Base metals, crude oil trade lower on dollar strength
Asian markets ended on a negative note today as European debt concerns have re-emerged. European stocks and US stock futures also traded in the red.
India’s food inflation slipped to a negative territory to -3.36 percent for the week ending 24th December, as prices decreased on improved supply of pulses, vegetables and potatoes and other essential commodities. The country’s food inflation stood at 0.42 percent in the previous week. The fuel price index accelerates to 14.60 percent in the same week from the previous 14.37 percent a week earlier.
Spot gold prices erased its earlier gains and was trading on a flat note in today’s session on account of a stronger dollar. The yellow metal touched an intra-day low of $1609.09/oz and was trading at $1612.59/oz till 4:30 pm IST. On the MCX prices declined by around 0.4 percent and were hovering around Rs.27750/10gms till 4:30pm IST today.
Taking cues from fall in base metals and dollar strength, spot silver decline by more than 0.4 percent today. The white metal touched an intra-day low of $28.86/oz and was trading at $29.04/oz till 4:30pm IST. On the MCX silver March contract dropped almost 1 percent and was hovering around Rs.52270/kg till 4:30pm IST today.
The base metals pack traded on a negative note on the LME today.
Copper declined by 1.1 percent today on LME taking cues from a stronger dollar. Copper, the leader on the base metals, touched an intra-day low of $7462/tonne and trading around $7473/tonne till 4:30pm IST. On the MCX, prices declined by 0.9 percent and were trading at Rs.399.85/kg till 4:30pm IST today.
Nymex crude oil prices declined by 0.7 percent today, taking cues from a stronger dollar coupled with weak sentiments in the global markets.
However, sharp declined was cushioned on account of supply concerns from Iran and expected fall in US crude oil inventories.
The US Energy Department (EIA) is scheduled to release it weekly inventories report today and crude oil inventories is expected to decline by 0.2 million barrels for the week ending on 30th December 2011. Gasoline stocks are expected to rise by 1.3 million barrels whereas distillate inventories are also expected to increase by 0.8 million barrels.
Outlook
We expect gold and silver to trade with a negative bias today on the back of a stronger dollar. Silver will also take cues from fall in gold prices and downside in base metals.
Base metals and crude oil prices are expected to come under pressure today, on account of dollar strength coupled with weak sentiments in the global markets due to escalating concerns over Euro Zone debt worries.
However in case of crude oil, sharp decline will be cushioned on the back of supply concerns from Iran and expected fall in US crude oil inventories.
Courtesy: Angel Commodities
Base metals settle lower on Euro debt concerns
Rising concerns with respect to Euro Zone debt worries coupled with mixed sentiments in the global markets exerted downside pressure on the base metals on Wednesday. In addition to this, strength in the US dollar also acted as a negative factor for the metals yesterday.
Copper
Copper was the worst performer amongst the base metals pack in yesterday’s trade, as the metal declined sharply by almost 3 percent on the LME and around 2.5 percent on the MCX.
The red metal came under pressure on account of deepening tensions over Europe’s debt crisis and dollar strength.
Copper touched an intra-day low of $7531/tonne and ended its trading session at the level of $7555/tonne on Wednesday.
MCX copper February contract touched an intra-day low of Rs402.80/kg and ended at the level of Rs403.60/kg yesterday.
Courtesy: Angel Commodities
Crude oil rises on weak US inventories
Nymex crude oil prices increased by 0.3 percent yesterday after European governments agreed in principle to ban imports of Iranian crude oil.
Additionally, declined in US crude oil inventories also acted as a positive factor for the commodity.
Prices touched an intra-day high of $103.74/bbl and closed at $103.2/bbl on Wednesday. On the MCX, crude oil gained by 0.4 percent and closed at Rs.5462/bbl after touching an intra-day high of Rs.5498/bbl on Wednesday.
API Inventories Data
As per the American Petroleum Institute (API) report last night, crude oil inventories declined sharply by 4.4 million barrels to 334.50 million barrels for the week ending on 30th December 2011.
Gasoline inventories rise by 3.4 million barrels to 219.1 million barrels and distillate inventories increased by 5.2 million barrels to 145.4 million barrels.
EIA Inventories Forecast
The US Energy Department (EIA) is scheduled to release it weekly inventories report today and crude oil inventories is expected to decline by 0.2 million barrels for the week ending on 30th December 2011.
Gasoline stocks are expected to rise by 1.3 million barrels whereas distillate inventories are also expected to increase by 0.8 million barrels.
Courtesy: Angel Commodities
Gold edges higher on firm crude oil prices, silver declines
Gold recovered its early losses mainly on the back of rise in crude oil prices after European governments agreed in principle to ban imports of Iranian oil.
This boosted the inflation-led demand for gold in yesterday’s trading session. However, sharp gains were capped due to a stronger dollar. The yellow metal hit an intra-day high of $1618/oz and closed at $1611/oz on Wednesday.
MCX Gold February contract rose around 0.7 percent and touched an intra-day high of Rs27,888/10 gms yesterday. The yellow metal closed its trading session at Rs27,852/10 gms on Wednesday.
Silver
Spot silver prices declined sharply by almost 1.5 percent in yesterday’s trading session, taking cues from a stronger dollar coupled with downside in base metals space. The white metal touched an intra-day low of $28.9/oz and ended at the level of $29.2/oz on Wednesday.
On the MCX, Silver March contract dropped around 0.7 percent and touched an intra-day low of Rs52,260/kg yesterday.
Courtesy: Angel Commodities
India soy complex under pressure on long liquidation
Soybean prices declined steeply on Wednesday as the traders liquidated their positions at higher prices driven lower palm oil prices also.
Spot prices remained stable and the meal demand remained subdued as prices have substantially increased in the recent past. CBOT bean prices ended slightly positive as weather concerns in Latin America still prevailed in the market.
Soy oil prices declined on Wednesday owing to weakness prevailing in palm oil prices. GAPKI reported increase in palm oil production estimates during 2012 which affected the prices.
Spot prices gained marginally by Rs.3/10kg. Soy oil from Brazil and Argentina had surged by Rs.1000/ton on next crop concerns.
Mustard seed prices sustained losses on Wednesday as spot prices remained stable and buying activities were also sluggish.
Some showers were reported across rajasthan regions which prompted the fall affecting. However, strong demand for edible oil limited steep fall along with robust meal demand.
Courtesy: Karvy Comtrade Ltd.
NCDEX turmeric finishes up on short covering
Dull trades at the domestic mandi led Spot prices to settle 0.31% lower on Wednesday. However, Futures witnessed mixed trades and settled 0.58% higher yesterday.
Production, Arrivals and Exports
Arrivals in Nizamabad and Erode mandi stood around 1,000 bags and 8,000 bags respectively on Wednesday.
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
Jeera Spot prices and Futures extended the gains of the previous day and settled 1.36% and 0.22% higher on Wednesday. Depleting arrivals due to end of the season amidst better offtakes is supporting jeera prices. Also, reports of fresh export enquiries supported prices in the last few trading sessions.
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 3,000 bags on Wednesday as compared to 4,000 bags on Tuesday. Off takes stood at 6,000 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 falls on subdued export demand
Fragile demand from the overseas and domestic buyers led prices to trade rangebound to weak on Wednesday. Prices at the Spot and Futures settled 0.54% and 0.55% lower yesterday.
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 $6,950/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 Kochi market stood at 20 tonnes while offtakes alos remained stable around 20 tonnes on Wednesday.
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 soy oil ends lower on higher production concerns
NCDEX January soybean futures ended in red on account of profit taking after continuous rise in the last 3-4 trading sessions coupled with improved arrivals on Wednesday.
Total arrivals of soybean in Madhya Pradesh were 2 lakh bags on Wednesday as compared to 1.5 lakh bags on Tuesday, Maharashtra was 1 lakh bags as compared to 75,000 bags on Tuesday and Rajasthan was 90,000 bags as compared to 60,000 bags (Bag=100 Kg).
Soybean prices in Indore were at Rs 2420-2450/qtl (auctions in Mandi) and plant delivery was quoted Rs 2530-2560/quintal. Soybean stock at NCDEX warehouses increased to 29,956 tonnes on Tuesday as compared to 28,940 tonnes on Monday.
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 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. Meal sales came in at 51,100 metric tonnes which was well below expectations. Oil sales were also slow at 2,300 metric tonnes.
Rape/mustard Seed
NCDEX April RM Seed futures ended lower on account of profit taking after continuous rise in the last 3 trading sessions. Weakness in other oilseeds and edible oil also added bearish market sentiments. According to Ministry of Agriculture, GOI, Sowing acreage of Rabi oilseeds in India was 79.22 lakh hectares (down 6.32%) as compared to 84.57 lakh hectares 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 ended in red on account of profit taking after continuous rise in the last 3 trading sessions. Weak overseas market as 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. Imported crude soy-oil price quoted Rs 67,000 /tonnes on Tuesday as compared to Rs 66,500/tonnes on Monday. Imported crude palm oil price quoted Rs 55,500 /tonnes on Tuesday as compared to Rs 55,000/tonnes on Monday (source: SEA).
Courtesy: Angel Commodities
NCDEX sugar tumbles on higher stocks
Sugar Futures traded weak on account of sufficient stocks at the domestic. 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 traded rangebound and settled marginally higher owing to reports of tightness in the supplies from Brazil while ICE Raw settled 0.37% lower on Wednesday on account 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%. 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 Spot and Futures gained on account of lower acreage covered under the crop this season and settled 0.31% and 0.54% higher respectively on Wednesday. As the Rabi sowing season is coming to an end, area covered under the Pulses and Chana are probably to miss the target.
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 30th 2011 is 5.9% down at 8.64 million hectares as compared to 9.18 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 firm exports
Guar futures continued with its upward rally on Wednesday and settled 1.93% higher while Guar gum settled 2.3% higher. Despite several efforts taken by the regulator, Guar futures continued to trade higher on expectations of tight supplies in the long run if exports continue to remain firm in the current season.
In continuation to the efforts taken by the FMC, the regulator is planning to issue showcause notices to leading traders in Rajasthan on Friday. (Source: Business Standard)
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).
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 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, 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