commodities weekly tracker 2nd sept 2013

7/30/2019 Commodities Weekly Tracker 2nd Sept 2013

1/24

Commodities & Currencies

Weekly Tracker


2/24

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 | September 02, 2013


3/24

Commodities Weekly TrackerMonday | September 02, 2013

3.0

0.5

0.0

(1.0)(1.3)

(1.8) (2.0)

(3.3)(3.7) (3.8)

(4.0)(3.5)(3.0)

(2.5)(2.0)(1.5)(1.0)(0.5)0.00.5

1.01.52.02.53.03.5

Global Equities Performance (%)


4/24


2.7

1.1

(0.0)

(2.1)

(3.3) (3.4)

(4.3) (4.4)(5.3)(5.5)

(4.5)

(3.5)

(2.5)

(1.5)

(0.5)

0.5

1.5

2.5

3.5

Non-Agri Commodities Weekly Performance


5/24


4.5

3.93.5

2.7

0.9

(0.4) (0.6)

(1.2)(1.5)

(0.5)

0.5

1.5

2.5

3.5

4.5

5.5

Currencies Weekly Performance


6/24

*Weekly Performance for September contract

*Soybean, Cotton October contract

*Kapas- April 2014 Contract



7/24


GoldWeekly Price Performance

Week-on-week gains in gold prices on the MCX have been phenomenal to the tune of

3.5 percent, with the yellow metal touching an all-time high of Rs35,074 on the

futures market. Rupee depreciation is the major factor that is aiding gains in the commodity. During

the week, Spot Gold prices have traded on a flat note and tested a high of

$1433.85/oz.

While overall international factors are supportive for upside in gold prices in the

short-term, it the currency factor that is fuelling gold prices sharply higher in the

domestic markets.

Year-to-date Price Performance

While gold prices in dollar terms are down by about 16 percent over the year, on the

other hand, MCX gold prices are up by more than 7 percent.

In the Indian markets, Rupee depreciation is acting as a catalyst to sharp gains in

prices. However, a reversal in the Rupee could be detrimental for gold prices as a

correction would then be inevitable.

SPDR Gold Holdings

Holdings in the SPDR Gold Trust saw a recovery in the last two weeks which rose by

0.1 percent to 921.03 tonnes on 30 thAugust13.

However, for the month of August 2013, holdings have slipped around 0.7 percent

and on a year till date basis it has declined around 31 percent.

Syrian tensions and risk aversion boost appeal of gold

Chemical attack on Syrian civilians has increased the threat of a geopolitical crisis

spreading in the Middle East, thus boosting the appeal of gold

Additionally, with equities being in a corrective mode along with economic concerns

in the emerging and developing economies, gold is garnering investor interest

Concern on the downside however remains on the back of the expected QE taper

which is likely to take place in the coming months

1,200

1,300

1,400

1,500

1,600

1,700

1,800

1,900

25,000

26,000

27,000

28,000

29,000

30,000

31,000

32,000

33,000

34,000

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

1,150

1,250

1,350

1,450

1,550

1,650

Spot Gold Vs Dollar I ndex

Spot Gold -$/oz US Dollar Index


8/24


GoldCentral banks continue gold buying - IMF

Data by the IMF (International Monetary Fund) showed that central banks were continuing to add gold to their reserves

Turkey had bought 22.5 tonnes of gold in July13 and Russias gold holdings touched 1000 tonnes

Norms for gold imports into India eased

Strict restrictions and measures by the RBI have caused a situation of concern in the domestic bullion market as news indicate a halt in gold imports in

India since 22ndJuly13

Indian gold imports have been linked with the exports and 20 percent of an imported consignment is expected to be exclusively made available for

exporters only

Hence, jewelers are managing with the previously held stocks and due this premiums on gold are rising

Gold futures margins increased in India

FMC (Forward Markets Commission) ordered exchanges to double the margins on commodities after a record low in Rupee fuelled a rally incommodities on the MCX. FMC said on website that Initial margins on all contracts will rise to 5 percent of the value from Sept. 2, from 4 percent along

with additional margin of 5 percent on gold.

US Mint Gold coin sales reach 11500 ounces, lowest since July 2007

Sales of gold coins slump to their lowest level in six years and reached 11500 ounces in August, down from 50,500 ounces last month. Gold coin sales

had surged to 40 month high of 209,500 ounces in April, before giving in to the bear market.

Commodity Futures Trading Commission (CFTC) data

Net-long position in gold surged by 34 percent to 97,902 futures in the week ended August 30.

Outlook

Trend in gold prices in this week is expected to be down on the back of a strength in the DX. Further, ease of military attacks on Syria from US and its

allies will also add downside pressure on the prices. Additionally, estimates of unfavorable employment data from US will act as negative factor.

In the Indian markets, the weaker Rupee will cushion sharp fall in prices.

Weekly Technical Levels

Spot Gold : Support $1378/$1362 Resistance $1406/$1424 (CMP: $1396.20)

Sell MCX Gold October between 33,250-33,300, SL-34,000, Target -31,950. (CMP: 32888)


9/24


SilverWeekly Price Performance

Rising around 0.7 percent on the MCX near-month futures contract, silver prices

touched a high of Rs59,942/kg.

Rupee depreciation coupled with positive cues from gold helped the white metal

rise. But in comparison to gold prices, gains in silver were restricted due to lower

gains in base metals.

Spot Silver prices during the last week fell 2.0 percent and tested a low of

$23.36/oz.

ETF Performance

Amount of silver held by the worlds largest silver-backed exchange traded fund

rose by 0.4 percent to 10,600.69 tonnes for the week ending on 29th August 2013.

For the month of August 2013 holdings gained around 1.75 percent and on a yeartill date basis holdings surged by more than 5 percent.

Increase of margins in Silver Futures in India

FMC on Thursday raised Initial margins on silver contract to 5 percent of the value

from Sept. 2, from 4 percent along with additional margin of 5 percent.


Bullish bets in Silver climbed 2 percent in the week ended August 30 to 16,469

contracts, the highest since February.

Outlook A negative trend is expected in case of silver during the week on the back of

strength in the DX along with downside in the base metals complex. However,

factors like increase in ETF holdings and overall supportive sentiments towards

precious metals will restrict sharp fall. In the Indian markets, Rupee depreciation

will cushion sharp fall in prices.


Spot Silver: Support $22.82/$22.20 Resistance $24.02/$24.62. (CMP:$23.56)

Sell MCX Silver December between 56,950-57,050, SL-58,201, Target -53,100.

(CMP: 55245)

18

20

22

24

26

28

30

32

38,500

43,500

48,500

53,500

58,500

MCX and Comex Silver Price Performance

MCX - Ne ar Month Si lve r Futures - Rs/ kg C om ex Si lve r F utur es - $ /oz

79.0

80.0

81.0

82.0

83.0

84.0

85.0

18.0

20.0

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 Ind ex


10/24


CopperWeekly Price Performance

A sense of caution was seen in case of copper as prices performed with a negative bias,

losing around 3.3 percent on the LME and testing a low of $7081.50/tonne. copper fellfrom a high of $7400/tonne as prices were unable to sustain around these levels due to

ongoing concerns over the emerging economies.

While LME prices corrected, the Rupee factor was supportive for copper prices on the

MCX. The near-month contract declined marginally around 0.4 percent over the last

week after touching an all-time high of Rs512.65/kg. However, a reversal in the Rupee

led to downside pressure and prices slipped below Rs500/kg.

Copper Inventories

On the LME last week, copper inventories gained around 4.2 percent to 588,000 tonnes

for the week ending on 30th August 2013 from 565,225 tonnes last week, thus acting asa negative factor for prices.

Inventories monitored in Shanghai rose by 0.3 percent which increased around 156,568

tonnes for the prior week.


Theholdings in copper contracts slid 9.1 percent to 13,043 contracts in the week ended

August 30.

Outlook

Copper prices are expected to trade on a negative note during the week on the back of

expectations of unfavorable employment data from the US.

Further, strength in the DX on account of favorable economic data from US has

increase concerns of QE tapering which will act as a negative factor.

However, sharp downside will be prevented as a result of positive manufacturing data

from China and Euro Zone .

The Rupee factor will restrict downside to prices in the Indian markets.


LME Copper: Support $6995/$6875 Resistance $7197/$7315. (CMP: $7111)

Sell MCX Copper November between 494-496, SL-508, Target -466. (CMP: 485.50)

365

385

405

425

445

465

485

505

6,700

6,900

7,100

7,300

7,500

7,700

7,900

8,100

8,300

LME and MCX Copper Price Performance

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

6,700

6,900

7,100

7,300

7,500

7,700

7,900

8,100

8,300

318,000

368,000

418,000

468,000

518,000

568,000

618,000

668,000

LME Copper v/s LME Inventory

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


11/24


Crude OilWeekly Price Performance

Geopolitical tensions in Syria led crude oil prices above $110/bbl, with prices on the

Nymex contract rising around 1.2 percent during the week. Risks associated with the

spreading of the crisis in the Middle East aided upside in prices.

The MCX near-month crude oil contract witnessed sharp gains due to Rupee weakness

and the commodity rose more than 8 percent over the week, touching a high of

Rs7784/bbl.

Oil Inventories

As per the US Energy Department (EIA) report, US crude oil inventories increased more

than expected by 3.0 million barrels to 362.0 million barrels for the week ending on

23rd August 2013. Gasoline stocks dropped by 0.6 million barrels to 217.80 million

barrels and whereas distillate stockpiles declined by 0.3 million barrels to 129.0 million

barrels for the last week.

The American Petroleum Institute (API) report showed US crude oil inventories gained

by 2.5 million barrels to 366.62 million barrels for the week ending on 23rd August

2013. Gasoline inventories dropped by 1.1 million barrels to 219.12 million barrels and

whereas distillate inventories rose marginally by 3,000 barrels to 129.19 million barrels

for the same week.

Syria Tensions

On 21st August 2013, chemical attack was done on Syria which killed around 1,429

civilians out of which 426 were children.

US intelligence agencies determined that Syrian President Bashar al-Assads and forces

were behind the attacks. Initially it was estimates that US military was moving closer to

attack on Syria

Syria produce less than 100,000 barrels a day however major concern was unrest could

spread to other Middle East region. The region accounted for 35 percent of global oil

production in Q1 of 2013 which created supply concerns.

During the later part of the week prices corrected as limited military will be taken on

Syria and UK Parliament voted against the attack which eased the supply concerns.

86.0

90.0

94.0

98.0

102.0

106.0

110.0

114.0

4,700

5,200

5,700

6,200

6,700

7,200

7,700

Nymex and MCX Crude Oil Price Performance

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

361.3363.1

371.7

376.4

381.4

385.9387.6

395.3 397.6

391.3

383.8

373.9

364.2

360.5355

360

365

370

375

380

385

390

395

400

Crude Oil Inventories (mn barrels)


12/24


Crude Oil

MCX Crude oil futures margins increased

FMC on Thursday raised Initial margins on both crude oil and Brent crude oil contract to 5 percent of the value from Sept. 2, as against current 4

percent along with additional margin of 5 percent

Saudi Arabian crude output soars to 24-year high: OPEC Survey

OPEC crude oil production rose in August mainly due to Saudi Arabia, which pumped oil at the fastest pace in 24 years.

OPECs total crude production increased 116,000 barrels a day in August from July, to 31.04 million barrels a day mainly due to rise in Saudi output.

Saudi crude oil production climbed 150,000 barrels to 9.95 million barrels a day in August, the sixth straight gain and the most for OPEC's biggest

supplier in monthly data since 1989.

Saudi Arabia is set to pump 10.5 million barrels a day in the third quarter, an increase of 1 million bpd from the second quarter and its highest ever

quarterly level of production.

Commodity Futures Trading Commission (CFTC) data Net-long positions in crude advanced 4.9 percent to 317,523 contracts in the week ended August 30.

Outlook

Crude oil prices in this week is expected to trade lower on the back of ease of military attack on Syria from US as approval from Congress is pending

along with France Parliament decision still awaited.

Additionally, favorable economic data from US increased concerns regarding QE tapering which will lead to strength in the DX and exert downside

pressure on prices.

Further, weak market sentiments along with increase in the US crude oil inventories will act as negative factor.

In the Indian markets, Rupee depreciation will restrict sharp fall in the prices.Weekly Technical Levels

Nymex Crude Oil: Support $104.80/$101.80 Resistance $108.50/$111.50. (CMP: $7220)

Sell MCX Crude September between 7280-7300, SL-7521, Target -6930. (CMP: 7220)


13/24


RupeeWeekly Price Performance

During the last week, the Rupee tested a new all-time low of 68.93 and at this level

when the weekly performance is seen, the currency actually depreciated 9 percent.

During intraday trade itself the Rupee weakened 3.9 percent on 28 thAugust13

The 3.9 percent decline is the biggest daily fall since 1 st March 1993 and the decline in

in absolute terms is the steepest since 4th July 1991

Concerns over further increase in CAD on the back of sharp increase in crude oil prices

led to weakness in the currency and overall risk aversion in the global markets also

added as a negative factor

Capital outflows weaken Rupee further

In the last nine trading sessions, foreign investors have sold around $1 billion of Indian

equities, indicating that investors are losing confidence amid the weakening economicsituation of India

Flight of funds is also seen on the back of expected QE taper by the Federal Reserve in

the coming months. With respect to the same, we feel that the Fed may postpone its

decision of tapering the QE program given the sensitive geopolitical conditions in the

Middle East along with an overall risk averse scenario. An announcement of the

pullback could be extremely detrimental for the world markets at large in the current

context

RBI intervenes to save Rupee from falling sharply

The Rupee continued to test new lows during the last week and time and again centralbank intervention was seen. However, this provided only temporary relief to the

currency that is already ailing with the ongoing economic worries

RBI plans to monitor overseas proposals

The central back will monitor overseas direct investment by Indian companies in order

to ensure that new norms and guidelines to prevent foreign exchange outflows is being

practiced. New norms were issued due to a sudden increase in proposals worth $1.7-

1.8 billion in the early part of the year and around $3.24 billion in July13

Individual annual outflow limit has been slashed from $200,000 to $75,000. Apart from

that there is also a ban on overseas real estate purchases at the moment

53.0

55.0

57.0

59.0

61.0

63.0

65.0

67.0

69.0

$/INR - Spot


14/24


RupeeFood Security Bill adds further dampener effect

The FSB (food security bill) added a dampener effect to the Indian markets as it has come at a time when the Indian economy is suffering the a high

CAD, falling foreign exchange reserves and a weak currency

The government announced a plan worth Rs 135,000cr that would provide cheap grains to the poor. Around 67 percent of the population will becovered under this plan but with a deficit-laden economy, this plan ensures a further deteriorating economic health for India

The FSB is expected to increase the governments expenditure on food subsidies to around 1.2 percent of GDP from the current 0.8 percent

RBI extends support to exporters

The RBI has asked banks to reduce the interest rates charged to the exporters as per base rate system in the existing sectors that are eligible for export

financial assistance

Considering the weakening economic scenario, the central banker is trying to boost exports by this move.

Expectations RBI will buy gold from citizens

There are also expectations of pilot project to be launched by RBI of purchasing gold from ordinary citizens and divert it to refiners. India has the worlds

third largest current account deficit nearing around $90 billion and major part of it is because of gold imports.

The country holds around 31,000 tonnes of commercial gold available in the country which is worth around $1.4 trillion at current levels. Even if a small

portion of this is diverted to the refiners the actual imports for the gold will decline and provide relief to CAD which will support Rupee. India imported

around 860 tonnes of gold last year and central bank holds 557.7 tonnes of gold in its reserves.

GDP data for June Quarter rose at slowest pace in last four years

Indias Gross Domestic Product (GDP) declined to 4.4 percent for the quarter ending on June from rise of 4.8 percent in earlier quarter. The majorreason for slow growth in Q1 of fiscal year 2013-14 was due to contraction in mining and manufacturing sectors by 2.8 percent and 1.2 percent

respectively. On the other hand, Agriculture grew around 2.7 percent, electricity rose around 3.7 percent and construction by 2.8 percent during the

same quarter.

Outlook

Concerns over the Indian economy continue to loom after slow growth of the countrys GDP data along with rising CAD. Further, services data during

the week is expected to come on a negative note along with stronger DX will exert downside pressure on the currency.


USD-INR September Contract: Support 65.60/64.00 Resistance 68.00/70.00 (CMP: 66.34)


15/24


Dollar IndexWeekly Price Performance

Over the week, the Dollar Index strengthened on the back of risk aversion and mixed US

economic data eased fears of QE taper

Escalation of geopolitical tensions in Syria coupled with fears of a beginning of the QE taper

acted as a supportive factor for the currency.

US economic data comes on the mixed note

Overall economic data from the US was mixed during the last week with durable and core

durable good orders falling, along with a decline in the house price index and a slump in

pending home sales.

While on the other hand, data which came on the positive side was the consumer confidence

index, rise in Gross Domestic Product (GDP) of the US along with increase in the consumer

sentiments data from the US. Core Durable Goods Orders declined by 0.6 percent in July as compared to a decline of 0.1

percent in June. The orders fell by the most in almost a year, casting doubts on the

projected pickup in US growth.

CB Consumer Confidence increased to 81.5-mark in August from 81 level in July. The index

slipped from a six year high in August, as Americans were less confident about the job

market but more confident regarding rise in incomes.

Prelim GDP rose to 2.5 percent in Q22013 from 1.7 percent in the last quarter. Consumer

spending as well as gains in durable goods such as automobiles and appliances led to spurt

in GDP in the second quarter.Outlook

Expectations of pullback in QE by the Federal Reserve after favorable economic data will

lead to strength in the Dollar Index during the week.

Additionally, employment data and manufacturing data during the week is estimated to

come on an unfavorable note which will add downside pressure on the market sentiments

and lead to rise in demand for low yielding currency.


Dollar Index: Support 81.20/80.00 Resistance 83.20/84.40 (CMP: 82.08)

79.0

80.0

81.0

82.0

83.0

84.0

85.0

US Dollar Index


16/24


EuroWeekly Price Performance

The Euro declined around 1.2 percent in the last week taking cues from strength

in the DX. Further, weak global market sentiments exerted downside pressureon the currency.

However, sharp downside movement in the currency was cushioned on account

of favorable economic data from the region. The Euro touched a weekly low of

1.3172 and closed at 1.322 on Friday.

Economic data from the Euro Zone comes positive

German ZEW Economic Sentiment for the month of August rose to 42-mark

from 36.3 level in July. Industrial Production gained 0.7 percent in the month of

June as compared to decline of 0.2 percent in May.

GfK German Consumer Climate for the month of August declined marginally to6.9-mark as compared to 7-level in July. German consumer confidence declined

slightly, yet remaining close to its highest level in six years. The decline was seen

due to consumer concerns of creeping inflation.

German Ifo Business climate rose to its 16 month high of 107.5 in August as

positive outlook for the Euro zones largest economy boosted sentiment.

German Unemployment Change increased by 7000 as against a decline of 7000

in May. This unexpected rise in unemployment indicated that Europes biggest

economy is cooling after rising for the second quarter.

Outlook

The Euro is expected to trade on a positive note on the back of favorable

economic indicators from the Euro Zone indicating a growth in the region.

However, sharp upside will be capped or reversal can be seen as a result of

strength in the DX and weak market sentiments.


EURO/USD SPOT: Support 1.3128/1.3036 Resistance 1.3356/1.3492. (CMP:

1.3213)

1.275

1.285

1.295

1.305

1.315

1.325

1.335

1.345

1.355

1.365

Euro/$ - Spot

69.0

74.0

79.0

84.0

89.0

94.0

EURO/INR -Spot


17/24

Chana


Weekly Price Performance

Chana futures declined in the initial part of the last week as supplies increased

considerably at higher levels. However, prices were unable to sustain at lower

amid robust demand to meet the festive season demand. Also, weakening

Indian rupee supported an upside in the prices. Chana September futures

settled higher by 2.5 percent w-o-w.

Festive season demand to offset higher supplies

Renewed buying interest from dal millers to meet the festive season demand

have pushed chana prices higher despite sufficient supplies. A series of festivals

shall commence in the coming weeks and thus demand side fundamentals shall

remain strong offsetting higher supplies.

Withdrawal of special margin on short side Special Margin of 5% on Short side imposed earlier has been withdrawn in

Chana wef Friday, August 23, 2013. After the withdrawal, total margin on

Chana now stands at 7.2 percent on both short and long side.

Pulses output heading for second year of bumper output

As on 30th August 2013, Pulses sowing is up 15.3 percent at 101.81 lakh ha.

Increase in acreage under kharif pulses this year and above average monsoon

has raised hopes of bumper Pulses output for second straight year in row.

Chana output at record high in 2012-13-

Ministry of Agriculture released its fourth Advance estimates of Food grain

production last week wherein it pegged Chana significantly higher at record 8.8

mn tn in the current season 2012-13. compared with 7.5 mn tn.

Outlook

Expected rise in demand by the dal millers shall keep the upward trend intact

in the coming weeks.

Weekly Strategy

Buy NCDEX Chana Sep between 3140 3130, SL 3000, Target 3300


18/24

Turmeric

Source: Agriwatch & Reuters

Commodities Weekly Tracker


Turmeric Futures corrected in the initial part of the week due to profit taking

supported by huge carryover stocks and good sowing of turmeric. However,

prices recovered towards the end of the week on reports of fresh overseasdemand. Coupled with domestic demand ahead of the upcoming festival.

The spot as well as the Futures settled 0.22% and 2.71% higher w-o-w.

Sowing of Turmeric for the 2013-14 season

The area covered under Turmeric in A.P. as on 28/08/2013 is reported at 0.51

lakh ha against 0.53 lakh ha last year and a normal sowing of 0.64 lakh ha. Normal

sowing for the season is 0.68 lakh hectares.

Imposition of Margins on the short side

The regulator has increased margins on the short side of all the running and yet tobe launched contracts w.e.f 6th August 2013.

Better than expected exports

Turmeric exports in 2012-13 stood at 80,050 tn as against 79,500 tn in 2011-12.

Lower production in the 2012-2013 season

Turmeric production in 2012-13 was around 50% lower compared to 2011-12 and

is expected around 45-50 lakh bags. Production in 2011-12 is reported at

historical high of 90 lakh bags/ 10.62 lakh tns.

Outlook Turmeric prices are expected to trade on a positive note this week as overseas as

well as domestic demand is likely to support prices in the coming days. Also, lower

arrivals may support prices. However, huge carryover stocks as well as good

sowing of turmeric this season may cap sharp gains and pressurize prices at

higher levels. Good rains are also expected to increase the yield in the coming

season. The progress of monsoon needs to be watched carefully as this may affect

the acreage as well as the yield of the crop.

Weekly Strategy Buy NCDEX Turmeric Sep between 5170 5150, SL 4950, Target 5450/5500 .


Source: Reuters & Angel Research.


19/24

Jeera

Source: Ministry of Agriculture, Gujarat.

Commodities Weekly Tracker


Jeera futures traded on a mixed note lat week. Prices declined due to good rains

in Gujarat which has raised prospects for the upcoming sowing coupled with

higher than expected arrivals. However, overseas as well as domestic demandsupported prices at lower levels . Festive buying can also be seen at lower levels.

The spot as well as the Futures settled 0.14% and 1.33% 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 in 2012-13 stood at 79,900 tn, as against 45,500 tn last year.

The ongoing tensions in Syria and Turkey, coupled with output concerns has led to

supply concerns, and thus, exports have been diverted to India.

International Scenario

According to reports, production in Turkey is reported around 8,000-10,000

tonnes while production in Syria is expected to be lower, raising supply concerns

in the international markets.

Currently, 1% Jeera of Indian origin is being offered for Singapore at $2,100/tn(FOB Mumbai) while for Europe at $2,300/tn (CNF).

Outlook

Jeera is expected to trade higher this week on account of overseas demand due

to escalated tensions in Syria coupled with good domestic demand ahead of the

festive season. However, good rains in the jeera sowing belt has increased

prospects of higher sowing this season and may pressurize prices. Higher

production last year may also cap sharp upside in the prices.

Weekly Levels

Buy NCDEX Jeera Sep between 13650 13630, SL 13400, Target 13950/14100.


Source: Reuters & Angel Research.


20/24

Soybean


Weekly price performance

Soybean futures opened the week on a bullish note due to heavy rains in the Soy

bean belt of Madhya Pradesh raising crop damage fears. However, prices corrected

sharply towards the end the week on account of profit taking coupled with a sharprecovery in the Rupee. Positive international markets also pushed up the prices. The

spot settled 1.43% lower while the Futures settled 2.09% higher w-o-w.

CBOT Soybean September futures also gained 4.3% last week.

Heavy rains to damage the standing crop

There are reports damage to the standing soy crop in the major soybean belts of MP

and Maharashtra due to incessant rains over the past few weeks. IMD has forecast

heavy rains in the next few days, which may damage the crop further. The acreage is

higher at record 188.16 lh, up by 12.59% compared to the same period last year.

Expectations of a cooler weather to ease prices in the coming days

Forecast of cooler weather coupled with rains in the coming days may ease the crop

concerns and provide some respite to the prices. Prices have gained on the back of

hotter and drier weather in the US Midwest coupled with good export sales data.

Soybean 2012-13 output revised up Fourth Advance Estimates

Ministry of Agriculture released its fourth Advance estimates of Food grain

production earlier in July wherein it pegged Soybean output significantly higher at

record 14.6 mn tn in the current season 2012-13 compared with 12.2 mn tn in 2011-

12. Total nine Oilseeds production is pegged at 31 MT in 2012-13, slightly higherthan 29.79 MT achieved in the previous year.

Outlook Soybean may trade with a negative bias this week on higher output expectations

coupled with commencement of arrivals of the early crop in the coming days.

However, fears of crop damage in India as well as the US due to weather conditions

may support prices at lower levels. Meal demand may also support prices.

Strategy

NCDEX Soybean Oct S1 3320, S2 - 3200, R1 - 3520, R2 3620


21/24

Refine Soy Oil and Crude Palm Oil


Weekly price performance

Edible oil complex gained significantly in the early part of the week amid

depreciating rupee and festive season demand. However, prices declinedtowards the later part of the week taking cues from the sharp fall in the

Malaysian palm oil futures and recovery in the Indian rupee. Soy oil as well as

MCX CPO settled 4.6% and 2.6% higher respectively last week

However, prices on KLCE settled 0.5% lower on expectations of increase in

the output during the seasonally higher yield period.

Global Scenario

Exports of Malaysian palm oil products in August increased 7.5% to 1,511,755

tons tonnes from 1,406,935 tonnes shipped in July.

Indonesia has cut export tax on crude palm oil to 9% in September from10.5% in August.

Domestic Scenario

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

imports of vegetable oils, including non-edible oils, declined 6.13% to 889,493

tn in July, as weakness in the Rupee has made imports more expensive.

India's refined palm oil imports declined 27.8 per cent in July to 213,853 tn

from 296, 230 tn in June as weakness in the Rupee has made imports

expensive..

Monthly soy oil imports rose 69% as local supplies are almost before the

soybean crop enters the markets.

Stockpiles of edible oil at ports on Aug 1 stood at 610,000 tn, the trade body

said, higher than 690,000 tn on July 1.

Strategy

Buy NCDEX Refined Soya Oil Sep between 690 685, SL 675, Target 710

Buy MCX CPO Aug between 545 540, SL 525, Target 570


22/24

Sugar



Sugar futures traded on a mixed note with a negative bias last week on account of

ample supplies and selling pressure from the millers. September contract settled

0.89% lower w-o-w.

LIFFE as well as ICE Sugar settled 1.08% and 0.79% lower last week on the back of

ample supplies due to higher crushing in Brazil.

India's sugar output seen up next year

According to the Ministry of Agriculture, Sugarcane has been planted in 48.53

lakh ha as compared to 50.06 lakh ha last year.

Excess rains in current season have raised hopes of higher output in the coming

season that shall begin in October 2013. Indian Sugar Mills Association (ISMA) has

projected 2013-14 sugar production at 23.7 million tonne as against the domesticrequirement of 23.5 million tonne.

Datagro reduces 2013/14 Brazilian sugar output forecast

Datagro has reduced its sugarcane production forecast for the 2013/14 season

fractionally to 584.8 mln tonnes from a previous forecast for 586.1 mln.

This means output will still be up sharply from 532.3 mln tonnes crushed in

2012/13 due to increased area and higher yields caused by the intensification of

the renewal of cane fields.

The volume of cane sugar produced by mills in the South-Central region of Brazil

reached 46.34 million tons in the first 15 days of August, up 4.72 percent

compared to value recorded in the same half of the previous year .

Outlook

Sugar may trade with positive bias in the coming weeks on expectations demand

to emerge at lower levels to meet the festive season requirement. Sharp upside

may however, be capped on account of ample supplies.

Strategy

Buy NCDEX Sugar Sep between 3000 2995, SL 2970, Target 3040

d kl k


23/24

Cotton



Weakness in the domestic currency, incessant rains and persistent demand from

yarn manufacturers pushed cotton prices higher last week. Although priceswitnessed profit booking at higher levels due to receding rains October contract at

MCX manage to settle 3.61% higher w-o-w.

ICE Cotton continued to drift lower this week as the Chinese government is

preparing to scrap a controversial scheme to stockpile cotton which could slash

imports by the world's top buyer of the fibre.

Cotton area in Maharashtra declines by 6.3%

Cotton acreage in Maharashtra has declined by 6.3% 41.26 lakh hectare area till

August 26 as farmers have shifted to other remunerative crops like soybean.

This has lowered overall cotton acreage in the country by 1 percent this year.Cotton crop was sown on 111.65 la ha as on 30th August.

Indias rain to delay cotton harvest by 15 days

Heavy rains in India's cotton-cultivating areas will delay its harvest by at least 15

days, worsening shortages. Above average rains in Gujarat, Maharashtra and MP

have crimped harvesting.

ICE Cotton down 2 percent in August

ICE Cotton saw a very volatile month August with prices gaining significantly in the

first half after the release of USDA monthly report, while in the second fortnightprices corrected almost 11 percent from the highs of 93.72 cents per pound on

concerns about changes in China's stockpiling policy .

Outlook

Sentiments remain positive across domestic cotton markets on hopes of higher

demand for cotton to meet yarn export commitments. However, sharp upside may

be capped as international markets remain week.

Strategy

Buy MCX Cotton Oct between 22300 - 22250, SL -21900, Target 22800

C di i kl k


24/24

Thank You!

Angel Commodities Broking Pvt. Ltd.

Registered Office: G-1, Ackruti Trade Centre, Rd. No. 7, MIDC, Andheri (E), Mumbai - 400 093. Tel: (022) 3083 7700Corporate Office: 6th Floor, Ackruti Star, Central Road, MIDC, Andheri (E), Mumbai - 400 093. Tel: (022) 2921 2000

MCX Member ID: 12685 / FMC Regn No: MCX / TCM / CORP / 0037 NCDEX : Member ID 00220 / FMC Regn No: NCDEX / TCM / CORP / 0302

Disclaimer: The information and opinions contained in the document have been compiled from sources believed to be reliable. The company does not warrant its accuracy, completeness and correctness.

The document is not, and should not be construed as an offer to sell or solicitation to buy any commodities. This document may not be reproduced, distributed or published, in whole or in part, by any

recipient hereof for any purpose without prior permission from Angel Commodities Broking (P) Ltd. Your feedback is appreciated on [email protected]

mailto:[email protected]:[email protected]

commodities weekly tracker 2nd sept 2013

Documents