices.
Oil world projected the global stocks and production of soybean to decline during current year which helped prices to gain.
Courtesy: Karvy Commtrade Ltd.
CBOT Updates: Soybean rises on export demand
CHICAGO (Commodity Online): US soybean futures ended higher, able to stabilize after previous declines on recent export demand and the absence of external financial pressure.
Soybeans were able to shake off the mixed signals from outside markets, buoyed by outlooks for strong demand at current price levels and seasonal buying, analysts say.
Soybeans have a seasonal tendency to bounce after Thanksgiving as harvest concludes, and some traders are looking to take advantage of lower prices before any rally, say Tim Hannagan, analyst at PFG Best. CBOT Jan soy ended up 5c at $11.53/bushel.
Courtesy: CME Group
CBOT Updates: Wheat declines on technical selling
CHICAGO (Commodity Online): US soybean futures ended higher, able to stabilize after previous declines on recent export demand and the absence of external financial pressure.
Soybeans were able to shake off the mixed signals from outside markets, buoyed by outlooks for strong demand at current price levels and seasonal buying, analysts say.
Soybeans have a seasonal tendency to bounce after Thanksgiving as harvest concludes, and some traders are looking to take advantage of lower prices before any rally, say Tim Hannagan, analyst at PFG Best. CBOT Jan soy ended up 5c at $11.53/bushel.
Courtesy: CME Group
CBOT Updates: Corn edges higher on short covering
CHICAGO (Commodity Online): US soybean futures ended higher, able to stabilize after previous declines on recent export demand and the absence of external financial pressure.
Soybeans were able to shake off the mixed signals from outside markets, buoyed by outlooks for strong demand at current price levels and seasonal buying, analysts say.
Soybeans have a seasonal tendency to bounce after Thanksgiving as harvest concludes, and some traders are looking to take advantage of lower prices before any rally, say Tim Hannagan, analyst at PFG Best. CBOT Jan soy ended up 5c at $11.53/bushel.
Courtesy: CME Group
India turmeric weakens on selling pressure
Demand from the local stockists from north India led Spot prices to settle 0.23% higher on Tuesday while Futures witnessed selling at the resistance levels and settled 0.87% lower. There are 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 Tuesday.
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
India jeera finishes down on higher sowing
Jeera prices at the bench mark Unjha market witnessed slight firmness due to buying by the local stockists and settled 0.18% higher on Tuesday. Jeera Futures however witnessed long liquidation towards the end of the trading session and settled 0.59% lower yesterday.
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 3,500 bags on Tuesday.
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 to settle lower on production concerns
Jeera prices at the bench mark Unjha market witnessed slight firmness due to buying by the local stockists and settled 0.18% higher on Tuesday. Jeera Futures however witnessed long liquidation towards the end of the trading session and settled 0.59% lower yesterday.
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 3,500 bags on Tuesday.
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 soybean trades higher on domestic demand
NCDEX December soybean futures traded higher on second consecutive trading sessions as improved demand from stockiest coupled with declining arrivals in the domestic market provided support to the bulls.
Arrivals of soybean declined to 6.50-7 lakh bags per day as compared to 9-10 lakh bags in the beginning of the month. 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 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 1-20, unchanged from a month earlier to 1.03 million tons.
As per another cargo surveyor (Intertek Agri Services), Malaysia's palm oil exports during the November 1-20, rose 0.6% from a month earlier.
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 gains on rising spot demand
Sugar Futures witnessed mixed sentiment throughout the day on apprehension that government might postpone the exports of sugar by one month or even early next year. Prices settled 0.14% higher on Tuesday.
However, late evening on Tuesday (November 22, 2011) government allowed exports of 1 million tonnes of sugar under Open General Licence (OGL) and removed the stock limit on sugar from December 1, 2011.
Currently (till November 30, 2011) sugar traders were not allowed to hold more than 500 tonnes of sugar.
Sugar mills in Uttar Pradesh have not started crushing in full swing; farmers are supplying canes to the jaggery manufacturers. Meanwhile Mills from Maharashtra have crushed 43 lakh tn sugarcane and produce 3.5 lakh tn sugar till date against 47 lakh tonnes of sugarcane and 3.9 lakh tonnes of sugar produced last year same period.
ICE Raw Sugar futures and LIFFE settled 1.73% and 2.70% lower on Tuesday on positive announcement that India will export 1 million tonnes of sugar.
The Brazil white Sugar prices have declined to $ 657 /tn last week ended 19th Nov, 2011 compared to $680-685 per tonne (FOB), in the previous week.
Current offer prices stands at Rs 32900 per ton in rupee terms compared to current domestic price of Rs 31000 / tn FOB. Sugar exporters may thus gain premium as the international prices have fallen further as the government has allowed exports of sugar.
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 ends higher on short covering
Chana futures after trading weak in the last few trading session bounced back from the support levels and settled 0.55% higher on Tuesday. Spot prices however continued to trade lower tracing reports of better area covered under Chana in Rajasthan and Maharashtra. Spot prices ended 1.35% lower yesterday.
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 likely to provide 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 settles lower on profit booking
Guar futures extended the gains of the previous days in the early trade on the back of robust demand from the millers on fears of lower output and carryover stocks, however, prices settled 1.1% lower towards the end on Tuesday on profit taking.
Arrivals which had touched 95 thousand to 1 lakh bags in the first fortnight of November, have declined to 65-70 thousand bags as farmers held back their fresh produce in anticipation of higher prices.
Weaker rupee is seen gearing up exporter’s profit margin. However, export demand may hit to some extent amidst higher prices and weaker rupee, which touched an intraday low of Rs 52.70 per $ yesterday.
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. 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.
Courtesy: Angel Commodities