2009 daily fundamental funda.pdf · months, sowing doubt about a u.s. recovery. the dollar was was...

Daily Fundamental

Tuesday, September 01,

2009

Market at a Glance

Monsoon Watch

Top Gainers

Exchange Commodity Price Chg %

NCDEX MILD STEEL INGOTS Sep09 23340 1.92

NCDEX CARDAMOM FUTURE Sep09 854.25 1.09

NCDEX TURMERIC FUTURE Sep09 7669 0.87

MCX SILVER FUTURE Sep09 23822 0.12

MCX GOLD FUTURE Oct09 15125 0.03

Top Losers

Exchange Commodity Price Chg %

MCX CRUDE OIL FUT Sep09 3431 -3.41

MCX COPPER FUT (MCX) Nov09 307.15 -3.4

NCDEX GUARSEED JODPR FT Oct09 2115 -3.03

NCDEX GUAR GUM JDHPR FT Oct09 4600 -2.56

NCDEX SOYBEAN A FUTURE Sep09 2249.5 -2.53

♦ Yesterday’s cyclonic circulation over north Bay of Bengal and

neighborhood has become a low pressure area at 0830 hours

IST of today and now lies over west central Bay of Bengal and

adjoining coastal Orissa.

♦ The axis of monsoon trough passes through Bikaner, Deesa,

Jabalpur, Raipur, Center of low pressure area and thence

southeastward to east central Bay of Bengal.

♦ Monsoon was active / vigorous over Orissa, Maharashtra,

Karnataka, Coastal Andhra Pradesh and Telangana during

past 24 hours.

♦ Isolated heavy to very heavy rainfall is likely over Orissa,

Chhattisgarh, south Madhya Pradesh, Madhya Maharashtra,

Marathwada, Vidarbha, north Andhra Pradesh, Konkan &

Goa and coastal Karnataka.

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banks that SOEs reserved the right to default on contracts, Caijing magazine quoted an unnamed in-dustry source as saying in an article p u b l i s h e d o n S a t u r d a y . The U.S. dollar rose against the yen and euro in light trade on Friday as mixed economic reports from around the world left traders guess-ing about the underlying health of the global economy. Data showing Japanese deflation and unemploy-ment at record levels and a sharp slide in household spending kept the yen under pressure two days ahead of Japan's general election. Euro-pean shares closed at a 10-month closing high, while a rise in oil prices helped lift the Australian dollar to a two-week high, as did expectations that Australian interest rates will rise by year end. But the euro fell along with U.S. stocks, which dipped after data showed U.S. consumer confi-dence fell to its lowest level in four months, sowing doubt about a U.S. Recovery. The dollar was was down about 0.4 percent at $1.4296 against

the Euro. Separate U.S. data showed consumer spending rose as expected in July but incomes remained flat. Trad-ing conditions remained light as they have all week, with many desks thinly staffed for summer vacation, analysts said. Many added that next week should provide a better gauge of the economic situa-tion, with a reports on U.S. manufacturing and service sector activity and employ-ment due.

Today important data which includes ISM manufacturing as well as construction spend-ing will be declared. We ex-pect ISM manufacturing to rise which will be a positive indicator for the U.S econ-omy. This will also lead to gold prices rising. We con-tinue to hold $960 as our target for this week.

.Chicago PMI rises

The Institute for Supply Management-Chicago said on Monday its index of Midwest business activity rose in August to 50.0 from 43.4 in July. Economists polled by Reuters had forecast an August figure of 48.0.

Precious Metals

Events

Economic Calendar

Da i ly Fundamenta l

Rise in Chicago PMI is

good news for U.S

economy.

Gold edged back above $950 an ounce on Tuesday, after falling 0.5 percent the previous day on selling by short-term investors due to caution in the face of tumbling Chinese equities and a fall in oil p r i c e s . U.S. gold futures for December delivery were at $952.30 an ounce. On Monday the contract fell $5.30 to $953.50 on the COMEX. The world's largest gold-backed ex-change-traded fund, the SPDR Gold Trust , said holdings stood at 1,061.83 tonnes on Monday, un-changed since Aug. 25.

A report that Chinese state-owned companies will be allowed to walk away from loss-making commod-ity derivative trades provoked an-ger and dismay among investment bankers on Monday as they feared it may set a damaging precedent. The State-owned Assets Supervi-sion and Administration Commis-sion, the regulator and nominal shareholder for state-owned enter-prises (SOEs), told six foreign

Date Time Event Survey Prior

09/01/2009 07:30:00 PM US ISM Manufacturing 50.6 48.9

09/01/2009 07:30:00 PM US Pending Home Sales MoM 1.70% 3.60%

09/01/2009 07:30:00 PM US ISM Prices Paid 57.3 55

09/01/2009 07:30:00 PM US Construction Spending MoM -0.10% 0.30%

09/01/2009 07:30:00 PM US Pending Home Sales YoY 1.70% 9.20%


Base Metals

Energy

Copper dropped the most in two weeks, tracking losses in New York and Shanghai after a plunge in Chinese stocks raised concern about weakening demand from the world’s largest metals consumer.

Copper fell as much as 3.6%, pac-ing a decline in industrial metals on the LME, as it resumed trading after a holiday. The Shanghai Composite Index slumped the most in 15 months yesterday and entered a bear market on concern slower lending growth may derail a rebound in the world’s third-largest economy.

The LME is catching up with the losses we saw in New York and Shanghai yesterday. The markets were overdue for a correction after such an extended rally and this is exacerbating the decline.

The measure may fall another 25% as China’s economic recovery isn’t sustainable.

China stocks fluctuated, following the Shanghai Composite Index’s biggest decline since June 2008, as a drop by commodity producers on lower metal prices countered a gain by banks.

Investors are watching to see what the government’s policies on liquidity will be. China’s econ-omy appears to be recovering, but any sign that the pace of recovery is slowing would leave the market very vulnerable.

There’s some panic in the copper and zinc markets after China’s equities plunged. Expanding in-ventories also raised speculation that zinc production may outpace demand for the metal used to galvanize steel.

Stockpiles monitored by the Shanghai Futures Exchange climbed by 1.8% to 117,499 tons last week, the highest since intro-duction of the contract in 2007.

Investors and producers are turn-ing cautious due to signs of weaker fundamentals, and have stepped up selling.

Early gains in the dollar also hurt commodities Monday, making them more expensive for foreign buyers. Meanwhile, oil prices dropped $2.78, or 3.8%, to $69.96 a barrel.

Zinc fell to the lowest in more than a week in Shanghai as ex-panding inventories raised specula-tion supply may outpace demand for the metal used to galvanize steel.

There’s some panic in the

copper and zinc markets

after China’s equities

plunged. Expanding

inventories also raised

speculation that zinc

production may outpace

demand.


U.S. crude futures fell further below $70 , after sliding almost 4 percent the curb in Chinese bank lending dented recovery and a pick-up in energy de-mand.

NYMEX delivery was down 10 cents at $69.86 a barrel by, after settling down $2.78 on Monday, as worries about the global economy's health grew after a plunge in Chinese equi-ties. China's key stock index dived 6.74 percent on Monday to a three-month low, prompted by concern that China's government is trying to moderate economic growth and choke off some specula-tion in its stock market by tightening bank lending. The Organization of the Petroleum Exporting Countries (OPEC) next meets to consider oil out-put policy on Sept. 9 in Vienna. Bulging global oil inventories remain a major concern for OPEC member states, even as

signs of a possible global eco-nomic recovery grow, and will likely be a topic at the gather-ing, Iran's OPEC governor said on Monday. The Interna-tional Energy Agency (IEA) said in its August report, stocks in developed countries stood at around 61.7 days of forward cover at the end of June, unchanged from the previous month and only just below a peak of 62.4 days at t h e e nd o f Ma r c h . OPEC members have in the past said they would be much more comfortable if stock levels came back to a five-year average of around 52 days and Khatibi reiterated that. U.S. crude inventories likely fell 400,000 barrels last week, a preliminary poll of analysts showed ahead of weekly supply data. The poll showed that analysts think gasoline stocks declined and distillate supplies increased.

The American Petroleum Insti-tute (API), an industry group, will release its inventory report on later on Tuesday, while the U.S. Energy Information Ad-ministration, a government or-ganisation, will release its own data on Wednesday.



Palm Oil & Mustard / RM Seed Spot prices of mustard seed fell

by Rs.10 per quintal to trade at

Rs.2,710 per quintal in Jaipur

today. Sluggish demand in the

physical market pulled down the

prices. However, traders are

expecting prices to rise in up-

coming days due to poor rainfall

in key mustard seed cultivating

region. Export of rapeseed has

declined to 3.52 lakh tonnes in

April-July 2009 from 3.55 lakh

tonnes during the same period in

2009. Arrivals were reported at

Maize

Soy Bean

India corn futures for June deliv-

ery fell Wednesday on poor ex-

port demand.

Some enquiries from overseas had

supported futures early in the

session but no actual orders had

been signed by the end of the day.

India has exported about 300,000

tonnes of corn so far in 2008/09

marketing year which began in

October. It exported about 3 mil-

lion tonnes of the commodity in

2007/08.Exports are being

pinched by lower-priced offerings

from competitors like the U.S

and Brazil amid the demand

slowdown in major economies.

At close, the most-active June

contract NMZM9 on the Na-

tional Commodity and Deriva-

tives Exchange was 0.53 per-

cent down at 841.5 rupees per

100 kg.

lakh hectares against 91.31 lakh

hectares in 2008-09. Arrivals

were reported at 400 to 500 quin-

tals in Indore Mandi on the

morning of 25 August 2009.

Spot prices of soya bean seed

fell by Rs.15 per quintal to trade

at Rs.2,329 per quintal in In-

dore Mandi today. Demand was

reported to be moderate in the

physical market. However, trad-

ers are expecting prices to re-

main firm as lower rainfall in

August may affect crops in the

oilseeds growing region. Ac-

cording to Agriculture Minis-

try's latest Crop Weather Watch

Report, soya bean sowing for

2009-10 has increased to 93.68

30,000 to 35,000 sacks in Ra-

jasthan on the morning of 25

August 2009. Stock of mustard

seed at NCDEX accredited

warehouses remain at 71,553

tonnes as on 24 August


Pepper

Chilli & Turmeric

Jeera (Cumin)

Pepper prices traded on a weaker note during yester-day’s trading session. This was on the back of profit booking and speculative sell-off.

Spot prices traded steady at Rs.145-46 levels. In the inter-national market Indonesia was said to have quoted $2700 a tonne (c&f). Indian parity has gone up to $2900 a tonne (c&f). Brazil was re-portedly not aggressive and was offering B Asta at $2500-2600 a tonne (c&f).

In case of Vietnam local prices were reported to be trading at 4 0 0 0 0 D O N G f r o m 36000DONG and Malaysia pepper at 8500MR both the origin trading upbeat.

But prices on Indian comexes trade weak on the back of profit booking, speculative sell-off and revival of rains.

Going further prices are ex-pected to show upbeat move due to tight supply situation as traders don't want to part with their stocks and Vietnamese

farmers are not willing to part with their stocks on expectation of better prices.

Chilli prices traded on a weaker note during yesterday’s trading session. Market opened on a steady note with some upside but after which prices slumped and closed in negative trajec-tory.

This was primarily on the back of revival of rainfall in Andhra Pradesh which is the major producing belt for chilli in In-dia. Spot market reported trade on a positive note due to lim-ited arrivals and crop concern.

Going further markets will be taking cues from further devel-opment in rains.

Turmeric prices traded on a weaker note during yesterday’s trading session. Market opened on a steady note with some upside after which prices slumped and closed in negative trajectory. This was on the back of revival of rains and some profit booking.

On the spot front prices were reported to be trading upbeat on the back of weak supply and domestic demand.

At present futures are trading well below spot prices and we expect markets to trade upbeat to converge with spot prices on expiry.

“ S p i c e s c o u n t e r

recovers on the back of

short covering and on

expectation of revival in

demand”


Jeera prices traded on a weaker note during yesterday’s trading session. This was on the back of profit booking.

Spot market reported arrival of about 7000bags same as previ-ous day and as a result prices were reported to trade on a steady note.

In futures prices opened on a

steady note with some upside but later slumped to closed in negative trajectory.

Overall prices could get sup-ported on the back of forth-coming demand, but export demand is expected to be lim-ited on the back of better crop from middle eastern countries.


Monsoon - Update

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2009 daily fundamental funda.pdf · months, sowing doubt about a u.s. recovery. the dollar was was...

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