Download - Commodities Weekly Tracker, 29th July 2013
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Commodities & Currencies
Weekly Tracker
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Commodities Weekly TrackerContents
Returns
Global Equities
Currencies
Non Agri Commodities
Agri Commodities
Global Manufacturing Economic Data
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 | July 29, 2013
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Commodities Weekly TrackerMonday | July 29, 2013
2.84
2.111.84
1.11
0.10
(0.03)
(1.04)
(1.99)(2.37)
(3.15)(3.5)
(3.0)
(2.5)
(2.0)
(1.5)
(1.0)
(0.5)0.0
0.5
1.0
1.5
2.0
2.5
3.0
Global Equities Performance (%)
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2.92.5
0.5
(0.8) (0.9)
(1.6)(2.4)
(3.1)
(5.9)(6.0)
(5.0)
(4.0)
(3.0)
(2.0)
(1.0)
0.0
1.0
2.0
3.0
Non-Agri Commodities Weekly Performance
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1.9
1.00.7
0.50.2
(0.5)
(1.2)
(2.4)(2.5)
(2.0)
(1.5)
(1.0)
(0.5)0.0
0.5
1.0
1.5
2.0 Currencies Weekly Performance
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*Weekly Performance for August contract
*Soybean, Cotton October contract
*Kapas- April Contract
Commodities Weekly TrackerMonday | July 29, 2013
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US Economic DataExisting Home Sales
US Existing Home Sales declined to 5.08 million in June as against a rise
of 5.14 million a month ago.New Home Sales
New Home Sales rose by 38,000 to 497,000 in June which is at highest
level in five years from 459,000 in May.
Unemployment Claims
US Unemployment Claims increased by 7,000 to 343,000 for the
week ending on 19th July as against a rise of 336,000 in prior week.
320000
330000
340000
350000
360000
370000
380000
390000
US Unemployment Claims
4400000
4500000
4600000
4700000
4800000
4900000
5000000
5100000
5200000
US Existing Home Sales
335000
355000
375000
395000
415000
435000
455000
475000
495000
US New Home Sales
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Global Manufacturing Economic Data
European Manufacturing PMI
French Flash Manufacturing Purchasing Managers' Index (PMI) increased by 1.4 points to 49.8-mark in July as against a rise of 48.4-level in June.
German Flash Manufacturing PMI gained by 1.7 points to 50.3-mark in July as compared to 48.6-level in June.
European Flash Manufacturing PMI increase by 1.3 points to 50.1-mark in July as compared to 48.8-level in previous month.
ChinasHSBC Manufacturing PMI
Chinas HSBC Flash Manufacturing Purchasing Managers' Index (PMI) declined by 0.5 points to 47.7-mark in July from previous 48.2-level in June.
US Manufacturing PMI
US Flash Manufacturing Purchasing Managers' Index (PMI) increased by 1.3 points to 53.2-mark in July as against a rise of 51.9-level in June.
48.8
51.9
48.2
50.1
53.2
47.7
45
46
47
48
49
50
51
52
53
54
Euro Zone US China
Manufacturing Growth - July'13
June'13 July'13
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GoldWeekly Price Performance
Week-on-week, Spot Gold prices have increased around 3 percent. In the last week,
Spot Gold had tested a high of $1347.69/oz.
In the Indian markets, prices on the MCX gained 2.7 percent over the week, testing a
high of Rs27716/10gm
Factors that supported a bounce back in prices
Fed Chairman Ben Bernanke said last week that the central bank would begin the
tapering only once the unemployment and job market scenario stabilizes.
Peoples Bank of China ended floor on lending rates which will offer consumer more
spending power.
Weakness in the Dollar Index, thus supporting prices in dollar terms. Further, upbeat
global market sentiments acted as a positive factor for prices.SPDR Gold Holdings
The SPDR Gold Trust holdings have declined more than 31 percent this year. Holdings
have slipped to 927.35 tonnes and declined around 0.5 percent in the last week.
RBI links gold imports to export volumes
Gold imports into India are tightened further as the RBI moved further by tying gold
imports to export volumes. The RBI said that 20 percent of imports should be used for
overseas sales, thereby assuring gold exporters a scenario of guaranteed supplies
It is now mandatory for importers to retain 20 percent of the gold imported in
custom-bonded warehouses and further purchases of the metal will be allowed only
after exports equivalent to 75 percent.
Central Banks Buying
Gold futures have rose around 8 percent in July biggest gains since January 2012 on
account of attractive lower prices.
Russia and Kazakhstan increased their bullion for ninth straight month in June.
As per the World Gold Council (WGC), central banks over the globe will buy around
400 metric tons in 2013 after adding 535 tons in 2012 which was highest since 1964.
1,200
1,300
1,400
1,500
1,600
1,700
1,800
25,000
26,000
27,000
28,000
29,000
30,000
31,000
MCX and Comex Gold Price Performance
MCX-Near Month Gold Futures -Rs/10 gms Comex Gold Futures -$/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 In dex
Sp ot G ol d -$ /o z US D ol lar I nd ex
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GoldIndian gold imports fall 80 percent in June13
Aggressive and stringent measures applied by the RBI and the
government led to a sharp fall in gold imports For the month ofJune13, gold imports fell sharply by 80 percent to
just 32 tonnes as against 162 tonnes seen in May13
When compared to imports in June12, the decline was 36 percent
Fall in gold imports will help to curb the CAD and in effect also have
a positive impact on the Rupee
Gold is Indias second-largest import after crude oil and for the
month ofApril13, golds import bill touched $7.5 billion
During April-May13, gold and silver imports accounted for $15.8billion in the import bill
Combined Indian gold-silver imports in June13 were $2.5 billion
Gold ETFs in India also witness correction
Value of gold ETFs in India fell for the third straight month in June13
Holdings fell to Rs96.1 billion ($1.6 billion), marking a fall of more
than 9 percent
In terms of value, assets have declined 20 percent Global gold ETF holdings have fallen below 2000 metric tonnes to
1993.8 metric tonnes for the first time since May 2010. Over the
year, assets have slumped 24 percent, falling by 638.2 tonnes and
are headed for the first annual drop since introduction in 2003
Data by the mutual funds association in India showed that for the
month of June13, net redemptions from gold ETFs were Rs2.06
billion
Gold Demand
Japan's biggest gold retailer Tanaka Kikinzoku Kogyo K.K sales
increased by three times in 1st quarter of 2013 as compared to
previous quarter.
As per the World Gold Council (WGC) forecasts imports from India may
rise to 900 metric tons in 2013 from 860 tons in 2012.
Chinas purchases might also shoot up to 1000 tons in current year
with respect to 817 tones in 2012 as per WGC.
Gold Scrap Supply
According to the World Gold Council, Gold supply from recycled
materials may fall by 25 percent this year as lower prices prevent
holders from selling the metal at times when physical demand is rising.
It is estimated that supply from bullion scrap may fall by 300 to 400
metric tons in 2013 from 1,600 tons in last year.Outlook
Over the week, gold prices in dollar terms are expected to trade higher
on the back of expectations of purchasing of the metal from central
banks.
Further, expectations that US Federal Reserve will not pullback its
stimulus measures and announcement regarding the same in Federal
Reserve meeting during the week will exert downside pressure on DX.
This factor will support an upside in dollar denominated commodities.
Appreciation in the Rupee will cap sharp gains in prices on the MCX.
Weekly Technical Levels
Spot Gold : Support 1,325/1,303 Resistance 1,356/1,378. (CMP:
$1327.60)
Buy MCX Gold October between 27,420-27,380, SL-27,100, Target -
27,850/28,200 (CMP : Rs.27720)
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SilverWeekly Price Performance
Last week, Spot Silver prices increased sharply around 4 percent and touched
a high of $20.60/oz mark On the MCX, prices witnessed gains of 2.7 percent as Rupee appreciation
impacted sharp gains in Indian prices
ETF Performance
Holdings in the iShares Silver Trust rose around 1.3 percent last week to
10419.04 tonnes.
Month-to-date, iShares Silver Trust Holdings gained around 5.2 percent and
year-to-date are increased about 3.3 percent.
Factor affecting the silver prices Upside in gold prices.
Positive movement in base metals complex.
Weakness in the DX.
Favorable economic data from US, Euro Zone and rise in UKs GDP.
Outlook A bullish trend is expected in silver prices over the week, taking cues from fall
in gold prices.
Further, weakness in the DX will support an upside in prices.
However, sharp upside in prices will be capped as a result of downside in base
metals group.
In the Indian markets, appreciation in the Rupee will cap sharp gains in prices
on the MCX.
Weekly Technical Levels
Spot Silver: Support 19.72/19.45 Resistance 20.28/21.08. (CMP:$19.83)
Buy MCX Silver March Between 40,700-40,650, SL-40,100, Target -41,700.
(CMP: Rs.40,867)
18
20
22
24
26
28
30
32
38,500
43,500
48,500
53,500
58,500
MCX and Comex Silver Price Performance
M CX - Ne ar M on th Si lv er F ut ur es - Rs/ kg C om ex Si lv er F u tu res - $ /o z
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 Silver -$/oz US Dollar Index
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CopperWeekly Price Performance
Copper prices gained almost 1.3 percent on the LME last week and touched a high of
$/tonne for the week ending on 26th
July,2013. On the MCX increased only around 0.8 percent as Rupee appreciation capped gains.
Copper Inventories
On the LME inventories declined around 2.7 percent to 621,175 tonnes.
SHFE inventories fell 3.5 percent to 161,564 tonnes respectively.
Factors affecting the upside in copper prices
Rise in New Home Sales data from US which is ay highest level in last five years.
Peoples Bank of China ended a floor on borrowing costs previously set at 30 percent
below the benchmark in a move to boost growth in the long run.
Statement from Chinese Premier that it wont allow economy to grow below 7 percent
and necessary steps will be taken to boost the economic growth.
Favorable manufacturing data from the Euro Zone and US indicating an industrial
growth thereby leading to expectations of rise in demand for the metal in future.
However, sharp upside in prices was capped on account of contraction in Chinese
manufacturing activity.
China which is the major consumer of base metals saw a decline which indicated a slow
economic growth in China.
Further, statement from International Monetary Fund (IMF) that Chinese economy will
not be able to meet its target of 7.5 percent growth in current year.
Surplus Production
As per the report from Goldman, Copper is forecasted to be at a surplus of 500,000
tons in 2015 from 257,000 tons in current year.
365
375
385
395
405
415
425
435
445
455
6,700
6,900
7,100
7,300
7,500
7,700
7,900
8,100
8,300
LME and MCX Copper Price Performance
LME Copper Future ($/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)
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Copper
Net position in Copper CFTC data showed that net positions in copper rose in last week, after signs of slow economic growth in China.
Copper net position of short holding was at 12,974 contracts from 15,673 contract a week earlier.
Outlook
Copper prices during the week expected to trade lower on the back of slow economic growth in Chinese economy thereby affecting the demand
for the metal.
Further, expectations of decline in advance GDP and consumer confidence from US will exert downside pressure on prices.
Additionally, forecast of surplus production will add more downside pressure on prices.
However, estimates that US Federal Reserve will not pullback its stimulus measures and announcement regarding the same in Federal Reserve
meeting during the week will exert downside pressure on DX. This factor will cushion fall in prices.
In the Indian markets, appreciation in the Rupee will act as a negative factor for prices on the MCX.
Weekly Technical Levels
LME Copper: Support 6755/6655 Resistance 6935/7045. (CMP: $6837.75)
Sell MCX Copper August between 412-413, SL-419.50, Target -402.50/397. (CMP: Rs 407.45)
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Crude OilWeekly Price Performance
Nymex crude oil prices declined around 2.4 percent in the last week. Crude
prices drop will be biggest fall in this month. Oil prices touched a weekly low of
$105.39/bbl on Wednesday.
On the domestic bourses, prices slipped 3.2 percent as a result of appreciation
in the Indian Rupee and touched a low of Rs.6174/bbl in the last week.
Inventories
As per the US Energy Department (EIA) report, US crude oil inventories decline
more than expectations by 2.8 million barrels to 364.20 million barrels for the
week ending on 19th July 2013.
The American Petroleum Institute (API) reported, US crude oil inventories
declined by 1.4 million barrels to 369.66 million barrels for the week ending on
19th July 2013
Difference between WTI and Brent widens
The spread between WTI and Brent crude oil prices increased by more than $2
during the week on account of decline in WTI prices as a result of rise in US
crude oil output. Further, decline in Chinas manufacturing activity also lead to
expectations of fall in demand for the fuel.
On the hand, positive manufacturing data from Euro Zone increased the Brent
prices and thereby widen the spread.
US Crude Output As per the EIA reports, US Crude output rose around 1 percent for week ending
on 19th July 2013 which is at highest level in 22 years.
US crude production shoot up due to the combination of horizontal drilling and
hydraulic fracturing, or fracking, which unlocked supplies trapped in shale
formations.
Crude stockpiles fell 29.9 million barrels for week of 19th July 2013 which is the
biggest four week drop in data from 1982 as per the EIA report.
US consumer around 21 percent of oil in 2012 which was followed by China
around 11 percent as per the IEA report.
361.3
360.3
363.1369.1
371.7
372.2
376.4
377.53
381.4
384
382.7
385.9
388.6 388.9
387.6
388.6
395.3 395.5
394.9 394.6
397.6
391.3
393.8
394.1
394.1
383.8
373.9
367
364.2
360
365
370
375
380
385
390
395
400
Crude Oil Inventories (mn barrels)
86.0
90.0
94.0
98.0
102.0
106.0
110.0
114.0
4,700
4,900
5,100
5,300
5,500
5,700
5,900
6,100
6,300
6,500
Nymex and MCX Crude Oil Price Performance
M CX cr ud e o il (Rs/ bb l) NY MEX Cr ud e Oi l ($/b bl)
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Commodities Weekly TrackerMonday | July 29, 2013
Crude OilNet Position in Crude Oil
As pet the CFTC data, net-long positions in crude oil rose around 9.8 percent to 334,094 contract which is at highest level since June 2006.
Outlook
Crude oil prices in the coming week expected to fall on account of rise in the US crude oil output as a result of invention of new technology of
fracking and cracking.
Further, slow economic growth in China will affect the demand for the fuel also exerted downside pressure on prices.
Additionally, expectations of decline in advance GDP and consumer confidence from US will add downside pressure on prices.
However, estimates that US Federal Reserve will not pullback its stimulus measures and announcement regarding the same in Federal Reservemeeting during the week will exert downside pressure on DX. This factor will cushion fall in prices
In the Indian markets, appreciation in the Rupee will act as a negative factor for prices on the MCX.
Weekly Technical Levels
Nymex Crude Oil: Support: 102.75/100.95 Resistance 105.65/107.45. (CMP:$104.22)
Sell MCX Crude August between 6280-6300, SL-6402, Target -6090. (CMP:Rs. 6198)
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Commodities Weekly TrackerMonday | July 29, 2013
RupeeWeekly Price Performance
The Indian Rupee appreciated around 0.6 percent in the last week.The currency touched a
weekly high of 58.725 on Thursday.
Capital Flows
For the month of July 2013, FII outflows totaled at Rs.6393.60 crores ($1066.90 million) as
on 26th July 2013. Year to date basis, net capital inflows stood at Rs.65,8784.70 crores
($12,433.90 million) till 26th July 2013.
Factors that affected currency movement
Measures taken by RBI.
Expectations of foreign inflows after government hoping to sale bonds to NRI investors or
allowing companies to raise debt in foreign markets.
Rise in risk appetite in domestic market sentiments coupled with weakness in the DX. However, sharp upside in currency was cap as result of dollar demand from importers and
outflow of foreign funds along with failure of bond auction.
Reserve Bank of India Moves
RBI issued a statement that importers need to retain 20 percent of the gold they import in
customs-bonded warehouses, and will only be able to buy more only after exports
equivalent to 75 percent of the retained amount have been shipped.
The central bank last month had ruled out any credit transactions for imports unless they
were intended for making jewelry for exports purposes was eased in this week.
The RBI bisect the daily funds available from it to banks and raised the cash reserverequirement (CRR).
Governor Duvvuri Subbarao cut the funds RBI lends to individual banks under the Liquidity
Adjustment Facility (LAF) to 0.5 percent of the deposits of a bank. This compared with 1
percent or Rs 75,000 crore, available for the entire financial system that has now been
brought down to Rs 37500 crore .
RBI also raised the minimum daily average holding of the mandated 4 percent cash reserve
requirement to 99 percent from previous 70 percent.
The government ruled out selling of sovereign bonds to offshore investors dampening hopes
for dollar inflows.
53.0
54.0
55.0
56.0
57.0
58.0
59.0
60.0
61.0
$/INR - Spot
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Commodities Weekly TrackerMonday | July 29, 2013
Dollar Index
Weekly Price Performance
US Dollar Index (DX) depreciated around 0.8 percent in the previous week.
The currency touched a low of 81.71-mark in the last week.
Factors that affected currency movement
Rise in risk appetite in the global market sentiments led to fall in demand for the
currency.
Further, favorable new home sales data which is at highest level in five years showed
signs of economic growth adding downside pressure on currency.
Additionally, increase in manufacturing data from US also lead to economic expansion
in the country. However, sharp downside in the currency was cushioned as a result of favorable
economic data lead to expectations of pullback in stimulus measures from the Federal
Reserve.
Also, US jobless claims data rose for the week ending on 19 th July thereby providing
some respite to fall in the currency.
Outlook
In the coming week, we expect the currency to weaken on account of estimates that
US Federal Reserve will not pullback its stimulus measures and any announcementregarding the same in Federal Reserve meeting will act as a negative factor.
However, sharp downside in currency will be cushioned on account of expectations of
unfavorable economic data from the country.
Weekly Technical Levels
US Dollar Index: Support 81.10/80.60 Resistance 82.40/83.10. (CMP: 81.59)
79.0
80.0
81.0
82.0
83.0
84.0
85.0
US Dollar Index
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Commodities Weekly TrackerMonday | July 29, 2013
EuroWeekly Price Performance
The currency appreciated around 1 percent in the last week.
The Euro touched a weekly high of 1.3295 on Thursday.
Economic data impressed
More than expected rise in the manufacturing data from the region showing
signs of progress in the debt ridden Zone.
Further, decline in Spanish unemployment rate ease concerns of Euro Zone debt
crisis.
Additionally, weakness in the DX and upbeat global market sentiments
supported an upside in the currency. Also German Business climate data came on a favorable note acting as a positive
factor.
Outlook
Over the week, a weaker Dollar Index will continue to support upside in
the Euro
Further, expectations of favorable economic data from the region will
support an upside in the currency. Additionally, ECB press conference during the week and any major
announcement will act as a positive factor.
Weekly Technical Levels
EURO/USD SPOT: Support 1.3174/1.3071 Resistance 1.3340/1.3403. (CMP:
1.3278)
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
77.0
78.0
79.0
EURO/INR - Spot
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Chana
Commodities Weekly TrackerMonday | July 29, 2013
Weekly Price Performance
Chana Futures declined sharply and hit contract lows for four consecutive
sessions last week on account of abundant supplies and lack of buying interest.
However, prices recovered sharply towards the end as an impact of the marginimposed on the selling side by the market regulator.
Chana August futures settled 1% lower w-o-w.
Imposition of special margin on short Positions
Considering a significant drop in Chana prices, FMC imposed special margin of
5% on short positions on in all running and yet to be launched contract with
effect from Saturday, 27th July, 2013.
Chana output estimated at record high Fourth Advance Estimates
Ministry of Agriculture released its fourth Advance estimates of Food grainproduction 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.
According to estimates released on 22nd July 2013, Total pulses output for
2012-13 season has been pegged at record 18.45 mn tn compared to the third
advance estimates of 18 mn tn and 17.09 mn tn produced in 2011-12 season.
Kharif Pulses sowing up 86 percent yoy
As per the data released by the ministry of Agriculture, area under kharif Pulses
stood at 73.62 lakh ha as on 26th July 2013, up by 86 percent compared to the
corresponding period last year.
Outlook
Although recovery in the prices may be seen in the initial part of current week
as a result of imposition of special margin on short positions and expectations
of demand to emerge at lower levels ahead of festivals, but, higher supplies
would keep the upside capped.
Weekly Strategy
NCDEX CHANA Aug S1 - 2550, S2 -2430, R1 -2820, R2 - 2930 (CMP 2680)
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Turmeric
Source: Agriwatch & Reuters
Commodities Weekly Tracker
Weekly Price Performance
Turmeric Futures traded on a bearish note last week as huge carryover stocks
mounted downside pressure on the prices. Good sowing as well as rains in the
Turmeric growing regions have also pressurized prices. Demand from theupcountry markets is also reported to be weak.
The spot as well as the Futures settled sharply lower by 2.48% and 11.2% w-o-w.
Better than expected exports
Turmeric exports in 2012-13 stood at 80,050 tn as against 79,500 tn in 2011-12.
Pickup in sowing of Turmeric for the 2013-14 season
The area covered under Turmeric in A.P. as on 24/07/2013 is reported at 0.35
lakh ha against 0.31 lakh ha last year and a normal sowing of 0.41 lakh ha. Sowing
last year commenced late due to drought conditions. Normal sowing for theseason is 0.68 lakh hectares.
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 is expected to continue to trade lower this week extending previous
weeks losses on the back of huge carryover stocks as well as good sowing ofturmeric this season. Good rains are also expected to increase the yield in the
coming season. However, prices may recover from lower levels on account of
overseas demand for the spice. Overseas demand for turmeric is usually good
around Ramadan. Also, expectations of improvement in the domestic demand in
the coming days ahead of the upcoming festive season ma support prices. 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
Sell NCDEX Turmeric Aug between 5330 5350, SL 5600, Target 5000/4950 .
Monday | July 29, 2013
Source: Reuters & Angel Research.
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Jeera
Source: Ministry of Agriculture, Gujarat.
Commodities Weekly Tracker
Weekly Price Performance
Jeera futures traded with a negative bias last week as higher than expected
arrivals coupled with good rains in the main jeera sowing belt pressurized prices.
However, good export demand for Indian Jeera support prices at lower levels.
The spot as well as the July Futures settled 0.62% and 2.62% lower 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 $2,350-
2,400/tn (FOB Mumbai) while for Europe at $2,750-2,850/tn (FOB Mumbai)..
Outlook
Jeera is expected to trade on a mixed note with a negative bias this week. Higher
than expected arrivals, coupled with higher production this year and good rains in
the jeera sowing belt may continue to pressurize prices. However, sustained
overseas demand may support prices at lower levels as other exporting nations
are not supplying.
Weekly Levels NCDEX Jeera Aug Trend Sideways- S1 - 12620, S2 - 12900, R1 - 13380, R2 - 13650.
Monday | July 29, 2013
Source: Reuters & Angel Research.
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Soybean
Commodities Weekly TrackerMonday | July 29, 2013
Weekly price performance
Favorable crop conditions in the soy growing belts of central India and a sharp fall in
the international markets led domestic soybean prices to settle 6.13% lower w-o-w.
After hitting a 10 month high on CBOT last week, CBOT soybean declined sharply on
the back of improvement in weather conditions in top growing belt.
Sharp decline in the International Markets
Soybean Futures on the CBOT declined sharply by 9.46% last week as cash bids
collapsed in US Midwest and lack of buying interest. Selling of the old crop by farmer
also added to the downside pressure.
Soybean 2012-13 output revised up Fourth Advance Estimates
Ministry of Agriculture released its fourth Advance estimates of Food grain
production on Monday wherein it pegged Soybean output signifincalty higher atrecord 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 higher
than 29.79 MT achieved in the previous year.
Oilseeds sowing up at 135.99 lakh hectares
Monsoon which slowed its pace and was flat to below average in the previous two
weeks, recovered significantly during the week ending 24th July 2013. As per the
IMD, Cumulative rainfall as on 28th July in the central India (major soy belt), were 45
percent above the LPA, while in the week ending 24th July they rains were recorded
up by 43% in Central India.
According to the ministry of agriculture, as on 26th July 2013, oilseeds were planted
on 167.15 lakh ha, an increase of 20.9 percent compared to last year.
Outlook Soybean may trade with negative bias this week on expectations of good yield and
early start to harvesting. However, short covering may be witnessed in the later
part. Prolonged excessive rains may damage the crops, thus supporting the prices.
Strategy
Sell NCDEX Soybean Oct between 2980 - 3000, SL - 3150, Target 2800/2750
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Refine Soy Oil and Crude Palm Oil
Commodities Weekly TrackerMonday | July 29, 2013
Weekly price performance
Soy oil declined as well as MCX traded on a negative note last week and
settled 3.39% and 1.26% lower on the back of comfortable imported edibleoil coupled with an appreciation in the Rupee. Weak oilseeds prices also
added to the downside pressure. However, lower levels buying as well as
festive demand limited the downside and supported prices at lower levels
Global Scenario
Exports of Malaysian palm oil products from July 1 to 25 fell 7 percent to
1,085,392 tonnes from 1,167,266 tonnes shipped during June 1 to 25.
Exports of Malaysian palm oil products in June rose 7% to 1,350,311 tonnes
from 1,262,281 tonnes shipped during May. Malaysia, the world's No.2 palm
oil producer, has set its crude palm oil export tax for July at 4.5 %.Domestic Scenario
As per the data released by the Solvent Extractors' Association of India
Imports of vegetable oils, including non-edible oils, rose 3.2% to 947591 tn in
June, supported by sunflower and soy oil imports ahead of Ramadan.
India's refined palm oil imports declined 20.7 per cent in June to 296, 230 tn,
from a record high 373,837 tonnes in May as overall weakness in the Rupee
made imports expensive.
Monthly soy oil imports rose 2.7% as local supplies are almost exhausted
before the new planting season for soybean.
Stockpiles of edible oil at ports on July 1 stood at 690,000 tn, the trade body
said, higher than 675,000 tn on June 1..
Strategy
Sell NCDEX Ref Soya Oil Aug between 650 655, SL 675, Target 625/620 .
Sell MCX CPO Aug between 485 490, SL 505, Target 465/460.
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Sugar
Commodities Weekly TrackerMonday | July 29, 2013
Weekly Price Performance
Sugar prices traded on a mixed note with a negative bias last week as ample
supplies in the domestic markets coupled with good rains in the major sugarcane
belts have eased cane output concerns. However, export demand as well as anincrease in the import duty on sugar supported prices at lower levels.
ICE as well as LIFFE Sugar recovered from lower levels last week and settled 1.1%
and 2.57% on account of short coverings on the back of rains in Brazil. Demand
for ethanol in Brazil has increased, leading to diversion of cane towards ethanol.
Sugarcane acreage down 3.17 percent as on 26th July
According to the Ministry of Agriculture, Sugarcane has been planted in 48.48
lakh ha as compared to 50.04 lakh ha last year.
Government notifies increase in import duty on Sugar to 15 percent The Government has notified its decision to raise the import duty on the
sweetener to 15 percent from 10 percent currently, to discourage overseas
buying amid a drop in local prices due to ample supplies.Increase in Sugar output in Brazil
According to UNICA, due to dry weather, production in Brazil increased in the first
half of July by 60% to 2.4 mn tn as against 1.5 mn tn in second half of June.
Increase in demand for Ethanol
According to fuel distributors, Brazils Ethanol demand increased by 24 percent in
June, leading to diversion of more cane towards production of Ethanol.
Outlook
Sugar may trade in a range bound manner with a negative bias as higher supplies
in the domestic markets coupled with an increase in the estimate of sugar
production may pressurize prices. However, export orders, festive demand as well
as an increase in the duty on imports may support prices at lower levels.
Strategy
Sell NCDEX Sugar Aug between 3035 - 3040, SL - 3065, Target 3000/2990
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Cotton
Commodities Weekly TrackerMonday | July 29, 2013
Weekly Price Performance
Above average rains in central India during the last week and higher sowing led to
a fall in Cotton prices last week. Weak international markets also exerted downsidepressure on the markets. NCDEX April Kapas as well as MCX Oct Cotton settled
1.57% and 2.93 lower w-o-w.
ICE Cotton contract settled 1.32% lower w-o-w as signs of slowing economic
growth in China stirred worry of reduced demand from world's top textile market.
Kharif Cotton Planting up at 8 percent yoy
Cotton sowing is nearing its end and almost 90 percent of sowing is completed till
last week. As per the ministry of agriculture, cotton is covered under 105 lakh ha
area as on 26th July, up 8 percent compared to the same period last year.
U.S. cotton prices seen likely to fall in late 2013-14- Reuters
China's cotton stockpiling policy & lower U.S. inventories will underpin 2013-14 ICE
cotton futures, though prices could fall some 10% later in the season as supplies
increase. 2013-14 prices will likely trade in a range of 75 to 92 cents/ lb. Prices will
fall as new global supplies are harvested, but price declines below about 72 cents
will likely spur even higher Chinese demand.
World Cotton stocks continue to soar
The ICAC lowered its production estimates by 5.4% to 24.95 mn tn for 2013-14
season (Aug-July). Consumption will continue to rise in 2013-14 season and is
pegged at 24.3 mn tn. Despite of increase in consumption by 2.3% and drop in
production, inventories are forecast up by 3.5% at 18.51 mn tn by end of July 2014.
Outlook
Cotton prices may remain under pressure due to higher cotton planting in the
domestic markets coupled with good progress of monsoon. Further, expectations
of drop in international prices may also turn domestic sentiments weak.
Strategy
Sell MCX Cotton Oct between 19700-19750, SL -20100, Target 19200/19100
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Commodities Weekly TrackerMonday | July 29, 2013
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