commodities weekly tracker, 10th june 2013

7/28/2019 Commodities Weekly Tracker, 10th June 2013

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Commodities & Currencies

Weekly Tracker


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Commodities Weekly TrackerContents

Returns

Non Agri Commodities Currencies

Agri Commodities

Non-Agri Commodities

Gold

Silver

Copper Crude Oil

Currencies DX, Euro, INR

Agri Commodities

Chana

Black Pepper Turmeric

Jeera

Soybean

Refine Soy Oil & CPO

Sugar

Kapas

Monday | June 10, 2013


3/27

Commodities Weekly TrackerMonday | June 10, 2013

3.9

3.22.6

2.4

1.7

0.8

(2.1)

(2.9)(3.0)

(2.0)

(1.0)

0.0

1.0

2.0

3.0

4.0Currencies Weekly Performance


4/27

Equities Performance during the week

0.88 0.78

(1.13)

(1.68) (1.75) (1.92)

(3.04)

(3.65) (3.86)

(6.51)(7.00)

(6.00)

(5.00)

(4.00)

(3.00)

(2.00)

(1.00)

0.00

1.00Global Equities Performance (%)


5/27


4.4

1.6

1.1

(0.2)(0.6)

(1.4) (1.7)(2.6)

(3.9)(4.0)

(3.0)

(2.0)

(1.0)

0.0

1.0

2.0

3.0

4.0

Non-Agri Commodities Weekly Performance


6/27

*Weekly Performance for July contract, Mentha Oil Cotton & CPO- June Conyract,



7/27


GoldWeekly Price Performance

Over the last week, Spot Gold prices fell 0.2 percent to close at $1384/oz. In the

Indian markets however, Rupee depreciation coupled with expectations of a supply-

side crunch post the increase in customs duty supported gains

ETF Performance

Holdings in the SPDR Gold Trust declined by 0.6 percent to 1,007.14 tonnes as on 7th

June 2013 from previous level of 1,013.15 tonnes as on 31st May 2013.

Domestic bullion imports scenario

Gold imports in May13 stood at 162 tonnes, much higher than the imports of 153

tonnes seen for the first-qtr of last fiscal.

Value of total gold and silver imports rose sharply by 138 percent to $7.5 billion in

April13, rising more than double from the previous months $3.1 billion. This led to

further widening of the trade deficit to $17.8 billion.

Stringent measures to curb gold sales

The Reserve Bank of India (RBI) increased restriction on gold imports on consignment

basis by banks and all other nominated agencies/premier/star trading houses for

domestic use. Hence, such imports would only cater to the genuine needs of

exporters of gold jewelry.

Import of gold on credit basis is also disallowed.

Furthermore, all Letters of Credit opened by nominated banks/agencies for import of

gold will be only on 100 percent cash margin basis.

Our opinion on RBIs move:

The central bank is mainly targeting to reduce the imports of gold in order to (a)

curb the excessively high Current Account Deficit and (b) cap further depreciation the

Rupee.

While gold will be viewed as a long-term asset, the buying patterns are most likely to

change, thereby having an impact on demand in the future.

1,350

1,400

1,450

1,500

1,550

1,600

1,650

1,700

1,750

1,800

25,500

26,500

27,500

28,500

29,500

30,500

31,500

MCX and Comex Gold Price Performance

MCX-Near Month Gold Futures -Rs/10 gms Comex Gold Futures -$/oz

79.0

80.0

81.0

82.0

83.0

84.0

85.0

1,350

1,400

1,450

1,500

1,550

1,600

1,650

1,700

Spot Gold Vs Dollar Ind ex

Spot Gol d -$ /oz US Dol lar I nde x


8/27


GoldGold Import Duty Structure

Imports duty on gold increased to 8 percent

To further its efforts in curbing gold imports, the government

on Wednesday last week increased import duty on gold.

The Central Board of Excise and Customs (CBEC) increased the

import duty on gold coins, bars and platinum by 2 percent to 8

percent. The duty has been raised for the second time in six

months.

Import duty on gold ores and concentrates that is used to

manufacture gold, has been raised to 6 percent.

However, the excise duty is a percent lower than the Customs

duty. This is in order to incentivize local refineries to import

raw gold and refine it in India.

Why is government taking stringent measures in the

Gold market?

During FY 2012-13, gold accounted for an 11 percent share in

Indias imports.

This factor led to the trade deficit widening further to $190.4

billion.

With the application of these measures, the Economic Advisory

Council expects gold imports to fall to $45 billion in FY2013-14.

Jewelers React

Indian jewelers demand an immediate rollback in the import

structure as rise in import tax on refined gold has led to sharp

increase in cost of production for a large community of small

jewelers.

Year Duty (%)

Jan 2012 2

Feb 2012 4

Jan 2013 6

Jun 2013 8

Source: BS, Angel Research

Source: BS, Angel Research


9/27


Gold

US Commodity Futures Trading Commission Data (CFTC)

Speculators have raised the long position by 19 percent to 57,113 futures and options as on 4 th June. The holdings have gained by 60 percent in past

two weeks.

World Gold Council Views in the past week

An expected normal monsoon along with a host of auspicious occasions during the wedding and festival season will boost gold demand during the

second-half of the year.

Immediately after the move by Reserve Bank of India (RBI) to curb gold imports, WGC said this move will only have a short term impact on the

precious metal prices and demand.

Outlook

The trend in gold prices for this week is expected to be up in the Indian markets. The yellow metal in the domestic markets will take upside support from depreciation in the Rupee along with expectations of lower supply of the

metal due to the Governments measures to curb supply.

Prices in dollar terms are expected to witness downside pressure due to strength in the Dollar Index and the decline in ETF holdings.

Weekly Technical Levels

Spot Gold : Support 1,366/1,348 Resistance 1,398/1,420. (CMP: $1,377.20)

Sell MCX Gold August between 27,800-27,850, SL-28,175, Target -27,100. (CMP: Rs 27,615)


10/27


Silver

Weekly Price Performance

Spot silver declined 2.6 percent in the last week and prices touched a low of$21.51 /oz, closing at $21.64/oz in at the end of the week.

Spot Silver prices slumped to a 32-month low of Friday due to Fed worries.

ETF Performance

Holdings in the iShares Silver Trust declined marginally by 0.05 percent to

9,988.42 tonnes on 7th June 2013 from 9,992.92 tonnes on 31st May 2013.

Factors that influenced downside in silver prices

Downside in gold prices.

Mixed Performance in the base metals complex.

Expectations of cut in the stimulus spending by the Fed.

However, sharp fall in prices was cushioned on account of weakness in the

DX.

Outlook Weak cues from gold prices along with an overall grim market scenario, silver

prices are expected to witness pressure.

Dollar Index strength would be negative for the commodity.

Rupee depreciation however will help support upside in silver in the Indian

markets.


Spot Silver: Support 21.20/20.62 Resistance 22.07/22.63. (CMP:$21.41)

Sell MCX Silver July between 43,500-43,550, SL-44,251, Target -

42,300/41,700. (CMP: Rs.42,748)

22

24

26

28

30

32

42,000

44,000

46,000

48,000

50,000

52,000

54,000

56,000

58,000

60,000

MCX and Comex Silver Price Performance

MCX-Near Month Si lve r Futur es -Rs/ kg Come x Si lve r Futur es -$ /oz

79.0

80.0

81.0

82.0

83.0

84.0

85.0

22.0

24.0

26.0

28.0

30.0

32.0

Spot Silver Vs US Dollar Index

Spot Sil ve r -$ /oz US Dol lar Inde x


11/27


CopperWeekly Price Performance

LME Copper prices slipped 0.6 percent last week, while prices on the MCX near-month

contract gained 0.4 percent, owing to Rupee depreciation in the last week thatcushioned downside.

Despite supply-side concerns, copper prices came under pressure over the second-half

of the week on the LME due increase in inventories on the LME and the SHFE.

After testing a high of $7500/tonne on the LME during mid-week due to supply worries

on account of a shutdown at the worlds second-biggest mine, prices corrected to a

weekly low of $7221/tonne on Friday as demand-side concerns loomed.

Copper Inventories

Copper inventories over the week increased marginally by 0.2 percent on the LME to

609,875 tonnes and on the SHFE, inventories increased sharply by 1.2 percent to181,472 tonnes.

Supply-side factors

Production at Freeport-McMoran Copper and Gold Inc. in Indonesia is expected to

remain closed for almost 3 months on the back of a government probe due to an

accident at its Grasberg mine.

Current supply-side factors that could be supportive to prices suspension of output at

Grasberg, reduced output at Collahuasi in Chile and lack of production at Bingham

Canyon at Utah.

The open-pit mine at Grasberg produces around 140,000 tonnes of copper ores per

day, while underground operations produce 80,000 tonnes.

A supply crunch amid a seasonally strong period for demand could be supportive for

copper prices in the medium-term.

365

375

385

395

405

415

425

435

445

455

6,800

7,000

7,200

7,400

7,600

7,800

8,000

8,200

8,400

LME and MCX Copper Price Performance

LME Copper Future ($/tonne) MCX Near Month Copper Contract (Rs/kg)

6,800

7,000

7,200

7,400

7,600

7,800

8,000

8,200

8,400

318,000

368,000

418,000

468,000

518,000

568,000

618,000

LME Copper v/s LME Inventory

Copper LME Inventory (tonnes) LME Copper Future ($/tonne)


12/27


Copper

Important Developments

Chilean copper exports increased to $4.4 billion in May13 from $3.2 billion during the same period last year.

Russian exports of aluminum, copper and nickel fell during Jan-April13 due to a fall in demand for metals in the world markets.

Outlook

Subdued price activity is expected in Copper this week as Chinese markets are closed for holiday for the first-half of the week.

Supply-side worries will continue to provide upside direction to prices.

The currency factor will also affect prices, with the stronger Dollar Index putting pressure on LME prices, while a weaker Rupee will support gains

domestically.


LME Copper: Support 7135/7035 Resistance 7320/7420. (CMP: $7133.25)

Sell MCX Copper June between 417-419, SL-424.10, Target -409. (CMP: Rs 411.40)


13/27


Crude OilWeekly Price Performance

Nymex WTI crude oil prices jumped 4.4 percent last week to close at $96/bbland on the MCX, the near-month contract gained 4.5 percent to close atRs5512/bbl.

Decline in inventories, upbeat US jobs report, weakness in the Dollar Indexalong with threat of a Hurricane affecting oil production in the Gulf of Mexicoregion supported gains in the commodity.

Oil Inventories Fall Last Week

Both, American Petroleum Institute and the US Energy Department reporteda decline in oil inventories by 7.8 mb and 6.3 mb for the week ending 31stMay13. In both the inventory reports, gasoline inventories slipped whiledistillate stockpiles increased. However, the overall correction in inventories

supported an upside in prices.Hurricane Impact Low Currently

Tropical storm Andrea did form in the Gulf Coast but is not expected to impactthe oil and gas production the region. However, threat of the same caused anupward impact on prices last week.

More reports of storms that could intensify and halt production in the US couldtrigger an upside in prices.

Sudan Oil Exports Threatened

South Sudan exports are threatened due to tensions over rebels in the

territory. Companies in South Sudan have been ordered to close pipelinescarrying oil from South Sudan fields to Port Sudan. The countrys economydepends heavily on oil export revenues. However, this could happen anytimein the next 60 days and negotiations would take place but currently exportshavent been affected.

South Sudan has to rely on a 1400-km pipeline through Sudan in order toexport its crude and the issue of transit fees usually causes supply trouble. Inthis case too, the export cut could hamper the fees obtained by South Sudan toSudan, thereby keeping the exports halt as the last option to resolve issues.

This closure comes after a recent 15-month oil supply shutdown which hadaffected its economy. From mid-May, South Sudan has produced 200,000 bpdand aims to ramp-up production to 350,000 bpd by year-end.

86.0

88.0

90.0

92.0

94.0

96.0

98.0

4,700

4,800

4,900

5,000

5,100

5,200

5,300

5,400

5,500

5,600

Nymex and MCX Crude Oil Price Performance

MCX crude o il (Rs/ bbl) NYMEX Crude Oi l ($/bbl)

361.3

360.3

363.1369.1

371.7

372.2

376.4

377.53

381.4

384

382.7

385.9

388.6 388.9

387.6

388.6

395.3 395.5

394.9 394.6

397.6

391.3

360

365

370

375

380

385

390

395

400

Crude Oil Inventories (mn barrels)


14/27


Crude Oil

Saudi Arabian Output

Crude oil production Saudi Arabia stood at 9.6 mbpd in May13, up from 9.3 mbpd in April13. The country typically increases output during the hotsummer months in order to meet a rise in air-conditioning demand.

Chinas Crude Oil Consumption Scenario

Data showed that Chinese crude oil imports stood at 23.95 million tonnes in May13, falling 6 percent y-o-y.

During the first five months of 2013, imports are down by 2 percent y-o-y to 116 million tonnes.

Exports from China too were affected as for May12 falling 39 percent y-o-y to 110,000 tonnes. From Jan-May13, exports slumped 29 percent y-o-y

to 830,000 tonnes.

May13 crude oil demand was up around 1 percent to 9.48 mbpd, marking the lowest since Sept12.

Refinery throughput in the country falls to a 9-month low at 9.2 mbpd.

Outlook

A mixed trend is expected to be seen in crude oil this week.

Bullish factors like falling inventories, threat of the Hurricane season and worries over a an expected cutback in Saudi Arabian oil output will be

supportive to prices.

But bearish factors like increase in Saudi Arabian oil output and slowing Chinese output will keep a check on rise in prices.


Nymex Crude Oil: Support: 94.65/92.80 Resistance 98.05/99.85. (CMP:$95.68)

Buy MCX Crude June between 5465-5455, SL-5390, Target -5625. (CMP:Rs 5530)


15/27

India

HSBC Manufacturing PMI fell to a 50-month low of 50.1 in May13, standing hardly a point mark higher that divides the line between expansion fromcontraction. Output growth witnessed contraction on account of slow order growth, power outages, high interest rates and slowing global demand.

Bank of America-Merill Lynch have lowered Indias GDP forecast to 5.8 percent for the FY2013-2014 and to 6.8 percent for the FY2014-15 on

account of a tight liquidity scenario and slow industrial progress.

Gross Domestic Product (GDP) grew as expected by 4.8 percent in Q4 of 2012 as against a rise of 4.5 percent in Q3 of 2012.

Finance Ministry officials hinted that India is expected to raise the cap on foreign investment in sovereign debt by $5 billion soon.

The HSBC Purchasing PMI showed that Indias service sector expanded to a three-month high in May13. Services PMI rose to 53.6 points in May13

from 50.7 in April13. Activity in the Service sector increased last month on the back of strong order flows and launch of new products.

China

Factory activity in China witnessed a decline for the first time in seven months in May13 and growth in the services sector also cooled.

The HSBC Markit PMI for May13 declined to 49.2, marking the lowest level since October 2012 and down from 50.4 seen in April13. Fall in factory

activity in China was backed by a weakening domestic demand scenario.

Chinas Trade Balance was at surplus of $20.4 billion in May as against a previous surplus of $18.2 billion in April. Consumer Price Index (CPI) declined

to 2.1 percent in last month from rise of 2.4 percent in April. Industrial Production grew at slower pace of 9.2 percent in May with respect to rise of

9.3 percent in April.

Japan

Capital Spending declined by 3.9 percent in Q1 of 2013 from earlier fall of 8.7 percent in Q4 of 2012.

Monetary Base rose by 31.6 percent in May from previous increase of 23.1 percent in April.

Current Account was at a surplus of 0.85 trillion Yen in April as against a surplus of 0.34 trillion Yen a month ago.

Final Gross Domestic Product (GDP) rose to 1 percent in Q1 of 2013 from earlier increase of 0.9 percent in Q4 of 2012.

Consumer Confidence increased by 1.2 points to 45.7-mark in May as compared to rise of 44.5-level in April.

Economy Watchers Sentiment declined by 0.8 points to 55.7-level in last month with respect to increase of 56.5-mark in April.


Economy


16/27

US

Consumer Sentiment increased by 0.8 points to 84.5-level in May as compared to earlier gain of 83.7-mark a month ago. ISM Manufacturing Purchasing Managers' Index (PMI) declined by 1.7 points to 49-mark in May as against a rise of 50.7-level in April.

Final Manufacturing PMI gained by 0.5 points to 48.3-mark in May with respect to rise of 47.8-level a month ago.

Automatic Data Processing, Incs. (ADP) Non-Farm Employment Change increased by 22,000 to 135,000 in May as against a rise of 113,000 in April.

The Institute for Supply Management (ISM) Non-Manufacturing Purchasing Managers' Index (PMI) gained by 0.6 points to 53.7-mark in May with

respect to rise of 53.1-level in April.

Unemployment Claims declined by 11,000 to 346,000 for week ending on 31st May as against a rise of 357,000 in prior week.

Trade Balance was at a deficit of $40.3 billion in April as against a earlier deficit of $37.1 billion a month ago.

Non-Farm Employment Change increased by 26,000 to 175,000 in May as against a rise of 149,000 in April.

Unemployment Rate rose to 7.6 percent in last month from earlier increase of 7.5 percent a month ago.

Euro Zone

Unemployment Rate grew to 12.2 percent in April from rise of 12.1 percent in March.

European Producer Price Index declined by 0.6 percent in April from previous decline of 0.2 percent a month ago.

Spanish Unemployment Change declined by 98,300 in May as against a earlier fall of 46,100 in April.

German Factory Orders declined by 2.3 percent in April as against a rise of 2.3 percent a month ago.

German Industrial Production rose by 1.8 percent in April with respect to previous rise of 1.2 percent in former month.


Economy


17/27


RupeeWeekly Price Performance

The Indian Rupee depreciated around 0.8 percent on a weekly basis.

Rupee has become the worst performing currency in Asia.

Depreciation is related to the fundamental weakness of the Indian economy.

Weakness in the currency is not only relative to the Dollar Index but also against other

major currencies, thereby indicating inherent domestic economic drawbacks.

Last Weeks Snapshot

At the start of the week, the Rupee hit an 11-month low of 56.76 on the back of dollar

buying and capital outflows.

RBI Governor D Subbarao said that a weaker Rupee should not be the criteria for the

exporter community and that exporters should improve their business and product

competitiveness in order to gain higher remittances, rather than depending on thecurrency factor to boost revenues. Hence, this statement too is a negative trigger and

would cause further sentimental havoc in the domestic economy.

Rupees all-time low was of 57.33 breached on Monday 10thJune13 as the Spot Rupee

tested a low of 58.05, raising further worries over the impact of the same on the Indian

economy.

FII Inflows

For the month of June 2013, FII inflows totaled at Rs.117.70 crores ($20.91 million) as

on 7th June 2013. Year to date basis, net capital inflows stood at Rs.83,322.80 crores

($15,373.90 million) till 7th June 2013.

Outlook

Depreciation bias is expected to be seen in the Rupee during the week.

RBI intervention is unlikely as last weeks statement by RBI officials indicate the same.

Exporter selling however is expected and Dollar Index strength would be fatal for the

currency movement further.


USD/INR MCX June Support 57.30/56.60 Resistance 58.30/59.00. (CMP: 57.90)

53.0

53.5

54.0

54.5

55.0

55.5

56.0

$/INR -Spot


18/27


Dollar Index (DX)Weekly Price Performance

US Dollar Index (DX) declined around 2.1 percent in the last week.

The DX began the week on a negative note on expectations that the Federal

Reserve would continue its bond-buying program.

Last Weeks Snapshot

Comments by President of the Kansas City branch of the Federal Reserve,

Esther George, led to a recovery in the DX as the President said in the

speech that an improving economic scenario along with the fact that the

financial markets were getting dependent on the Federal Reserves move,

called for a change in the monetary policy regime.

Over the first-half of the week, this statement triggered an upside in the DX,

while all other riskier investment assets corrected on worries that thepullback would deteriorate the partially improved economic scenario.

However, a positive US jobs report led to rise in risk appetite and towards

the end of the week the Dollar Index came under pressure.

Also, mixed views with respect to the Feds rollback of the bond-buying

program led to pressure on the currency.

Factors that influenced downside movement in the DX

Favorable economic data from the US.

Further, rise in the US equities also exerted downside pressure on the DX.

Outlook

Over the week, strength is expected to be seen in the currency.

Expectations of the Feds move towards its stimulus package would rive

movement in the currency.


US Dollar Index: Support 81.50/80.70 Resistance 83.0/84.30. (CMP:

81.82)

79.0

80.0

81.0

82.0

83.0

84.0

US Dollar Index


19/27

Commodities Weekly TrackerMonday | June , 2013

Euro


The Euro appreciated 1.7 percent last week, touching a weekly high of 1.3304.

Factors that influenced upside movement in the Euro

Favorable economic data from the region supported an upside in the currency.

Further, optimistic statement from European Central Bank (ECB) President

Mario Draghi, that the regions economy will gain momentum over a period of

time also added further support.

But the ECB has cut its economic outlook for the region to -0.6 percent for 2013

compared to earlier estimates of -0.5 percent prevented sharp positive

movement in the currency.

Outlook

Movement in the Euro will be largely dependent on the quality of economic data

releases.

Negative data could trigger downside pressure and strength in the Dollar Index

will additionally lead to further decline in the currency.


EURO/USD SPOT: Support 1.3010/1.2800 Resistance 1.3360/1.3500. (CMP:

1.3224)

1.275

1.285

1.295

1.305

1.315

1.325

1.335

1.345

1.355

1.365

Euro/$ - Spot

69.0

70.0

71.0

72.0

73.0

74.0

75.0

76.0

EURO/INR - Spot


20/27

Chana



Chana traded on a mixed note with a negative bias last week. Prices have

declined on the back of higher supplies coupled with and record output

expectations. However, buying by stockists to stock up inventories supportedprices a lower levels.

Chana spot as well as July futures settled 1.64% and 0.19% lower w-o-w.

Timely arrival of monsoon to boost Kharif Pulses sowing

Smooth progress of Monsoon over the last few days has increased the prospects

of sowing of kharif pulses. Pulses are mainly grown in the western and southern

belts of India.

Chana output estimated at record high - Third Advance Estimates

According to the third advance estimates released last week, Chana output ispegged marginally lower to 8.49 mn tn compared with its second advance

estimates of 8.57 million tonnes. Chana output is expected to breach its 2010-11

record of 8.2 mn tn in 2012-13.

Seasonal pattern to restrict further downside in the prices

Chana prices tend to follow a seasonality pattern, wherein prices decline during

the harvesting period (Apr-May) and bottom out when arrivals reach their peak

in the month of May. Thus, taking cues from seasonality pattern , chana prices

are set to recover from the current month (June as arrival will decline gradually.

Outlook Chana prices are expected to remain under downside pressure on account of

good arrivals coupled with prospects of higher sowing of kharif pulses. However,

the downside may be limited as arrivals will gradually start declining in the

coming weeks which may restrict further downside in the prices. Also, prices are

hovering around the MSP levels below which farmers will not liquidate their

stocks.

Weekly Strategy

Sell NCDEX CHANA July between 3210-3220, SL -3290, Target - 3120 / 3100.


21/27

Turmeric

Source: Agriwatch & Reuters

Commodities Weekly Tracker


Turmeric Futures continued to decline for the third week and hit a fresh contract

low of`5552 per quintal on the back of huge carryover stocks coupled with weak

demand.

The spot as well as the July futures settled 5.59% and 3.73% lower w-o-w.

Weak exports

Turmeric exports during Apr-Jan 2013 declined by 4% to 66,550 tn. (Source Factiva)

Modification in Tick size and Lot size

NCDEX issued a circular earlier this month that it will modify the tick as well as the

lot size in the Turmeric contract. However the exchange later announced that it

has kept the circular issued earlier has been kept in abeyance till further notice.

Lower acreage of Turmeric for the 2012-13 season

Production of turmeric declined in 2012-2013 season due to weak monsoon as

well as lower turmeric prices. The area covered under Turmeric in A.P. as on 10th

October, 2012 was been reported at 0.58 lakh hectares. The area covered was

lower as compared to the previous year (0.81 lha), as well as normal as on date

(0.67 lha). Sowing is reported to be 30-35% lower compared to the previous year.

Lower production in the 2012-2013 season

Turmeric production in 2012-13 is expected around 50% lower compared to last

year and is expected around 45-50 lakh bags. Production in 2011-12 is reportedat historical high of 90 lakh bags/ 10.62 lakh tns.

Outlook

Turmeric prices are expected to trade on a weak note this week as huge stocks as

well as weak demand may continue to pressurize prices. Arrivals of monsoon may

also lead to commencement of sowing of the new crop. However, farmers may

hold back their stocks. Also export demand may emerge at lower levels ahead of

Ramadan, which may support prices at lower levels.

Weekly Strategy Sell NCDEX Turmeric July between 5560-5600, SL -5800, Target - 5250 / 5200.


Source: Reuters & Angel Research.


22/27

Jeera

Source: Ministry of Agriculture, Gujarat.

Commodities Weekly Tracker


Jeera futures traded with a positive bias last week on reports of some fresh

export enquiries, however, the gains were capped as demand did not pick up as

expected. Higher production estimates have also capped sharp gains in the prices.Prices had declined over the last few months due to higher sowing. The 3 years

average sowing is reported at 3.189 lk ha. About 25-30% of the new crop from

Gujarat has already been exported to Singapore, Europe & Dubai.

The spot as well as the Futures settled 0.33% and 0.94% higher w-o-w.

Second consecutive year of higher output

Indias 2013 Jeera output is estimated at 40-45 lakh bags (of 55kgs each), higher

than 40 lakh bags in 2012. However, increase in the exports due to supply

concerns in the global markets offset the impact of higher supplies on the prices

and thus, medium term fundamentals remain supportive for the upside.

Global supply concerns boost Jeera exports

Jeera exports during Apr-Jan 2013 stood at 64,400 tn, higher by 86% (Source Factiva).

Due to lower production in Syria and Turkey, coupled with the ongoing tensions

between them, exports are not taking place and have been diverted to India. They

have stopped shipments. Turkey may start offering its Jeera in the coming days.

International Scenario

According to reports, production in Syria is reported around 22,000 tonnes while

production in Turkey is reported between 5000-7000 tonnes, lower by 20% and

around 50% respectively, raising supply concerns in the international markets.

Indian Jeera in the international market is being offered at $2,450/tn (c&f).

Outlook

Jeera may trade on a mixed note with a negative bias this week as good arrivals

coupled with higher output this season. However, prices may find support at

lower levels if there is an improvement in the overseas demand.

Weekly Levels

Sell NCDEX Jeera July between 13200-13250, SL -13500, Target - 12900 / 12750.


Source: Reuters & Angel Research.

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23/27

Soybean


Weekly price performance

After declining over the last four weeks, Soybean prices recovered from lower levels

and settled 3.17 higher w-o-w on account of poor supplies coupled with positive

international markets. However, the good progress of monsoon capped the upside. CBOT Soybean Futures gained 1.21% w-o-w as delayed planting due to heavy rains

in the US Midwest coupled with tight soybean stocks supported prices.

India's soy meal Exports Fall by 57 Percent during FY13-14 SEA

Indias soy meal exports for the month of May 2013 were 96,492 tonnes, lower by

32.33 percent from 142,588 tonnes a year ago.

Increase in the output in the 3rd Advance Estimates

As per the 3rd Advance Estimates released by the Ministry of Agriculture, soybean

output increased to 14.14 mn tn from 12.24 mn tn in the previous estimates.Decline in Brazils Output

According the Brazils Agriculture Ministry, soybean output for 2012-13 is estimated

at 81.3 mn tn from its earlier estimates of 81.5 mn tn.

South American Soybean Exports Seen at Record High- Oil World

Brazil, set to become the worlds largest soybean exporter, may ship a record 7.6

million tons of the oilseed in May after permitting ports to operate 24 hours a day,

from a previous 8-hour limit.

US Soy planting- 57% complete According to the USDA weekly crop report, Soybean planting is 57% complete

compared to 44% last week. However, it is lower than 5 years average of 74% and

said to be the slowest in 17 years. The delay is attributed to heavy rains in the US

Midwest.

Outlook Soybean is expected to trade higher on account of poor supplies coupled with firm

international markets. However, the progress of the monsoon may cap the upside.

Strategy

Buy NCDEX Soybean July between 3740-3720, SL -3650, Target - 3830 / 3850.

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24/27

Refine Soy Oil and Crude Palm Oil


Weekly price performance

Edible oils continued to trade higher for the third consecutive week tracking

gains in Palm oil on the KLCE coupled with a sharp depreciation in the Rupee.Lower stocks and seasonally lower yield period of Malaysian Palm Oil also

continued to support prices. Ref Soy oil on NCDEX as well as CPO prices at

MCX settled 0.28% and 3.08% higher w-o-w.

Global Scenario

Exports of Malaysian palm oil products for May declined 3.4 percent to

1,248,014 tonnes from 1,292,371 tonnes shipped during April.

Stocks data from industry regulator the Malaysian Palm Oil Board showed

inventory levels at the end of May down 5.12 percent to 1.82 million tonnes

against the previous month's 1.91 mn tn.Domestic Scenario

As per the data released by the The Solvent Extractors' Association of India

Imports of all vegetable oils, including non-edible oils, by India, declined

29.23% in April 2013, to 654,827 tonnes from 925,334 tonnes in April 2012

due to high stocks lying at the ports.

Stockpiles of edible oil at ports on May 1 stood at 670,000 tn, the trade body

said, off a record of 930,000 tn on March 1. Stocks were still on the higher

side despite the decline in monthly imports.

India's imports of palm oil could rise more than 17% in the year to October

2013 to stand at 9 mn tn, compared with 7.67 mn tn of palm oil in 2011/12 as

the edible oil is the cheapest available, despite an import duty.

Strategy

Buy NCDEX Ref Soya Oil July between 692-690, SL -685, Target - 700 / 702.

Buy MCX CPO June between 494-495, SL -484, Target - 510 / 512.

C di i W kl T k


25/27

Sugar



After remaining in the negative zone over the preceding two weeks, sugar prices

recovered last week on account of good demand from the stockists coupled with

concerns over cane output in Maharashtra in the coming season.

Liffe Sugar recovered from lower levels last week on account of short coverings.

Prices have declined sharply on account of 3rd year of global sugar surplus.

Sugarcane acreage likely to fall 10% this kharif season

The sowing area under sugarcane is likely to decline by 10 per cent this season

following shortage of water in major producing states including Maharashtra,

Tamil Nadu and Karnataka. (Source: Business Standard)

The latest data compiled by the agriculture ministry showed planting is completed

in 42.09 lakh ha compared with 46.78 lakh hectares last year.India sugar reserves at five-year high set to avert imports

Sugar inventories in India, are poised to surge by 37% to 9.2 million tonnes at the

start of October, a five-year high as exports halt because of slumping global

prices. Exports have plunged to about 35,000 tonnes since 1 October from 3.4

million tonnes in 2011-2012.

Brazil's CS sugar output up 40 percent yoy

Sugar and ethanol mills in Brazil's main center-south cane belt made strong

progress harvesting record crop through mid-May, producing more than twice the

amounts of sugar and ethanol than they did from last season's smaller cane crop.

Mills in the region benefited from dry weather in late April and early May and

produced mn tn of sugar, up 40 percent from a year ago.

Outlook

Sugar is expected to trade higher extending last weeks gains on account of good

demand from the stockists coupled with concerns about cane output this season.

However, sharp upside maybe capped tracking weak international markets.

Strategy

Buy NCDEX SUGAR July between 3095-3085, SL -3050, Target - 3150 / 3160.

C diti W kl T k


26/27

Kapas/Cotton



Kapas corrected last week on account of profit taking at higher levels. However,

MCX Cotton continue to trade higher on account of a pick up in demand for yarn

mixed coupled with a sharp recovery in the international markets. ICE Cotton futures recovered from lower levels and settled 3.04% higher last week

on account of lower level demand coupled with good export sales and a weak Dollar.

Increase in the planting in India.

Cotton planting in India is reported at 11.86 lakh ha as against 10.4 lakh ha last year.

Government selling cotton through e-auction

Cotton Corporation & NAFED are expected to offload 8 lakh bales at lower prices.

CCI offered 38100 bales two weeks ago through e-auction.

Cotton Advisory Board sees lower kharif sowing CAB in its latest meet has projected cotton crop at 34 mn bales for 2012-13 season

compared to the previous estimates of 33 mn bales. Mill consumption is expected to

go up from 22.3 million bales last year to 23.5 million bales.

Exports are estimated at 8.1 mn bales. While Import are estimated 2.5 mn bales.

Lower US Cotton planting to support cotton prices

Cotton Plantings in the US were reported at 82% v/s 59% last week, but lower

against 5 year avg of 83%.

Outlook Cotton prices are expected to continue to trade higher this week supported by an

improvement in the demand for yarn coupled with improvement in the international

markets. Buying by millers towards the end of the season may also supported prices.

However, offloading more stocks in the local markets from state reserves may exert

pressure from higher levels on the domestic cotton prices.

Strategy

Buy MCX Cotton June between 18850-18800, SL -18500, Target - 19300 / 19400.

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27/27

Thank You!

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commodities weekly tracker, 10th june 2013

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