Base metals witness mixed trend, crude oil falls
European stocks traded on a flat note ahead of the European leaders meet today in order to discuss the rescue plans for the Euro over the next three months. Asian stocks traded on a negative note today, on account of rising tensions with respect to Europe’s debt worries, while US stock futures trading on a positive note till 4:30 pm IST.
Spot gold prices declined around 0.1 percent and touched an intra-day low of $1604 /oz till 4:30pm IST. However, sharp decline was cushioned on account of a weaker dollar and was trading at the level of $1614/oz till 4.30 pm IST. On the MCX, Gold February contract declined by 0.3 percent and was hovering around Rs.27670/gms till 4.30 pm IST today.
Spot silver prices increased more than 0.6 percent on the back of a weaker dollar today. Prices touched an intra-day high of $29.18/oz and was hovering around $28.88/oz till 4:30pm IST today. On the MCX, Silver March contract dropped around 0.2 percent on account of Rupee appreciation and was trading at Rs.51,792/kg till 4.30 pm IST.
The base metals pack traded on a mixed note on the LME today, with copper, lead and nickel trading in the red, while zinc and aluminum managed to trade in the green. LME copper prices declined by 0.7 percent taking cues from choppy sentiments in the global markets.
Prices touched an intra-day low of $7445/tonne and were hovering around $7520/tonne till 4:30 pm IST today. On the MCX, the red metal prices dropped almost 0.5 percent and was trading at Rs.400/kg till 4:30 pm IST today.
Nymex crude oil prices declined by 0.3 percent today before the European leaders meet to discuss about the rescue plan for the Euro region. However, sharp downside in oil prices was restricted because of a weaker dollar and supply concerns from Iran.
Oil prices are hovering around $101.21/bbl and touched an intra-day low of $100.91/bbl till 4:30 pm IST. On the MCX, prices declined by around 0.2 percent and were trading at Rs.5336/bbl till 4:30 pm IST today.
Outlook
German Chancellor Angela Merkel and French President Nicolas Sarkozy are scheduled to meet today in order to discuss rescue plans for the Euro Zone over the next three months. Taking cues from uncertainty over the actions by the European leaders in the meeting, markets are expected to trade on a choppy note today.
On account of this, precious metals, base metals and crude oil prices are expected to trade lower today.
In case of crude oil, sharp downside will be cushioned on the back of supply concerns from Iran. However, any positive outcome from the meeting ahead may lead to reversal in the markets.
Courtesy: Angel Commodities
Base metals edge higher on positive US economic data
Positive economic data from the US last week indicated that the economic recovery in the world’s largest economy is gaining pace. This acted as a supportive factor for the base metals on the LME to trade higher in the last week with lead being an exception. However, ongoing tensions with respect to Euro Zone debt worries and a stronger dollar capped sharp gains in metal prices.
Copper
Copper, the leader of the base metals complex, rose around 0.2 percent last week on the LME on account of better-than expected US economic data. But further gains were resisted due to sharp rise in Shanghai weekly inventory of the red metal, a stronger dollar and rising Euro Zone debt concerns.
Copper inventories in warehouses monitored by the Shanghai Futures Exchange increased sharply by almost 13 percent to 105,258 tonnes last week
The red metal touched a high of $7787/tonne during the week and closed at $7574/tonne on Friday. On the MCX, Copper February contract declined by 1 percent on account of a stronger Rupee and touched a low of Rs398.60/kg in the last week.
Courtesy: Angel Commodities
Crude oil edges higher on global supply concerns
On a weekly basis, Nymex crude oil prices increased sharply by 2.8 percent taking cues from supply concerns due to sanctions on Iran by the European Union coupled with positive economic data from the US economy. However, further gains were restricted because of a stronger dollar and escalating worries over Europe’s debt crisis.
Oil prices touched a high of $103.74/bbl during the week and closed at $101.6/bbl on Friday. On the MCX, prices gained around 0.6 percent last week and closed at the level of Rs.5345/bbl on Friday after touching a high of Rs.5498/bbl during the week.
Natural Gas
Nymex natural gas posted its first weekly gain since December and rose more than 3.6 percent last week, on the back of forecasts of cooler climate in Northern Hemisphere. However, further upside in prices was restricted because of a stronger dollar.
Prices touched a high of $3.076/mmBtu and closed at $3.074/mmBtu last week. On the MCX, gas prices increased by around 0.2 percent, as sharp gains were caped due to appreciation in the Indian Rupee and closed at Rs.162.4/mmBtu last week.
Courtesy: Angel Commodities
Precious metals settle higher on safe haven demand
On a weekly basis, spot gold prices rose sharply by 3.4 percent as rise in crude oil prices fueled inflation-led demand for gold. However, further gains were resisted on the back of a stronger dollar. The yellow metal hit a high of $ 1630/oz last week and ended its trading session at the level of $1616/oz on Friday.
On the MCX, Gold February contract rose around 1.1 percent and touched a high of Rs27,945/10 gms. Appreciation in the Indian currency capped further gains on the domestic bourses and closed at Rs27,755/10 gms last week.
Silver
Taking cues from rise in gold prices coupled with upside in base metals, spot silver prices traded higher by around 3.6 percent last week. The metal hit a high of $29.72/oz and ended its trading session at $28.70/oz in the last week. However, further gains were not witnessed on account of dollar strength.
On the MCX, Silver March contract gained around 0.8 percent and touched a high of Rs53,500/kg in the last week. However, a stronger Rupee capped sharp gains on the Indian platform.
Holdings in the iShares Silver Trust, the world's largest silver-backed exchange-traded fund, declined by almost 1 percent to 9516.75 tonnes on 6th January 2012 from the previous 9605.79 tonnes on 30th December 2011.
Courtesy: Angel Commodities
India soy complex settles lower on higher arrivals
Soybean prices have declined on Saturday owing to the increased arrivals and decline in spot prices. Buyers are refraining from buying at higher spot prices. Meal prices have dropped by Rs. 100/ton which had bearish impact on soybean prices.
Soy oil prices extended losses on Saturday owing to weakness prevailing in spot demand. Buyers remained inactive at higher price levels. GAPKI reported increase in palm oil production estimates during 2012 which affected the prices and kept the prices under pressure.
Mustard seed price declined steeply on Saturday owing to weakness in soy complex. Better crop conditions also kept prices under pressure along with decline in the spot market activities. Drop in demand for meal and oil currently is affecting the prices.
Courtesy:Karvy Comtrade Ltd.
NCDEX turmeric trades lower on firm domestic demand
Depleting arrivals in the domestic mandi kept Turmeric Spot prices firm in the last week. Futures however, witnessed mixed sentiments and settled 0.34% lower w-w. There are reports that overseas orders might improve on account of lower prices.
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 rises on weak arrivals
Lower arrivals in the domestic market led Spot prices to remain firm and settled 3.17% higher w-w. However, Futures which initially traded firm and touched new contract highs of Rs. 16,975/qtl, witnessed profit booking towards the end and settled 2.05% lower w-w.
According to Gujarat farm ministry, area sown under jeera till December 26, 2011 stood at 2.78 lakh hectares (lh) up 21.5% as compared to last year 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 6,000 bags while offtakes stood at 6,500 bags on Friday.
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 drops on weak export demand
Lacklustre trades at the domestic and overseas market led Spot prices and Futures to trade weak and settled 2.97% and 4.17% lower w-w. Demand from the overseas and domestic buyers continues to remain 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/tonne 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 14 tonnes while offtakes stood at 24 tonnes on Friday.
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 tumbles on global cues
NCDEX January soybean futures traded lower on 4th consecutive trading session and hit 2% lower limit on Saturday as weak overseas market due to bearish USDA’s weekly export sales report. USDA’s weekly export sales released on January 6, 2012, weekly export sales for soybeans were well below trade expectations at 281,300 metric tonnes.
Cumulative soybean sales stand at 68.2% of the USDA forecast for 2011/2012 (current) marketing year versus a 5 year average of 73.2%. Sales of 319,000 metric tonnes are needed each week to reach the USDA forecast. Meal sales were higher than expected at 144,400 metric tonnes as compared with sales of 97,000 metric tonnes needed each week to reach the USDA forecast. Oil sales came in at 7,300 metric tonnes.
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 lower on account of weakness in other oilseeds and huge losses in soy oil futures on Saturday. Uttar Pradesh mustard acreage increased to 663,141 hectares till date as compared to 657,228 hectare. 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 fell sharply and hit 3% lower limit on account of profit taking and lower domestic demand at prevailing prices. Lower demand of palm oil from China and euro zone on weak global economy coupled with higher production estimates of Indonesia, palm oil production estimates. Indonesia’s higher production estimates of palm oil (25 million tonnes) this year (due to increased plantation acreage), up by 6.32% as compared to 23.5 million tonnes last year. As per Intertek (cargo surveyor), Malaysian Palm Oil exports in the month of December 2011 fell by 2.6% to 1.49 million tonnes as compared to last month.
Courtesy: Angel Commodities
NCDEX sugar slumps on higher stocks
Sugar Futures declined 3.63% w-o-w on sufficient stocks at the domestic market. Also, reports of better Sugar recovery in Maharashtra during October 2011-December 2011 is pressurizing prices.
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 0.08% and 0.69% higher respectively on Friday.
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 edges higher on lower acreage
Chana futures settled 2.39% higher wow on the back of lower area covered under Chana. 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 settles higher on thin supply
Despite several measures and stricter norms by the regulator, Guar Seed and Guar gum futures continued with its upward rally during the week and settled 11.13% and 11.1% higher wow on expectations of tight supplies in the long run if exports continue to remain firm. Prices witnessed some profit booking on Saturday and thus settled marginally lower by 0.48% and 0.28% respectively.
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