Base metals trade mixed, crude oil declines
European markets traded on a choppy note today ahead of German auction. Germany is scheduled to sell 4 billion Euros ($5.1 billion) of five-year notes today.
Economic data indicated that the German economy shrank in the last 3 months of 2011 reducing expectations of improvement in the economic outlook. Italy and Spain has planned to sell as much as 17 billion of debt tomorrow.
Spot gold prices rose around 0.5 percent and touched an intra-day high of $1646/oz till 4.30 pm IST today. However, sharp gains were capped due to strength in the US dollar, as a stronger dollar makes dollar-denominated commodities look expensive for the holders of other currencies. On the MCX, Gold February contract rose around 0.3 percent and touched an intra-day high of Rs 27,668/10 gms till 4.30 pm IST today.
Taking cues from rise in gold prices, silver also traded higher around 0.3 percent today. But further gains were resisted on account of a stronger dollar and mixed market sentiments. MCX silver March contract gained around 0.3 percent and was hovering around Rs52,700/kg till 4.30 pm IST today.
The base metals complex traded on a mixed note today with lead and zinc trading lower, while copper, nickel and aluminium managed to trade in the green till 4.30 pm IST. Strength in the US dollar coupled with mixed sentiments in the global markets acted as a negative factor for lead and zinc and capped sharp gains in case of copper, nickel and aluminium.
Nymex crude oil prices declined around 0.4 percent today, taking cues from expected rise in US crude oil inventories coupled with a stronger dollar. However, sharp decline was cushioned on account of supply concerns from Iran. Oil prices are trading around $101.79/bbl after touching an intra-day low of $101.60/bbl till 4.30pm IST. On the MCX, prices declined around 0.9 percent and was trading at Rs5279/bbl till 4.30pm IST today.
The US Energy Department (EIA) is scheduled to release it weekly inventories report today and crude oil inventories is expected to rise by 0.8 million barrels for the week ending on 6th January 2012.
Gasoline stocks are expected to increase by 2.3 million barrels whereas distillate inventories are also expected to boost by 2 million barrels for the same period.
Outlook
We expect gold and silver to trade slightly higher today, but sharp gains will be capped due to a stronger dollar.
Base metals are expected to trade with a sideways bias today on account of dollar strength coupled with mixed sentiments in the global markets.
We expect crude oil prices to trade lower today, taking cues from expected rise in US crude oil inventories, choppy market sentiments and a stronger dollar. However, sharp decline will be cushioned on account of supply concerns from Iran.
Courtesy: Angel Commodities
Base metals trade higher on firm industrial demand
The base metals pack traded higher on Tuesday on account of rise in risk appetite in the global markets due to expectations that China may go for monetary easing in order to accelerate its economy growth. Additionally, weakness in the US dollar also acted as a positive factor for the metal prices yesterday.
However, appreciation in the Indian Rupee capped further gains on the domestic bourses.
Copper
Copper prices rose sharply by almost 3 percent on Tuesday, mainly on the back of better-than-expected China’s copper imports data, a weaker dollar and upbeat market sentiments.
Copper touched an intra-day high of $7738/tonne and closed at $7725/tonne yesterday. On the MCX, Copper February contract gained around 1.2 percent and hit an intra-day high of Rs404.40/kg on Tuesday.
China’s unwrought aluminium imports rose 31.8 pct in Dec As per the data from the General Administration of Customs, China’s imports of unwrought aluminium increased sharply around 32 percent to 103,738 tonnes as compared to 78,673 tonnes in November. The imports of unwrought aluminium including primary, alloy and semi-finished aluminium products.
The country’s exports of unwrought aluminium declined around 23 percent to 64,284 tonnes December as against 83,571 tonnes in November.
Courtesy: Angel Commodities
Crude oil gains on global economic concerns
Nymex crude oil prices gained around 1 percent on Tuesday, taking cues from rising supply concerns from Iran. Additionally, a weaker dollar and upbeat sentiments in the global markets on expectations of China’s step to boost economy also acted as a positive factor for the commodity.
Oil prices touched an intra-day high of $103.41/bbl and closed at $102.2/bbl yesterday. On the MCX, crude prices increased by 0.4 percent and closed at Rs.5318/bbl after touching an intraday high of Rs.5369/bbl on Tuesday.
API Inventories Data
As per the American Petroleum Institute (API) report last night, crude oil inventories increased by 397,000 barrels to 334.90 million barrels for the week ending on 6th January 2012.
Gasoline inventories rise by 1.89 million barrels to 221 million barrels and distillate inventories also shoot up by 846,000 barrels to 146.2 million barrels for the same week.
EIA Inventories Forecast
The US Energy Department (EIA) is scheduled to release it weekly inventories report today and crude oil inventories is expected to rise by 0.8 million barrels for the week ending on 6th January 2012.
Gasoline stocks are expected to increase by 2.3 million barrels whereas distillate inventories are also expected to boost by 2 million barrels for the same period.
Courtesy: Angel Commodities
Precious metals settle higher on weak US dollar
Weakness in the US dollar helped gold prices to witness gains in the international markets on Tuesday. A weaker dollar makes dollar denominated commodity cheaper for the holders of the other currencies.
Additionally, rise in crude oil prices also boost inflation led demand for gold yesterday. The yellow metal touched and intraday high of $1639/oz and closed at $1630/oz on Tuesday.
On the MCX, Gold February contract declined around 0.1 percent yesterday on account of appreciation in the Indian Rupee. The yellow metal touched an intra-day low of Rs27,476/10 gms and closed at Rs27,537/10 gms yesterday.
Silver
Spot silver prices rose sharply by more than 3 percent on Tuesday, on the back of rise in gold prices coupled with a weaker dollar.
Additionally, silver being an industrial metal also took cues from upside on base metals. The white metal touched an intra-day high of $30.29/oz and closed at the level of $29.9/oz yesterday.
On the MCX, Silver March contract rose around 1.6 percent and touched an intraday high of Rs53,019/kg on Tuesday.
Courtesy: Angel Commodities
India soy complex ends higher on global cues
Soybean prices remained on gaining note supported by international markets. CBPOT soybean prices ended marginally higher yesterday owing to the weather reports in Latin America.
Forecast of revival in the weather conditions prompted profit booking towards end of the day. Spot arrivals remained around 2.5 lakh bags while prices hovered around Rs. 2430/quintal in the mandi.
Soy oil prices remained higher while it declined towards the closing owing to weakness in palm oil prices. Decline in demand for the palm oil during the month of December kept the prices under pressure on Tuesday.
CBOT soy oil prices ended higher on concerns of lower supplies to be reported in supply demand report to be released tomorrow. Spot prices were higher marginally by Rs.5/10kg.
Mustard seed prices gained yesterday in line with the soybean on the Indian commodity bourses. Marginal gain in spot prices of oil and meal supported the uptrend in mustard. Production estimates are currently lower and acreage is lagging by 4 lakh hectares kept the prices higher.
Courtesy: Karvy Comtrade Ltd.
NCDEX turmeric settles lower on selling pressure
Depleting arrivals amidst dull demand in the domestic mandi kept Turmeric Spot prices steady on Tuesday. Futures however, witnessed selling pressure and settled 0.94% lower yesterday.
Production, Arrivals and Exports
Arrivals in Nizamabad mandi stood around 1,000 bags on Tuesday while Erode mandi remained closed due to agitations by the spot traders.
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 declines on higher sowing
Lacklustre trades at the domestic coupled with reports of increased area covered under Jeera and thereby possibility of better output led jeera prices to trade bearish and settled 1.57% lower on Tuesday.
According to Gujarat farm ministry, area sown under jeera till January 2, 2012 stood at 2.82 lakh hectares (lh) up 18.5% 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 5,000 bags while offtakes stood at 4,500 bags on Tuesday.
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 tumbles on weak domestic demand
Dull demand from the overseas and domestic buyers led Spot Pepper prices and Futures to remain bearish for the second consecutive day of the week and settled 2.97% and 4% respectively on Tuesday. Fresh crop arrivals in small quantities also are providing support to the bears in the market.
Demand from the overseas and domestic buyers remains 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 8 tonnes while offtakes stood at 5 tonnes on Tuesday.
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 trades up on global cues
NCDEX January soybean futures traded higher on second consecutive trading sessions on account of strong gains in overseas market.
Lower arrivals of soybean in the domestic market coupled with improved demand from stockists also provided support to the bulls. Total arrivals of soybean in Madhya Pradesh were 1.5 lakh bags, Maharashtra was 75,000 bags and Rajasthan was 35,000 bags (Bag=100 Kg) on Tuesday. Soybean prices in Indore were at Rs 2380- 2450/qtl (auctions in Mandi) and plant delivery was quoted Rs 2480- 2540/quintal.
Production estimate of global soybean is expected to decline in the USDA’s monthly supply and demand report which is scheduled to release on January 12, 2012 as dry weather concern in South America also added bullish market sentiment.
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 traded higher on second trading sessions on account of firm overseas market and gains in other oilseeds and vegetable oil also provided support to the bulls. Lower production estimates of RM Seed also provided support to the bulls.
The country's mustard rabi sowing has totaled 6.46 million hectares as on January 05, 2012, down 5.4% from 6.82 million hectares in the year-ago period. Mustard seed accounts for about 70% of India's winter-season oilseed output.
Refined Soy Oil
NCDEX January refined soy oil futures traded higher on account of strong gains in overseas market. As per Malaysian Palm Oil Board, Malaysia’ s palm oil output fell 8.2% from a month ago 1.49 million tonnes also added bullish market sentiments.
In 2011-12 season, Indian edible oil imports are estimated to reach 90 lakh tonnes, up by 7.5 lakh tonnes compared to the previous year on the back of rise in consumption by 5% to 170 lakh tonnes.
Indian vegetable oil output is expected to rise by 2-2.5%. Imports in 2011-12 are expected to turn costlier as Indonesia hiked export duty on crude palm oil (CPO) by 1.5% to 16.5% and lowered duty on refined Palmolein (RBD) from 15% to 8%.
Courtesy: Angel Commodities
NCDEX sugar ends higher on short covering
Spot prices of Sugar remained steady throughout the day and settled 0.41% higher on Tuesday on expectations that government might consider second tranche of exports shortly. Also, reports that government might discuss on decontrol of sugar and levy sugar supported prices yesterday. Discussion on the same is scheduled on January 16, 2012.
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.
Mixed sentiments prevailed across global Sugar markets with Liffe ending higher by 1.07% while ICE down by 0.09%. Although International Sugar prices have fallen drastically during the past few months, buyers are not hurrying to build fresh long positions on account of comfortable supplies.
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%. 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 settles higher on fresh buying
Chana futures added to the gains of the previous day and settled 0.155 higher on Tuesday. Lower area covered under Chana is providing support to the market sentiments. 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 extends uptrend on thin supply
Guar futures extended gains of the previous day and settled at the upper freeze of 4% on expectations of tight supplies in the long run owing to robust exports. Declining arrivals in the domestic mandi are also providing support to the prices since past few days.
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