Commodities & Currencies Weekly Tracker - Angel...

Commodities & Currencies

Weekly Tracker

Commodities Weekly Tracker

Contents 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 | November 12, 2012

Commodities Weekly Tracker Monday | November 12, 2012

*Weekly Performance for December contract; Kapas - April 2013 contract, Mentha oil and CPO – November 2012



Gold Weekly Price Performance

• Spot gold prices erased earlier gains and settled 3.2 percent higher .

• The yellow metal touched a weekly high of $1,738.8 per ounce and settled at $1,730.7 per ounce on Friday.

• On the MCX, Gold December contract gained 4 percent taking cues from strength in the spot gold prices. Demand from the local buyers ahead of Diwali also supported an upside in the gold prices on MCX..

ETF Performance

• Holdings in the SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, gained 0.18 percent to 1338.71 tonnes till November 09th , 2012 as compared to 1336.30 tonnes till November 02, 2012.

Factors that influenced gold prices

• Optimism that with Mr Barack Obama re-election, would make the stimulus

measures to continue. There were also signs that gold was now behaving as

safe haven asset as the US fiscal cliff issues is worrying market sentiments.

• In the domestic market , depreciation in the Indian rupee acted as a

supportive factor for the gold prices.

Outlook

• In the coming week, we expect gold prices to remain firm due to worries of fiscal cliff which stands unresolved along with continued debt concerns of the Euro zone regions.

• Demand from the Chinese and Indian buyers is expected to support an upside in the precious metals.

Weekly Technical Levels

• Spot Gold : Support $1,680/1,655 Resistance $1,760/1780. (CMP: 1734.65)

• Buy MCX Gold December between 31450-31,500-, SL-31,100, Target -32000/32100 (CMP:31848)


Silver Weekly Price Performance

• Spot silver prices gained 5.6 percent week on week. The white metal touched a weekly high of $32.75/oz and closed at $32.57/oz on Friday.

• In the Indian markets, MCX silver prices gained by 5.4 percent and closed at Rs.60,785/kg on Friday and touched a weekly high of Rs.61,142/kg .

Factors that influenced silver prices

• Strength in the gold prices. Demand from the major consumers ahead of the festivals.

• However weakness in the base metals and strength in the DX capped sharp gains.

ETF performance

• On a weekly basis, holdings in the iShares Silver Trust rose by 1.33 percent to 10,075.52 tonnes till November 09, 2012 from previous week holdings of 9943.01 tonnes till November 02, 2012.

Outlook

• Silver prices in the coming week is expected to trade with positive bias

tracking strength in spot gold prices. Positive data from the US and Chinese

economy is expected to increase the demand for the base metals thereby

supporting an upside in the industrial metal.

• In the domestic markets depreciation in the Indian Rupee might support an

upside in the MCX Silver prices. Demand ahead of festivals is also expected

to support prices in the domestic market.


• Spot Silver : Support 31.45/ 30.25 Resistance 33.70/35.20 (CMP: 32.68)

• Buy MCX SILVER Dec between 60000-60100, SL - 58800, Target - 61900 /

62000 (CMP: 60, 785)


Copper Weekly Price Performance

• Copper, the leader of the base metals complex declined 1.24 percent on the back of weak demand from the consuming nations .

• The red metal closed at $7,576/tonne on Friday after touching a low of $7,506/tonne in the last week

Copper Inventories

• Rise in LME Copper inventories by 1.3 percent also acted as a bearish factor for the downside in the Copper prices in the last week. LME Copper stocks stood at 2,46,275 tonnes. The red metal closed at $7,576/tonne on Friday after touching a low of $7,506/tonne in the last week.

• Copper inventories at warehouse monitored by the Shanghai Futures Exchange increased by 3.6 percent to 2,04995 tn in the w/e 09th November.

Factors that influenced copper prices

• Additionally, strength in the DX along with continued Euro zone debt concerns are exerting a downside pressure on the copper prices.

• Sharp downside in the copper prices were however capped on the back of positive data from the Chinese economy and favorable data from the US. In the domestic market, depreciation the Indian rupee however, cushioned sharp fall in the copper prices.

Outlook

• Copper prices in the coming week is expected to remain subdued due to weak demand from the consuming nations despite positive data from the US and Chinese economy. Strength in the DX is also expected to exert downside pressure on the copper prices. Depreciation in the Indian Rupee will act as a supportive factor for the copper prices on MCX.


• Sell MCX COPPER Nov between 424-426, SL - 436, Target - 410 / 408

• LME Copper: Support $7,390/7190 Resistance $7,720/7900. (CMP: $7,591)


Crude Oil Weekly Price Performance

• On a weekly basis, Nymex crude oil prices gained 1 percent.

• On the domestic bourses, prices gained 2 percent and closed at Rs.4,697/bbl after touching a high of Rs.4,712/bbl in yesterday’s session.

US Energy Department Facts and Figures

• As per the US Energy Department (EIA) report last night, US crude oil inventories increased as expected by 1.8 million barrels to 374.80 million barrels for the week ending on 2nd November 2012.

• Gasoline stocks rose by 2.9 million barrels to 202.40 million barrels and whereas distillate stockpiles also gained by 0.1 million barrels to 118.1 million barrels for the last week.

Factors that influenced crude oil prices

• Expectation of demand to rise in the coming days due to positive data from the US and Chinese data .

• However, strength in the DX restricted sharp gains in the crude oil prices .

• Rise in the crude oil inventories also capped sharp gains .

Outlook

• Crude oil prices are expected to remain weak in the coming week on the aback of reduced demand. Strength in the DX is also expected to add to the losses of the crude oil prices. In Indian markets depreciation in the Rupee will act as the supportive factor for the crude prices on MCX.


• Buy MCX CRUDE Oil Nov between 4560-4610, SL - 4450, Target - 4775 / 4800. (CMP: 4732)

• Nymex Crude Oil: Support: $83.80/82.0 Resistance $85.60/86.60 (CMP: 84.60)


DX/ INR Weekly Price Performance

• US dollar Index gained 1.1 percent week on week.

• The Indian Rupee depreciated by 2.1 percent in the last week.

Factors that influenced movement in the DX

• US Dollar Index gained due to rise in the risk aversion amongst market participants as investors were worried over the fiscal cliff issues and its strategy to be resolved by the US.

Factors that influenced movement in the Rupee

• The Indian Rupee depreciated 2.1 percent in the last week. The currency depreciated on the back of weakness in the equity markets and sustained dollar demand from importers of gold and oil and along with banks.

• Additionally strength in the DX along with weakness in the global markets also exerted a downside pressure on the domestic currency.

• However, sharp downside in the currency was cushioned on account of increasing FIIs inflows

FII Inflows

• For the current month FII inflows totaled at Rs. 3,166.60 crores till 9th November 2012. While year to date basis, net capital inflows stood at Rs. 96,861.50 crores till 9th November 2012.

Outlook

• We expect rupee to depreciate in the current week on the back of worries over the fiscal cliff in US which is creating bearish market sentiments. Strength in the DX might also exert downside pressure on the rupee. However, FII inflows might cap sharp depreciation in the rupee.


• USD/INR MCX November: Support 54.1/53.5 Resistance 55.6/56.2(CMP:55)

• US Dollar Index: Support 80.5/79.95 Resistance 81.7/82.5(CMP: 81.09)


Euro Weekly Price Performance

• Euro declined 1.8 percent week on week.

• The currency touched a weekly low of f 1.2688 and closed at 1.271 on Friday.

Factors that influenced movement in the Euro

• Worries of Greece bailout and as European leaders struggle to find solution to debt issues.

• Further, unfavorable data from the region along with strength in the DX also exerted a downside pressure on the currency.

News • French Industrial Production declined by 2.7 percent in September as against a rise of

1.9 percent in August.

• French Gov Budget Balance was at a deficit of 85 billion Euros in September from earlier deficit of 97.7 billion Euros a month ago. I

• Italian Industrial Production declined by 1.5 percent in September as compared to rise of 1.7 percent in August.

• German Trade Balance was at a surplus of 17 billion Euros in September as against a previous surplus of 18.1 billion Euros in August. French Trade Balance was at a deficit of 5 billion Euros in September from previous deficit of 5.3 billion Euros a month ago. European Minimum Bid Rate remained unchanged at 0.75 percent in November

Outlook

• We expect the Euro to trade with a negative bias as the European leaders struggle to find a solution to the debt issues. Strength in the DX will also exert downside pressure on the currency.


• EURO/USD SPOT: Support 1.2569/1.2425 Resistance 1.283/ 1.295 (CMP:1.2711)

Chana


Weekly Price Performance

• Chana futures recovered sharply during the early part of the week on account of festive season demand. However, prices settled marginally higher by 1.3% as expected higher imports and better sowing prospects led to short coverings.

Pre expiry margin increased in Chana November expiry contract

• NCDEX has increased the pre-expiry margin on both sell and buy side on Chana November contract from the existing 3% to 7% for last five trading days.

MSP Hike to boost Chana sowing

• MSP of Chana/Gram is raised by Rs 200 per qtl for 2012-13 season to Rs 3000. Higher returns and favorable soil condition will boost acreage in 2012-13.

Chana sowing gathered momentum in Maharashtra and AP

• Although overall pulses sowing is lagging by 20% to 37.23 lakh ha till 9th Nov, Chana sowing is up Maharashtra and AP.

• In Maharashtra, Chana sowing is completed on 4.6 lakh hectares as on 9th November, which is 37.5% of the targeted 12.32 lakh ha, and up by 66% compared to last year. In AP Chana sowing is up by 41% to 3.81 lakh ha.

• In Rajasthan, the third largest Chana producing states, sowing is lagging behind by almost 55% and stands at 5.45 lakh hectares as on 9th November, 2012.

Chana output targeted at 7.9 mn tn after poor Kharif harvest

• The Farm ministry has targeted higher rabi pulses output, particularly Chana at 7.9 mn tn vs. 7.5 mn tn in previous year.

Outlook

• Chana futures may recover during the early part of the week on account of lower level demand . However, selling at higher levels may be seen on prospects of higher sowing and thereby better output next season.

Weekly Strategy

• Buy NCDEX CHANA Dec between 4175-4225, SL -3930, Target - 4595 / 4650

Black Pepper

Source: Agriwatch & Reuters



• Pepper corrected for the second consecutive week on expectations of better domestic as well as international pepper output this year. Also, reports of inspection of two warehouses in Kochi by a senior FMC official, where bulk of alleged inferior quality pepper deposits took place pressurised prices. The IPC has raised their global output projections to 3.36 lakh tn for 2012. The Spot as well as the December Futures settled 1.82% and 3.39% lower w-o-w.

• Indian Pepper is being offered at $8,350/tn (c&f) while Indonesia is offering its Austa at $6,500/tn and Vietnam is offering Austa at $7,000/tn.

• Average daily arrivals stood at 10 tn while offtakes stood at 10 tn last week .

Expectations of higher output in 2012-13

• According to market sources, Pepper production is expected around 63,000 tn in 2013, while the IPC projects India’s 2013 production at 70,000 tn..

Global updates

• Pepper imports by U.S. the largest consumer of Pepper declined 14.8% in the first 2 months of the year to 8810 tn as compared to 10344 tn in the same period last year. Consumption in the US is expected to be lower by 22-24% this year.

• Global pepper production in 2012 is projected at 3.36 lk tn vis-à-vis 2.98 lk tn in 2011.Exports of Black Pepper from Vietnam during January till September 2012 is reported at 80,433 mt. Indonesia is expected to produce 40,000 tn this while Brazil is expected to produce 28,000-30,000 tn, and Srilanka 26,500 tn.

Outlook

• Pepper Futures may recover from lower levels on if traders cover their short positions. However, prices are expected to correct from higher levels taking cues from higher output expectations coupled with weak export demand for Indian pepper. Higher supplies in the international markets may also pressurize prices. However, festive season demand as well as winter buying may support the prices

Weekly Strategy • Sell NCDEX Dec Pepper between 41800-41900, SL- 42900, Target- 40330/40110.

Source: Reuters & Angel Research.

Turmeric

Source: Agriwatch & Reuters



• Turmeric Futures traded on a bullish note in the early part of the week on reports of demand from the upcountry markets coupled with reports of crop damage due to flooding in the aftermath of Cyclone Nilam. Expectations of lower output this year also supported the prices. However, good stocks and higher arrivals in the spot markets capped sharp gains. The regulator has removed additional cash margin of 20% . Sowing is expected to be 30-35% lower compared to last year.

• The farmers are reportedly keeping around 12 lakh bags of turmeric with them.

• According to the weather department, rainfall in the key grown region (Southern Peninsula) is reported at 10% below normal. The spot as well as the December Futures settled 2.25% and 1.54% higher w-o-w.

Lower acreage of Turmeric for the 2012-13 season

• Production of turmeric may decline 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 has been reported at 0.58 lakh hectares. The area covered is lower as compared to last year (0.81 lha), as well as normal as on date (0.67 lha).

Lower production in the 2012-2013 season

• Production of Turmeric is expected to fall this year as the farmers have sown about 30% less turmeric as the prices corrected last year. Production of turmeric in Erode in 2011-12 was reported at around 55 lakh bags as compared to 35 lakh bags in 2010-11, an increase of about 57% .

Outlook

• Turmeric prices are expected to trade on a positive note in the coming days due to fresh demand from the upcountry markets. Also expectations of revival of exports in the coming days are like to support the prices. However, good carryover stocks with the stockists may keep prices under check and may cap sharp upside.

Weekly Strategy • Buy NCDEX Dec Turmeric between 5100-5150, SL- 4900, Target- 5450/5500.



Jeera

Source: Ministry of Agriculture, Gujarat.



• Jeera prices traded on a positive note last week as exporters were reported to be active at lower levels. However, commencement of rabi sowing in Gujarat kept prices under check. Sowing in Gujarat is reported 15-20% lower than last year. Total stocks are reported at around 5 lakh bags, as against 8 lakh bags last year.

• The Spot as well as the December Futures settled 1.31% and 1.53% higher w-o-w.

Higher exports to offset higher production

• India’s 2012 jeera output is estimated at 40 lakh bags (of 55kgs each), higher than 29 lakh bags in 2011, a rise of 37.9%. 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 to boost Jeera exports

• Exports of Jeera rose from 2,369 tn in April 2011 to 2,500 tn in April 2012. Target for exports in 2012 have been set at 45,000 tn against 35,000 tn in 2011. According to market sources, about 75% of export targets have been achieved.

• Due to fall in the production in Syria and Turkey, and the ongoing tensions in Syria, exporters have been diverted to India. Syria and Turkey have stopped shipments. Export enquiries may re-emerge at lower levels.

International Scenario

• According to reports, production in Syria is reported around 22,000 tons while production in Turkey is reported between 5000-7000 tons, lower by 20% and around 50% respectively, raising supply concerns in the international markets.

• Indian Jeera in the international market is being offered at $2,850/tn (c&f).

Outlook

• Jeera prices may trade with a positive bias in the coming week. Fresh export demand as well as festive buying may provide support to prices at lower levels. However, improvement in sowing may keep prices under check.

Weekly Levels • Buy NCDEX Dec Jeera between 14600-14700, SL-13800, Target 15880/16050.


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Soybean


Weekly price performance

• NCDEX Soybean December contract which remained sideways during the most part of the week, settled lower towards the week end after the release of USDA monthly crop report.

• CBOT soybean declined sharply and settled 4.9% lower w-o-w after USDA revised upward soybean output estimates. Weak palm oil futures also pressurized domestic as well as international soybean prices. oil markets.

Arrivals declined amid festival mood

• Average daily soybean arrivals stood around 550000 bags. During the week arrivals declined from 770000 bags on Monday to 340000 bags on Saturday.

Soy meal exports down in October, but

• Soy meal exports during October are down 49,840 tn in October, the seventh consecutive month of fall in the current fiscal year, from 223,594 tn a year ago.

China imported 4.03 mln tonnes of soy in October

• China, the world's largest soy buyer, imported 4.03 million tonnes of soybeans in October, down 18.9 percent from 4.97 million tonnes in September.

USDA revised upward soybean crop estimates

• USDA, in its November monthly crop report raised its estimate for soybean production by 4% from its forecast last month. Brazil's government on 8th Nov 2012 edged up its forecast for a record 2012-13 soybean crop to between 80.1 and 83 mn tn, despite concerns after dry October weather and planting delays

Outlook

• Soybean prices may remain range bound in the domestic markets amid festival week. However, sentiments remain weak on expected improvement in arrivals after Diwali.

Strategy

• Sell NCDEX Soybean Dec between 3290-3340, SL -3450, Target - 3120 / 3090

Refine Soy Oil and Crude Palm Oil


Weekly price performance

• Edible oil complex remained under downside pressure on expectations of further rise in Malaysian palm oil stocks after the export duty cut on palm oil exports by Indonesia. BMD CPO and MCX CPO settled 5.1 and 1.7% lower w-o-w while CBOT and NCDEX Soy oil settled 3.02% and 1.5% lower last week.

Global Scenario

• Malaysia's October palm oil stocks inched up 1.1 percent to a record 2,508,644 tonnes from a revised 2,480,990 tonnes in September. Exports of Malaysian palm oil products for Nov. 1-10 rose 15.6 percent to 518,688 tonnes from 448,624 tonnes for Oct. 1-10. Despite hopes for an improved exports trend, rising inventories, remain worrying as palm oil output shows no signs of slowing.

• Indonesia, the world's top palm oil producer, has cut its export tax for crude palm oil to 9 % for November, down from 13.5% in October. Palm oil exports from Indonesia are set to increase to 1.6 mn tn from an estimated 1.41 mn tn in October. Output will decline to 2.4 mn tn from 2.43 mn tn. Stockpiles may drop to 2.5 mn tn from 2.6 mn tn.

Domestic Scenario

• India imported 111,163 tonnes of refined palm oil in September, an increase of 39.9 percent from August (Source: Reuters).

• Total vegetable oil imports in September were 993,912 tonnes, up from 897,018 tonnes in the previous month.

• India's 2012/13 edible oil imports seen at record 10.31 mln tonnes, up 5.4 pct on year an industry expert said in glob oil conference. India's 2012/13 palm oil imports seen at 8.1 mln tn vs. 7.5 mln tn yr earlier .

Strategy: Refine Soy Oil

• Sell NCDEX Refined Soya Oil Dec between 675-680, SL -705, Target - 635 / 630

Strategy : Crude palm Oil (CPO)

• Sell MCX CPO Nov between 435-440, SL -460, Target - 405 / 400

Sugar

Commodities Weekly Tracker Monday| November 12, 2012


• NCDEX Sugar futures remained range bound and settled marginally lower by 0.2% w-o-w. traded on a mixed note and settled marginally higher by 1.7% w-o-w. Although supplies are higher compared to the demand, crushing delay is restricting sharp downside in the prices. Liffe white sugar declined 1.4% w-o-w on forecast of higher Brazilian output and fears global glut could persist.

Crushing delay in Maharashtra and UP

• Disputes over cane pricing has delayed crushing in UP and Maharashtra. Sugar mills in UP have not yet started crushing though cane harvesting begun more than a week ago. In Maharashtra, out of the 160 mills that are expected to be active in crushing season this year, only 27 mills have started operations. Among them, only 15 mills are currently active in crushing.

Maharashtra to witness 40 per cent fall in sugarcane crushing

• Maharashtra to witness 40 per cent fall in sugarcane crushing. According to the latest statistics, sugar production in Uttar Pradesh is expected to be higher by about 10 per cent. combined production of these two States is expected to be lower at about 9 million tonnes as compared to 13 mn tn.

Dry weather in Brazil helped speed up Crushing

• Sugar cane industry association Unica reported sugar output in the second half of October was up 73% at 2.55 mn tn from the same period a year ago, with ethanol output up 54% and cane crushing up 56%. 2013/14 Centre-south Brazilian cane output would rise to around 565-575 mn tn, up from some 510 mn in 2012-13.

Outlook

• We expect sugar to trade range bound during the week. Despite of higher supplies, no major downside is expected in sugar prices on account of delay in crushing in the top two producing states. However, upside is also limited as supplies are sufficient to cater the domestic demand.

Strategy

• Sell NCDEX Sugar Dec between 3460-3510, SL -3675, Target - 3210 / 3170

Kapas/Cotton

Commodities Weekly Tracker Monday| November 12, 2012


• NCDEX Kapas futures settled marginally lower by 0.6% w-o-w as weak international market along with arrival pressure is weighing on the prices. However, procurement by CCI at lower levels is restricting any sharp fall. ICE Cotton futures extended losses and settled 1.09% lower w-o-w as reports of bumper US cotton crop this season is weighing on the prices.

Cotton Arrivals commenced across India

• As on 4th November 2012, 13.02 lakh bales of Cotton has arrived so far, down by 29% compared to last year 18.57 lakh bales during the same period.

Lower availability to restrict sharp downside

• Lower opening stocks coupled with estimated lower output will result in lower supplies this season at 374 lakh bales, a decline of 8.7% compared with last year’s 410.77 lakh bales. On the consumption front, domestic consumption is estimated higher at 270 lakh bales on the back of higher mill consumption.

CCI begins its purchases for 2012-13 season

• State-run Cotton Corporation of India which procured 3.48 lk bales in 2011-12 marketing season, has begun its annual cotton procurement drive for the 2012-13.

USDA monthly supply demand report raised production estimates

• USDA monthly report shows a gain in yield due to favorable weather which resulted in rise in production estimates to 17.45 mln bales for 2012-13 season. Also, U.S has raised its 2012/13 forecast for global cotton inventory to above 80 mln 480-pound bales . Of November Harvesting is on in US and 64% is completed till date.

Outlook

• Weak international markets may pressurize cotton prices during the initial part of the week. However, buying at dips is suggested as farmers will not sell their stocks at very low prices. Also, CCI procurement at MSP levels will led to recovery in the lapas prices.

Strategy

• Buy NCDEX Kapas April'13 between 940-950, SL -895, Target - 1015 / 1025

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 7700 Corporate 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]


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