Commodities Weekly Tracker, 17th June 2013

7/28/2019 Commodities Weekly Tracker, 17th June 2013

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Commodities & Currencies

Weekly Tracker


2/27

Commodities Weekly Tracker

ContentsReturns

Non Agri Commodities Currencies

Agri Commodities

Non-Agri Commodities

Gold

Silver

Copper Crude Oil

Currencies DX, Euro, INR

Agri Commodities

Chana

Black Pepper Turmeric

Jeera

Soybean

Refine Soy Oil & CPO

Sugar

Kapas

Monday | June 17, 2013


3/27

Commodities Weekly TrackerMonday | June 17, 2013

4.5

1.7 1.7

0.9 0.9 0.8

(1.2)

(3.5)(4.0)

(3.0)

(2.0)

(1.0)

0.0

1.0

2.0

3.0

4.0

5.0Currencies Weekly Performance


4/27

Equities Performance during the week

(1.01) (1.17) (1.23) (1.29)(1.48) (1.54)

(1.74) (1.80)

(2.81)(3.22)(3.50)

(3.00)

(2.50)

(2.00)

(1.50)

(1.00)

(0.50)

0.00

Global Equities Performance (%)


5/27


1.9 1.8

0.5

(1.8) (2.0)(2.2)

(2.5)

(3.7)

(4.6)(5.0)

(4.0)

(3.0)

(2.0)

(1.0)

0.0

1.0

2.0

Non-Agri Commodities Weekly Performance


6/27

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



7/27


Gold

Weekly Price Performance

Spot Gold prices rose 0.5 percent last week to close at $1390.20/oz.

On the MCX, gold prices increased 1 percent to close at Rs.27,811/10 gms as Rupee

depreciation supported further upside.

ETF Performance

SPDR Gold Trust Holdings declined 0.4 percent to 1,003.53 tonnes in the last week

Gold Equity Stocks Correct on RBIs Import Restrictions

The RBI reiterated that all imports of gold for domestic consumption can be made

only on 100 percent cash margin basis.

This led to sharp decline in shares of jewelry maker Titan last week. Stocks of other

manufacturers also came under pressure. Restrictive measures are not expected to

curb demand but rather lead to a restricted supply-side crunch.

China Gold ETF Products

China has approved two domestic exchange-trade gold products amid a drop in world

gold ETF holdings. These funds will be dominated in Yuan and the China Gold

Association thinks that this step will help to boost gold demand as the avenue will

make investment in the yellow metal easier.

Last year, China was the worlds second-largest gold consumer with demand at 776.1

metric tonnes, slightly behind Indias at 864.2 metric tonnes.

Our Opinion This launch of ETFs may not necessarily translate into increase in

demand, as the status of gold as a safe-haven asset is fading but it will rather bring in

a new investment avenue within the gold market for investors.

1,350

1,400

1,450

1,500

1,550

1,600

1,650

1,700

1,750

1,800

25,500

26,500

27,500

28,500

29,500

30,500

31,500

MCX and Comex Gold Price Performance

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

79.0

80.0

81.0

82.0

83.0

84.0

85.0

1,350

1,400

1,450

1,500

1,550

1,600

1,650

1,700

Spot Gold Vs Dollar Index

Spot Gol d -$/oz US Dol lar Inde x


8/27


GoldNews and Developments

VietnamAsias fourth-largest gold consumer

The countrys central bank has increased supply via regular tenders.

The gold market in Vietnam is tightly controlled by a central bank that is

trying to revive its economy. The central bank is also trying to reduce the

price gap between the local and global markets in order to stabilise the

dollar/dong exchange rate.

South Korean Gold Market Fading Sentiment

The rise in gold prices had attracted gold investors in South Korea but the

sharp crash seen in April13 pulled investors away. The Korea Gold Exchange witnessed a steep fall in total sales of gold bars.

With expectations of further correction in prices, investors are keeping

away.

Sudan Gold Exports

Sudans central bank has restricted all types of imports and exports of

gold including refined and bars unless an import permit is received from

the Ministry of Commerce.

The yellow metal has now become the countrys major export and has

partially replaced oil revenues that used to account for 50 percent of the

countrys income

For 2013, gold output in the country is expected to stand at 50 tonnes

Indian gold imports fall in May13

Net gold imports into India may have declined from an average

$135 million in the first-half ofMay13 to $36 million in the second-

half of the month. Finance Minister P Chidambaram urged Indian investors to resist

the temptation to buy gold. He added that if gold purchases declined

then this would help to curb the burgeoning Current Account Deficit.

OutlookWeekly trend in gold prices is expected to be bullish on account of

expectations that the Federal Reserve might continue its bond-

buying program in the next few months, thereby leading to weakness

in the Dollar Index.

Weekly Technical LevelsSpot Gold : Support 1,373/1,354 Resistance 1,402/1,414.(CMP: $1,386.95)Buy MCX Gold August between 27,711-27,680, SL-27,470,Target -28,220. (CMP: Rs 27,782)


9/27


Silver


Silver prices in the international markets and on the MCX increased 1.8percent in the last week, taking cues from increase in gold prices.

ETF Performance

Holdings in the iShares Silver Trust gained marginally last week to 9,998.93

tonnes from 9,988.42 tonnes on 7th June 2013.

Factors that influenced upside in silver prices

Positive movement in gold prices. Weakness in the DX.

Rise in the ishares silver trust holdings.

However, sharp upside in prices was capped on account of weak performance

in the base metals group.

Outlook Silver prices are expected to trade on a positive note this week as upbeat cues

from gold prices coupled with weakness in the Dollar Index will act as a

supportive factor for prices.

Weekly Technical Levels

Spot Silver: Support 21.73/21.42 Resistance 22.58/23.14. (CMP:$21.96)

Buy MCX Silver July between 43,500-43,450, SL-42,900, Target -

44,600/45,200. (CMP: Rs.43,640)

21

23

25

27

29

31

42,000

44,000

46,000

48,000

50,000

52,000

54,000

56,000

58,000

60,000

MCX and Comex Silver Price Performance

MCX-Near Month Silver Futures -Rs/ kg Comex Silver Futures -$/oz

79.0

80.0

81.0

82.0

83.0

84.0

85.0

21.0

23.0

25.0

27.0

29.0

31.0

Spot Silver Vs US Dollar Index

Spot Silve r -$ /oz US Dollar Inde x


10/27


CopperWeekly Price Performance

LME Copper prices slipped 2 percent last week, while prices on the MCX near-month

contract declined 1.7 percent, owing to Rupee depreciation in the last week thatcushioned downside.

On the LME, the red metal touched a weekly low of $7011.25/tonne last week. Around

mid-week, LME copper prices recovered from their five-week low as supply setbacks at

the Grasberg mine in Indonesia supported upside. The miner declared a force majeure

in shipments of copper concentrates , indicating that the current situation is not in the

companys control.

On the domestic front, prices dropped around 1.7 percent and closed at Rs. 407.50/kg,

on Friday after touching a low of Rs 405.40/kg in the last week. Depreciation in the

Rupee prevented sharp fall in prices on the MCX.Copper Inventories

Copper inventories over the week increased 1.3 percent on the LME to 618,075 tonnes

and on the SHFE, inventories rose 1.1 percent to 183,410 tonnes..

Supply-side factors

Mine shutdowns due to accidents at Freeport McMorans Grasberg mine and Rio

Tintos operations in Utah have affected world supply

On the back of this, BHP Billiton has agreed to an increase of 3 percent in smelting fees

to Japanese smelters

World copper market is expected to witness a surplus, but these shutdowns may help

to reduce the extent of surplus

Freeport McMoran

The estimated daily output impact on account of a temporary shutdown is expected to

be around 3 million pounds (1361 tonnes) of copper (accounts for around 2.9 percent

of average daily world copper output) and 3000 ounces of gold per day.

Between 15th May to 11th June, the Grasberg mine has lost approximately 80 million

pounds of copper and 80,000 ounces of gold output.

365

375

385

395

405

415

425

435

445

455

6,800

7,000

7,200

7,400

7,600

7,800

8,000

8,200

8,400

LME and MCX Copper Price Per formance

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

6,800

7,000

7,200

7,400

7,600

7,800

8,000

8,200

8,400

318,000

368,000

418,000

468,000

518,000

568,000

618,000

LME Copper v/s LME Inventory

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


11/27


Copper

Antofagastas annual copper output

The miner expects it annual copper output to stand around 700,000 tonnes in 2013, in l ine with estimates made earlier

During the first-quarter of the year, average throughput levels at Esperanza stood around 90,000 tonnes per day

Outlook

Supply-side worries are expected to be supportive for copper prices during the week.

Weakness in the Dollar Index will additionally aid upside in prices on the LME.


LME Copper: Support 6995/6895 Resistance 7205/7320. (CMP: $7134.75)

Buy MCX Copper June between 397-395, SL-389, Target -411. (CMP: Rs 410.25)


12/27


Crude OilWeekly Price Performance

Nymex WTI crude oil prices jumped 1.9 percent last week to close at

$97.85/bbl and on the MCX, the near-month contract gained 2.4 percent toclose at Rs5643/bbl.

Weakness in the Dollar Index along with supply concerns from Turkey

supported gains in the commodity. Additionally, expectations of decline in

crude output from Libya acted as a positive factor.

Oil Inventories Fall Last Week

Both, American Petroleum Institute and the US Energy Department reported

a rise in oil inventories by 9.0 mb and 2.5 mb for the week ending 7thJune13.

Energy Information Administration Short-term Energy Outlook

Crude oil demand for April13 in the Non-OECD nations rose more than that of

the developing nations for the first time ever in history.

Non-OECD consumption touched 44.5 mpbd in April13, rising around 50

percent in the last decade. During the same period, OECD consumption stood

at 44.3 mbpd

Growth in Non-OECD demand has been backed by surge in growth in China

By 2013, the EIA expects the developing countries to become a major world oil

consumer

Patterns of world oil demand are witnessing a change, with China being at theforefront . On the supply front too, China has captured a large share of oil

development and production in Iraq, giving the country an edge over the other

developing nations in terms of securing domestic oil supplies

World oil demand is expected to average 89.2 mpbd in 2012, rising around

900,000 bpd from last year. The average stood at 78 mbpd 10 years ago.

Non-OPEC output is expected to increase more than consumption, rising by

around 1.2 mpbd to 53.91 mbpd

86.0

88.0

90.0

92.0

94.0

96.0

98.0

4,700

4,800

4,900

5,000

5,100

5,200

5,300

5,400

5,500

5,600

Nymex and MCX Crude Oil Price Performance

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

361.3

360.3

363.1369.1

371.7

372.2

376.4

377.53

381.4

384

382.7

385.9

388.6 388.9

387.6

388.6

395.3 395.5

394.9 394.6

397.6

391.3

393.8

360

365

370

375

380

385

390

395

400

Crude Oil Inventories (mn barrels)


13/27


Crude Oil

Outlook

Supply-side worries from Turkey and Libya will be the major factor that will support upside in crude oil prices over the week. Over the week, if crude oil inventories decline then the commodity will receive further upside support.


Nymex Crude Oil: Support: 96.80/95.40 Resistance 99.60/101.15. (CMP:$98.08)

Buy MCX Crude July between 5625-5605, SL-5540, Target -5765. (CMP:Rs 5658)


14/27

India

Consumer Prices Index (CPI) fell to 9.31 percent in May as against a rise of 9.39 percent in April. Industrial production declined to 2 percent in April from rise of 2.5 percent a month ago.

Manufacturing output also dropped and was at 2.8 percent in April as compared to increase of 3.2 percent in prior month.

Wholesale Price Index (WPI) inflation declined to 4.7 percent in May as against a rise of 4.89 percent in April.

WPI fuel index dropped to 7.32 percent in May from previous rise of 8.8 percent a month ago. W

Food inflation rose to 8.25 percent in last month as compared to 6.1 percent in April .

Japan

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

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

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

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

Business Survey Index (BSI) Manufacturing Index rose to 5-mark in Q2 of 2013 from earlier -4.6-level in Q1 of 2013.

Prelim Machine Tool Orders declined by 7.4 percent in May from earlier fall of 23.6 percent a month ago.

Core Machinery Orders declined by 8.8 percent in April as against a rise of 14.2 percent a month ago.

Corporate Goods Price Index (CGPI) rose to 0.6 percent in May from earlier rise of 0.1 percent in April.


Economy


15/27

US

Core Retail Sales increased by 0.3 percent in May. Retail Sales rose by 0.6 percent in May as against a previous rise of 0.1 percent in April.

Unemployment Claims declined by 12,000 to 334,000 for week ending on 7th June from earlier rise of 346,000 in prior week.

Producer Price Index (PPI) increased by 0.5 percent in May as against a decline of 0.7 percent in April.

Current Account was at a deficit of $106 billion in Q1 of 2013 from previous deficit of $102 bill ion in Q4 of 2012.

Treasury International Capital (TIC) Long-Term Purchases declined 37.3 billion in Apri l as compared to fall of 13.4 bil lion a month ago.

Capacity Utilization Rate was at 77.6 percent in May with respect to rise of 77.7 percent in earlier month.

Prelim University of Michigan (UoM) Consumer Sentiment declined by 1.8 points to 82.7-mark in June when compared to rise of 84.5-level in May.

Euro Zone

French Industrial Production increased by 2.2 percent in April as against a decline of 0.6 percent a month ago.

Italian Industrial Production fell by 0.3 percent in April from earlier drop of 0.9 percent in March.

European Sentix Investor Confidence was at -11.6-mark in May as compared to -15.6-level in April.

European Industrial Production gained by 0.4 percent in April from earlier rise of 0.9 percent a month ago.

European Consumer Price Index (CPI) remained unchanged at 1.4 percent in the month of May.

Core CPI rose to 1.2 percent in May from earl ier rise of 1 percent a month ago.


Economy


16/27


RBI Monetary Policy Review Silent on Interest Rates Citing growth-inflation dynamics and recent developments in the external sector, the

Reserve Bank of India (RBI) kept interest rates unchanged as expected. Rupee was the

worst performing currency in Asia in the last week.

With improving US economic data and expectations of the monetary stimulus pullback,

the Indian economy will have to gear up in order to sustain capital inflows and increase

the concentration of investments in India in order to mitigate the impact of a bounce

back in the US. This is because, better economic prospects and treasury yields in the US

will reduce investor concentration and participation in the Indian markets. Asia, in any

case is seeing a marked slowdown, with China being at the forefront.

Indications for further changes in interest rates in the July13 policy are currently mute

but may change over time, given that the monsoon this year is expected to be normal,thus reducing the supply-side pressure and thereby easing inflation.

In its review, the central bank has indicated that the key to boosting economic growth

could be done through increasing investment by creating a favorable and conducive

environment for private investment, improving project clearance and raising the role of

public investment.

This move by the RBI has largely dampened sentiments at a time when the world

economy is suddenly witnessing a slowdown in growth momentum. Recent measures

in order to reduce the Current Account Deficit (CAD) by way of curbing gold imports

through restricting its supply and increasing customs duty, it looks like the RBI is using

indirect measures to reduce economic hurdles and is also applying the same strategy to

boost economic growth.

8.5

7

6

9

6.5

4.75

6.75

8.5

7.25

4.2

5.2

6.2

7.2

8.2

9.2

10.2

27

-04-2001

28

-05-2001

23

-10-2001

28

-03-2002

30

-10-2002

3

-03-2003

19

-03-2003

25

-08-2003

27

-10-2004

26

-10-2005

8

-06-2006

31

-10-2006

31

-03-2007

25

-06-2008

20

-10-2008

8

-12-2008

5

-03-2009

19

-03-2010

2

-07-2010

16

-09-2010

25

-01-2011

3

-05-2011

26

-07-2011

25

-10-2011

17

-04-2012

19

-03-2013

17

-06-2013

Repo Rate (%)

6.5

5.5

4.5

6 6

3.25

5.25

7.5

6.25

3

3.5

4

4.5

5

5.5

6

6.5

7

7.5

8

27-04-2001

28-05-2001

23-10-2001

28-03-2002

30-10-2002

3-03-2003

19-03-2003

25-08-2003

27-10-2004

26-10-2005

8-06-2006

31-10-2006

31-03-2007

25-06-2008

20-10-2008

8-12-2008

5-03-2009

19-03-2010

2-07-2010

16-09-2010

25-01-2011

3-05-2011

26-07-2011

25-10-2011

17-04-2012

19-03-2013

17-06-2013

Reverse Repo Rate (%)


17/27


RupeeWeekly Price Performance

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

Rupee was the worst performing currency in Asia in the last week.

Last Weeks Snapshot

The Rupee touched a lifetime low of 58.985 in the prior week on the back of

unfavorable industrial production and manufacturing output data.

Further, cut in the growth outlook of the economy to 5.7 percent by World Bank also

exerted downside pressure on the currency.

Additionally, weak global and domestic markets acted as a negative factor for the

Rupee.

During the end of the week, countrys inflation data came on a positive note which

provided some respite to the free falling and sharp depreciation of the Indian Rupee.

FII Inflows

For the month of June 2013, FII outflows totaled at Rs.1,457.70 crores ($244.39 million)

as on 14th June 2013. Year to date basis, net capital inflows stood at Rs.81,747.40

crores ($15,108.60 million) till 14th June 2013.

Outlook

With no immediate pullback in stimulus measures from the Fed, the Dollar Index is

expected to weaken.

On the back of this, we expect the Rupee to trade with an appreciation bias during theweek.


USD/INR Support 56.70/55.90 Resistance 58.60/59.80. (CMP: 57.85)

53.0

54.0

55.0

56.0

57.0

58.0

59.0

$/INR - Spot


18/27


Dollar Index (DX)


US Dollar Index (DX) declined around 1.2 percent in the last week.

The DX began the week on a negative note on uncertainty over the Fedregarding its bond buying program.

Last Weeks Snapshot

Expectations over a withdrawal of the Federal Reserves stimulus measures

is driving market sentiments.

However, to a large extent this has been factored in and in case the Fed

does not show any indication of a pullback in this weeks FOMC statement

then, the DX could witness downside pressure.

A sudden pullback in the bond-buying programme could be detrimental for

the world financial markets and the Federal Reserve is expected to take a

slow approach for the same.

The DX has been influenced a lot by the movement and the volatility in the

Yen

Factors that influenced downside movement in the DX

Favorable retail sales and jobless claims data from the US.

Further, expectations of Fed keeping interest rates lower added downside

pressure on the currency.

Outlook The currency will take cues and direction from the Federal Reserves

statement and announcement.

Weakness in the DX could be seen over the week if the Federal Reserve does

not give a clear picture of its stimulus withdrawal plan.


US Dollar Index: Support 80.00 / 79.50 Resistance 81.0/81.60. (CMP:

80.72)

79.0

80.0

81.0

82.0

83.0

84.0

US Dollar Index


19/27


Euro


The Euro appreciated 0.9 percent last week, touching a weekly high of 1.339.

Factors that influenced upside movement in the Euro

Weakness in the DX.

Further, favorable industrial production data from the region supported an

upside in the currency.

During the later part of the week cut in the growth outlook by the World Bank

restricted sharp positive movement in the currency.

World Bank has forecasted that Gross Domestic Product (GDP) growth in Euro

Zone region will contract by 0.6 percent for the current year.

The bank also estimates that growth in the region will decline by 0.1 percent in

2013.

Outlook

With new infrastructure investment spending in Italy, we expect a positive

sentiment towards the Euro Zone.

Since this new spending plan is expected to boost the job market, we expect the

Euro to trade higher during the week.


EURO/USD SPOT: Support 1.3303 / 1.3216 Resistance 1.3430/1.3520. (CMP:

1.3341)

1.275

1.285

1.295

1.305

1.315

1.325

1.335

1.345

1.355

1.365

Euro/$ - Spot

69.0

70.0

71.0

72.0

73.0

74.0

75.0

76.0

EURO/INR - Spot


20/27

Chana



Chana prices remained firm last week on account good buying at lower levels.

Supplies are gradually declining as farmers have started sowing kharif crops

with the timely onset of monsoon. Chana spot as well as July futures settled 1.64% and 0.19% lower w-o-w.

IMD forecast normal monsoon for 2013

IMD in its Second Long Range forecast predicted normal monsoon at 98

percent of the Long Period Average. Monsoon is predicted 94% of its LPA over

North-West India, 98% over Central India, 103% over South Peninsula, and 98%

over North-East India all with a model error of 8 %.

Normal monsoon to boost Kharif Pulses sowing

Smooth progress of Monsoon has increased the prospects of sowing of kharifpulses. Pulses are mainly grown in the western and southern belts of India.

Chana output estimated at record high - Third Advance Estimates

According to the third advance estimates released last week, Chana output is

pegged marginally lower to 8.49 mn tn compared with its second advance

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

record of 8.2 mn tn in 2012-13.

Seasonal pattern to restrict further downside in the prices

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

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

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

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

Outlook

Chana prices may trade range bound with upward bias as demand is strong at

current price levels while arrivals have started declining. Good sowing prospects

of kharif pulses may cap sharp gains in the prices.

Weekly Strategy

Buy NCDEX CHANA July between 3200-3190, SL -3140, Target - 3280 / 3290


21/27

Turmeric

Source: Agriwatch & Reuters



Turmeric July Futures opened the week on a negative note and touched a fresh

contract low of` 5266 per quintal on the back of huge carryover stocks coupled

with weak demand. However, prices bounced back on account declining arrivalscoupled with lower level buying.

The spot settled 2.5% lower while the July futures settled 0.39% higher w-o-w.

Weak exports

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

Lower acreage of Turmeric for the 2012-13 season

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

well as lower turmeric prices. The area covered under Turmeric in A.P. in 2012

was reported at 0.58 lakh hectares. The area covered was lower as compared tothe preceding year (0.81 lha), as well as normal as on date (0.67 lha). Sowing was

reported to be 30-35% lower compared to the previous year.

Lower production in the 2012-2013 season

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

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

at historical high of 90 lakh bags/ 10.62 lakh tns.

Outlook

Turmeric prices may trade on a mixed note this week. Bargain buying at lowerlevels are expected to support prices. Export demand may emerge at lower levels

ahead of Ramadan. Declining arrivals coupled with closure of markets for five

days as declared by Erode Turmeric Merchants Association may also support

prices. However, huge carryover stocks may cap sharp gains and pressurize prices.

Arrivals of monsoon may also lead to improvement in sowing.

Weekly Strategy NCDEX Turmeric July Trend Sideways- S1 - 5350, S2 - 5150 R1- 5800, R2 - 6050.


Source: Reuters & Angel Research.


22/27

Jeera

Source: Ministry of Agriculture, Gujarat.



Jeera traded on a mixed note last week. Good arrivals coupled with higher

production estimates have pressurized prices. However, improvement in overseas

demand supported prices at lower levels. About 25-30% of the new crop fromGujarat has already been exported to Singapore, Europe & Dubai.

The spot as well as the July Futures settled 0.28% and 0.1.15% 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 during Apr-Jan 2013 stood at 64,400 tn, higher by 86% (Source Factiva).

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, Indian Jeera in the international market is being offered at $2,450/tn

(FOB Mumbai).

Outlook

Jeera may trade on a mixed note this week. Prices may recover from lower levels

on expectations of emergence of overseas demand at lower levels. Arrivals may

also decline in the coming days. However, higher production figures this season

may cap sharp gains and pressurize pries from higher levels. Good progress of the

monsoon may also limit the upside in the prices.

Weekly Levels

NCDEX Jeera July Trend Sideways- S1 - 13350, S2 - 13570, R1- 12950, R2 - 12700.


Source: Reuters & Angel Research.

d kl k


23/27

Soybean


Weekly price performance

Soybean futures continued to rise for the second consecutive week and settled 2.4%

higher w-o-w on account of tight supplies in the domestic markets. However,

commencement of sowing amidst good progress of monsoon capped the upside. CBOT Soybean Futures declined 0.77% w-o-w on prospects of a record crop in the

coming season. However, tight soybean stocks supported prices at lower levels.

Commencement of Kharif Sowing

Sowing of kharif oilseeds such as soybean, groundnut, sesame and castor has

commenced in various parts of the country and is expected to gain momentum in

the coming days. Good monsoon progress is also expected to boost the acreage.

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

Indias soy meal exports for the month of May 2013 were 96,492 tonnes, lower by32.33 percent from 142,588 tonnes a year ago.

USDA Crop Outlook

The U.S. Department of Agriculture report kept US Soybean output expectations at

3,390 mn bushels, unchanged as compared to its earlier forecast in May. Also, net

weekly soybean export sales totaled 480,600 tons. Global oilseeds output in 2013-14

is expected to decline to 490.83 mn tn compared to 491.34 mn tn forecast in May.

US Soy planting- 71% complete

According to the USDA weekly crop report, Soybean planting is 71% completecompared to 57% last week. However, it is lower than 5 years average of 84% and

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

Midwest.

Outlook Soybean is expected to trade higher on account of tight supplies in the domestic

markets. However, good progress of the monsoon, expected improvement in the

acreage as well as weak international markets may pressurize prices at higher levels.

Strategy

Buy NCDEX Soybean July between 3810-3790, SL -3720, Target - 3930 / 3950.

C di i kl k


24/27

Refine Soy Oil and Crude Palm Oil


Weekly price performance

Edible oils continued to trade higher on account of good demand ahead of

Ramadan. A sharp depreciation in the Rupee also supported an upside in theprices. Ref Soy oil on NCDEX as well as CPO prices at MCX settled 0.50% and

1.52% higher w-o-w.

Global Scenario

Exports of Malaysian palm oil products for June 1-15 rose 15.7 percent to

707,148 tonnes, compared with 611,277 tonnes shipped during May 1-15.

Malaysia, the world's No.2 palm oil producer, will set its crude palm oil export

tax for July at 4.5 percent, unchanged since march

Domestic Scenario

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

Imports of vegetable oils, including non-edible oils, rose 40.2% to 917,964 tn

in May, after dropping for 3 months, mainly due to surge in palm oil imports.

India's refined palm oil imports hit a record high in May by jumping 47.5

percent from April. The world's top buyer of vegetable oils imported 373,837

tonnes of refined palm oil in May.

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 May 1 stood at 670,000 tn, the trade body

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

side despite the decline in monthly imports.

Strategy

Buy NCDEX Ref Soy Oil July between 695-693, SL -688, Target - 702 /704

(CMP 698.30)

MCX CPO June between Support 1 - 492, Support 2 - 487 and Resistance 1-

502,Resistance 2 - 508

C di i W kl T k


25/27

Sugar



Sugar prices remained flat as good progress of monsoon in the drought ridden

state of Maharashtra has eased some concerns over output. This may offset lower

planting to some extent.

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

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

Sugarcane acreage down 10 percent as on 14th June

According to the Ministry of Agriculture, Sugarcane has been planted in 42.09

lakh ha as compared to 46.78 lakh ha as drought affected Maharashtra and

Karnataka have reported lower area.

After producing surplus sugar in the current season, sugar output is expected to

decline in 2013-14 season on account of lower plantings.India sugar reserves at five-year high set to avert imports

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

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

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

million tonnes in 2011-2012.

Brazil's CS sugar output up 40 percent yoy

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

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

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

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

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

Outlook

Sugar prices are expected to remain firm this week on account of good demand

from the stockist coupled with expected lower output this season. However,

sharp upside maybe capped tracking smooth monsoon progress.

Strategy

Buy NCDEX SUGAR July between 3095-3085, SL -3050, Target - 3160 / 3180.

C diti W kl T k


26/27

Kapas/Cotton



MCX Cotton prices gained for fourth straight week and settled higher 2.2% on

account of thin supplies to meet the demand from yearn manufacturer. Firm

international markets also supported an upside in the prices. ICE Cotton futures gained 7.5% w-o-w as U.S. government cut its inventory forecast

more than expected .

Kharif Cotton Planting Progress

Cotton planting has been reported at 15.85 lakh ha as against 15.72 lakh ha during

the same period last year. Planting is almost complete in North India and sowing in

Punjab and Haryana declined marginally.

Andhra Pradesh has reported a higher area of 1.13 lakh ha under cotton, while in

Karnataka the acreage is up by about half a lakh hectares at 1.26 lakh ha.

Cotton Advisory Board sees lower kharif sowing

CAB in its latest meet has projected cotton crop at 34 mn bales for 2012-13 season

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

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

USDA reduces U.S. cotton production, global stocks projections

According to USDA monthly crop report released last week, U.S. cotton stocks will

reach their lowest level in 3 years in 2013-14, as it reduce US production forecast.

Global inventories will reach a record of 92.49 million bales next year, though that

was slightly reduced from the USDA's May forecast of 92.74 mil lion bales. More than two-thirds of the global carryover is expected to become part of China's

stocks, where inventories will total 58.93 million bales by the end of July 2014.

Outlook

Upward trend in Cotton may continue this week as lower supplies in the domestic

markets along with cut in global cotton inventories may support prices. Good

monsoon may however, cap sharp gains in the prices.

Strategy

Buy MCX Cotton June between 19100-19050, SL -18770, Target - 19550 / 19600

C diti W kl T k


27/27

Thank You!

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Commodities Weekly Tracker, 17th June 2013

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Transcript of Commodities Weekly Tracker, 17th June 2013