Crude Oil Settles Higher on Global Demand Concerns

Floor and electronic trading on the Nymex was closed yesterday in observance of the Christmas holiday.

On the MCX crude oil prices declined by 0.2 percent in yesterday’s trading session on the back of Rupee appreciation. Prices touched an intraday low of Rs.5269/bbl and closed at Rs.5289/bbl on Monday.

Iran started 10 days of naval exercises in the Strait of Hormuz on 24th December, raising concern over the possibilities of closure of the world's most strategic oil transit channel in the event of any outbreak of military conflict between Tehran and the West.

Syrian’s Oil Minister Sufian Alao also stated that the country's oil production have declined by around 30 to 35 percent as a result of sanctions imposed on Syria over its nine-month crackdown on antigovernment protests. This will lead to supply concerns which will help rise in crude oil prices.

Natural Gas

On the MCX, natural gas prices declined around 0.9 percent on Monday on account of appreciation in the Indian Rupee. Prices touched an intra-day low of Rs.164.6/mmBtu and closed at the level of Rs,164.8/mmBtu yesterday.

Courtesy:Angel Commodities


Precious metals edge lower on poor safe haven demand

Spot gold prices declined around 0.5 percent on Monday due to thin trading on account of Christmas holidays and touched an intraday low of $1597/oz. However, the yellow metal managed to close its trading session above the crucial $1600-mark yesterday.

On the MCX, Gold February contract declined around 0.2 percent on Monday on account of Rupee appreciation and touched an intraday low of Rs27,741/10 gms.

Floor and electronic trading on the Comex was closed on Monday in observance of the Christmas holiday.

Holdings in the SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, declined almost 2 percent to 1,254.57 tonnes on 23rd December 2011, the lowest since early November from the previous level of 1,279.98 tonnes on 16th December 2011.

Silver

Spot silver traded on a flat note on Monday and touched an intra-day low of $293.05/oz. MCX Silver March contract rose marginally by 0.2 percent and touched an intra-day high of low of Rs53,200/kg in yesterday trading session.

Holdings in the iShares Silver Trust, the world's largest silver-backed exchange-traded fund, declined almost 1.5 percent to 9605.79 tonnes on 23rd December 2011 from the previous level of 9743.41 tonnes on 16th December 2011.

Courtesy: Angel Commodities


Base metals settle on mixed trend, nickel gains

Base metals traded mixed yesterday and Nickel turned out to be the top gainer amidst weak volumes and lower participation. Aluminum and Copper lost slightly but due to holiday at LME no clear trend was witnessed.

Today in the morning the Asian equities have opened negative due to thin participation and lingering worries about the economic outlook. LME is closed for the day consecutively due to the Christmas festival. From the Euro-zone Italy is going for bond auction and the same will be of much interest to investors.

The Italian bond yield increased by 7 basis points yesterday floating the interest rate above the 7 percent level and may force for a bailout. The Euro has also depreciated in this regard and is expected to continue the trend.

The manufacturing and industrial activities have contracted and the export oriented economies are also bleeding to recover from the crisis. Japan’s Aluminum shipments have reduced by 6 percent to support the same.

From the economic data front, the US consumer confidence and manufacturing activity index in the form of Richmond and Dallas are expected to improve considerably however the home price index may turn out to be a toss after decrease in building permits and average home starts data.

The US housing sector and the overall economy has shown signs of slight improvement and has supported the metal prices.

Overall we expect the metals to lose from the present levels in the early trading hours due to weak Asian equities and continue the trend till afternoon as the European markets open.

However some pull back in prices may be witnessed post the US markets opens and unfolds the confidence and manufacturing activity data.

Aluminium

Aluminum prices ended down by 0.05 percent at MCX and LME was closed.

Japan’s Aluminum exports have reported a drop of 6 percent over last year due to contraction of export demand and glooming economic-crisis.

Copper

Copper prices came down slightly by 0.02 percent at the MCX. The red metal traded in range but due to less volumes failed to post any gains.

The open interest for the futures have also decreased indicating the dicey trend for the metal.

Lead

Lead prices were unchanged for the day and it made a high of Rs. 106.10 after opening at Rs. 105.5.

The open interest at futures markets has decreased indicating the dicey trend in near term.

Nickel

Nickel was the top gainer for the day and prices ended up by 0.18 percent at MCX.

After losing last week the prices are recovering but the metal is expected to trade range bound, the open interest for the futures has also increased supporting the gains.

Zinc

Zinc prices came up slightly by 0.05 percent at the MCX.

The open interest for the futures have increased by 12 percent indicating that the future demand is picking up supporting the bullish trend.

Courtesy: Karvy Commtrade Ltd.


NCDEX soy complex settles higher on firm spot demand

Soybean prices gained substantially on Monday driven by the higher spot market prices. Spot prices increased by Rs. 10-15/quintal which supported the futures. Upside was limited as the meal demand was very sluggish due to Christmas and New Year holidays across the globe.

Soy oil prices gained steeply on Monday as the spot prices drove the price rally. Steep surge in spot prices by Rs.10-15/10kg supported the prices at futures. Despite the demand being lower the price rallied on estimation of the traders that the imports of edible oils during December and January might be lower.

Mustard seed prices gained in line soy complex. Sudden Increase in spot prices by '20-30/quintal across major markets supported the rally in prices. Good demand for edible oil also resulted in rise in spot prices of oil which supported seed prices at the futures.

Courtesy: Karvy Commtrade Ltd.


NCDEX guar seed tumbles on long liquidation

Guar seed and Guar gum futures after surging by around 10% and 12% in the last week witnessed long liquidation at higher levels and settled at the lower freeze of 4% respectively on Monday.

With total special margin on long positions on the Complex to rise to 30% from 20% led prices to dip yesterday.

Further, special margin of 10% is being imposed on long side of all running contracts with effect from December 27th 2011. Thus, from tomorrow total margin on long side of Guarseed and Guargum would be around 40% which includes special margin of 30%.

FMC is mulling to put Guar Futures in trade to trade segment. (Source: Newswire 18).If this is imposed market participants may not be allowed to square off their intraday positions.

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

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

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

Arrivals of late sown Guar crop is ongoing in Rajasthan. Arrivals currently in Rajasthan and Haryana stand around 1.35 lakh bags (Newswire 18).

Production

Guar seed output in Rajasthan is estimated at 11.36 lakh tonnes for 2011-12 season, down by 25% compared to 15.46 lakh tonnes in 2010-11 (Rajasthan Farm Dept). Production of Guar in Haryana and Gujarat is expected to be 0.2 lakh tonnes and 0.07 lakh tonnes respectively in 2011- 12.

Thus, with lower carryover stocks and lower output the supplies would not be sufficient in the long run if Guar gum export trend continue to remain the same as last year, thus supporting the upside rally in the longer term.

Exports

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

Courtesy: Angel Commodities