commodities weekly tracker 10th december 2012

7/30/2019 Commodities Weekly Tracker 10th December 2012

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Commodities & Currencies

Weekly Tracker


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Commodities Weekly TrackerContents

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 | December 10, 2012


3/20

Commodities Weekly TrackerMonday | December 10, 2012


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5/20

*Weekly Performance for January contract; Kapas - April 2013 contract.



6/20


GoldWeekly Price Performance

Spot gold prices fell 0.7 percent week on week .

The yellow metal touched a weekly low of $1,683.79/oz and closed at $1,703.04

per ounce on Friday.

On the MCX, Gold February contract ended 0.6 percent higher week on week on

taking cues on account of improved buying at lower levels and depreciation in

the rupee in the last week. Gold prices on the MCX closed at Rs.31,276/10 gms

on Friday after touching a weekly high of Rs. 31,572/ 10gms.

ETF Performance

Holdings in the SPDR Gold Trust, the world's largest gold-backed exchange-

traded fund, rose 0.34 percent to 1353.35 tonnes till December 07th, 2012 as

compared to 1348.83 tonnes till November 30th , 2012.

Factors that influenced gold prices

Worries amongst market participants over how US law makers might be able to

resolve the fiscal cliff issue.

Strength in the DX. Euro zone growth forecast lowered by the European Central

Bank exerted downside pressure on the euro, thereby supporting an upside in

the US Dollar Index. This further added to the losses of the gold prices.

Outlook

In the coming week, we expect gold prices to witness strength in coming weekon hopes that the US Federal Reserve might increase the stimulus package in the

coming meeting on Dec 11-12. Strength in the DX might cap sharp gains in the

gold prices. In the domestic markets appreciation in the Indian rupee might

exert downside pressure on the gold prices on MCX.

Weekly Technical Levels

Spot Gold : Support $1,698/1,694 Resistance $1,723/1742. (CMP: 1711.90)

Buy MCX Gold February between 31,220-31,180, SL-30,880, Target -

31,740/32,000 (CMP:31,500)


7/20


SilverWeekly Price Performance

Spot silver fell 1.1 percent in last week . The white metal touched a weekly low

of $32.49/oz and closed at $33.04 per oz on Friday.

In the Indian markets, MCX silver prices increased 2.1 percent and closed at Rs.

62,492/kg on Friday and touched a weekly high of Rs. 62,949/ kg. Depreciation

in the Indian rupee supported an upside in the silver prices.

Factors that influenced silver prices

Bearishness in the spot gold prices. Doubts amongst market participants as to

how US law makers would solve the fiscal cliff issue created bearish market

sentiments. Strength in the DX and mixed movement in the base metals pack

also acted as a bearish factor for the silver prices.

Positive data from the US and Chinese economy cushioned sharp fall in theprices.

ETF performance

On a weekly basis, holdings in the iShares Silver Trust gained by 0.7 percent to

9,829.15 tonnes till December 07th 2012 from previous week holdings of

9,829.15 tonne till November 30th 2012 .

Outlook

Silver prices in the coming week is expected to trade firm on the back of

strength in the base metals pack and positive economic data from the majoreconomies. Expectation that the US Federal Reserve might increase the

stimulus package in the coming meeting on December 11-12.

In the domestic markets appreciation in the Rupee might exert downside

pressure on the MCX Silver prices.


Spot Silver : Support $ 32.86/32.40 Resistance $33.40/33.86 (CMP: $33.32 )

Buy MCX Silver March between 62,250-62,200, SL-61,600, Target -63,300(CMP

: Rs.63,105)


8/20


CopperWeekly Price Performance

Copper, increased 0.6 percent in last week and closed at $8,038/tonne on Friday. In

the domestic markets MCX copper gained 1.7 percent taking cues from firmness in

the international prices along with depreciation in the Indian rupee.

Copper Inventories

LME Copper inventories increased by 1.7 percent in last week and stood at 2,55,200

tonnes as against 2,51,050 tonnes on 30th November 2012.

Copper inventories at warehouse monitored by the Shanghai Futures Exchange rose

by 0.5 percent to 1,97,979 tn in the w/e 07th December, 2012.

Factors that influenced copper prices

Positive economic data from the US and China indicating the two consuming nations

are on the path of recovery.

Strength in the DX along with rise in the copper inventories on LME however,

restricted sharp gains in the copper prices in last week. Additionally, worries as to

how the US law makers would be solving the fiscal cliff issue of the nation also

capped sharp gains in the copper prices. LME Copper inventories increased by 1.7

percent in last week and stood at 2,55,200 tonnes as against 2,51,050 tonnes on

30th November 2012. In the domestic market, appreciation in Indian rupee capped

sharp gains in copper prices on MCX.

Outlook

Copper prices in the coming week is expected to remain firm due to positive

economic data from the US and China. Strength in the DX along with political

uncertainty in the Italy might cap sharp gains. However, investors are also awaiting

decision on further stimulus measure from the Federal Reserve in the meeting to be

held this week. Appreciation in the Indian Rupee will cap sharp gains in the copper

prices on MCX.


Buy MCX Copper February between 440-439, SL-434, Target -449/454

LME Copper: Support $7,970/7900 Resistance $8101/8165 (CMP: $8,084.85)


9/20


Crude OilWeekly Price Performance

On a weekly basis, Nymex crude oil prices fell 3.4 percent.

On the domestic bourses, prices declined 3 percent and closed at Rs.4,691/bblon Friday after touching a weekly low of Rs.4,673/bbl on Friday.

US Energy Department Facts and Figures

As per the US Energy Department (EIA) report last night, US crude oil inventories

declined more than expectations by 2.36 million barrels to 371.76 million barrels

for the week ending on 30th November 2012. Gasoline stocks rose by 7.86

million barrels the most since 21st September 2001 and whereas distillate

stockpiles also gained by 3.03 million barrels for the last week.

Factors that influenced crude oil prices

Worries that the demand from the European region might witness a decline asEuropean Central Bank cuts the growth forecasts of the region along with

persistent worries amongst market participants over the US fiscal cliff issue

resolution.

Strength in the DX also exerted downside pressure on the crude prices on Friday.

Towards the end of the week positive data from the US and China raised hopes

that the demand is likely to increase from the two major economies of the

world.

Outlook

Crude oil prices are expected to gain strength due to favorable data from the US

and China. Unexpected decline in the US crude oil inventories is also expected to

support an upside in the crude oil prices. Concerns of fiscal cliff issue in the US is

expected to cap sharp gains in the prices. In Indian markets appreciation in the

Rupee will exert downside pressure on crude prices on MCX.


Nymex Crude Oil: Support: $84.35/82.70 Resistance $87.35/89.10 (CMP: 86.42)

Buy MCX Crude December between 4580-4570, SL-4500, Target -4700


10/20


DX/ INRWeekly Price Performance

US Dollar Index (DX) gained 0.3 percent week on week.

The Indian Rupee depreciated by 0.1 percent in the last week.

Factors that influenced movement in the DX

US Dollar rose in the last week on account of increased risk aversion in the global

markets as to how the US fiscal cliff issue might be resolved. Additionally, demand for

the low yielding currency also witnessed a rise as European Central Bank cut the regions

growth forecast for the next year and Bundesbank cut the growth forecast of the

Germany the largest economy of the European region.

However, towards the end of the session favorable jobs data from the US erased some

of the gains in the index.

Factors that influenced movement in the Rupee

Appreciation in the rupee was on account of approval of the FDI in both the houses of

the parliament.

But, towards the end of the week mixed global markets and dollar demand depreciated

the currency. Strength in the DX depreciated the Indian rupee. The rupee closed at 54.33

after touching a high 54.96 on Friday

FII Inflows

For the current month FII inflows totaled at Rs. 6147.20 crores till 07th December 2012.

While year to date basis, net capital inflows stood at Rs. 109,419.20 crores till December

07th 2012.Outlook

We expect rupee to appreciate in the current week taking cues from approval of FDI in

both the houses of the parliament. Expectations of further reforms to be announced to

revive the economy is also expected to support appreciation. Strength in the DX might

however cushion sharp appreciation in the rupee.


USD/INR MCX December : Support 54.1/53.5 Resistance 55.2/55.7(CMP:54.49)

US Dollar Index: Support 80.1/79.7 Resistance 80.95/81.3(CMP: 80.43)


11/20


EuroWeekly Price Performance

Euro increased 0.5 percent week on week.

The currency touched a weekly low of 1.2878 and closed at 1.2924 on Friday.

Factors that influenced movement in the Euro

European Central Bank cut the growth forecast of the region in 2013 creating bearish

market sentiments coupled with Bundesbank lowering the growth forecast of the

Germany in 2013. Strength in the DX also exerted downside pressure on the currency.

News

French Gov Budget Balance was at deficit of 94.6 billion Euros in October as against a

previous deficit of 85 billion Euros a month ago.

French Trade Balance was at a deficit of 4.7 billion Euros in October from earlier

decline of 5 billion Euros in September.

German Industrial Production declined by 2.6 percent in October as compared to

decline of 1.8 percent a month earlier.

European Revised Gross Domestic Product (GDP) remained unchanged at -0.1 percent

in third quarter of 2012.

German Factory Orders increased by 3.9 percent in October as against a decline of 3.3

percent a month ago.

European Retail Sales declined by 1.2 percent in October with respect to previous fall

of 0.2 percent a month earlier. European Minimum Bid Rate remained unchanged at0.75 percent in December.

Outlook

We expect the Euro to trade with a negative bias due to political uncertainty caused by

the resignation of the Mario Monti and hampering the efforts taken by the government

to curtail debt of the nation. Additionally, persistent fiscal cliff issues in the US might

also exert downside pressure on the currency .


EURO/USD SPOT: Support 1.281/1.273 Resistance 1.302/1.31 (CMP:1.291)


12/20

Chana


Weekly Price Performance

Chana continued to decline during the early part of the week on higher sowing

prospects coupled with higher imports. However, prices recovered and settledmarginally lower by 1.6% towards the week end on account of short coverings.

Pulses sowing improved, but still below last years level

Total pulses acreage as on 7th December 2012 recovered significantly and stood

at 116.11 lakh hectares, down marginally by 0.9% yoy. As on 30th November

pulses acreage was down by 6.4 percent to 102.49 lakh ha.

Chana sowing picked pace mainly in Rajasthan, where it is up by 1% at 14.21

lakh hectares compared to last week when acreage was down by 19.2%. In

Maharashtra Chana acreage is up by 46% at 8.64 lakh ha as on 7th Dec, 2012.

While in AP it is up by 18.36% at 5.8 lakh ha as on 5th Dec.

Chana production up 53% in Australia

Total chickpea production in 201213 is estimated to have increased to a record

of around 7.46 lakh tn as compared with 4.85 lakh tn in 2011-12.

India imports Chana mainly from Australia and Canada and higher availability in

these countries at comparatively cheaper rates is seen boosting imports of

Chana to meet the domestic shortfall. Australian Chana are quoted at lower

rates -USD 625-635 per MT. (Source: Agriwatch)

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 prices are expected to remain under downside pressure in the coming

weeks on account of higher area under Chana cultivation coupled with rising

imports from Australia.

Weekly Strategy

Sell NCDEX CHANA Jan between 4100-4150, SL -4290, Target - 3890 / 3860


13/20

Black Pepper

Source: Reuters & Angel Research



Pepper Feb Futures traded on a negative note last week on expectations of better

international as well as domestic output this year. The ongoing probe by FMC intoan alleged market manipulation of pepper futures contracts by certain market

participants have also pressurized prices. However, winter demand supported

prices in the spot. Harvesting of the new crop is expecting to start mid December.

The Spot settled 2.14% higher while the Feb Futures settled 0.96% lower w-o-w.

Indian Pepper is being offered at $7,700/tn (c&f) while Indonesia is offering its

Austa at $6,500/tn and Vietnam is offering Austa at $7,000/tn.

Averages daily arrivals stood at 16 tn while offtakes stood at 15 tn last week .

Expectations of higher output in 2012-13

According to market sources, Pepper production is expected around 63,000 tn in2013, while the IPC projects Indias 2013 production at 70,000 tn..

Global updates

Pepper imports by U.S. the largest consumer of the spice declined 26% during

Jan-Sept 2012 period to 41,923 tn as compared to 52,489 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 3.27 lk tn vis--vis 3.17 lk tn in

2011.Exports of Black Pepper from Vietnam during January till September 2012 is

reported at 80,433 mt. Pepper production from Vietnam decreased to 1 lk tn in

2012 from 1.1 lk tn in 2011.

Outlook

Pepper Futures may correct on expectations of higher output coupled with weak

export demand for Indian pepper. The ongoing probe by FMC into allegations of

market manipulation may also keep prices under pressure. However, low stocks

as well as winter demand in the domestic markets may support the prices.

Weekly Strategy NCDEX Jan Pepper Trend Sideways. S2- 32300, S1- 33200, R1- 35000, R2- 35800.

Source: Reuters & Angel Research.

35000

37000

39000

41000

43000

45000

47000

Price Trend: Pepper Spot vis-a-vis Futures

Pepper S pot (Rs./qt l) Pepper Fut ures (Rs./qt l)

2158722900

28336

30043

3430832318

3821938282

41973

42420

38371

0

5000

10000

15000

20000

25000

30000

35000

40000

45000Prices (Rs/qtl)

Monthly Average Spot Prices of NCDEX Black Pepper


14/20

Turmeric

Source: Agriwatch & Reuters

Commodities Weekly Tracker


Turmeric Futures traded on a bullish note last week week as traders expecte

upcountry orders in the coming days. Also, stockists were reportedly buying due

to low arrivals. There are reports that the Turmeric Farmers Association of India

have decided to fix their own Minimum Support Price at Rs. 10,000/qtl. 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.

Stocks in Nizamabad reported around 6.5 lakh bags, which is lower than Erode.

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 April Futures

settled 1% and 3.84% higher.

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

Turmeric production in 2012-13 is expected around 64-65 lakh bags. Production

in 2011-12 is projected at historical high of 10.62 lakh tns. .

Outlook

Turmeric prices are expected to trade on a positive note this week as traders

fresh export orders from the upcountry markets. Also, low arrivals are expected

to support prices. demand from stockists may also be supportive for the prices.

however, commencement of harvest of the early crop in the coming weeks may

cap sharp upside. Market expectations of an improvement in the output due to

improvement in the weather conditions may also put some pressurise on the

prices.

Weekly Strategy Buy NCDEX April Turmeric between 5750-5850, SL-5500, Target 6230/6280



3000

3500

4000

4500

5000

5500

6000

6500

Price Trend: Turmeric Spot vis-a-vis Futures

Turmeric Spot Rs./qtl Turmeric Futures

3400

3900

4400

4900

5400

5900

6400

0

2000

4000

6000

8000

10000

12000

14000

16000

18000

1-Jun-12 1-Jul-12 1-Aug-12 1-Sep-12 1-Oct-12 1-Nov-12

PriceArrivals

Turmeric - Prices vis-a-vis Arrivals

Arrivals (in bags of 75 kg each) NCDEX Spot Price (Rs/qtl)


15/20

Jeera

Source: Ministry of Agriculture, Gujarat.

Commodities Weekly Tracker


Jeera Futures traded in a range bound manner last week. Prices consolidated

after correcting over the last couple of weeks due to the ongoing sowing. Sowing

in Gujarat was reported at 2.219 lk ha as on 3rd Dec, compared with 1.926 lk ha in

the same period last year. Also, export demand supported prices in the spot. Total

stocks are reported at around 6-7 lk bags, as against 5-6 lk bags last year.

The Spot settled lower by 0.02% while the Futures settled 0.15% higher w-o-w.

Effect of higher production offset by higher exports

Indias 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 lower production in Syria and Turkey, coupled with the ongoing tensions

between them, exports are not taking place and have been diverted to India. They

have stopped shipments. Export enquiries may also 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 $2,750/tn (c&f).

Outlook

Jeera prices may trade with a negative bias this week on reports of good sowing

in Gujarat. However, fresh export demand may limit sharp downside.

Weekly Levels Sell NCDEX March Jeera between 15500-15600, SL-16100, Target 14750/14650.


0

1

1

2

2

3

3

Production,

in

LakhT

onnes

Production of Jeera in India


11,000

12,000

13,000

14,000

15,000

16,000

17,000

Price Trend: Jeera Spot vis-a-vis Futures

Jeer a S pot (R s/qt l) Jeer a F ut ur es (R s. /qt l)


16/20

Soybean


Weekly price performance

NCDEX Soybean futures recovered and settled 3.7%on higher soy meal exports

declining arrivals and on expectations USDA would make downward revision in

the brazil and Argentina soy crop estimates. CBOT settled 2.3% higher wow on

account of higher Chinese imports in November.

Soy meal exports rose 30 percent in November

Exports of soy meal rose to 517,103 tonnes in November from 397,659 tonnes a

year ago. Overall oil meal exports in the first eight months of the year beginning

April fell to 2.4 million tonnes from 3 million tonnes in the previous year.

Rabi oilseed planting at 7.19 mn ha as on 7th Dec

Rabi oilseeds sowing has gained momentum post Diwali and is up by 0.6% as on

Dec 07 at 7.19 mn ha. The sowing of major rabi oilseeds, i.e. mustard seed, is upat 6.5 mn ha compared with 5.96 mn ha last year.

China Nov soy imports up 3.2 pct month on month

China, the world's largest soy buyer, imported 4.16 mn tn of soybeans in

November, up 3.2% from October with crushing margins improving from a month

ago . Imports for the first 11 months stood at 52.49 million tonnes, up 11.4

percent on the year.

USDA to release its monthly crop report tomorrow

USDA monthly demand supply report is scheduled to be released on 11th

December 2012. For soybeans, little change is expected in USDA's record-large

forecasts for Brazil and Argentina, the world's No. 1 and No. 3 soy suppliers

respectively.

Outlook

Soybean complex may extend the gains of previous week as demand continues to

remain robust while supplies may dwindle in the domestic markets. Also, market

will take cues from the USDA monthly crop report to be released on Tuesday.

Strategy

Buy NCDEX Soybean Jan between 3200-3250, SL -3060, Target - 3460 / 3490


17/20

Refine Soy Oil and Crude Palm Oil


Weekly price performance

Edible oil complex witnessed mixed sentiments during the last week, with soy

oil witnessing positive sentiments on the backs of higher demand, while crudepalm oil plunged as higher palm oil stocks weighed down the sentiments.

CPO prices at MCX and BMD settled 2.4% and 1.5% lower w-o-w. At NCDEX

ref soy oil remained firm and settled higher by 0.9% on account of good

demand of soy oil on account of lower availability of other oilseeds.

Global Scenario

Malaysia's November palm oil stocks rose 2.3 percent to a record high of

2,562,900 tonnes from a revised 2,505,713 tonnes in October.

Exports of Malaysian palm oil products for Dec 1-10 rose 0.4 percent to

516,841 tonnes from 514,798 tonnes shipped during Nov 1-10. Indonesia 2013 Palm oil output is likely to rise by as much as 10% on year to

around 2.4 mn tn as more plantations mature.

Domestic Scenario

The country's oilseed crushing industry had made a proposal to Farm Minister

in November, seeking a 10% tax on imports of crude edible oil. However,

Food Minister rejected the same.

In October, India's imports of refined palm oil fell sharply 45% to 61544 tn as

an import duty hike aimed at protecting the local refining industry from

cheaper Indonesian supplies of the edible oil took effect.

India's 2012-13 edible oil imports seen at record 10.31 mn tn, up 5.4% on

year an industry expert said in glob oil conference. India's 2012/13 palm oil

imports seen at 8.1 mn tn vs. 7.5 mn tn yr earlier .

Strategy: Refine Soy Oil

Buy NCDEX Refined Soya Oil Jan between 680-685, SL -660, Target - 715 / 720

Strategy : Crude palm Oil (CPO)

Buy MCX CPO Dec between 405-410, SL -390, Target - 437 / 440


18/20

Sugar



Sugar futures which declined initially on account of higher supplies, recovered

sharply and settled range bound after the hike in UP cane price by almost 16% for2012-13 season. Liffe white sugar which recovered marginally amid short

coverings, declined sharply after the kings man raised its sugar surplus forecast .

UP announces 16% hike in cane prices

The UP state government on Friday last week fixed the state advisory price (SAP)

for early maturing variety of cane at Rs 290 per qtl against Rs 240 in the previous

season, for common variety Rs 280 per qtl against Rs 245 and for late maturing

variety, Rs 275 per qtl against Rs 240. The price is about 71 percent higher than

the floor price fixed by the federal government at Rs 170/qtl.

Sugar output down marginally by 2.59 percent at 23.3 lakh tn till date Sugar output has marginally declined to 23.30 lakh tn in the first two months (Oct

& Nov) of the 2012-13 marketing year against 23.92 lakh tn in the year-ago.

Higher quota of 70 lakh tn for December 2012-March 2013

In a move to curb any further spike in sugar prices considering lower sugar

production for the marketing year 2012-13, Government has allocated total 70

lakh tn of non-levy sugar quota for Dec-March 2012-13 period which is higher

from 59.5 lakh tn sugar quota allocated by government last year same period .Kingsman raises 2012/13 sugar surplus forecast Consultancy Kingsman SA revised up its 2012-13 world sugar surplus estimate to

9.2 mn tn raw value last week.

Outlook

Sugar prices may extend the gains of the previous week on account of hike in

cane price in UP. However, sharp gains may be capped as crushing which was

delayed by a month will not start at full pace.

Strategy

Buy NCDEX SUGAR Jan between 3250-3300, SL -3130, Target - 3480 / 3500


19/20


20/20

commodities weekly tracker 10th december 2012

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