Base Metals End on Mixed Trend

The base metals complex traded on a mixed note on Thursday with nickel and zinc ending in the red while copper, lead and aluminium closing in the green.

Copper, the leader in the base metals, rose around 1.1 percent on the LME and by 0.6 percent on the MCX yesterday on the back of positive economic data from the US coupled with dollar weakness.

Nickel

Nickel prices traded lower by 1.7 percent on the LME and around 1.3 percent on the MCX in yesterday trading session. Sharp rise in the metal inventories on the LME warehouses acted as a negative factor for prices. Nickel inventories rose around 2 percent to 89,568 tonnes on Thursday. On the MCX, the metal touched an intra-day low of Rs985/kg and closed at Rs 986/kg yesterday.

Japan November rolled copper output down 10.4 pct yr/yr Japan's output of rolled copper product declined by 10.4 percent (yo- y) to 65,030 tonnes in the month of November.

The country’s output declined mainly on the back of weak demand from chip and electronics sectors and marked the fifth-consecutive month of yearon- year declines. The figure represents a rise of 1 percent from October, according to the data from the Japan Copper and Brass Association.

Courtesy: Angel Commodities


Crude oil edges higher on global supply concerns

Nymex crude oil prices increased by around 1 percent during yesterday’s trading session taking cues from supply concerns due to sanctions on Iran and upbeat economic data from the US.

Additionally, a weaker dollar also acted as a positive factor for the commodity.

Oil prices touched an intra-day high of $100.05/bbl and closed at $99.4/bbl on Thursday. On the MCX, prices increased by 1 percent and closed at Rs.5268/bbl after touching an intra-day high of Rs.5275/bbl on Thursday.

Natural Gas

Nymex natural gas declined by 0.2 percent yesterday taking cues from warm weather and less than expected fall in US natural gas inventories which have kept prices at 27-month low. However, sharp downside in prices was cushioned because of a weaker dollar. Prices touched an intra-day low of $3.1/mmBtu and closed at $3.157/mmBtu. On the MCX, prices declined by 1.5 percent and close at Rs.165.9/mmBtu on Thursday.

EIA Inventories

US Energy Information Administration (EIA) released its weekly inventories report yesterday which indicates that US natural gas inventory has fallen less than expected by 100 billion cubic feet (bcf) for the week ending on 16th December 2011.

Courtesy: Angel Commodities


Precious metals settle lower on Euro debt concerns

Gold prices declined around 0.6 percent on Thursday as investors remain cautious about Euro Zone’s ability to tackle the debt problem.

However, dollar weakness cushioned sharp decline on the international markets yesterday. The yellow metal touched an intraday low of $1598/oz and closed its trading session at $1603/oz.

On the MCX, Gold February contract declined around 0.4 percent on Thursday. The yellow metal touched an intra-day low of Rs27,591/10 gms and closed at 27,698/10 gms yesterday.

Holdings in the SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, declined by 1 percent from a day earlier to 1,254.57 tonnes on 22nd December 2011, the lowest since early November.

Silver

Spot silver prices declined around 1 percent in yesterday’s trading session taking cues from fall in gold prices. However, weakness in the US dollar resisted further decline on the international markets. Prices touched an intra-day low $28.98/oz and ended its trading session at $29.10/oz yesterday.

On the MCX, Silver March contract dropped by 0.5 percent and touched an intra-day low of Rs53,460/kg on Thursday.

Courtesy: Angel Commodities


NCDEX turmeric rises on extended buying

Turmeric Futures extended gains of the previous day and settled 0.48% on Thursday owing to improved buying by market participants. Spot prices however settled 0.84% lower yesterday on account of increased arrivals.

Production, Arrivals and Exports

Arrivals in Nizamabad and Erode mandi are steady around 1,000 bags and 12,000 bags respectively on Wednesday.

Turmeric production for the year 2011-12 is projected at historical high of 82 lakh bags (1 bag= 70 kgs) compared to 69 lakh bags in 2010- 11. Erode is expected to produce45 lakh bags of turmeric a rise of 29% as compared to previous year. According to Spices Board of India, exports of Turmeric during April 2011- October 2011 stood at 50,000 tonnes as compared to 32,000 tonnes in 2010-11, rise of 56%. Targets set by the Spices Board have already been met till October 2011.

Exports are expected to touch new historical levels in 2011-12.

Courtesy: Angel Commodities


NCDEX jeera edges higher on spot demand


Jeera prices recovered from the earlier losses of the previous day and settled 1.61% up on Thursday. Demand from the local stockists amidst reports of surge in the exports of jeera might support prices to remain supported in the last few sessions.

According to Gujarat farm ministry, area sown under jeera till December 19, 2011 stood at 2.64 lakh hectares (lh) up 20% as compared to last year. Carryover stocks of jeera is expected to be around 9-10 lakh bags as compared to 4-5 lakh bags in the last year.

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

Production, Arrivals and Exports

Unjha markets witnessed arrivals of 3000 bags 1000 bags less as compared to Wednesday amidst off takes of 2,500 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 extends uptrend on limited stocks

Pepper Futures continued to add to the gains of the previous day and settled 2.52% higher on Thursday. Spot prices however, ended 0.13% lower owing to lower offtakes yesterday. Demand from the local stockists amidst lower arrivals may support prices in the coming days. 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 is being offered at $7,050- 7,100(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 13,750 tonnes as compared to 10350 tonnes in 2010-11, rise of 32.8%.

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

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

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

Production and Arrivals

Arrivals of pepper in the domestic mandi on Thursday stood at 26 MT as compared to 18 MT on Wednesday while offtakes on the other hand stood at 56 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 edges lower on global cues


NCDEX January soybean futures traded lower on second consecutive trading sessions on account of weak overseas market as fears of a global slowdown in the economy and news that China soybean import demand from the US for the month of November was down 34.8% from last year was seen as negative.

Total arrivals of soybean in Madhya Pradesh were 1.80 lakh bags, Maharashtra was 1.10 lakh bags and Rajasthan was 60,000 bags(Bag=90-100 Kg). Soybean prices in Indore were at Rs 2280- 2330/qtl (auctions in Mandi) and plant delivery was quoted Rs2375- 2410/quintal.

USDA’s weekly export figures released on December 15, 2011, which shows that the net weekly export sales for soybeans came in at 468,600 metric tonnes which was slightly below trade expectations.

China was the largest buyer of 354,200 tonnes. Cumulative soybean sales stand at 63.7% of the USDA forecast for 2011/2012 (current) marketing year versus a 5 year average of 68.5%. Meal sales came in at 103,700 metric tonnes for the current marketing year and 3,600 for the next marketing year for a total of 107,300. Net oil sales came in at 5,500 metric tonnes which was near the low end of expectations.

Rape/mustard Seed

NCDEX January RM Seed futures ended lower on account of weakness in other oilseeds and edible oil also added bearish market sentiments.

Sowing acreage of Rabi oilseeds in India was 7.56 million hectare as compared to 8.15 million hectare a year ago. Oilseeds area in the Maharashtra declined 23% to 207,000 ha, with safflower acreage falling 17.4% to 121,600 ha. 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 million based on the latest survey results from Statistics Canada.

Refine Soy Oil

NCDEX December refined soy oil futures traded lower on account of lower demand at prevailing prices and lower exports figures of Malaysian palm oil also provided support to the bears. As per SGS (cargo surveyor), Malaysian Palm Oil exports from 1-20 December fell by 10.1% to 9.34 lakh tonnes as compared10.37 lakh tonnes in the same period previous year. A firm rupee weighs on edible oil prices as it makes imports cheaper for domestic buyers. India is the world's leading edible oil importer.

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.

Courtesy: Angel Commodities


NCDEX sugar declines on cane crushing

Sugar prices witnessed rangebound trades throughout the day and settled 0.24% lower on Thursday. Also the first pan-India satellite mapping of sugarcane has revealed that the estimated area under the crop has gone up by 5% to 51.82 lakh hectare in the current sugar season, according to ISMA.

Further, sufficient supplies and lower demand from the bulk manufactures amidst winter season kept prices under pressure. According to the Food Minister, Ministry is planning to discuss with States, the Finance and Agriculture Ministries on removing some of the controls such as doing away with the mandatory obligation to offer sugar for the public distribution system (PDS) in the New Year.

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.

The Food Ministry has issued permits for the export of nearly 37,000 tonnes of sugar so far out of the one million tonnes that the government has allowed for overseas shipment in the ongoing 2011-12 marketing year.

Liffe white sugar & ICE Raw settled 0.84% and 0.51% higher on Thursday owing to short coverings ahead holidays.

Domestic Sugar updates

Sugar output in Maharashtra rose 9% between Oct 01 and Dec 15 to 18.6 lakh tonnes compared with the 17 lakh tonnes same period last year. The output was earlier down by 6%. Recovery rate also increased to 10.07% from 9.70% a year ago.

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 has crushed 9.4 mn tn cane this season against 3.3 mn tn a year ago. Thailand sugar output could reach to 9.9 million tonnes in 2011-12 compared to 9.64 million tonnes in 2010-11.

According to UNICA, Sugar output in Brazil's center-south in the first half of November fell 13.8 percent from a year ago, as more mills ended crushing the 2011/12 cane crop. Sugar production in the period totaled 1.26 million tonnes, compared with 1.46 million tonnes a year earlier.

Swiss sugar consultancy Kingsman lowered its global 2011-12 sugar surplus estimate by 940,000 tn to 8.22 mln tn.

Courtesy: Angel Commodities


NCDEX chana tumbles on profit booking

Chana futures continued to trade lower for the third consecutive day and settled 1.48% lower on Thursday on profit booking amidst reports that weather conditions in Maharashtra have turned favorable for the crop since the beginning of the week.

Pulses production during the current fiscal is expected to decline by 5-7% over 2010-11 due to lack of adequate rain, According to India Pulses and Grain Association (IPGA). (Source: Financial Express)

Rajasthan, rabi pulses area is 1.60 mln hectares as compared to 1.56 mln hectares as on 16th December 2011. Area covered under Chana stands around 1.56 mln hectares as compared to 1.54 mln hectares in the same period previous year(State Farm Ministry)

However concerns over unfavorable weather in Ap and Karnataka still persist and lower area under Chana in these states may restrict sharp downside in the prices.

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.

Sowing progress and Production

Chana is the main Rabi Pulse crop grown in India, sowing of which is done during October-December, and harvesting begins in January. Sowing of Chana began on a brisk note; however, the progress was not satisfactory in Maharashtra, Karnataka, UP, Bihar and AP.

The area under pulses has been marginally lower by 0.8% on account of lack of rains. Area under Chana, a dominant pulse crop has been lower at 83.55 lakh ha against 86.36 lakh ha in corresponding last year.

Indian government is targeting total pulses output of 17 mln tn in the current crop year that started July 2011, down marginally from last year's record production of 18.09 mln tn on account of 10% decline in Kharif Pulses output. Although government has targeted higher Rabi Pulses output, it is difficult to achieve the same taking into consideration the sowing progress and prevailing weather conditions.

According to the first advance estimates, Kharif Pulses output for 2011- 12 season is down by 9.6% at 6.43 mt. Tur output estimates is up by 0.35% while moong & Urad is down by 21% & 16% respectively. Kharif Pulses sowing is down by 9% as on 23rd September, 2011. 109.41 lakh ha has been covered against 120.3 lakh ha in the last year.

Courtesy: Angel Commodities


NCDEX guar seed edges higher on firm eports

Guar seed and Guar gum futures witnessed volatile session and settled 2.05% and 3% higher respectively on Thursday. However, prices in the spot markets declined on account of drop in the demand at higher levels. Prices traded higher despite of high margin 30% on the long side of Guar seed and Guar gum contracts.

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.

As per the NCDEX circular dt 16/12/2011, further Special Margin of 10% in cash on the Long side of Guar seed and Guar gum will be imposed w.e.f. from Monday, December 19, 2011 on all running and yet to be launched contracts.

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).

Besides imposing special margin, FMC is also considering various measures like cutting position limits on Guar seed , soughing data on top guar traders in NCDEX etc.

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