Metals Aren't Going Up

Base metals closed on a mixed note on Thursday but prices recovered from their lows on account of dollar weakness.

Uncertainty over the global economic front remains and this is expected to be a negative factor for prices in the short-term. As we approach the year-end worries over the European economic scenario rise. Not only that, there are also concerns over slowing growth in China, the world’s largest metals consumer.

Copper

Copper, the leader of the base metals pack closed in the red yesterday but managed to end above the $7200/tonne mark. But prices on the MCX have corrected sharply as a result of slight reversal in the Rupee. The copper MCX February contract declined almost 2 percent and the red metal closed at Rs390.7/kg on Thursday.

Courtesy: Angel Commodities


Crude oil tumbles on global production concerns

Nymex crude oil prices declined by more than 1 percent yesterday, taking cues from agreed of the oil cartel OPEC to increase its production.

But, a weaker dollar helped cushion sharp decline in the commodity. Prices touched an intra-day low of $93.31 and closed at $93.87/bbl in yesterday’s trading session.

On the MCX, prices declined by more than 3 percent and closed at Rs.5036/bbl after touching an intra-day low of Rs.5021/bbl on Thursday.

Natural Gas

Nymex natural gas prices declined by 0.3 percent yesterday on the back of mild weather forecast in cooler regions.

However, sharp downside in prices was cushioned because of fall in inventories more than expectations coupled with a weaker dollar.

Prices touched an intra-day low of $3.1/mmbtu and closed at $3.129/mmbtu in yesterday’s trading session. On the MCX, prices declined by 1.75 percent and closed at Rs.168.9/mmbtu on Thursday.

EIA Inventories

US Energy Information Administration (EIA) released its weekly inventories and natural gas inventory has fallen more than expected by 102 billion cubic feet (bcf) for the week ending on 9th December 2011.

Courtesy: Angel Commodities



Precious metals remain lower on global economic concerns

Gold prices closed in the negative territory on Thursday, and continued to remain below the crucial $1600/oz mark.

Although market sentiments revived yesterday, investors remain cautious over future global economic prospects and fresh buying is not coming as a major supportive factor as markets are expecting further fall in prices.

Movement in the yellow metal is now connected to the move in riskier assets, rather than it moving solely as a safe-haven asset.

This is because during the year gold prices had increased sharply and when the yellow metal touched its peak of $1920/oz, investors began to book profits in this asset class in order to cover up losses in other segments.

In yesterday’s trade, Spot Gold declined 0.3 percent but fall on the MCX February futures contract was sharp by more than 2.3 percent as reversal in the Rupee added pressure on prices.

Silver

Spot Silver prices closed in the green on Thursday on the back of a weaker dollar but prices on the MCX fell more than 1 percent as the Rupee appreciated.

Courtesy: Angel Commodities


NCDEX soy oil declines on global cues

Soy oil prices resumed losing spree on Thursday as rupee appreciated by 0.13% towards the closing.

Sentiments of importers about rupee movement drastically affected edible oil prices excluding supply demand situation.

Major edible oil companies raised prices of oil by '2/10 kg for second time in fortnight which affected the buyers.

Weakness in Malaysian palm oil prices due to bleak exports also affected edible oil prices in India.

Mustard seed prices remained in deviation from soy complex on Thursday as spot prices continued to surge by '50-80/quintal across major markets.

Spot market arrivals were stable around 35000 bags with millers and crusher aggressively buying across spot markets.

Courtesy: Karvy Commtrade Ltd.


CBOT Updates: Rice edges higher on weak dollar

CHICAGO (Commodity Online): US rice futures eke out small gains, ending higher on a weaker dollar. The small gains came after the market set another fresh 5 1/2-month low.

The January contract is down 27% since Sept. 12, as poor export demand and a lack of supply problems around the world weigh.

A retreat in the dollar after sharp Wednesday gains boosted some commodities. CBOT Jan. rice ends up 1 1/2c to $13.66 1/2 per hundredweight.

Courtesy: CME Group


CBOT Updates: Soy complex rises on crop concerns

CHICAGO (Commodity Online): US soy futures end higher amid worries about the South American crop. Dry weather in Argentina fueling concerns about potential yield loss, although traders say the growing season is still early.

A weaker dollar added to the support. Traders also say the market's inability to pierce support at $11 prompted short-covering.

Prices rallied despite losses in corn. CBOT March soy ends up 11 3/4c, or 1.1%, to $11.11 3/4 a bushel.

March soybean oil ends up 0.56 cents to 49.36 cents/lb, while March soybean meal flat at $286.30 per short ton.

Courtesy: CME Group


CBOT Updates: Wheat tumbles on weak exports

CHICAGO (Commodity Online): US wheat futures end slightly lower as weak exports and pressure from corn offset a weaker dollar and gains in soybeans.

A weaker dollar helped prompt some short-covering in a market that has fallen sharply throughout the fall, but weekly exports were lackluster, reaffirming that ample world supplies are limiting demand for U.S. wheat. Analysts expect that trend to continue.

March CBOT wheat ends down 1 1/2c to $5.79 1/4 a bushel, some deferred contracts higher. KCBT March wheat up 3/4c to $6.36 1/4, MGEX March wheat flat at $8.15 3/4.

Courtesy: CME Group


CBOT Updates: Corn declines on subdued demand


CHICAGO (Commodity Online): US corn futures end lower, falling to a fresh nine-month low in a move traders say could spur more liquidation.

The March contract closed below key support at $5.80, and traders say that technically there's little underlying support.

"The psychology is not good at this point," says Jerry Gidel, analyst with North America Risk Management Services. Weak exports have weighed on prices recently.

Gains in soybeans and a weaker dollar limit corn's losses. CBOT March corn ends down 1 3/4c to $5.79.

Courtesy: CME Group


NCDEX turmeric remains lower on increased arrivals

Spot prices of Turmeric continued to trade weak on account of increased arrivals amidst lower offtakes and settled 1.04% lower on Thursday. Futures traced the Spot prices and settled at the lower freeze yesterday. Long liquidation by the market participants as the contract nears expiry also led prices to close down yesterday.

Production, Arrivals and Exports

Arrivals in Nizamabad and Erode mandi stood at 10,000 bags and 1,500 bags respectively on Thursday.

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 50000 tonnes as compared to 32000 tonnes in 2010-11, rise of 56%.

Courtesy: Angel Commodities


NCDEX jeera tumbles on weak export demand

Jeera futures witnessed mixed sentiment throughout the day and settled 1.33% lower on Thursday. However, Spot prices ended in green owing to increased exports and reports of unfavorable weather conditions prevailing in the major growing areas.

According to Gujarat farm ministry, area sown under jeera till December 13, 2011 stood at 2.32 lakh hectares (lh) up 26.68% as compared to last year. Carryover stocks of jeera is expected to be around 9-10 lakh bags as compared to 4-5 lakh bags in the last year.

Prices in the global markets of Indian origin are quoting around $2,800-2,950/tn while Syrian origin is quoting at $3,100-$3,150/tn.

Production, Arrivals and Exports

Unjha markets witnessed steady arrivals of 5,000 bags amidst off takes of 6,000 bags on Thursday.

Production of jeera in 2011-12 is expected to be around 35 lakh bags as compared to 29 lakh bags in 2010-11. (Each bag weighs 55 kgs). (Source: spot market traders).

According to Spices Board of India, exports of Jeera during April 2011-Ocotber 2011 stood at 20500 tonnes as compared to 19,800 tonnes in 2010-11, an increase of 3.5%.

Courtesy: Angel Commodities


NCDEX pepper settles higher on weak arrivals


Spot pepper prices continued to add to the gains of the pervious day owing to demand from the local stockists amidst lower arrivals. Prices at the Spot and near month Futures settled 0.92% and 0.61% higher respectively on Thursday. Far month Pepper futures however, settled 0.57% down yesterday anticipating fresh arrivals from domestic.

Supply disruptions were noticed on account of ongoing agitations in Kerala with regard to Mullaperiyar dam which supported prices.

Pepper stocks with Vietnam are expected to be around 10 thousand tonnes while that in India is expected to be 12 thousand tonnes.

Indian parity in the international market was at $7,325-7,450(c&f) a tonne and remained competitive while Vietnam 550 gl was quoting its pepper at $7,250 per tonne (fob).

Exports

According to Spices Board of India, exports of pepper during April 2011- October 2011 stood at 13750 tonnes as compared to 10350 tonnes in 2010-11, rise of 32.8%.

According to International Pepper Community (IPC) exports of black pepper during January to October 2011 from six major exporting countries (Brazil, India, Indonesia, Malaysia, Vietnam and Sri Lanka) was around 2.04 lakh tonnes a decline of 4.6% as compared to 2.14 lakh tonne in the same period last year.

Exports from Indonesia posted significant decrease of 40% as compared to previous year. Exports stood at 29,000 tonnes as compared to 48,500 tonnes in the last year.

During Jan to Oct 2011, Brazil exported 25,331 tonnes of pepper a rise of 4.74% as compared to previous year. U.S. remained the major destination of the pepper imports.

Production and Arrivals

Arrivals of pepper in the domestic mandi on Thursday stood at 8 MT as compared to 16 tonnes on Wednesday while offtakes on the other hand stood at 185 tonnes.

Global Pepper production in 2012 is expected to increase 7.2% to 3.20 lakh tonnes as compared to 2.98 lakh tonnes in 2011 with sharp rise of 24% in Indonesian pepper output and in Vietnam by 10%. Pepper production in Vietnam and Indonesia is projected at 1.10 lakh tonnes while that in Indonesia is projected to be 41 thousand tonnes. (Source: Financial Express).

On the other hand production of pepper in India in 2011-12 is expected to be scale down further by 5% to 43 thousand tonnes as compared to 48 thousand tonnes in the last year.

Courtesy: Angel Commodities


NCDEX soybean falls on profit taking

NCDEX January soybean futures ended in red on account of profit taking after yesterday’s sharp fall.

Weakness in overseas market also provided support to the bears. Total arrivals of soy bean in Madhya Pradesh were 1.35 lakh bags, Maharashtra was 65,000 bags and Rajasthan was 50,000 bags(Bag=90-100 Kg). Soybean prices in Indore were at Rs2,230-2,280/qtl (auctions in Mandi) and plant delivery was quoted Rs2,320-2,360/quintal.

The NOPA crush report for November showed soybeans crushed at 141.277 million bushels as compared with trade expectations near 142.5 million. October crush was 141.2 million and November of last year was 148.8 million bushels so the report is considered slightly negative showing sluggish crush demand.

Rape/mustard Seed

NCDEX January RM Seed futures ended in green on fear lower yield as unfavorable weather condition for crop.

According to data from the Directorate of Oilseeds Development, mustard has been planted over 6.16 mln ha this rabi season as on December 08, 2011, up marginally from around 6.08 mln ha in the year ago period. In Rajasthan, the largest producer of mustard in the country, acreage was slightly lower about 5.4% on year at 2.60 million ha.

In Uttar Pradesh, the second largest producer, the crop has been sown across 1.03 mln ha, up almost 7% from a year ago. The crop, the most crucial of winter oilseeds, has been sown across 97% of the usual area of 6.36 million ha.

The government is aiming total mustard acreage of 7.55 mln ha this year and output at a record 8.19 million tonnes this rabi season. Last year, farmers had harvested 7.67 mln tn of the oilseed. Mustard seed accounts for about 70% of India's winter-season oilseed output. As per WASDE (USDA) monthly supply & demand report which is released on December 09, 2011 shows that the Canada rapeseed production raised 1.3 million tons to 14.2 mln based on the latest survey results from Statistics Canada.

Refine Soy Oil

NCDEX December refined soy oil futures fell sharply as lower export figures of Malaysian Palm Oil. As per SGS ( a cargo surveyor ), Malaysia's palm oil exports in the first 15 days of December fell 19% from a month earlier, to 649,138 metric tons.

Crude palm oil price $965/tonne C&F Mumbai on Thursday as compared to $985/tonne on Wednesday. As per Solvent Extractors Association of India, India imported 827,684 tonnes of vegetable oils in the first month of oil marketing year (November to October), up 27 percent from 652,262 tonnes a year ago.

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

According to the Malaysian Palm Oil Board, the Malaysia's palm oil output and inventories fell 15% and 1.5% on month, respectively, in November, while exports declined 10%. A Cargo surveyor SGS Malaysia's palm oil exports during December 1-10 at 436,633 tonnes, down 4.6% from a month ago.

Courtesy: Angel Commodities


NCDEX sugar slumps on higher monthly quota

Sugar futures declined on Thursday on higher monthly quota coupled with lower demand from the bulk manufactures amidst winter season demand.

There are reports of lower yield of Sugarcane in Maharashtra which may lower the output in the second largest cane producing state.

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

Liffe white sugar and ICE Raw settled 0.23% and 0.22% down respectively.

Pessimistic comments from EU paymaster Germany and new figures exposing growing stress among Europe's banks took the shine off financial market hopes of a turning point in the euro zone debt crisis at a summit this week.(source: Reuters)

Domestic Sugar updates

According to ISMA, India is likely to have crushed 14.4 mln tn cane during Oct 1-Nov 23 and produced 1.3 mln tn sugar during the current crushing season. Maharashtra Oct 1-Dec 8 sugar output is up at 1.45 mln tn vs 1.31 mln yr ago due to higher recovery at 9.8% from 9.344% last year.

Indian Sugarcane production is estimated higher by 0.9% at 342 mn tn for 2011-12 season starting October 1, 2011. ISMA has projected sugar production at 26 million tonnes for 2011-12.

With the opening stocks of 6 mn tn, domestic Sugar supplies are estimated at 32 mn tn against the domestic consumption of around 23 mn tn. Thus there is a wide scope for exports from India.

Global Sugar Updates

Thailand 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 today lowered its global 2011-12 sugar surplus estimate by 940,000 tn to 8.22 mln tn, due to higher projection for consumption than earlier estimated.

Courtesy: Angel Commodities


India chana declines on weak spot demand


Chana futures declined 1.3% on Thursday, while spot declined 0.22% on lack luster trades in the physical markets.

However, lower acreage under Chana and concerns over unfavorable weather in AP, Maharashtra etc is seen supporting Chana prices in the short term.

Forward Market Commission (FMC) has scrapped special margin of 10% on Chana on long side on all running contracts with effect from Friday December 09, 2011.

According to the latest report by Ministry of Agriculture, pulses have been sown in 12.06 million hectares as on 8th December 2011, up 1.17% as compared to 11.92 million hectares in the same period last year.

However, area sown under Chana in India till 8th December 2011 was 7.94 million hectares down 0.37% as compared to 7.97 million hectares in the same period previous year.

Area under Chana in Maharashtra till date is 8.21 lakh hectares down 16% as compared to 9.82 lakh hectares in the same period previous year.

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 on account of 10% decline in Kharif Pulses output.

However, Rabi Pulses output is targeted higher on higher area and conducive weather 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 where acreage is down by 16.4%, 12.4%, 10.3%, 27.5% and 5.7% respectively.

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 extend uptrend on firm exports

Guar seed and Guar gum futures touched new high of Rs 6552 per qtl and settled at an upper limit of 4 percent for the fourth consecutive session on Thursday.

Despite regulator’s measures to impose special margin on long side Guar seed and Guar gum futures, prices continued to trade higher on export expectations amidst lower output and carry over stocks.

Another important factor that is supporting the upside is the rupee factor which has depreciated over 9.5% since November 01, 2011. Yesterday rupee depreciated 0.7% at Rs 53.23 per dollar.

Total margin on Guar seed and Guar gum which stood around 8.5% and 9.5%, i.e around Rs 48700 and Rs 88800 per contract, before imposition of special margin, has now increased to 18.5% and 19.6% i.e. around Rs 107000 and Rs 186000 respectively.

Indian Guar gum Association has sought the FMC’s intervention by the way of imposition of special margin over and above the existing 19-20% margin.

They clarified that the price surge is not only defeating the futures trade, but also hurting the export prospects. (Newswire 18) Arrivals of late sown Guar crop has started across Churu, Bikaner and other growing areas of Rajasthan and thus arrivals have increased in this week (since 5th December 2011) and stands around 1.50 lakh bags.

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

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 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.

Export figures clearly indicate that global crisis has not hit Guar exports as of now in the current season too. In fact rupee has increased profit margin of the exporters in the current season.

Courtesy: Angel Commodities