Base Metals Settle Lower on Euro Debt Worries

Rising worries over Euro Zone debt concerns coupled with mixed sentiments in the global markets exerted downside pressure on the base metals complex on Monday.

In additional to this, mounting global economic risk also acted as a negative factor for the metals yesterday.

However, dollar weakness cushioned sharp fall on the international markets. Depreciation in the Indian Rupee resisted further declined on the domestic bourses on Monday.

Copper

Copper, the leader of the base metals, declined almost 1 percent on Monday, as signs that the property market was cooling in China, the world’s largest metals consumer, has increased demand fears for industrial metals.

The red metal touched an intra-day low of $7198/tonne and closed at the level of $7296/tonne yesterday.

On the MCX, Copper February contract declined marginally by 0.1 percent as further fall was not witnessed due to Rupee depreciation on Monday.

Courtesy: Angel Commodities


Crude oil edges higher on global supply concerns

Nymex crude oil prices increased by 0.4 percent in yesterday’s trading session, as protests in Kazakhstan raised fears of supply disruption which produces over 1.6 million barrels per day.

The strike continued for the third day in capital after 15 people were killed in Central Asia’s deadliest riots in decades.

Threat to supply also comes from high tension and more sanctions to be imposed on Iran from the West regions over Tehran's nuclear program. China and India are also depending less on Iranian oil exports.

Oil prices touched an intra-day high of $94.42/bbl and closed at $93.8/bbl. On the MCX, prices increased by 1.6 percent and closed at Rs.4983/bbl after touching an intra-day high of Rs.5003/bbl on Monday.

API Inventories Forecast

The American Petroleum Institute (API) is scheduled to release its weekly inventories today and crude oil inventories are expected to decline by 2.4 million barrels for the week ending on 16th December 2011.

Gasoline stocks are expected to rise by 1 million barrels and distillate inventories are expected to fall by 0.4 million barrels.

Courtesy: Angel Commodities


Precious metals under pressure on poor safe haven demand

Spot gold prices declined around 0.4 percent on Monday while prices on the Comex traded on a flat note. However, dollar weakness cushioned sharp fall in the yellow metal prices yesterday.

It touched an intra-day low of $1582/oz on the international markets and closed at the level of $1591/oz on Monday.

On the MCX, Gold February contract rose around 0.7 percent on Monday as depreciation in the Indian Rupee led gains on the domestic bourses.

It hit an intra-day high of Rs27,795/10 gms and ended at 27,692/10 gms yesterday.

Silver

Spot silver dropped sharply by 3 percent on Monday, taking cues from fall in gold prices and downside pressure in the base metals. The metal remained under pressure as economic prospects weaken.

Silver touched an intra-day low of $28.65/oz and closed below the level of $29-mark at $28.75/oz.

Courtesy: Angel Commodities


CBOT Updates:Soybean ends higher on extended buying

CHICAGO (Commodity Online):US soybean futures end higher, settling at a 1-month high. The market's gains were driven by traders covering short positions after recent price declines, with dryness concerns for South American crops attracting buying, analysts say.

Traders added a risk premium due to the potential threats to the soybean crop there, as South America is the main competition for US exporters, and a smaller crop there would likely mean greater demand for US soybeans, analysts add.

The absence of price weakness from external financial markets kept attention on Brazil and Argentina weather. CBOT March soy ended up 7 1/4c at $11.46 3/4/bushel.

Courtesy:CME Group


CBOT Updates:Wheat surges on crop concerns

CHICAGO (Commodity Online):US wheat futures rally to one-week highs, feeding off spillover support from corn and soybean futures.

Corn and soybeans rose on crop concerns in South America, also drawing support from worries dryness in South America could hurt wheat crops there as well, analysts say.

Wheat also drew support from the slow emergence of the winter wheat crop in the Ukraine, a feature that sparked short covering.

Because of large net short position in wheat, market had greater potential for upside moves than corn and beans, analysts add.

CBOT March wheat ended up 16c at $599 3/4/bushel; March KCBT wheat rose 19c to $6.58 1/2; March MGEX wheat climbed 16c to $8.27 1/4.

Courtesy:CME Group


CBOT Updates:Corn settles higher

CHICAGO (Commodity Online): US corn futures rally on worries about the South American crop and short-covering.

It's been dry in South America, and there's worries that rains this week won't be enough to offset the dry longer-term trend.

Traders are increasingly focused on potential corn-yield losses, as well as soybeans.

But some analysts say the main driver behind corn's gains was an oversold market and covering short positions. CBOT March corn ended up 3.1% at $6.01/bushel.

Courtesy:CME Group


NCDEX turmeric remains higher on short covering

Turmeric Futures after posting huge losses in the previous week bounced back owing to short coverings by the market participants and settled at the upper freeze of 4% on Monday. Spot prices traced the Futures and settled marginally up yesterday.

Production, Arrivals and Exports

Arrivals in Nizamabad and Erode mandi are steady around 1,500 bags and 10,000 bags respectively on Monday.

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 firm spot demand

eera prices extended gains of the previous day and settled 0.91% and 0.98% higher respectively on Monday. Demand from the local stockists amidst reports of surge in the exports of jeera led prices to strengthen.

According to Gujarat farm ministry, area sown under jeera till December 13, 2011 stood at 2.32 lakh hectares (lh) up 26.68% 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 steady arrivals of 3,000 bags amidst off takes of 4,000 bags on Monday.

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 weak arrivals

Spot Pepper and Futures continued to add to the gains of the previous day and settled 0.52% and 1.73% higher respectively on Monday. Demand from the local stockists amidst lower arrivals led prices to remain at higher levels.

Pepper stocks with Vietnam are expected to be around 10 thousand tonnes while that in India is expected to be 12 thousand tonnes. Indian parity in the international market was at $7,150-7,200(c&f) a tonne and remained competitive while Vietnam 550 gl was quoting its pepper at $7,250 per tonne (fob).

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 6 MT as compared to 17 tonnes on Saturday while offtakes on the other hand stood at 38 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 trades higher on global cues

NCDEX January soybean futures ended higher on second consecutive trading session on account of firm overseas market as dry weather concern of South America and better demand in the domestic market from solvent extractors and stockists coupled with farmers are holding back their stocks in anticipation of higher prices in coming days.

Total arrivals of soybean in Madhya Pradesh were 1.50 lakh bags, Maharashtra was 1 lakh bags and Rajasthan was 50,000 bags(Bag=90- 100 Kg). Soybean prices in Indore were at Rs2280-2340/qtl (auctions in Mandi) and plant delivery was quoted Rs2380-2415/quintal.

USDA’s weekly export figures released on December 15, 2011, which shows that the net weekly export sales for soybeans came in at 468,600 metric tonnes which was slightly below trade expectations.

China was the largest buyer of 354,200 tonnes. Cumulative soybean sales stand at 63.7% of the USDA forecast for 2011/2012 (current) marketing year versus a 5 year average of 68.5%. Meal sales came in at 103,700 metric tonnes for the current marketing year and 3,600 for the next marketing year for a total of 107,300. Net oil sales came in at 5,500 metric tonnes which was near the low end of expectations.

As per local statistics bureau of China, soybean output in China's Heilongjiang province, the top-producing area, fell 7.5% to 5.42 million metric tons this year.

Rape/mustard Seed

NCDEX January RM Seed futures ended slightly higher on lower sowing acreage of Rabi oilseeds. Higher prices of other oilseeds and edible oil also provided support to the bulls. Sowing acreage of Rabi oilseeds in India was 7.56 million hectare as compared to 8.15 million hectare a year ago.

Oilseeds area in the Maharashtra declined 23% to 207,000 ha, with safflower acreage falling 17.4% to 121,600 ha. Mustard seed accounts for about 70% of India's winter-season oilseed output.

As per WASDE (USDA) monthly supply & demand report which is released on December 09, 2011 shows that the Canada rapeseed production raised 1.3 million tons to 14.2 mln based on the latest survey results from Statistics Canada.

Refine Soy Oil

NCDEX December refined soy oil futures traded higher on second consecutive trading sessions as firm overseas market due to dry weather concern of South America coupled delayed harvesting of C{O in Malaysia due to heavy rains. Improved demand from domestic market as winter season demand also added bullish market sentiments.

As per Solvent Extractors Association of India, India imported 827,684 tonnes of vegetable oils in the first month of oil marketing year (November to October), up 27 percent from 652,262 tonnes a year ago.

Marker share of palm oil imports was about 90% of total vegetable oil imports. However, soybean oil’s share was less than 1% and rest was sunflower oil. India imports palm oil from Indonesia and Malaysia and a small quantity of soy oil from Argentina and Brazil.

Courtesy: Angel Commodities


NCDEX sugar regains on short covcering

Sugar prices rebounded on Monday due to short coverings. Prices had declined sharply last week on reports that Maharashtra Sugarcane crushing and Sugar output improved and is up from the year ago period.

Further, sufficient supplies and lower demand from the bulk manufactures amidst winter season kept prices under pressure.

Government has released 19.1 lakh tonne (tn) of Sugar for the month of December which includes 2.07 lakh tn of levy quota, 17 lakh tn of non levy quota and 600 tn of Sugar refined from imported raw.

The Food Ministry has issued permits for the export of nearly 37,000 tonnes of sugar so far out of the one million tonnes that the government has allowed for overseas shipment in the ongoing 2011-12 marketing year.

Liffe white sugar and ICE Raw settled almost range bound on Monday and would continue to remain sideways until more details emerge about the size and availability of the crop from Brazil and India in the next season.

Domestic Sugar updates

Sugar output in Maharashtra rose 9% between Oct 01 and Dec 15 to 18.6 lakh tonnes compared with the 17 lakh tonnes same period last year. The output was earlier down by 6%. Recovery rate also increased to 10.07% from 9.70% a year ago.

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 settles higher on lower acreage

Chana futures extended the gains of the previous week and settled around 1% higher wow on the reports of lower acreage for the second straight week.

Concerns over unfavorable weather in AP, Maharashtra coupled with lower area under cultivation in these states have raised concern over Chana output in the coming season.

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.

The area under pulses has been marginally lower by 0.8% on account of lack of rains. Area under Chana, a dominant pulse crop has been lower at 83.55 lakh ha against 86.36 lakh ha in corresponding last year.

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 hitting lower circuit during the previous two consecutive sessions, Guar seed and Guar gum futures continued to trade higher and settled at 4% upper limit.

Prices traded higher despite of high margin 30% on the long side of Guar seed and Guar gum contracts.

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 led to high volatility in the Guar prices.

As per the NCDEX circular dt 16/12/2011, further Special Margin of 10% in cash on the Long side of Guar seed and Guar gum will be imposed w.e.f. from Monday, December 19, 2011 on all running and yet to be launched contracts.

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. (Newswire 18).

Besides imposing special margin, FMC is also considering various measures like cutting position limits on Guar seed , soughing data on top guar traders in NCDEX etc.

Although long term fundamentals remain supportive for the prices, such rise was not expected at the time when arrivals are at its peak.

Arrivals of late sown Guar crop is ongoing in Rajasthan. Daily average arrivals stood around 1.1 lakh bags on Saturday compared to 90 lakh bags on Thursday.

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.

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 July of the current fiscal year 2011-12 stood at 1.93 lakh tn a rise of 82% compared to 1.02 lakh tn during the same period last year. However, the latest figures from April to August are 5% lower than the April – July number published last month. This has created panic in the markets.

Courtesy: Angel Commodities