Commodities Weekly Tracker, 5th Aug 2013

7/27/2019 Commodities Weekly Tracker, 5th Aug 2013

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Commodities & Currencies

Weekly Tracker


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Commodities Weekly Tracker

ContentsReturns

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 | August 05, 2013


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Commodities Weekly TrackerMonday | August 05, 2013

2.4 2.22.0 1.9

1.1 1.00.7 0.6

(3.0)

(3.5)(4.0)(3.5)(3.0)(2.5)(2.0)(1.5)(1.0)(0.5)0.0

0.51.01.52.02.53.0

Global Equities Performance (%)


4/24



5/24



6/24

*Weekly Performance for August contract

*Soybean, Cotton October contract

*Kapas- April 2014 Contract



7/24


RBI Policy ReviewUnchanged policy stance - Rupee stability the main priority

Keeping the exchange rate volatility on the forefront, the RBI (Reserve

Bank of India) has kept interest rates unchanged. The repo and reverse repo rate remained unchanged at 7.25 percent

and 6.25 percent.

The cash reserve ratio and bank rate also remained steady at 4 percent

and 8.25 percent, while the marginal standing facility stood at 10.25

percent, which was already increased by 200 basis points by the RBI in

the recent past.

While inflation control and economic growth are also a major priority

at the current point in time, the central bank is playing cautiously,

given the sharp depreciation and volatility in the Rupee in the recent

past.

Weakness in the Rupee has caused an economic havoc and any further

depreciation would increase the import costs of raw materials

substantially.

With India being an importer in case of major commodities like crude

oil, a weaker Rupee creates a negative economic effect. Thus, the

threat of rise in inflation remains and a rate cut in the current scenario

may again lead to a rise in inflation, thereby making this an extremely

challenging situation from the central banks perspective.

Growth forecast cut for FY2013-14 GDP (Gross Domestic Product) forecast for FY2013-14 have been

lowered from 5.7 percent to 5.5 percent in the quarterly monetary policyreview.

Factors that are expected to lead to a decline in economic growth are

weakness in industrial activity have increased risk to growth, loss of

momentum in US economy, slowdown in the EDEs (emerging and

developing economies), contraction in the Euro Area and the impact of

these factors on world trade.

Exports from India could be affected to a great extent due to these

economic concerns and given the unchanged monetary policy stance by

the RBI; the economy will receive lower boosting as compared to othercountries like Japan that is stimulating its economy in order to recover

from the crisis.

Repo Rate 7.25%

Reverse Repo Rate 6.25%

Cash Reserve Ratio 4%

Bank Rate 8.25%Marginal Standing Facility 10.25%

4.3

5.5

4.0

8.1

7.0

9.59.3

6.7

9.3

6.2

5.0

5.5

3.5

4.5

5.5

6.5

7.5

8.5

9.5

10.5

India's Annual GDP (%)


8/24


FOMC, ECB, BOE Maintain Status Quo

Economic data to decide Feds stimulus stance

The FOMC (Federal Open Market Committee) maintained status quo in their monetary policy review, indicating a continuation of monthlybond purchases to the tune of $85 billion.

The Fed on the other hand did not indicate much on the tapering front, but it is clear that positive economic data releases are ensuring the

path towards the pullback.

Inflation and unemployment data to drive Feds decision. The Advance GDP Price Index has declined in the month ofJuly13, while the CPI

indicates a rise during June13 on the back of increase in costs of food and energy.

The unemployment rate has slumped to 7.4 percent in July13 but slow job creation has come as a concern. Ahead of the September FOMCmeet, the Federal Reserve will focus on the job market report in order to take a calculated stance.

Hence, economic data in the near-term will decide the Feds stance on the QE tapering.

ECB and BOE pledge to hold low interest rates

The ECB (European Central Bank) and the Bank of England (BOE) held interest rates at a record low of 0.5 percent.

While the Euro Zone is expected to witness a contraction in 2013 by around 0.6 percent, the UK on the other hand is expected to see

growth to the tune of 0.9 percent (estimates by the IMF).

Hence, the ECBs focus is to continue with a loose monetary policy, considering the weak economic stature.

The BOE maintained its bond-buying program at 375 billion pounds ($567 billion), despite expectations of a bounce back in the economy as

this will help support a complete turnaround.

The UK economy expanded 0.6 percent in the second-quarter and unemployment claims declined sharply in three years to June13.


9/24


Global Manufacturing Activity

Manufacturing index in the US, UK, Euro Zone and China witnessed an increase in the month ofJuly13 and in the same period Japan and India saw

a decline.

Reading of the manufacturing index above 50 indicates expansion, while a reading below 50 suggests contraction. Improvement in manufacturing

activity in these major economies will help support sentiments at a time when markets are vulnerable due to the Feds tapering program.

A sharp bounce back is seen in UK manufacturing index to 54.6 in July13, indicating that the country has bounced back from its weak phase and the

ongoing stimulus spending by the BOE will help support further growth.

Reason for decline in Japanese manufacturing is the cutback in production by manufacturers as exports witness a fall. Industrial output in Japan also

witnessed a decline on the back of curbs in production so as to avoid a build up of inventories.

India also saw a decline in manufacturing activity on the back of falling new orders, slowing economy and a weaker Rupee that has raised input

costs.

53.252.9

50.1 50.1

52.3

50.3

53.7

54.6

50.3 50.350.7

50.1

48.5

49.5

50.5

51.5

52.5

53.5

54.5

55.5

US UK Euro China Japan India

Manufacturing grows in US, UK, Euro, China..

Falls in Japan and India

J une'13 J uly'13


10/24


GoldWeekly Price Performance

Spot Gold prices declined 1.5 percent last week, after touching a weekly high of

$1339/oz on Wednesday. While the whole of the week saw pressure on gold prices,

the yellow metal bounced back on Friday as US jobs data came in below marketexpectations and led to views that the Federal Reserve will continue with its monthly

bond purchases, and make the move only once the data stabilises.

On the MCX however, the yellow metal prices closed the last week around 3.9

percent higher as Rupee depreciation supported prices. Prices touched a high of

Rs29,010/10gm on Wednesday but could not sustain around these levels.

The currency factor is playing a crucial role in prices on the MCX due to Rupee

depreciation and this is leading to divergence in price performance in the

international and domestic markets.

Prices witness increase during July13

Spot Gold prices increased more than 7 percent in July13 and tested a high of

$1348/oz on 23rdJuly13.

Factors that contributed to the rise in prices was the expectation that bond purchases

by the Fed would continue on the back of comments by Fed Chairman that the

economy needed support in achieving growth. The Dollar Index weakened over the

month and this factor too acted as a support to prices.

Taking cues from increase in gold prices in dollar terms, MCX gold prices also

increased, but the rise was far more over the month on the back of weakness in the

Rupee. During July13, prices on the MCX rose almost 12 percent, marking the biggestrise since the start of the year.

SPDR Gold Holdings

Holdings in the SPDR Gold Trust slipped further to 918.64 tonnes last week. Thus the

fall in ETF holdings continues to remain a bearish factor for gold prices.

Falling ETFs was the key reason for the April price crash and if the decline continues

further then this could remain a continuous threat for gold.

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

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


11/24


GoldGold premiums in India rise on curb in supply

With continuing restrictions being announced by the RBI one after

the other, the latest in line on 22nd

July13 has made it mandatoryfor gold importers to set aside 20 percent for re-exports as jewelry

The All India Gems and Jewelry Trade Federation indicated that

imports of gold have been halted since 22nd July13, thus sending

premiums higher

This has create a supply scarce, thus sending premiums higher and

gold traders are quoting premiums of up to $45/oz last week from

$25-$30/oz in the week prior to that

Indian gold imports expected to rise in July13 After witnessing a sharp decline in the month of June13 to 31.5

tonnes from a whopping 162 tonnes in May13, gold imports are

expected to rise in July13 to around 45 tonnes

However, these are expectations and with imports post 22ndJuly13

being nil, the actual figures could show a change

Chinese gold demand expected to hit 1000 tonnes - WGC

China could overtake India as the worlds largest gold consumer as

the countrys gold demand is expected to top 1000 tonnes this year

This increase in Chinese demand is coming at a time when India is

putting excessive curbs on demand and supply of the yellow metal,

in order to curb demand

Increase in Chinese demand is expected to be backed by rise in

investment and jewelry demand

Last year, Chinas demand for gold fabrication that goes into making

of jewelry and other articles had touched 590.5 tonnes

Outlook

With Rupee depreciation expected to continue in the near-term, we

expect gold prices to witness an upside.

Prices in the international markets are also expected to trader higher as

the Dollar Index is expected to weaken. But risk to the downside in prices

remains on account of continuous decline in SPDR gold ETFs.

Weekly Technical Levels

Spot Gold: Support 1301/1208 Resistance 1340/1368 (CMP: $1315) MCX Gold October: Support 27,910/27640 Resistance 28417/28781

(CMP: 28025)


12/24


SilverWeekly Price Performance

Week-on-week, silver prices declined marginally by 0.3 percent and

witnessed a bearish trend over the week.

Over the week, prices in dollar terms touched a high of $20.29/oz but could

not sustain around these levels

Prices on the MCX gained more than 3 percent despite a fall in the

international markets on the back of Rupee depreciation that supported

prices in the Indian markets

Factor affecting the silver prices

Global economic data

Currency movement Rupee depreciation in the Indian markets

Outlook Silver prices are expected to take cues from a weaker Rupee and this factor

will support prices on the MCX.

In the international markets, silver prices are expected to trade with a

positive bias, taking cues from rise in gold and weakness in the Dollar Index.


Spot Silver: Support 19.75/19.25 Resistance 20.40/20.90. (CMP:$19.96)

MCX Silver Sep: Support 41750/40880 Resistance 42800/43700 (CMP:

Rs.41977)

18

20

22

24

26

28

30

32

38,500

43,500

48,500

53,500

58,500

MCX and Comex Silver Price Performance

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

79.0

80.0

81.0

82.0

83.0

84.0

85.0

18.0

20.0

22.0

24.0

26.0

28.0

30.0

32.0

Spot Silver Vs US Dollar Index

Sp ot Si lve r -$ /oz US Dol lar In de x


13/24


CopperWeekly Price Performance

LME copper prices gained more than 2 percent in the last week, while rise in prices on

the MCX stood at a whopping 5 percent as Rupee factor supported further upside in

Indian prices. The red metal could not sustain above the crucial $7000/tonne mark inthe last week and this indicates that fundamental bearishness along with ongoing

uncertainty in the global financial markets.

Copper Inventories

On the LME last week, copper inventories declined 2 percent to 608,675 tonnes, thus

acting as a support to prices

Global Copper Market in 264,900 ton Surplus Jan-May

The WBMS (World Bureau of Metal Statistics) indicated that global copper market was

in oversupply by 264,900 metric tons in the first five months of the year

In the same period of 2012, the world copper market saw a shortfall of 278,900 tonnes,

while the whole of 2012 saw a surplus of 70,900 tonnes. Between Jan- May13, global

copper consumption stood at 8.517 million tonnes, falling 1 percent over the same

period last year

Global refined copper production rose 5.5 percent between Jan-May13 to 8.782

million tonnes when compared to the same period last year, with major production

increases seen in China and the US

Net short positions in copper increase

The latest CFTC report indicated that investors more than doubled net short holdings incopper to 26,924 contracts, compared with 12,974 last week . This increase in net short

positions is on the back of expected increase in surplus of the metal over the year

Outlook

A bearish trend is expected in case of copper on the back of an oversupply scenario

amid an overall slowing Chinese economy


LME Copper: Support 6935/6790 Resistance 7150/7300. (CMP: $7009)

MCX Copper August Support 422.20/412.20 Resistance 438.10/448.10 (CMP: Rs 427)

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 Perfor mance

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)


14/24


Crude OilWeekly Price Performance

Nymex crude oil prices increased around 2 percent to close at $106.94/bbl last

week. Supply-side concerns supported gains in prices but further gains wereseen in prices on the MCX due to Rupee depreciation

The MCX near-month crude oil contract gained a whopping 5 percent to close

at Rs6521/bbl last week

Inventories

While the American Petroleum Institute showed a decline inventories by

740,000 barrels, the US Energy Information Administration report showed an

unexpected rise by 431,000 barrels.

A mixed inventory report did not provide major cues to oil prices last week.

Saudi Arabia signals production cap

Saudi Arabia indicated that it will not increase production on the back of

slowing demand concerns

As planned, the oil producing country will not boost its output capacity to 15

million barrels a day on the back of rise in shale production in the US

Oil production in the US has increased to 7.56 million barrels a day during the

week ended 19thJuly13. This is the highest increase in output since December

1990

Outlook Crude oil prices are expected to trade with a positive bias over the week as

news that Saudi Arabia will not increase production will act as a supportive

factor for oil prices.

Rupee depreciation will further support gains in prices on the MCX.


Nymex Crude Oil: Support: 106.10/103.40 Resistance 109.50/112.20

(CMP:$107.40)

MCX Crude August Support 6448/6260 Resistance 6710/6900 (CMP:Rs 6535)

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

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

6,700

Nymex and MCX Crude Oil Price Performance

M CX crude oi l (Rs/ bbl) NY MEX C rude Oi l ($ /bbl)


15/24


Rupee and Dollar IndexWeekly Price Performance

Despite a flat performance by the Dollar Index over the week, the Rupee did not take

cues and depreciated sharply by around 3.5 percent last week

Bearish domestic fundamentals have continued to act as a negative factor on the

Rupee

In the last week, the Rupee touched a low of 61.22 as no major measures by the RBI in

its monetary policy review led to further weakness in the currency

Capital Flows

During the months ofJune13 and July13, FIIs have pulled out more than Rs62,000cr

($10.5billion) from the Indian capital markets on the back of concerns over a

weakening Rupee

In the month ofJuly13, FIIs have withdrawn around Rs18,124cr ($3 billion) from thedebt and equities markets after pulling out a record Rs44,162cr ($7.5billion) in June13

Foreign Exchange Reserves

For the week end 28thJune13, total foreign exchange reserves fell by $3 billion to $285

billion

Foreign exchange reserves are sufficient only to cover around six and a half months of

imports, while a comfortable level for the currency is that of eight to ten months

Outlook

Over the week, the Dollar Index is expected to weaken due to uncertainty with respect

to the Feds move as jobs data last week came below market expectations

Depreciation in the Rupee is expected to continue despite Dollar weakness as

fundamentals are bearish and would continue to act as a negative factor


Dollar Index: Support 81.40/80.80 Resistance 82.50/83.10 (CMP: 81.81)

USD-INR August Contract: Support 60.00/58.00 Resistance 62.20/63.10 (CMP: 61.04)

53.0

54.0

55.0

56.0

57.0

58.0

59.0

60.0

61.0

62.0

$/INR - Spot

79.0

80.0

81.0

82.0

83.0

84.0

85.0

US Dollar Index


16/24


EuroWeekly Price Performance

The Euro witnessed a flat week-on-week performance, taking cues from

flat movement in the Dollar Index Economic data from the Euro Zone was mixed and with major focus

surrounding the ECBs monetary policy, the currency largely remained

under pressure

Minimum Bid Rate

The ECB continued to commit to a lower interest rates at 0.5 percent as the Euro

Zone economy needs boosting in order to support growth

Euro Zone unemployment rate remains high

With economic growth being the focus of the ECB, a high unemployment

rate is a major concern on the forefront

The unemployment rate has remained stable at 12.1 percent for the

fourth straight month, indicating job market weakness

Outlook

Over the week, largely, positive economic data is expected from the Euro

Zone and this factor will help to support upside in the currency Weakness in the Dollar Index will additionally support gains in the Euro


EURO/USD SPOT: Support 1.3192/1.3110 Resistance 1.3350/1.3426. (CMP:

1.3284)

1.275

1.285

1.295

1.305

1.315

1.325

1.335

1.345

1.355

1.365

Euro/$ - Spot

69.0

71.0

73.0

75.0

77.0

79.0

81.0

EURO/INR - Spot


17/24

Chana


Weekly Price Performance

Chana Futures declined in the initial part of the last week and made new low of

Rs 2528 as abundant supplies exerted pressure on the prices. However, prices

recovered later on reports of crop damages due heavy rains in kharif pulses

going states.

Chana August futures settled 2.19% higher w-o-w.

Kharif Pulses sowing up 86 percent yoy

As per the data released by the ministry of Agriculture, area under kharif Pulses

stood at 79.50 lakh ha as on 2nd August 2013, up by 26.2 percent compared to

the corresponding period last year.

Tur acreage stood at 32.68 lh (26.60 lh), while area under Urad bean was up at

18.55 lh (16.62 lh). The area under moong was up at 18.21 lh (12.16 lh).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 grain

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

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

According to estimates released on 22nd July 2013, Total pulses output for

2012-13 season has been pegged at record 18.45 mn tn.

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

Buy NCDEX Chana Aug between 2720 2700, SL 2520, Target 2950/3000


18/24

Turmeric

Source: Agriwatch & Reuters



Turmeric Futures continued to traded on a bearish note last week on the back of

huge carryover stocks and touched a new contract low of `4796 per qtl. Good

sowing as well as rains in the Turmeric growing regions have also pressurizedprices. Demand from the upcountry markets is also reported to be weak.

The spot as well as the Futures settled sharply lower by 4.77% and 7.47% w-o-w.

Imposition of Margins on the short side

The regulator has increased margins on the short side of all the running and yet to

be launched contracts w.e.f 6th August 2013.

Better than expected exports

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

Sowing of Turmeric for the 2013-14 season

The area covered under Turmeric in A.P. as on 31/07/2013 is reported at 0.39

lakh ha against 0.4 lakh ha last year and a normal sowing of 0.46 lakh ha. Normal

sowing for the season 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 Huge carryover stocks as well as good sowing of turmeric this season may

continue to mount pressure on the prices. Good rains are also expected to

increase the yield in the coming season. However, imposition of margins on the

short side coupled with overseas demand for the spice may support prices at

lower levels. Domestic demand may also improve in the coming days ahead of the

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

may affect the acreage as well as the yield of the crop.

Weekly Strategy NCDEX Turmeric Aug- Trend Sideways S1 - 4700, S2 -4550, R1 - 5100, R2 - 5330 .


Source: Reuters & Angel Research.


19/24

Jeera

Source: Ministry of Agriculture, Gujarat.



Jeera futures opened lower last week due to higher arrivals coupled with good

rains in the main jeera sowing belt. However, prices recovered from lower levels

on good export as well as domestic demand. Arrivals also declined at lower levels.

The spot as well as the July Futures settled 0.44% and 0.83% 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 this week. Overseas demand as well as

expectations of improvement in domestic demand in the coming days may

support prices. However, higher production in 2012-13 coupled with good rains in

the jeera sowing belt may cap sharp gains and pressurize prices at higher levels.

Overseas demand is expected to remain strong as other exporting nations are not

supplying.

Weekly Levels

NCDEX Jeera Aug Trend Sideways- S1 - 12900, S2 -12620, R1 -13380, R2 - 13650.


Source: Reuters & Angel Research.


20/24

Soybean


Weekly price performance

Soybean prices gained sharply in the early part of the last week on reports of crop

damages in MP and Maharashtra due to excessive rains. However, weakness in the

international markets along with liquidation of old stocks by the farmers in thedomestic markets exerted downside pressure on the soybean prices in the later

part. NCDEX soybean prices to settle marginally higher by 0.3% last week.

CBOT Soybean futures corrected last week on the back of favorable weather in US

for soybean and settled 1.39% lower.

Higher Soy acreage to offset losses caused due to heavy rains

Incessant rains in the past two weeks in the major soy growing belt of MP and

Maharashtra have caused damaged to the standing soy crop. However, marginal

losses may not impact much on the output as acreage is significantly higher at record

118.76 lh , up by 15 percent compared to the same period last year.

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 at

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

12. Total nine Oilseeds production is pegged at 31 MT in 2012-13, slightly higher

than 29.79 MT achieved in the previous year.

Favorable Weather Pushes Corn, Soybean Prices Lower

Soybean prices were lower this week as cool temperatures combined with increasedrainfall are starting to raise soybean production prospects.

Outlook Despite reports of crop damages, we expect soybean price to remain under

downside pressure as reported acreage under this crop is signifincalty higher

However, if excessive rains continue in the coming week then it may damage the

crops, thus brining reversal in the prices.

Strategy

Sell NCDEX Soybean Oct between 2980 - 3000, SL - 3150, Target 2800/2750


21/24

Refine Soy Oil and Crude Palm Oil


Weekly price performance

Soy oil as well as MCX CPO traded with a positive bias last week and settled

3.36% and 0.06% higher respectively on account of festive demand coupledwith a sharp depreciation in the Rupee. an increase in the soybean prices on

reports of crop damage also lent support to soy oil prices. However,

comfortable imported edible oil stocks capped sharp upside.

Global Scenario

Exports of Malaysian palm oil products in July increased 4.2 percent to

1,406,935 tonnes from 1,350,311 tonnes shipped during June.

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 August 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 65 670, SL 690, Target 635/630.

Buy MCX CPO Aug between 490 485, SL 475, Target 505/510.


22/24

Sugar



Sugar prices traded with a negative bias and settled 0.93% lower last week as the

supplies in the domestic markets are ample. Good rains in the major sugarcane

belts have also eased cane output concerns. However, export demand as well asan increase in the import duty on sugar have limited the downside.

ICE as well as LIFFE Sugar traded on a higher last week gaining 1.94% and 2.13%

on reports that frost damaged sugarcane in Brazil. Increasing demand for ethanol

in has lead to diversion of more cane towards ethanol.

Sugarcane acreage down 3.06 percent as on 2nd August

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

lakh ha as compared to 50.06 lakh ha last year.

Frost damages unharvested cane, dry weather to boost crushing According to Datagro, frost in Southern Brazil towards the end of July damaged

about 18 percent of 365 mn tonnes of unharvested sugarcane. However, dry

weather in the coming days weeks may boost the pace of cane crushing.

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.

Sugar loans due at July end repaid in cash- USDA

According to USDA, sugar loans taken by processors have been repaid in cash.

USDA bought cane from processors as they stood at risk of forfeitures.

Outlook

Sugar may trade range bound manner with a negative bias. Comfortable supplies

in the domestic markets coupled with expectations of sugar surplus situation may

exert downside pressure on prices. However, festive as well as export demand,

coupled with an increase in import duty may support prices at lower levels.

Strategy

NCDEX Sugar Aug Trend Sideways- S1 - 2977, S2 -2951, R1 - 3025, R2 - 3050

d kl k


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Cotton



MCX Cotton as well as NCDEX Kapas Futures recovered from lower levels and

settled 2.87% and 1.49% higher last week after the government relaxed norms oncotton exports by CCI.

ICE Cotton remained flat last week and settled 0.06% higher last week.

Kharif Cotton Planting up at 7.3 percent yoy

As per ministry of agriculture, cotton sowing was done on 108.52 la ha as on 2nd

Aug 2013 as against 144.87 la ha last year. Acreage is reported higher mainly in

Gujarat, where sowing is up at 26.13 la ha as on 29th July 2013 as against 21.92 la

ha during the same period last year.

India allows CCI to export cotton in 2012-13 season

Government has relaxed restrictions on the export of cotton by the state-run

Cotton Corporation of India (CCI) in the current season to end-September.

The Indian government, through the CCI and farmers' cooperative NAFED, has

bought 2.5-3.0 million bales of cotton in the current crop year. CCI has a stockpile

of around 900,000 bales.

World Inventory Forecast by 7%

Global cotton stockpiles in 2013-14 will be 7 percent higher than estimated in July

and will reach 19.81 mn tn. Inventories stood at 18.22 mn in 2012-13. production

in the 2013-2014 season will drop 3.1% from a year earlier to 25.59 mn tn.Outlook

Cotton prices this week may trade with upward bias on reports of crop damages

in Maharashtra due to excess rains. Further relaxation in cotton export norms for

CCI may also support positive market sentiments. However, if weather conditions

turn favorable this week, then we may see some correction at higher levels.

Strategy

Buy MCX Cotton Oct between 20100 - 20050, SL -19700, Target 20500/20600

C di i W kl k


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Commodities Weekly Tracker, 5th Aug 2013

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Transcript of Commodities Weekly Tracker, 5th Aug 2013