Gold Under Pressure, Crude Declines On US Dollar Strength
European equities are trading in the red today as the newly appointed Prime Minster Mario Monti, faced difficulty in getting help from political parties to form his new Cabinet. These fresh political concerns affected risk sentiments in the global financial markets today, and stocks in Asia also corrected. US stock futures are trading on a negative note, and the DX has bounced back today.
Gold prices in the international markets came under pressure today as uncertainty in the global markets led to selling pressure. Additionally, strength in the DX added further downside in prices. But gold prices could bounce back as risks associated with the European economies rise and this will help support safe-haven demand for gold.
Spot Gold prices have slipped around 1 percent but prices on the MCX are down only 0.3 percent till 4.30pm IST, as Rupee depreciation cushioned sharp downside. In the case of silver as well, prices in the international markets corrected around 1.3 percent, while on the MCX silver slipped only around 0.2 percent, taking cues from a weaker Rupee.
Strength in the US dollar coupled with weak sentiments in the global markets due to escalating concerns over Euro Zone debt worries exerted pressure on base metals today. However, depreciation in the Indian Rupee resisted sharp decline in prices on the domestic bourses.
Nymex crude oil prices declined by 0.4 percent today and currently trading at $97.76/bbl till 4:45pm IST. Prices came under pressure today, on concern that Europe may continue to struggle in resolving its debt crisis. This coupled with a stronger dollar added pressure on prices today. On the MCX, crude oil prices gained by 0.6 percent on the back of Rupee depreciation and are trading around Rs.4949/bbl after touching an intra-day high of Rs.4965/bbl till 4:45pm today.
The American Petroleum Institute (API) is scheduled to release its weekly inventories tonight and crude oil inventories are expected to decline by 1.1 million barrels for the week ending on 11th November 2011.
Outlook
We expect gold and silver to trade lower today on account of a stronger dollar. Silver will take cues from fall in gold prices coupled with downside in base metals.
Today, base metals and crude oil prices are expected to come under pressure on the back of weak global market sentiments due to rising Europe’s debt worries and dollar strength. Expected fall in US crude oil inventories may cushion sharp decline in oil prices today.
Mixed Trend In Base Metals On Global Economic Worries
The base metals complex delivered a mixed performance on the LME on Monday with aluminium and nickel closing in the red while copper, lead and zinc ending in the green.
Rising concerns over Europe’s debt situation led to rise in risk aversion in the markets which acted as a negative factor for the metals.
Additionally, a stronger dollar also exerted pressure on prices.
Copper
Copper, the leader of the base metals pack, rose almost 1 percent on the LME and by 1.2 percent on the MCX on Monday.
Taking cues from news that China is expected to boost development of electric cars, may fuel further demand for copper, thus supporting upside in prices yesterday.
Copper touched an intra-day high of $7933/tonne and closed at $7720/tonne on Monday. Depreciation in the Indian Rupee led further gains on the domestic bourses yesterday.
Crude Oil Declines On Euro Debt Worries
Nymex crude oil prices declined around 1 percent yesterday, taking cues from escalating worries over Euro Zone debt tensions along with demand concerns from China. Additionally, a stronger dollar exerted further downward pressure on the commodity.
Oil prices closed at the level of $98.1/bbl after touching an intra-day low of $97.19/bbl. On the MCX, oil prices traded on a flat note and closed at Rs.4919/bbl after touching an intra-day low of Rs.4896/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 1.1 million barrels for the week ending 11th November 2011.
Gasoline stocks are expected to decline by 0.7 million barrels and distillate inventories are also expected to drop by 2.2 million barrels.
Precious Metals Under Pressure On Firm Dollar Index
Gold prices came under pressure on Monday as Spot Gold prices declined around 0.5 percent.
Prices declined due to a stronger dollar as it makes dollar-denominated commodities look expensive for holders of other currencies.
Concerns over the European debt crisis continue and this has reduced risk appetite globally. The yellow metal touched an intra-day low of $1773/oz and closed at $1779/oz yesterday.
On the MCX, Gold December contract gained marginally by 0.1 percent on account of depreciation in the Indian Rupee on Monday. It touched an intra-day low of Rs28,880/10 gms and ended its trading session at Rs28,938/10 gms
Silver
Spot silver prices traded lower by 1.2 percent in yesterday’s trading session taking cues from fall in gold prices coupled with a stronger dollar.
The white metal touched a low of $33.92/oz and ended the trading session at $34.3/oz on Monday.
On the MCX, Silver December contract declined 1.1 percent and touched an intra-day low of Rs58,095/kg and closed at the level of Rs57,215/kg yesterday.
Volatile Trend Seen In Base Metals On Global Debt Worries
Base metals witnessed some profit booking as investors remained cautious after Italy’s five year bond yields rose to a record euro‐era high. Shanghai Copper fell by nearly 2 percent after rising more than 5 percent yesterday.
LME copper also fell to $7700, down by half percent after rising 1.6 percent yesterday. Nickel prices also showed sharp technical selling.
The most‐active January copper contract on the Shanghai Futures Exchange fell 1.6 percent to 57,500 Yuan ($9,049.70) per tonne, as investors took profits after the contract shot up 5.1 percent on Monday.
The flip‐flopping in sentiment over the euro zone has led to a lack of trading direction. An appointment of new Prime minister in Italy and Greece was seen as positive news but spike in Italian bond yields and Germany’s suggestions for voluntary exits from the euro zone again depressed the investors’ confidence.
Today, we may see some selling in base metals.
Copper (Nov): S1=388, R1=396
Nickel (Nov): S1=890, R1=915
Lead (Nov): S1=100, R1=102.50
Zinc (Nov): S1=97, R1=99
Steel long (Nov): S1=33200 R1=32700
Crude Oil To Edge Lower On EU Economic Concerns
Crude oil futures fell more than 1% traded below $98 on stronger dollar and weak equity indices on renowned EU crisis after Italy’s bond yield rose to the record in the auction.
U.S. gasoline consumption dropped 3.6 percent in the week ended Nov. 4 from a year earlier. Drivers used 8.67 million barrels a day, down from 8.99 million a year earlier.
US commercial crude oil inventories fell by 1.40 mb to 338.1 mb which are in the upper limit of the average limit of the this time of the year. Gasoline stockpiles declined by 2.1 mb to 204.2 mb in the week ended Nov 4.
Natural gas futures fell more than 2% traded below $3.50 on weak spot demand and moderate weather conditions. The Energy Department reported that stockpiles rose 37 billion cubic feet to 3.831 trillion cubic feet the week ended Nov. 4.
We expect oil prices to trade down on EU economic concerns pressured by depressed demand and poor equity indices. NYMEX crude oil has resistance at $100, support at $96.
Crude Oil S1: 4850 S2: 4810, R1: 4970, R2: 5010
Precious Metals Under Pressure On Weak Investor Demand
Bullions opened higher with the expectation that Berlusconi’s quit may give certain strength to the Euro nation but after weak Industrial production release as well as hiking Italian borrowing costs on the back of expectation that new government will struggle to contain the nation’s debt crisis, the single currency continued trading weaker giving rise to expectation of liquidation at the higher prices.
Taking into consider the current volatile commodity front global research houses gave indications regarding upcoming move in bullions whereas UBS said Gold rise in Euro may outperform Gold growth in Dollar terms whereas Goldman said Precious metals will increase 5% and overall commodity gain may be slowed to 15% correcting the earlier forecast of 20%.
Considering the current economic uncertainty over the Euro region as well as profit booking view of investors at the higher level it is expected that prices may trade in the sideways zone with $1750 (28800) being the support of Gold while Silver has $33.50 as a support.
Gold: S1=28860, S2=28700, R1=29100 R2=29250
Base Metals Settle Higher On Euro Debt Worries
Base Metal prices ended higher with gains of anywhere between half to three percent as higher GDP numbers from Japan supported prices to move higher.
The only exception in the pack was nickel which ended lower with cuts of more than a percent after Japan’s largest producer of the metal, Sumitomo, indicated that global nickel surplus might move to four year highs in 2012.
European equity markets ended in red and dollar index ended with gains of 0.8 percent thereby lead to metals paring some of their gains.
US equity markets ended lower with cuts of half to one percent as bond yields of Spain moving higher raised concerns that the contagion might spread. Taking cues most of the Asian equity markets are trading lower with losses of half percent. Euro is trading marginally on the lower side.
In the morning session on London Metal Exchange, base metal prices are trading with marginal gains or quarter to half a percent. On the economic data front, German economy is expected to have grown at a slightly better pace in the third quarter.
However given the concerns prevailing in the peripheral European nations, ZEW survey numbers of the common currency zone, as a whole, are expected to deteriorate. From US, both the advance retail sales and the empire manufacturing numbers are expected to decline from prior numbers.
Indian rupee has depreciated by nearly half a percent and thereby might support metal prices in Indian markets. Overall, base metal prices might open slightly on the higher side, but given the expectation of weak economic data –especially from the Euro zone, the upside would remain capped.
Aluminium
Aluminium prices ended with marginal gains of 0.1 percent on both LME and MCX.
Aluminium stocks on London Metal Exchange witnessed draw-downs of 3,125 tonnes as against decline of 3,200 tonnes on the previous day.
Open interest and volumes also witnessed marginal change from the previous day indicating that in the near term consolidation might continue.
Copper
Copper prices ended higher with gains of 1.5 percent on LME and 1.2 percent in Indian markets.
Copper stocks on London Metal Exchange witnessed draw-downs of 2,300 tonnes as against decline of 2,325 tonnes on the previous day.
Open interest declined by nearly 20 percent in Indian markets indicating unwinding of positions which might have pushed prices higher by more than a percent.
Lead
Lead was the top gainer among the base metal pack as it ended with gains of 3 percent on LME while in Indian markets gains were limited to 2 percent.
Lead stocks from London Metal Exchange warehouses witnessed draw-downs of 1,950 tonnes as against decline of 1,925 tonnes on the previous day.
Cancelled warrant ratio on LME still remains at stable levels of 5 percent indicating draw-downs might continue in the near term.
Nickel
Nickel prices continue to underperform the entire base metal pack as it ended with cuts of more than a percent.
On the fundamental front, Japan’s largest producer of the metal indicated that the global nickel surplus might increase to 54,000 tonnes in 2012 to the highest level in four years.
On LME nickel stocks declined by 288 tonnes as against increase of 900 tonnes on the previous day.
Zinc
Zinc stocks on London Metal Exchange witnessed build-up of 1,175 tonnes as against draw-downs of 4,200 tonnes on the previous day.
Cancelled warrant ratio is slowly drifting lower indicating slower pace of decline in stocks or even build-up might be witnessed.
Open interest declined by nearly 12 percent on MCX along with increase in prices indicating short covering which might have pushed prices higher.
India Wheat Weakens On Selling Pressure
Wheat futures traded negative on Monday. Traders took advantage of earlier gains during last week and continued selling at higher levels which pressurized the prices to trade downside.
Government stocks had declined during the beginning of this month to 29.67 million tons against 31.43 million tons as on October 1, 2011.
Also the regular demand for commodity across the markets minimized the losses. Prices across the physical markets had been stable at Rs.1205 per quintal.
NCDEX Maize Tumbles On Fresh Arrivals
Maize futures traded negative on Monday. Fresh arrival season for the commodity and its sluggish demand in Nizamabad and Davangere market pressurized the prices to decline.
However, stockiest demand for maize in Delhi market minimized the losses. Prices across the physical markets had been stable at Rs.1050 per quintal.
NCDEX Guar Seed Drops On Arrival Pressure
Guar seed and gum futures witnessed a volatile trend on Monday. However, the trend was biased towards downside.
Arrivals had declined in Jodhpur physical market by around 20,000 bags to 85,000 bags. However, still the arrival pressure remained intact over the markets which kept the prices downside.
Weak demand for gum across the markets also pressurized the prices to end the day in red.
Prices across the physical markets had been stable at Rs.4180 per quintal.
NCDEX Chana Edges Higher On Limited Stocks
Chana futures traded positive on Monday. Good demand for chana across the market supported by supply concerns across the markets had a positive impact over the prices.
Gradual decline in stock position also added to the supply crunch situation thereby supporting the gains. Prices across the physical markets gained by Rs.25 as it traded at Rs.3500 per quintal.
However, crop acreage under pulses as on 11th November 2011 has been higher at 45.07 lakh ha as compared to 36.86 lakh ha during last year same period which limited the gains.
MCX Cardamom Regains On Fresh Buying
Cardamom prices extended the recovery on fresh buying on Monday.
Shifting of positions from current contract to far month contracts supported the prices.
However, spot market activity remained down due to rising arrivals from producing belt.
Courtesy: Karvy Commtrade Ltd.
India Chilli Tumbles On Arrival Pressure
Chilli prices traded down on fresh selling in far month contract on Monday.
Increased arrivals at spot market of Guntur pressurized the prices.
Therefore on cues from spot market futures also traded down and ended in red.
Courtesy: Karvy Commtrade Ltd.
India Jeera Settles Higher On Active Buying
Futures started the day on lower note on extended corrections.
However, later on prices witnessed small recovery on lower level buying and ended the day on positive note.
Courtesy: Karvy Commtrade Ltd.
NCDEX Turmeric Slumps On Fresh Selling
Turmeric prices continued the recovery in current month contract on short covering while far month contracts ended down.
Fresh selling in far month contracts pulled down the prices.
Courtesy: Karvy Commtrade Ltd.
NCDEX Pepper Ends Lower On Profit Booking
Pepper prices witnessed volatility on mixed responses from investors.
Futures started the day on higher note however, later on traded down on profit booking at higher levels.
Nonetheless, overall trend remained positive and futures ended flat.
Courtesy:
India Soybean Gains On Fresh Buying
Soybean prices gained by around 1% on Monday as stockist and millers buying supported the physical market prices and thereby had same impact on futures.
Electronic trading session of CBOT was also higher through out the day which lent support to Indian soybean futures prices.
However CBOT prices touched high of 1190 cents but closed near by opening at 1177. Expectations of revival in demand from china as La Nina weather is returning in Brazil and Argentina regions.
Soy oil prices extended gains on Monday as expectations of lower imports during November prevailed in the physical markets. Strength in palm oil prices also supported gains in soy oil during the day.
Disrupting supplies of palm oil and possible shift of demand to soy oil might happen to meet the bio diesel and edible oil requirements across the globe.
Courtesy: Karvy Commtrade Ltd.
India rm Seed Settles Higher On Weak Sowing
Mustard seed prices closed higher on Monday taking cues from lagging sowing prospects. Acreage in Rajasthan is lower by 95 compared to normal mustard acreage.
Despite good weather conditions for sowing acreage is lagging as competitive crops like cotton is been more preferred by the farmers IN North western regions of rajasthan.
Courtesy: Karvy Commtrade Ltd.
India Turmeric To Settle Higher On Rising Demand
Turmeric Futures traded continued to add to the gains of the previous day and settled 0.68% higher on Monday. Near month futures settled at upper freeze of 4% yesterday. Demand from the local stockists is supporting prices.
However, there are some reports of crop damage in A.P due to in adequate rainfall in the month of October. Crop damage would be around 10%.
Production, Arrivals and Exports
Arrivals in Nizamabad stood at 1,000 bags while Erode market witnessed arrivals of 8,000 bags on Monday.
Turmeric production for the year 2011-12 is projected at 82 lakh bags (1 bag= 70 kgs) compared to 69 lakh bags in 2010-11. However, area covered under turmeric till 21st September 2011 stood at 0.67 lakh ha 2.9% lower as compared to 0.69 lakh ha in the previous year.
According to Spices Board of India, exports of Turmeric during April 2011- September 2011 stood at 41,500 tonnes as compared to 28,500 tonnes in 2010-11, rise of 46%.
Courtesy: Angel Commodities
NCDEX Jeera Tumbles On Higher Sowing
Jeera prices after trading weak in the early part of the trading session bounced back from the lows and settled 0.29% higher on Monday. Spot prices also ended 0.28% higher due to lower arrivals amidst similar offtakes yesterday.
Sowing of jeera in Rajasthan has gained momentum due to favorable weather condition. Sowing of Jeera has also commenced in some parts of Gujarat but it is on slow pace. 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, 500 bags less as compared to previous day against offtakes of 3,000 bags on Monday.
Production of jeera in Gujarat and Rajasthan in 2011 was around 21 lakh bags and 7-8 lakh bags respectively. (Each bag weighs 55 kgs). (Source: spot market traders).
According to Spices Board of India, exports of Jeera during April 2011- September 2011 stood at 16,000 tonnes as compared to 18,800 tonnes in 2010-11, decline of 15%.
Courtesy: Angel Commodities
India Pepper Gains On Higher Import Data
Pepper Futures continued to add to the gains of the previous day and settled 0.03% higher owing to reports of increased imports till second quarter. Prices in Spot also settled 0.18% higher. Reports that pepper crop in 2011-12 might fall below last year level of 48,000 tonnes is supporting pepper prices. It expected to be in the range of 42-44 thousand tonnes.
Lower stocks with Vietnam and Indonesia, the major suppliers of pepper will also support prices.
Vietnam has reportedly sold 1.12 lakh tonnes of pepper from January to September 2011 a rise of 14% as compared to previous year. Carryover stocks of pepper with Vietnam till commencement of fresh arrivals in March are projected to be around 15,000 tonnes. (Source: Pepper Trade Board)
Indian parity in the international market was at $7,625 a tonne and remained competitive and was attracting overseas orders while Vietnam 550 gl $7,200/tonnewas quoting its pepper at $7,325 per tonne (f.o.b).
Indonesian and Brazil Asta grade is being offered at $7,200 and $7,450/tonne respectively.
Exports from the major countries
According to Spices Board of India, exports of pepper during April 2011- September 2011 stood at 11,250 tonnes as compared to 9,250 tonnes in 2010-11, rise of 22%.
According to International Pepper Community (IPC) exports of black pepper during January to September 2011 export of pepper from six major exporting countries (Brazil, India, Indonesia, Malaysia, Vietnam and Sri Lanka) was around 188,000 mt, 4% lower from the corresponding period of 195,000 mt. Exports from Brazil, Indonesia, Malaysia and Sri Lanka have decreased, while exports from Vietnam and India increased.
Sharp fall of 38% in pepper exports was witnessed in Indonesia during above period. Exports stood at 26,300 tonnes as compared to 42,082 tonnes in the last year.
Production and Arrivals
Arrivals of pepper in the domestic mandi on Monday stood at 11 tonnes as compared to 10 tonnes on Saturday. Offtakes on the other hand stood at 15 tonnes.
Production of pepper in India in 2010-11 was 48 thousand tonnes (according to the Spices Board) as compared to 50 thousand tonnes last year. Production is estimated to fall below 45000 tonnes.
According to IPC global output of Pepper for 2011 is expected to decline by 6,500 tonnes to 3.10 lakh tonnes. Vietnam production of the spice is expected to be same as that of previous year to 1.10 lakh tonnes. Pepper production in Brazil stood around 27,000 tonnes in 2010-11 as compared to 35,000 tonnes the previous year.
Courtesy: Angel Commodities
NCDEX soybean rises on global cues
NCDEX November soybean futures ended higher on account of firm overseas market coupled with declining arrivals of soybean in major mandis as farmers are holding their stocks in anticipation of higher prices in coming months. As per 49th All India Convention on Oilseeds, oils Trade and Industry which was organized by COIIT and hosted by SOPA on November 06, 2001 (Sunday).
COIIT estimates, India soybean output in Kharif 2011 at 115 lakh tonnes against 95 lakh tonnes last year. Soybean futures on the Dalian Commodity Exchange fell sharply, tracking a broad decline for commodities, as concerns mounted over the deteriorating economic situation in the euro zone. China's soybean imports in October fell to a seven-month low of 3.81 million tons, down 8% from September, as many domestic crushers delayed shipments, preferring to wait for global prices to fall further amid sluggish domestic sales.
USDA’s monthly S& D report released on Wednesday (November 09, 2011) which shows slightly higher global oilseeds production estimates and higher ending stocks. Global oilseed production for 2011/12 is projected at 454.8 million tons, up 1.3 million tons from last month.
Brazil soybean production is increased 1.5 million tons to 75 million. Total U.S. oilseed production for 2011/12 is projected at 91.2 million tons, down 0.5 million from last month due to lower soybean and cottonseed production. The soybean yield is forecast at 41.3 bushels per acre, down 0.2 bushels from last month.
USDA’s weekly export sales released on Thursday (November 10, 2011) which shows that the weekly export sales for soybeans came in at 604,000 metric tonnes for the current marketing year and 2,800 for the next marketing year for a total of 606,800. Meal sales came in at 291,400 metric tonnes for the current marketing year and 4,400 for the next marketing year for a total of 295,800. Oil sales came in at 21,700 metric tonnes as compared with 12,000 metric tonnes.
Mustard Seed
NCDEX November RM Seed futures ended higher due to improved demand from miller as improved demand of edible oils and higher prices of other vegetable oils and oilseeds also provided support to the prices. Total sowing acreage of RM Seed in Rajasthan increased to 22.58 lakh hectares till November 08, 2011 as compared to 21.50 lakh hectares last year during the same period. Rajasthan is a major producing state of RM Seed in India.
Refine Soy Oil
NCDEX November Refined Soy oil futures traded higher due to firm overseas market as supply concern of palm oil due to heavy rains in Indonesia and Malaysia as well. Improved global equity market sentiments as well as depreciation of INR against US dollar also provided support to the prices. Import of vegetable oil would be costly due to depreciation of INR against US dollar.
As per Intertek Agri Services ( a cargo surveyor), Malaysia's palm oil exports during the November 1-10 fell 5.9% from a month ago to 467,600 metric tons. As per Malaysia Palm Oil Board (MPOB), Malaysia’s crude palm oil output rose 2.1% in October compared with a month earlier to 1.91 million tonnes.
The Malaysian Palm Oil Board (MPOB) which released the October data showed a 2.1% increase in crude palm oil (CPO) production. Inventory levels fell 1.55% to 2.1 million tonnes from September but remained significantly higher than the five-year average of 1.7 million tonnes.
Courtesy: Angel Commodities
NCDEX Sugar Settles Lower On Ample Supply
Sugar spot as well as futures settled on sufficient supplies amidst higher quota along with the expectations that crushing might commence in Maharashtra, the second largest Sugarcane producing state.
Sugar mills from Kolhapur, Sangli and Satara would pay a first advance of Rs. 2,050 a tonne (last year they paid Rs.2,000), while mills from underdeveloped Vidarbha, Marathwada and Khandesh would pay Rs.1,800 a tonne ( Rs 1,750). And, Rs.1,850 (Rs. 1800) a tonne is to be paid by mills in Pune, Ahmadnagar, Nashik and Solapur. (Source: Business standard) Further, reports that the Empowered Group of ministers may consider fresh Sugar exports on 16th or 17th November is likely to provide support to the prices.
ICE Raw Sugar futures settled 1% lower , while Liffe Sugar settled 1.09% higher on Monday. Sugar market participants monitored possible buying by Malaysia, the approval of Indian sugar exports, possible delays in No 2 sugar exporter Thailand caused by flooding, and weather in Russia, where frost could damage the beet crop.
Brazil sugar exports down 17% Y-Y in October 2011. Brazil exported 2.55 million tonnes of sugar in the month of October 2011 on account of less cane and sugar output.
Domestic Sugar updates
Cane output in Maharashtra is expected to rise to 82.5 mn tn during2011-12 from 80.3 mn tn last year, while sugar output is likely to increase about 2.5% to 9.3 mn tn.
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
According to UNICA, Sugar production in Brazil's center-south in the second half of Oct dipped 23.5 percent from a year ago, as more mills ended crushing the 2011/12 cane crop. Sugar output totaled 1.47 million tonnes, down from 1.92 million tonnes a year earlier. Eighty-nine out of the 310 existing mills in the region had concluded crushing by Nov. 1.
China, the world's largest sugar consumer, has imported 1.6 million tons of sugar in the first 11 months of 2011, with preliminary data for the full year likely to be issued around October 10.
Courtesy: Angel Commodities
NCDEX Chana Settles Higher On Limited Stocks
Chana futures as well as spot continued to trade firm and settled 0.77% and 0.81% higher due to lower stocks at the domestic coupled with tight supplies in the global markets which are making imports costlier.
According to the Ministry of Agriculture, pulses have been sown in 45.07 lakh hectares as on November 11th 2011 as compared to 36.86 lakh hectares in the last year same period.
The biggest jump has been in the area under gram in Madhya Pradesh (1.29 million hectares, up 80 per cent more than last year) and Rajasthan (833,000 hectares, up 65 per cent). Together, they account for four-fifth of the gram produced in the country. Overall, acreage of all pulses, which also includes lentil and peas apart from gram, in these two states is almost 59 per cent and 65 per cent more than last year. (Source: Business Standard)
Government announced Support price for Rabi crops on 25th October 2011. Chana MSP has been raised by Rs.700/qtl to Rs.2,800/qtl a rise of 38%. Higher base price coupled with remunerative returns earned by the farmers during the last year is likely to boost area under Chana cultivation in 2011-12 seasons.
Pulses Imports
Imports have declined dramatically in the current FY 2011-12 with India's state-owned trading agencies having contracted imports of only 121,660 tn pulses since the beginning of the current financial year till September 12, 2011 compared with 596,700 tn during the same period last year.
Imports have been weak because domestic pulses output in 2010-11 (Jul- Jun) was at an all time high of 18.09 mln tn, up 23percent from a year ago. Also, the Centre has abolished one of the reimbursement schemes for the state-owned importing agencies.
Sowing progress and Production
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.
Chana is the main Rabi Pulse crop grown in India, sowing of which is done during October-December, and harvesting begins in January. If the sowing trend is maintained India may witness another bumper crop of Chana in the coming season.
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 Lower On Long Liquidation
Guar Futures witnessed long liquidation at higher levels and settled 0.66% lower on Monday. Increased arrivals at the domestic also weighed on the prices yesterday.
Despite of lower output estimates in the current season arrivals are much higher. This is because farmers this season are not holding back their stocks due to record high prices.
Record Average daily arrivals which are hovering around 90 thousand to 1 lakh bags compared to 55-60 thousand bags in the previous year.
There are reports that higher prices of Guar gum have made users to think for other alternative cheaper sources of gum for Oil exploration. However, no confirm reports are available as of now.
Production
Guar seed output in Rajasthan is estimated at 11.36 lakh tonnes for 2011-12 season 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.
However, there are unconfirmed reports that Guar seed output may be lower around 10 lakh tonnes compared to the government target of 11.3 lakh tonne due to excess moisture in the soil during the sowing period.
Exports
According to Agriculture and Processed Food Products Export Development Authority, Indian Guar gum exports for the period April- March 2010-11 surged by 84% and stood at 4,03,007 tonnes as compared to 2,18,473 tonnes during the last year.
Exports of Guar gum from April to June of the current fiscal year 2011-12 stood at 1.45 lakh tn compared to 0.71 lakh tn during the same period last year.
Exporters believe that exports which had crossed over 4 lakh tn last year, may hit this year due on financial crisis in U.S & Europe along with shift in demand.
However the export figures clearly indicates that global crisis has not hit Guar exports as of now in the current season too.
Courtesy: Angel Commodities, Karvy Commtrade Ltd., Edelweiss Comtrade Limited Research
European equities are trading in the red today as the newly appointed Prime Minster Mario Monti, faced difficulty in getting help from political parties to form his new Cabinet. These fresh political concerns affected risk sentiments in the global financial markets today, and stocks in Asia also corrected. US stock futures are trading on a negative note, and the DX has bounced back today.
Gold prices in the international markets came under pressure today as uncertainty in the global markets led to selling pressure. Additionally, strength in the DX added further downside in prices. But gold prices could bounce back as risks associated with the European economies rise and this will help support safe-haven demand for gold.
Spot Gold prices have slipped around 1 percent but prices on the MCX are down only 0.3 percent till 4.30pm IST, as Rupee depreciation cushioned sharp downside. In the case of silver as well, prices in the international markets corrected around 1.3 percent, while on the MCX silver slipped only around 0.2 percent, taking cues from a weaker Rupee.
Strength in the US dollar coupled with weak sentiments in the global markets due to escalating concerns over Euro Zone debt worries exerted pressure on base metals today. However, depreciation in the Indian Rupee resisted sharp decline in prices on the domestic bourses.
Nymex crude oil prices declined by 0.4 percent today and currently trading at $97.76/bbl till 4:45pm IST. Prices came under pressure today, on concern that Europe may continue to struggle in resolving its debt crisis. This coupled with a stronger dollar added pressure on prices today. On the MCX, crude oil prices gained by 0.6 percent on the back of Rupee depreciation and are trading around Rs.4949/bbl after touching an intra-day high of Rs.4965/bbl till 4:45pm today.
The American Petroleum Institute (API) is scheduled to release its weekly inventories tonight and crude oil inventories are expected to decline by 1.1 million barrels for the week ending on 11th November 2011.
Outlook
We expect gold and silver to trade lower today on account of a stronger dollar. Silver will take cues from fall in gold prices coupled with downside in base metals.
Today, base metals and crude oil prices are expected to come under pressure on the back of weak global market sentiments due to rising Europe’s debt worries and dollar strength. Expected fall in US crude oil inventories may cushion sharp decline in oil prices today.
Mixed Trend In Base Metals On Global Economic Worries
The base metals complex delivered a mixed performance on the LME on Monday with aluminium and nickel closing in the red while copper, lead and zinc ending in the green.
Rising concerns over Europe’s debt situation led to rise in risk aversion in the markets which acted as a negative factor for the metals.
Additionally, a stronger dollar also exerted pressure on prices.
Copper
Copper, the leader of the base metals pack, rose almost 1 percent on the LME and by 1.2 percent on the MCX on Monday.
Taking cues from news that China is expected to boost development of electric cars, may fuel further demand for copper, thus supporting upside in prices yesterday.
Copper touched an intra-day high of $7933/tonne and closed at $7720/tonne on Monday. Depreciation in the Indian Rupee led further gains on the domestic bourses yesterday.
Crude Oil Declines On Euro Debt Worries
Nymex crude oil prices declined around 1 percent yesterday, taking cues from escalating worries over Euro Zone debt tensions along with demand concerns from China. Additionally, a stronger dollar exerted further downward pressure on the commodity.
Oil prices closed at the level of $98.1/bbl after touching an intra-day low of $97.19/bbl. On the MCX, oil prices traded on a flat note and closed at Rs.4919/bbl after touching an intra-day low of Rs.4896/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 1.1 million barrels for the week ending 11th November 2011.
Gasoline stocks are expected to decline by 0.7 million barrels and distillate inventories are also expected to drop by 2.2 million barrels.
Precious Metals Under Pressure On Firm Dollar Index
Gold prices came under pressure on Monday as Spot Gold prices declined around 0.5 percent.
Prices declined due to a stronger dollar as it makes dollar-denominated commodities look expensive for holders of other currencies.
Concerns over the European debt crisis continue and this has reduced risk appetite globally. The yellow metal touched an intra-day low of $1773/oz and closed at $1779/oz yesterday.
On the MCX, Gold December contract gained marginally by 0.1 percent on account of depreciation in the Indian Rupee on Monday. It touched an intra-day low of Rs28,880/10 gms and ended its trading session at Rs28,938/10 gms
Silver
Spot silver prices traded lower by 1.2 percent in yesterday’s trading session taking cues from fall in gold prices coupled with a stronger dollar.
The white metal touched a low of $33.92/oz and ended the trading session at $34.3/oz on Monday.
On the MCX, Silver December contract declined 1.1 percent and touched an intra-day low of Rs58,095/kg and closed at the level of Rs57,215/kg yesterday.
Volatile Trend Seen In Base Metals On Global Debt Worries
Base metals witnessed some profit booking as investors remained cautious after Italy’s five year bond yields rose to a record euro‐era high. Shanghai Copper fell by nearly 2 percent after rising more than 5 percent yesterday.
LME copper also fell to $7700, down by half percent after rising 1.6 percent yesterday. Nickel prices also showed sharp technical selling.
The most‐active January copper contract on the Shanghai Futures Exchange fell 1.6 percent to 57,500 Yuan ($9,049.70) per tonne, as investors took profits after the contract shot up 5.1 percent on Monday.
The flip‐flopping in sentiment over the euro zone has led to a lack of trading direction. An appointment of new Prime minister in Italy and Greece was seen as positive news but spike in Italian bond yields and Germany’s suggestions for voluntary exits from the euro zone again depressed the investors’ confidence.
Today, we may see some selling in base metals.
Copper (Nov): S1=388, R1=396
Nickel (Nov): S1=890, R1=915
Lead (Nov): S1=100, R1=102.50
Zinc (Nov): S1=97, R1=99
Steel long (Nov): S1=33200 R1=32700
Crude Oil To Edge Lower On EU Economic Concerns
Crude oil futures fell more than 1% traded below $98 on stronger dollar and weak equity indices on renowned EU crisis after Italy’s bond yield rose to the record in the auction.
U.S. gasoline consumption dropped 3.6 percent in the week ended Nov. 4 from a year earlier. Drivers used 8.67 million barrels a day, down from 8.99 million a year earlier.
US commercial crude oil inventories fell by 1.40 mb to 338.1 mb which are in the upper limit of the average limit of the this time of the year. Gasoline stockpiles declined by 2.1 mb to 204.2 mb in the week ended Nov 4.
Natural gas futures fell more than 2% traded below $3.50 on weak spot demand and moderate weather conditions. The Energy Department reported that stockpiles rose 37 billion cubic feet to 3.831 trillion cubic feet the week ended Nov. 4.
We expect oil prices to trade down on EU economic concerns pressured by depressed demand and poor equity indices. NYMEX crude oil has resistance at $100, support at $96.
Crude Oil S1: 4850 S2: 4810, R1: 4970, R2: 5010
Precious Metals Under Pressure On Weak Investor Demand
Bullions opened higher with the expectation that Berlusconi’s quit may give certain strength to the Euro nation but after weak Industrial production release as well as hiking Italian borrowing costs on the back of expectation that new government will struggle to contain the nation’s debt crisis, the single currency continued trading weaker giving rise to expectation of liquidation at the higher prices.
Taking into consider the current volatile commodity front global research houses gave indications regarding upcoming move in bullions whereas UBS said Gold rise in Euro may outperform Gold growth in Dollar terms whereas Goldman said Precious metals will increase 5% and overall commodity gain may be slowed to 15% correcting the earlier forecast of 20%.
Considering the current economic uncertainty over the Euro region as well as profit booking view of investors at the higher level it is expected that prices may trade in the sideways zone with $1750 (28800) being the support of Gold while Silver has $33.50 as a support.
Gold: S1=28860, S2=28700, R1=29100 R2=29250
Base Metals Settle Higher On Euro Debt Worries
Base Metal prices ended higher with gains of anywhere between half to three percent as higher GDP numbers from Japan supported prices to move higher.
The only exception in the pack was nickel which ended lower with cuts of more than a percent after Japan’s largest producer of the metal, Sumitomo, indicated that global nickel surplus might move to four year highs in 2012.
European equity markets ended in red and dollar index ended with gains of 0.8 percent thereby lead to metals paring some of their gains.
US equity markets ended lower with cuts of half to one percent as bond yields of Spain moving higher raised concerns that the contagion might spread. Taking cues most of the Asian equity markets are trading lower with losses of half percent. Euro is trading marginally on the lower side.
In the morning session on London Metal Exchange, base metal prices are trading with marginal gains or quarter to half a percent. On the economic data front, German economy is expected to have grown at a slightly better pace in the third quarter.
However given the concerns prevailing in the peripheral European nations, ZEW survey numbers of the common currency zone, as a whole, are expected to deteriorate. From US, both the advance retail sales and the empire manufacturing numbers are expected to decline from prior numbers.
Indian rupee has depreciated by nearly half a percent and thereby might support metal prices in Indian markets. Overall, base metal prices might open slightly on the higher side, but given the expectation of weak economic data –especially from the Euro zone, the upside would remain capped.
Aluminium
Aluminium prices ended with marginal gains of 0.1 percent on both LME and MCX.
Aluminium stocks on London Metal Exchange witnessed draw-downs of 3,125 tonnes as against decline of 3,200 tonnes on the previous day.
Open interest and volumes also witnessed marginal change from the previous day indicating that in the near term consolidation might continue.
Copper
Copper prices ended higher with gains of 1.5 percent on LME and 1.2 percent in Indian markets.
Copper stocks on London Metal Exchange witnessed draw-downs of 2,300 tonnes as against decline of 2,325 tonnes on the previous day.
Open interest declined by nearly 20 percent in Indian markets indicating unwinding of positions which might have pushed prices higher by more than a percent.
Lead
Lead was the top gainer among the base metal pack as it ended with gains of 3 percent on LME while in Indian markets gains were limited to 2 percent.
Lead stocks from London Metal Exchange warehouses witnessed draw-downs of 1,950 tonnes as against decline of 1,925 tonnes on the previous day.
Cancelled warrant ratio on LME still remains at stable levels of 5 percent indicating draw-downs might continue in the near term.
Nickel
Nickel prices continue to underperform the entire base metal pack as it ended with cuts of more than a percent.
On the fundamental front, Japan’s largest producer of the metal indicated that the global nickel surplus might increase to 54,000 tonnes in 2012 to the highest level in four years.
On LME nickel stocks declined by 288 tonnes as against increase of 900 tonnes on the previous day.
Zinc
Zinc stocks on London Metal Exchange witnessed build-up of 1,175 tonnes as against draw-downs of 4,200 tonnes on the previous day.
Cancelled warrant ratio is slowly drifting lower indicating slower pace of decline in stocks or even build-up might be witnessed.
Open interest declined by nearly 12 percent on MCX along with increase in prices indicating short covering which might have pushed prices higher.
India Wheat Weakens On Selling Pressure
Wheat futures traded negative on Monday. Traders took advantage of earlier gains during last week and continued selling at higher levels which pressurized the prices to trade downside.
Government stocks had declined during the beginning of this month to 29.67 million tons against 31.43 million tons as on October 1, 2011.
Also the regular demand for commodity across the markets minimized the losses. Prices across the physical markets had been stable at Rs.1205 per quintal.
NCDEX Maize Tumbles On Fresh Arrivals
Maize futures traded negative on Monday. Fresh arrival season for the commodity and its sluggish demand in Nizamabad and Davangere market pressurized the prices to decline.
However, stockiest demand for maize in Delhi market minimized the losses. Prices across the physical markets had been stable at Rs.1050 per quintal.
NCDEX Guar Seed Drops On Arrival Pressure
Guar seed and gum futures witnessed a volatile trend on Monday. However, the trend was biased towards downside.
Arrivals had declined in Jodhpur physical market by around 20,000 bags to 85,000 bags. However, still the arrival pressure remained intact over the markets which kept the prices downside.
Weak demand for gum across the markets also pressurized the prices to end the day in red.
Prices across the physical markets had been stable at Rs.4180 per quintal.
NCDEX Chana Edges Higher On Limited Stocks
Chana futures traded positive on Monday. Good demand for chana across the market supported by supply concerns across the markets had a positive impact over the prices.
Gradual decline in stock position also added to the supply crunch situation thereby supporting the gains. Prices across the physical markets gained by Rs.25 as it traded at Rs.3500 per quintal.
However, crop acreage under pulses as on 11th November 2011 has been higher at 45.07 lakh ha as compared to 36.86 lakh ha during last year same period which limited the gains.
MCX Cardamom Regains On Fresh Buying
Cardamom prices extended the recovery on fresh buying on Monday.
Shifting of positions from current contract to far month contracts supported the prices.
However, spot market activity remained down due to rising arrivals from producing belt.
Courtesy: Karvy Commtrade Ltd.
India Chilli Tumbles On Arrival Pressure
Chilli prices traded down on fresh selling in far month contract on Monday.
Increased arrivals at spot market of Guntur pressurized the prices.
Therefore on cues from spot market futures also traded down and ended in red.
Courtesy: Karvy Commtrade Ltd.
India Jeera Settles Higher On Active Buying
Futures started the day on lower note on extended corrections.
However, later on prices witnessed small recovery on lower level buying and ended the day on positive note.
Courtesy: Karvy Commtrade Ltd.
NCDEX Turmeric Slumps On Fresh Selling
Turmeric prices continued the recovery in current month contract on short covering while far month contracts ended down.
Fresh selling in far month contracts pulled down the prices.
Courtesy: Karvy Commtrade Ltd.
NCDEX Pepper Ends Lower On Profit Booking
Pepper prices witnessed volatility on mixed responses from investors.
Futures started the day on higher note however, later on traded down on profit booking at higher levels.
Nonetheless, overall trend remained positive and futures ended flat.
Courtesy:
India Soybean Gains On Fresh Buying
Soybean prices gained by around 1% on Monday as stockist and millers buying supported the physical market prices and thereby had same impact on futures.
Electronic trading session of CBOT was also higher through out the day which lent support to Indian soybean futures prices.
However CBOT prices touched high of 1190 cents but closed near by opening at 1177. Expectations of revival in demand from china as La Nina weather is returning in Brazil and Argentina regions.
Soy oil prices extended gains on Monday as expectations of lower imports during November prevailed in the physical markets. Strength in palm oil prices also supported gains in soy oil during the day.
Disrupting supplies of palm oil and possible shift of demand to soy oil might happen to meet the bio diesel and edible oil requirements across the globe.
Courtesy: Karvy Commtrade Ltd.
India rm Seed Settles Higher On Weak Sowing
Mustard seed prices closed higher on Monday taking cues from lagging sowing prospects. Acreage in Rajasthan is lower by 95 compared to normal mustard acreage.
Despite good weather conditions for sowing acreage is lagging as competitive crops like cotton is been more preferred by the farmers IN North western regions of rajasthan.
Courtesy: Karvy Commtrade Ltd.
India Turmeric To Settle Higher On Rising Demand
Turmeric Futures traded continued to add to the gains of the previous day and settled 0.68% higher on Monday. Near month futures settled at upper freeze of 4% yesterday. Demand from the local stockists is supporting prices.
However, there are some reports of crop damage in A.P due to in adequate rainfall in the month of October. Crop damage would be around 10%.
Production, Arrivals and Exports
Arrivals in Nizamabad stood at 1,000 bags while Erode market witnessed arrivals of 8,000 bags on Monday.
Turmeric production for the year 2011-12 is projected at 82 lakh bags (1 bag= 70 kgs) compared to 69 lakh bags in 2010-11. However, area covered under turmeric till 21st September 2011 stood at 0.67 lakh ha 2.9% lower as compared to 0.69 lakh ha in the previous year.
According to Spices Board of India, exports of Turmeric during April 2011- September 2011 stood at 41,500 tonnes as compared to 28,500 tonnes in 2010-11, rise of 46%.
Courtesy: Angel Commodities
NCDEX Jeera Tumbles On Higher Sowing
Jeera prices after trading weak in the early part of the trading session bounced back from the lows and settled 0.29% higher on Monday. Spot prices also ended 0.28% higher due to lower arrivals amidst similar offtakes yesterday.
Sowing of jeera in Rajasthan has gained momentum due to favorable weather condition. Sowing of Jeera has also commenced in some parts of Gujarat but it is on slow pace. 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, 500 bags less as compared to previous day against offtakes of 3,000 bags on Monday.
Production of jeera in Gujarat and Rajasthan in 2011 was around 21 lakh bags and 7-8 lakh bags respectively. (Each bag weighs 55 kgs). (Source: spot market traders).
According to Spices Board of India, exports of Jeera during April 2011- September 2011 stood at 16,000 tonnes as compared to 18,800 tonnes in 2010-11, decline of 15%.
Courtesy: Angel Commodities
India Pepper Gains On Higher Import Data
Pepper Futures continued to add to the gains of the previous day and settled 0.03% higher owing to reports of increased imports till second quarter. Prices in Spot also settled 0.18% higher. Reports that pepper crop in 2011-12 might fall below last year level of 48,000 tonnes is supporting pepper prices. It expected to be in the range of 42-44 thousand tonnes.
Lower stocks with Vietnam and Indonesia, the major suppliers of pepper will also support prices.
Vietnam has reportedly sold 1.12 lakh tonnes of pepper from January to September 2011 a rise of 14% as compared to previous year. Carryover stocks of pepper with Vietnam till commencement of fresh arrivals in March are projected to be around 15,000 tonnes. (Source: Pepper Trade Board)
Indian parity in the international market was at $7,625 a tonne and remained competitive and was attracting overseas orders while Vietnam 550 gl $7,200/tonnewas quoting its pepper at $7,325 per tonne (f.o.b).
Indonesian and Brazil Asta grade is being offered at $7,200 and $7,450/tonne respectively.
Exports from the major countries
According to Spices Board of India, exports of pepper during April 2011- September 2011 stood at 11,250 tonnes as compared to 9,250 tonnes in 2010-11, rise of 22%.
According to International Pepper Community (IPC) exports of black pepper during January to September 2011 export of pepper from six major exporting countries (Brazil, India, Indonesia, Malaysia, Vietnam and Sri Lanka) was around 188,000 mt, 4% lower from the corresponding period of 195,000 mt. Exports from Brazil, Indonesia, Malaysia and Sri Lanka have decreased, while exports from Vietnam and India increased.
Sharp fall of 38% in pepper exports was witnessed in Indonesia during above period. Exports stood at 26,300 tonnes as compared to 42,082 tonnes in the last year.
Production and Arrivals
Arrivals of pepper in the domestic mandi on Monday stood at 11 tonnes as compared to 10 tonnes on Saturday. Offtakes on the other hand stood at 15 tonnes.
Production of pepper in India in 2010-11 was 48 thousand tonnes (according to the Spices Board) as compared to 50 thousand tonnes last year. Production is estimated to fall below 45000 tonnes.
According to IPC global output of Pepper for 2011 is expected to decline by 6,500 tonnes to 3.10 lakh tonnes. Vietnam production of the spice is expected to be same as that of previous year to 1.10 lakh tonnes. Pepper production in Brazil stood around 27,000 tonnes in 2010-11 as compared to 35,000 tonnes the previous year.
Courtesy: Angel Commodities
NCDEX soybean rises on global cues
NCDEX November soybean futures ended higher on account of firm overseas market coupled with declining arrivals of soybean in major mandis as farmers are holding their stocks in anticipation of higher prices in coming months. As per 49th All India Convention on Oilseeds, oils Trade and Industry which was organized by COIIT and hosted by SOPA on November 06, 2001 (Sunday).
COIIT estimates, India soybean output in Kharif 2011 at 115 lakh tonnes against 95 lakh tonnes last year. Soybean futures on the Dalian Commodity Exchange fell sharply, tracking a broad decline for commodities, as concerns mounted over the deteriorating economic situation in the euro zone. China's soybean imports in October fell to a seven-month low of 3.81 million tons, down 8% from September, as many domestic crushers delayed shipments, preferring to wait for global prices to fall further amid sluggish domestic sales.
USDA’s monthly S& D report released on Wednesday (November 09, 2011) which shows slightly higher global oilseeds production estimates and higher ending stocks. Global oilseed production for 2011/12 is projected at 454.8 million tons, up 1.3 million tons from last month.
Brazil soybean production is increased 1.5 million tons to 75 million. Total U.S. oilseed production for 2011/12 is projected at 91.2 million tons, down 0.5 million from last month due to lower soybean and cottonseed production. The soybean yield is forecast at 41.3 bushels per acre, down 0.2 bushels from last month.
USDA’s weekly export sales released on Thursday (November 10, 2011) which shows that the weekly export sales for soybeans came in at 604,000 metric tonnes for the current marketing year and 2,800 for the next marketing year for a total of 606,800. Meal sales came in at 291,400 metric tonnes for the current marketing year and 4,400 for the next marketing year for a total of 295,800. Oil sales came in at 21,700 metric tonnes as compared with 12,000 metric tonnes.
Mustard Seed
NCDEX November RM Seed futures ended higher due to improved demand from miller as improved demand of edible oils and higher prices of other vegetable oils and oilseeds also provided support to the prices. Total sowing acreage of RM Seed in Rajasthan increased to 22.58 lakh hectares till November 08, 2011 as compared to 21.50 lakh hectares last year during the same period. Rajasthan is a major producing state of RM Seed in India.
Refine Soy Oil
NCDEX November Refined Soy oil futures traded higher due to firm overseas market as supply concern of palm oil due to heavy rains in Indonesia and Malaysia as well. Improved global equity market sentiments as well as depreciation of INR against US dollar also provided support to the prices. Import of vegetable oil would be costly due to depreciation of INR against US dollar.
As per Intertek Agri Services ( a cargo surveyor), Malaysia's palm oil exports during the November 1-10 fell 5.9% from a month ago to 467,600 metric tons. As per Malaysia Palm Oil Board (MPOB), Malaysia’s crude palm oil output rose 2.1% in October compared with a month earlier to 1.91 million tonnes.
The Malaysian Palm Oil Board (MPOB) which released the October data showed a 2.1% increase in crude palm oil (CPO) production. Inventory levels fell 1.55% to 2.1 million tonnes from September but remained significantly higher than the five-year average of 1.7 million tonnes.
Courtesy: Angel Commodities
NCDEX Sugar Settles Lower On Ample Supply
Sugar spot as well as futures settled on sufficient supplies amidst higher quota along with the expectations that crushing might commence in Maharashtra, the second largest Sugarcane producing state.
Sugar mills from Kolhapur, Sangli and Satara would pay a first advance of Rs. 2,050 a tonne (last year they paid Rs.2,000), while mills from underdeveloped Vidarbha, Marathwada and Khandesh would pay Rs.1,800 a tonne ( Rs 1,750). And, Rs.1,850 (Rs. 1800) a tonne is to be paid by mills in Pune, Ahmadnagar, Nashik and Solapur. (Source: Business standard) Further, reports that the Empowered Group of ministers may consider fresh Sugar exports on 16th or 17th November is likely to provide support to the prices.
ICE Raw Sugar futures settled 1% lower , while Liffe Sugar settled 1.09% higher on Monday. Sugar market participants monitored possible buying by Malaysia, the approval of Indian sugar exports, possible delays in No 2 sugar exporter Thailand caused by flooding, and weather in Russia, where frost could damage the beet crop.
Brazil sugar exports down 17% Y-Y in October 2011. Brazil exported 2.55 million tonnes of sugar in the month of October 2011 on account of less cane and sugar output.
Domestic Sugar updates
Cane output in Maharashtra is expected to rise to 82.5 mn tn during2011-12 from 80.3 mn tn last year, while sugar output is likely to increase about 2.5% to 9.3 mn tn.
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
According to UNICA, Sugar production in Brazil's center-south in the second half of Oct dipped 23.5 percent from a year ago, as more mills ended crushing the 2011/12 cane crop. Sugar output totaled 1.47 million tonnes, down from 1.92 million tonnes a year earlier. Eighty-nine out of the 310 existing mills in the region had concluded crushing by Nov. 1.
China, the world's largest sugar consumer, has imported 1.6 million tons of sugar in the first 11 months of 2011, with preliminary data for the full year likely to be issued around October 10.
Courtesy: Angel Commodities
NCDEX Chana Settles Higher On Limited Stocks
Chana futures as well as spot continued to trade firm and settled 0.77% and 0.81% higher due to lower stocks at the domestic coupled with tight supplies in the global markets which are making imports costlier.
According to the Ministry of Agriculture, pulses have been sown in 45.07 lakh hectares as on November 11th 2011 as compared to 36.86 lakh hectares in the last year same period.
The biggest jump has been in the area under gram in Madhya Pradesh (1.29 million hectares, up 80 per cent more than last year) and Rajasthan (833,000 hectares, up 65 per cent). Together, they account for four-fifth of the gram produced in the country. Overall, acreage of all pulses, which also includes lentil and peas apart from gram, in these two states is almost 59 per cent and 65 per cent more than last year. (Source: Business Standard)
Government announced Support price for Rabi crops on 25th October 2011. Chana MSP has been raised by Rs.700/qtl to Rs.2,800/qtl a rise of 38%. Higher base price coupled with remunerative returns earned by the farmers during the last year is likely to boost area under Chana cultivation in 2011-12 seasons.
Pulses Imports
Imports have declined dramatically in the current FY 2011-12 with India's state-owned trading agencies having contracted imports of only 121,660 tn pulses since the beginning of the current financial year till September 12, 2011 compared with 596,700 tn during the same period last year.
Imports have been weak because domestic pulses output in 2010-11 (Jul- Jun) was at an all time high of 18.09 mln tn, up 23percent from a year ago. Also, the Centre has abolished one of the reimbursement schemes for the state-owned importing agencies.
Sowing progress and Production
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.
Chana is the main Rabi Pulse crop grown in India, sowing of which is done during October-December, and harvesting begins in January. If the sowing trend is maintained India may witness another bumper crop of Chana in the coming season.
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 Lower On Long Liquidation
Guar Futures witnessed long liquidation at higher levels and settled 0.66% lower on Monday. Increased arrivals at the domestic also weighed on the prices yesterday.
Despite of lower output estimates in the current season arrivals are much higher. This is because farmers this season are not holding back their stocks due to record high prices.
Record Average daily arrivals which are hovering around 90 thousand to 1 lakh bags compared to 55-60 thousand bags in the previous year.
There are reports that higher prices of Guar gum have made users to think for other alternative cheaper sources of gum for Oil exploration. However, no confirm reports are available as of now.
Production
Guar seed output in Rajasthan is estimated at 11.36 lakh tonnes for 2011-12 season 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.
However, there are unconfirmed reports that Guar seed output may be lower around 10 lakh tonnes compared to the government target of 11.3 lakh tonne due to excess moisture in the soil during the sowing period.
Exports
According to Agriculture and Processed Food Products Export Development Authority, Indian Guar gum exports for the period April- March 2010-11 surged by 84% and stood at 4,03,007 tonnes as compared to 2,18,473 tonnes during the last year.
Exports of Guar gum from April to June of the current fiscal year 2011-12 stood at 1.45 lakh tn compared to 0.71 lakh tn during the same period last year.
Exporters believe that exports which had crossed over 4 lakh tn last year, may hit this year due on financial crisis in U.S & Europe along with shift in demand.
However the export figures clearly indicates that global crisis has not hit Guar exports as of now in the current season too.
Courtesy: Angel Commodities, Karvy Commtrade Ltd., Edelweiss Comtrade Limited Research