Base Metals, Crude Oil to Trade Higher on Weak US Dollar

European markets traded higher today, ahead of US manufacturing data which is expected to come on the positive side. ISM Manufacturing Purchasing Managers' Index (PMI) in the US is expected to increase up to 53.3-mark in December from the previous level of 52.7 in November. Additionally, improved manufacturing data from China, UK and India also led to rise in risk appetite in the global markets.

Spot gold rose sharply by more than 1.5 percent today on the back of weakness in the US dollar. The yellow metal touched an intraday high $1592/oz and was trading at $1589/oz till 4.30 pm IST.

MCX Gold February contract gained around 0.8 percent and hit a high of Rs27,637/10 gms till 4.30 pm IST today. However, a stronger Rupee resisted further gains on the domestic bourses.

Taking cues from rise in gold prices coupled with a weaker dollar, spot silver rose sharply by more than 3 percent today. The white metal tested an intra-day high of $28.72/oz and was trading at $28.67/oz till 4.30 pm IST. On the MCX, silver March contract gained around 1.6 percent and appreciation in the Indian Rupee capped further gains on the domestic platform today.

The base metals complex traded on a mixed note today with nickel and lead trading lower while copper, zinc and aluminium trading in the green. In case of nickel and lead, sharp decline was cushioned on the back of weakness in the US dollar.

Copper prices rose sharply by almost 1.5 percent on the LME and around 0.7 percent on the MCX. Appreciation in the Indian currency capped sharp gains on the domestic bourses today.

Nymex crude oil prices gained by 2.1 percent today taking cues from the supply concerns from Iran and favorable manufacturing data from China and India. A weaker dollar and upbeat market sentiments also acted as a positive factor for the commodity.

Prices were trading around $100.92/bbl after touching an intraday high of $101.10/bbl till 4:30pm today. On the MCX, prices increased by 1 percent and were hovering around Rs5378/bbl after touching an intra-day high of Rs5392/bbl till 4:30pm today.

Outlook
Gold and silver are expected to trade with a positive bias today, taking cues from weakness in the US dollar coupled with upbeat sentiments in the global markets. Silver being an industrial metal will also take cues from upside in base metals.

We expect base metals and crude oil to trade higher today on account of rise in risk appetite in the global markets coupled with a weaker dollar.

In case of crude oil, supply concerns from Iran will also act as a supportive factor for oil prices.

Courtesy: Angel Commodities

Base metals settle higher on debt concerns

The base metals complex on the MCX traded on a positive note in yesterday’s trading session. However, less volatility was observed as LME markets were closed on Monday on account of New Year Holliday. Lead was the top performer in yesterday’s trading session, as the metal rose sharply by 2.5 percent on the MCX.

Copper
Copper, the leader of the base metals pack, traded higher by 0.4 percent on the MCX on Monday. The red metal touched an intra-day high of Rs408/kg and closed its trading session at the level of Rs407.8/kg yesterday.

On a month-on-month basis, copper prices witnessed a fall of 1 percent mainly on the back of demand concerns for the commodity due to global economic worries.

Courtesy: Angel Commodities

Crude oil edges higher on demand concerns

MCX crude oil prices increased by 0.2 percent in yesterday’s trade and touched an intra-day high of Rs.5329/bbl.

However, less volatility was observed due to absence of major global markets on Monday on account of New Year Holiday. Prices ended its trading session at the level of Rs.5325/bbl on Monday.

Natural Gas

On the MCX natural gas prices declined by 0.3 percent yesterday on the back of mild weather forecasts and consistently higher production.

Thin trading was witnessed due to absence of major global markets on Monday. Prices touched an intra-day low of Rs.160.4/mmBtu and closed at Rs.161.6/mmBtu on Monday.

Courtesy: Angel Commodities   


Precious metals tumble on absence on global markets

Spot gold prices traded on a flat note on Monday, as less volatility was witnessed mainly due to absence of the major global markets on account of New Year Holiday.

The yellow metal touched an intra-day high of $1568/oz and closed at the level of $1565/oz yesterday.

On the MCX, Gold February contract dropped around 0.2 percent and touched an intra-day low of Rs27,271/10 gms on Monday. The yellow metal closed its trading session at Rs27,382/10 gms yesterday.

Silver
Spot silver prices rose around 0.4 percent on Monday and touched an intra-day high of $27.80/oz. On the MCX, Silver March contract declined around 0.2 percent an touched an intra-day low of Rs51,381/kg. The white metal ended its trading session at the level of Rs51,330/kg on the domestic bourses.

Courtesy: Angel Commodities  


India soy complex settles higher on strong domestic demand

Soybean prices extended steep gains at futures owing to strength in domestic demand. Gradual increase in meal prices and demand for edible oil supported the prices to close higher on Monday.

Arrivals are declining while spot prices have increased by ' 10-20/quintal which is supported the prices.

Soy oil prices rose steeply on Monday back by the domestic demand. Spot prices also surged steeply by '10/quintal across major markets. Soy oil from Brazil and Argentina are costlier with rupee depreciation which in turn supported price rally.

Export tax structures in Indonesia and bad weather conditions in Malaysia are affecting imports of palm oil in India which is adding to supply bottle neck helping prices to gain.

Mustard seed prices extended gains on Monday as robust meal demand is driving seed prices higher. Demand of mustard oil as substitute for palm oil helped prices to gain. Some showers were reported across rajasthan regions which limited steep gains.

Courtesy:Karvy Comtrade Ltd.


NCDEX turmeric finishes up on firm domestic demand

Fragile demand from the overseas and domestic market kept prices rangebound throughout the day. Spot prices and Futures settled 0.50% higher respectively on Monday.

Production, Arrivals and Exports
Arrivals in Nizamabad and Erode mandi stood around 1,000 bags and 10,000 bags respectively 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 edges higher on weak arrivals

Jeera Spot prices and Futures continued to add the gains of the previous week on account of lower arrivals amidst better offtakes.

Also, expectation of ground frost in the growing areas is providing support to the prices. Spot prices and Futures settled 0.27% and 2.92% higher respectively on Monday.

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. 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 3,500 bags on Monday as compared to 4000 bags on Saturday. Off takes stood at 5,000 bags yesterday.

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 settles higher on fresh buying

Dull activity at the domestic and overseas market led Spot prices and Futures to remain rangebound on the first day of the week. Prices at the Spot and Futures settled 0.26% and 0.15% higher on Monday.

Demand from the overseas and domestic buyers is dull as buyers are following a wait and watch stance anticipating fall in the prices as fresh arrivals will gain momentum at the end of month (January).

Indian parity in the international market is being offered at $6,950/tonne.

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 the domestic mandi on Monday stood at 10 MT as compared to 8 MT on Saturday while offtakes on the other hand stood at 12 tonnes.

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).

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 rises on extended buying

NCDEX January soybean futures traded high on account of improved demand from crushers and stockists in domestic markets. Total arrivals of soybean in Madhya Pradesh were 1.30 lakh bags on Monday, Maharashtra was 70,000 bags and Rajasthan was 30,000 bags (Bag=100 Kg).

Soybean prices in Indore were at Rs 2380- 2450/qtl (auctions in Mandi) and plant delivery was quoted Rs 2480- 2550/quintal. Bullish USDA’s weekly export figures also provided support to the prices. USDA’s weekly export figures released on December 30, 2011, which shows that the net weekly export sales for for soybeans came in at 662,700 metric tonnes for the current marketing year and 500 for the next marketing year for a total of 663,200 which was higher than expected.

As of December 22nd, cumulative soybean sales stand at 67.4% of the USDA forecast for 2011/2012 (current) marketing year versus a 5 year average of 71.9%. Sales of 318,000 metric tonnes are needed each week to reach the USDA forecast. Meal sales came in at 51,100 metric tonnes which was well below expectations.

Sales of 98,000 metric tonnes are needed each week to reach the USDA forecast. Oil sales wee also slow at 2,300 metric tonnes. Cumulative soybean oil sales stand at 25.9% of the USDA forecast for 2011/2012 (current) marketing year versus a 5 year average of 40.0%. Sales of 12,000 metric tonnes are needed each week to reach the USDA forecast.

Rape/mustard Seed
NCDEX January RM Seed futures traded higher on 7 consecutive trading sessions on account of strong gains in edible oil coupled with lower production estimates for this year as compared to last year due to lower sowing acreage coupled with crop damage talk of RM Seed due to frost in Rajasthan and Haryana.

According to Mistry of Agriculture, GOI, Sowing acreage of Rabi oilseeds in India was 79.22 lakh hectares (down 6.32%) as compared to 84.57 lakh hectare a year ago on 30/12/2011. Sowing acreage of rape/mustard seed in India was 64.55 lakh hectares (down 5.37%) as compared to 68.21 lakh hectares a year ago. Mustard seed accounts for about 70% of India's winter-season oilseed output.

Refined Soy Oil
NCDEX January refined soy oil futures traded higher and hits all time high on account of firm overseas market and improved demand of edible oil in winter season. Depreciation of Indian rupee against US dollar also provided support to the prices as import of edible oil would be more expensive. India imports about 50% edible oil of its total requirements.

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. Imported crude soy-oil price quoted Rs 66,500 /tonnes on Monday as compared to Rs 66,000/tonnes on Friday (source: SEA).

Courtesy: Angel Commodities   


NCDEX sugar settles higher on firm domestic demand

Sugar Spot prices settled 1.61% higher on Monday owing to reports of issue of release of export order of 2.32 lakh tonnes out of the total 10 lakh tonnes. Also, reports that Food Minister’s might consider 1 million tonnes more Sugar exports for 2011-12 season is providing support to the prices.

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 & ICE Raw settled 0.43% and 0.89% lower on Friday amidst long liquidation by the market participants.

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%. Recovery rate 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 1.3 mln tn sugar during the current crushing season. Maharashtra Oct 1-Dec 8 sugar output is up at 1.45 mln tn vs 1.31 mln yr ago due to higher recovery at 9.8% from 9.344% last year.

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 declines on subdued demand

Lower acreage covered under Rabi pulses and Chana led Chana spot prices to settle 0.08% higher respectively. As the rabi sowing season is coming to an end, area covered under the Pulses and Chana are probably to miss the target. However, temperature prevailing in the growing areas is conducive for the growth of the sown crop. This is restricting prices from trading higher.

According to the Farm Ministry area sown under Rabi pulses is down by 1.28% to 13.85 million hectares as compared to 14.02 lakh hectares in the same period previous year. Chana sowing till December 23rd 2011 is 5.9% down at 8.64 million hectares as compared to 9.18 million hectares in the same period previous year.

According to Gujarat farm Ministry, Chana acreage in the state is down 4.9% to 1.84 lakh hectares as con December 26th 2011.

Rajasthan, rabi pulses area is 1.60 mln hectares as compared to 1.56 mln hectares as on 16th December 2011. Area covered under Chana stands around 1.56 mln hectares as compared to 1.54 mln hectares in the same period previous year(State Farm Ministry)

Forward Market Commission (FMC) has scrapped special margin of 10% on Chana on long side on all running contracts with effect from Friday December 09, 2011.

Sowing 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.

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 edges higher on firm exports

After witnessing some corrections during the last week, Guar seed and Guar gum Futures continued its upward trend and settled 4% higher on Monday. Fears that Forward Market Commission (FMC) might impose stricter norms to curb high volatility in the prices led prices to witness correction.

According to Chairman Ramesh Abhishek Forward Market Commission, the regulator is likely to take action with respect to rising Guar prices in the Futures. The team probing the issue will submit the report findings on Tuesday January 3, 2012 and action on the same will be taken on Wednesday. (Source: Newswire 18).

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%.

Reports of discrepancies in the latest export figures released by the APEDA (Agricultural & Processed Food Products Export Development Authority) coupled with talks of high manipulation has also led to high volatility in the Guar prices.

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).

Indian Guar gum Association has sought the FMC’s intervention so as to curb rising Guar seed and Gum prices. They clarified that the price surge is not only defeating the futures trade, but also hurting the export prospects. (Source: Newswire 18).

Arrivals of late sown Guar crop is ongoing in Rajasthan. Arrivals currently in Rajasthan and Haryana stand around 1.1 lakh bags (Newswire 18).

Production
Guar seed output in Rajasthan is estimated at 11.36 lakh tonnes for 2011-12 season, down by 25% 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.

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 lower 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.

Courtesy: Angel Commodities