Commodities & Currencies

Weekly Tracker

Commodities Weekly Tracker

Monday | August 12, 2013

Contents
Returns Non Agri Commodities Currencies Agri Commodities

Services & Manufacturing Activity in Emerging Economies European Services PMI & US non-manufacturing PMI
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

Commodities Weekly Tracker

Monday | August 12, 2013

Global Equities Performance (%)

2.5 2.0 1.5 1.0 0.5 0.0 (0.5) (1.0) (1.5) (2.0) (2.5) (3.0) (3.5) (4.0) (4.5) (5.0) (5.5) (6.0)

2.4
0.8

(0.8)

(1.1)

(1.5)

(1.7)

(2.0)

(2.0)

(2.2)

(5.9)

Commodities Weekly Tracker

Monday | August 12, 2013

Currencies Weekly Performance

2.2 2.0 1.4 1.0 0.0 (0.2) (1.0) (2.0) (3.0) (2.8) (0.7) (1.0) 0.7 0.5

Commodities Weekly Tracker

Monday | August 12, 2013

Non-Agri Commodities Weekly Performance

5.3 5.0 4.0 3.0 2.0 1.0 0.0 (1.0) (2.0) (3.0) (4.0) 3.9 3.8 3.2 3.2 3.0

0.2 (0.9)

(3.9)

Commodities Weekly Tracker

Monday | August 12, 2013

Non-Agri Commodities Weekly Performance

5.3 5.0 4.0 3.0 2.0 1.0 0.0 (1.0) (2.0) (3.0) (4.0) 3.9 3.8 3.2 3.2 3.0

0.2 (0.9)

(3.9)

Commodities Weekly Tracker

Monday | August 12, 2013

*Weekly Performance for August contract *Soybean, Cotton October contract *Kapas- April 2014 Contract

Commodities Weekly Tracker

Monday | August 12, 2013

Services and Manufacturing Activity Slows in Emerging Economies

Services PMI in the emerging economies like BRIC (Brazil, Russia, India and China) countries declined in the month of July. While on the other hand, advance economies like Euro Zone, Japan and US showed an improved numbers for the last month. Any reading of Services PMI below 50-mark in not good for the economy and shows signs of slowdown in the economic growth. But on the other hand, a reading above 50-level indicates economic growth in the country. A sharp rise in US non-mfg PMI was seen to 56-mark in July from earlier rise of 52.2-level in June. Indias Service PMI fell the most by 3.8 points to 47.9-mark in the month of July.

Indias Private Sector output fell to the lowest in the month of July. Output had fallen the most in the last month since the beginning of the 2013. From January 2013, onwards output was seen on a declining trend till April 2013 thereafter a recovery was seen in May 2013.

But from June 2013 the trend again continued to be bearish and dropped sharply to 48.4-level in the last month.

Commodities Weekly Tracker

Monday | August 12, 2013

European Services PMI Rises

Advance Economies Services PMI Data
50 49 48 47
55 54 53 52 56

US ISM Non-Manufacturing PMI

46
45 44 43 42 41 40 Jan-13 Feb-13 Mar-13 Spanish Apr-13 Italian May-13 Euro Zone Jun-13 Jul-13
50

51

Jan-13

Feb-13

Mar-13

Apr-13

May-13

Jun-13

Jul-13

European Services PMI

Spanish Services PMI for the month of July rose to 48.5-mark from 47.8-level in the month of June. Italian Services PMI for July increased to 48.7-level from 45.8-mark in June Euro zone services PMI rose from 49.6-mark in June to 49.8-level in July Data from the Euro Zone indicated improvement in the economy, however expansion is yet to be seen Improvement can be attributed to the fact that the rate of decline in new orders has slowed down for the first time in July 2013 after witnessing a sharp decline since August 2011

US ISM NON-MANUFACTURING ACTIVITY

ISM Non-Manufacturing PMI for the month of July showed a significant increase to 56-mark in the month of July from 52.2-level in the month of June Services industry registered the highest growth in five months, showing that the economy is gaining momentum This 3.8 point gain in July is the highest rise since February 2008

Since the US is a service oriented economy, this growth becomes an even more important indicator pointing towards improvement in the economy

Commodities Weekly Tracker

Monday | August 12, 2013

Gold
Weekly Price Performance
Spot Gold prices gained around 0.2 percent last week, after touching a weekly high of $1319.30/oz on Monday. During the week prices traded on a mixed note and kept falling in early part of the week on account of fall in SPDR gold holdings. The yellow metal bounced back on Thursday as a result of rise in US jobless claims that eased concerns over the Federal Reserve pullback of its stimulus measures. On the MCX however, the yellow metal prices fell around 2.1 percent in last week as Rupee appreciation exerted downside prices. Prices touched a low of Rs27,342/10gm on Wednesday but recovered over the period. The currency factor is playing a crucial role in prices on the MCX due to Rupee appreciation and this is acting as a negative factor for gold prices in the domestic markets.
MCX and Comex Gold Price Performance
1,800 31,000
1,700

30,000

29,000

1,600

28,000

1,500

27,000

1,400

26,000

1,300

25,000

1,200

SPDR Gold Holdings

During the week, Holdings in the SPDR Gold Trust continued to decline and slipped to 909.33 tonnes on Thursday but recovered and closed at 911.13 tonnes as on 9th August 2013.
However, when compared to the last week gold holdings fell around 0.8 percent from previous level of 918.64 tonnes as on 2nd August 2013. On a year till date basis, SPDR gold holdings fell around 32.5 percent from 1350.82 tonnes in last trading session of the previous year. Net gold imports of China from Hong King declined around 5 percent in June13 as lower prices prevented investors from buying gold.
1,650 84.0 1,550
83.0
MCX- Near Month Gold Futures - Rs/10 gms Comex Gold Futures - $/oz

Spot Gold Vs Dollar Index

85.0

Chinese gold imports from Hong Kong decline

1,450
82.0 1,350

81.0

Additionally, the Chinese government also reduced the use of bullion in financing deals.
As per the Hong Kong Statistics department, China imported around 101 tonnes of gold in June as compared to 106 tonnes a month ago.

1,250

80.0

1,150

79.0

Spot Gold -$/oz

US Dollar Index

Commodities Weekly Tracker

Monday | August 12, 2013

Gold
Gold Premiums in India Seen Extending Climb to Record on Curbs
India which was the world's biggest gold consumer in last year saw an increase in gold premiums which extended its advances in the country.
Fees paid by jewelers to banks jumped from $30 in the week ended on 2nd August to $40 an ounce over the London cash price. This is due to the RBI efforts to curb gold imports by linking imports to exports, leading to a significant decline in imports As per the Commodity Futures Trading Commission (CFTC) data, money managers has cut their long position by 27 percent to 48,103 futures and options. Holdings of short contracts have gained around 26 percent.

CTFC data

Outlook
Over the week, we expect gold prices to trade higher on the back of upbeat global market sentiments and due to recovery in SPDR gold holdings In the Indian markets, appreciation in the Rupee will cap gains.
Spot Gold : Support 1,303/1,284 Resistance 1,333/1,351. (CMP: $1329.5) Buy MCX Gold October between 27,840-27,800, SL-27,500, Target 28,270/28,600 (CMP: Rs.28,333)

Weekly Technical Levels

Commodities Weekly Tracker

Monday | August 12, 2013

Silver

Weekly Price Performance

Week-on-week, silver prices gained around 3.2 percent and witnessed a bullish trend. Over the week, prices in dollar terms touched a high of $20.58/oz in the last trading session of the week. Prices on the MCX gained more than 1 percent but appreciation in the Rupee capped sharp gains in prices on domestic bourses. Holdings in the iShares Silver Trust remained unchanged at 10,396.73 tonnes in the last week. Month-to-date, iShares Silver Trust Holdings fell around 0.2 percent from 10,419.04 tonnes as on 31st July 2013. While on a year-to-date, holdings have gained by more than 3 percent from 10,084.96 tonnes in the last trading session of the prior year. Positive economic data from major global economies. Weakness in the DX along with positive movement in gold prices and base metals complex. Rupee appreciation capped sharp gains in prices in the Indian markets During the week, we expect Silver prices to trade higher on the back of rise in gold prices coupled with upside in base metals complex. Further, expectations of favorable economic data from major global economies will support an upside in prices. In the Indian markets, appreciation in the Rupee will cap sharp gains. Spot Silver: Support 20.08/19.58 Resistance 21.04/21.54. (CMP:$21.01) Buy MCX Silver September between 42,250-42,200, SL-41,500, Target 43,350/43,800. (CMP: Rs.43,834)
Spot Silver -$/oz US Dollar Index

MCX and Comex Silver Price Performance

58,500
32 30

53,500

28 26

ETF Performance

48,500

24 22 20

43,500

38,500

18

Factor affecting the silver prices

MCX- Near Month Silver Futures - Rs/ kg

Comex Silver Futures - $/oz

Spot Silver Vs US Dollar Index

32.0 30.0 28.0 26.0 24.0 22.0 20.0 18.0 81.0 80.0 79.0 85.0 84.0
83.0

Outlook

82.0

Weekly Technical Levels

Commodities Weekly Tracker

Monday | August 12, 2013

Copper
Weekly Price Performance

LME copper prices gained around 3.8 percent in the last week, while prices on the MCX stood at a 3 percent as appreciation in Rupee prevented further upside in Indian prices. The red metal traded above crucial $7000/tonne in the last week on the back of favorable economic data from China showing signs of economic growth.

LME and MCX Copper Price Performance

8,300 8,100 7,900 7,700 7,500 7,300 7,100 6,900 6,700 455 445 435 425 415 405 395 385 375 365

Copper Inventories

On the LME last week, copper inventories declined 2.3 percent to 594,500 tonnes, thus acting as a support to prices. While on the Shanghai, Copper inventories fell sharply around 7.6 percent to 151,148 tonnes for the week ending on 9th August 2013.
Imports in Chinese economy rose by 10.9 percent in the last month which beat the estimates. Further, exports also grew by 5.1 percent in July which came more than forecast of 2 percent. Industrial production in China increase showing signs of economic growth which has the main demand for metals. The latest CFTC report indicated that investors trimmed its net short holdings in copper to 14,660 contracts from 26,924 contracts, last week . The decline in net short positions is on the back of rise in copper prices around 4 percent in prior week. A bullish trend is expected in case of copper on the back of favorable economic data from China in the last week Further, favorable economic data from the US and Euro Zone will also support upside. LME Copper: Support 7160/7020 Resistance 7410/7550. (CMP: $7258.0) Buy MCX Copper August between 437-435, SL-430, Target -448. (CMP: Rs 443.0)

Chinas imports and exports increased

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

LME Copper v/s LME Inventory

668,000 618,000 568,000 518,000 468,000 418,000 368,000 318,000 8,300 8,100 7,900 7,700 7,500 7,300 7,100 6,900 6,700

Net short positions in copper increase

Outlook

Copper LME Inventory (tonnes)

LME Copper Future ($/tonne)

Weekly Technical Levels

Commodities Weekly Tracker

Monday | August 12, 2013

Crude Oil Weekly Price Performance

Nymex crude oil prices declined around 1 percent and closed at $105.97/bbl last week. Expectations of over supply from Libya exerted downside pressure on prices along with weak global market sentiments which led to estimates of decline in demand for fuel. The MCX near-month crude oil contract slipped around 2 percent on account of appreciation in the Indian Rupee to close at Rs.6394/bbl on Friday. Inventories As per the US Energy Department (EIA) and American Petroleum Institute (API) report, US crude oil inventories declined by 1.32 million barrels and 3.66 million barrels respectively for the week ending on 2nd August 2013. Libya signals rise in crude oil production & IEA cuts demand outlook Libyas Oil Minister Abdulbari Al-Arusi said that country will increase in its production for the next month. It is expected that country will pump around 800,000 barrels a day in next month from 700,000 in July. The International Energy Agency (IEA)has cut the global oil demand for current as well as next year on account of forecast of slow global economic growth. The agency cut the global oil demand by 30,000 barrels per day to 895,000 barrels per day in current year and reduced 100,000 barrels a day to 1.1 million barrels a day for 2014. CFTC data As per the CFTC report, net long positions for crude oil fell for second straight week by 2.5 percent to 310,827 contracts.
Nymex and MCX Crude Oil Price Performance
6,700 6,500 6,300 6,100 5,900 5,700 5,500 5,300 5,100 4,900 4,700 114.0 110.0 106.0 102.0 98.0 94.0 90.0 86.0

MCX crude oil (Rs/bbl)

NYMEX Crude Oil ($/bbl)

Crude Oil Inventories (mn barrels)

400
395.3 395.5 393.8 388.6 384
381.4 397.6

395 390 385 380 375 370 365 360

363.1 361.3 360.3 369.1 376.4
371.7

394.1

388.9 387.6

394.9 388.6

394.6 391.3

394.1

385.9 382.7 377.53

383.8

Outlook Crude oil prices are expected to trade with a positive bias over the week on the back of favorable economic data from China in the last week and expectations of upbeat economic data from major global economies. Sharp upside will be capped as a result of forecast for rise in Libyas production and cut in global oil demand by IEA.
Weekly Technical Levels Nymex Crude Oil: Support: 105.30/102.90 Resistance 108.40/110.80. (CMP:$105.97) Buy MCX Crude August between 6365-6345, SL-6300, Target -6550. (CMP:Rs 6437)

372.2

373.9 367 364.2

364.6

363.3

Commodities Weekly Tracker

Monday | August 12, 2013

Rupee and Dollar Index

Weekly Rupee Performance Rupee tested new all-time low of 61.866 on Tuesday but recovered and appreciated around 0.7 percent in the last week. Capital Flows For the month of August 2013, FII inflows totaled at Rs.1153.10 crores and net capital inflows stood at Rs.67245.50 crores as on 8th August 2013. Reserve bank of India and Government Measures Reserve bank of India (RBI) will auction 220 billion rupees of government cash management bills every Monday. The central bank has not specified the period for which it will continue with auction of these bills. Further, there were expectations that Indian government will relax its norms for External Commercial Borrowings (ECB) to enable debt burden companies to tap foreign markets. The measure will include allowing repayment of rupee loans from ECB proceeds and will let companies to raise up to $300 million by external debt with tenure of less than three years as against with current limit of $20 million. Additionally, ECB under automatic route will double to 1.5 billion from $750 million now for debt with a maturity of up to five years. It will also allow state run banks to raise capital consisting of equity plus free reserves from overseas markets under ECB category. Dollar Index Weekly Performance The US Dollar Index (DX) declined around 1 percent in the last week and touched a low of 80.895 on Thursday. The DX declined on the back of favorable ISM non-manufacturing data from the US exerted downside pressure on the currency. Further, rise in the initial jobless claims eased the concerns that Federal Reserve will pullback its stimulus measures thereby acting as a negative factor. FOMC Member Speech FOMC member Evans said in a statement on Tuesday that Federal Reserve is most likely to taper its QE program in the current year. It also stated that pullback in stimulus measures can be seen as early as from September of this year.
$/INR - Spot
62.0 61.0

60.0
59.0 58.0 57.0 56.0 55.0 54.0 53.0

US Dollar Index
85.0 84.0 83.0 82.0 81.0 80.0 79.0

Commodities Weekly Tracker

Monday | August 12, 2013

Rupee and Dollar Index

Outlook
Over the week, the Rupee is expected to strengthen due to measures taken by RBI along with expectations of favorable industrial production data. However, sharp upside in currency will be capped as a result of forecast for rise in countrys inflation data. In the coming week, Dollar Index is expected to decline on account of estimates of positive economic data from the US. Core Retail Sales, Building Permits and Prelim UoM Consumer sentiments data is expected to come on a positive note. While on the other hand, sharp downside in the currency will be capped as a result of forecast for decline in retail sales and Philly Fed Manufacturing data.

Weekly Technical Levels

USD-INR August Contract: 61.30/62.10 (CMP: 60.85) Support 60.30/59.45 Resistance

Dollar Index: Support 80.60/79.80 Resistance 82.0/82.80 (CMP: 81.25)

Commodities Weekly Tracker

Monday | August 12, 2013

Euro
Weekly Price Performance
The Euro appreciated around 0.5 percent in the last week on the back of sharp fall in the DX. The currency touched a weekly high of 1.34 on Thursday on the back of favorable economic data from the region.
1.365
1.355 1.345 1.335 1.325 1.315 1.305

Euro/$ - Spot

Factors affecting the upside in currency Favorable services PMI data from Spain, Italy and Euro Zone. Additionally, we saw rise in German factory orders and German industrial production data acted as a positive factor. Further, investor confidence in the Euro Zone recovered which also supported an upside in the currency. Outlook Over the week the Euro is expected to trade on a positive note on the back of upbeat global markets. Further, expectations of rise in economic sentiments from Germany and Euro Zone along with increase in the GDP data of Germany and France will support an upside in the currency. Additionally, forecast for rise in Euro Zone industrial production will act as a positive factor.
Weekly Technical Levels
EURO/USD SPOT: Support 1.325/1.3170 Resistance 1.3405/1.3520. (CMP: 1.3323)

1.295
1.285 1.275

EURO/INR - Spot
81.0

79.0
77.0 75.0

73.0
71.0

69.0

Commodities Weekly Tracker

Monday | August 12, 2013

Chana
Weekly Price Performance
Chana Futures recovered in the early part of the week on reports of crop damages due heavy rains in kharif pulses going states. However, higher supplies continued to exert downside pressure on the prices. Chana August futures settled marginally lower by 0.48 w-o-w.

Incessant rains to cause marginal yield losses for kharif pulses

As on 2nd August, Pulses sowing is up 26 percent at 79.5 lakh hectares. Increase in acreage under kharif pulses this year and above average monsoon has raised hopes of bumper kharif output this season. Although, incessant rains in the past 2 week in the kharif pulses growing belts may damage standing crop to some extent, but still kharif pulses output may stand above last years levels. 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. 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.
Chana prices are expected to recover as a result of imposition of special margin on short positions and expectations of demand to emerge at lower levels ahead of festivals.

Imposition of special margin on short Positions

Chana output estimated at record high Fourth Advance Estimates

Outlook

Weekly Strategy
Buy NCDEX CHANA Sep between 2800 2780, SL 2610, Target 3050/3100

Commodities Weekly Tracker

Monday | August 12, 2013

Turmeric

Weekly Price Performance

After touching a fresh contract low of `4556, Turmeric Futures recovered from lower levels last week on account of short coverings. Prices have declined sharply over the last few week on the back of huge carryover stocks coupled with good sowing as well as rains in the Turmeric growing regions. The spot settled 3.34% lower while the Futures settled 0.29% higher w-o-w. 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. Turmeric exports in 2012-13 stood at 80,050 tn as against 79,500 tn in 2011-12. The area covered under Turmeric in A.P. as on 07/08/2013 is reported at 0.43 lakh ha against 0.44 lakh ha last year and a normal sowing of 0.49 lakh ha. Normal sowing for the season is 0.68 lakh hectares.

Imposition of Margins on the short side

Better than expected exports

Sowing of Turmeric for the 2013-14 season

Source: Reuters & Angel Research.

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.
Turmeric prices may trade on a mixed note this week. Short coverings coupled with lower level demand may support prices at lower levels. Domestic demand may also improve in the coming days ahead of the festive season. However, huge carryover stocks as well as good sowing of turmeric this season may continue to mount pressure on the prices at higher levels. Good rains are also expected to increase the yield in the coming season. The progress of monsoon needs to be watched carefully as this may affect the acreage as well as the yield of the crop. NCDEX Turmeric Aug- Trend Sideways S1 - 4700, S2 -4550, R1 - 5100, R2 - 5330 .
Source: Agriwatch & Reuters

Outlook

Weekly Strategy

Commodities Weekly Tracker

Monday | August 12, 2013

Weekly Price Performance

Jeera futures traded on a positive note last week on account of good export as well as domestic demand coupled with declining arrivals at lower levels. However, good rains in the main jeera sowing belt capped sharp upside in the prices. The spot as well as the July Futures settled 0.44% and 0.83% lower w-o-w.

Jeera

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.
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.
Source: Reuters & Angel Research.

Global supply concerns boost Jeera exports

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/tn (FOB Mumbai) while for Europe at $2,500/tn (CNF). Jeera is expected to trade with a positive bias this week supported by overseas demand as well as domestic demand. However, good rains in the jeera sowing belt may pressurize prices at it may increase prospects of higher sowing and a better yield in the coming season. higher production last year may also cap sharp gains and pressurize prices at higher levels.

Outlook

Weekly Levels
Buy NCDEX Jeera Sep between 13320 13300, SL 13050, Target 13800.
Source: Ministry of Agriculture, Gujarat.

Commodities Weekly Tracker

Monday | August 12, 2013

Soybean
Weekly price performance
Soybean prices traded on a positive note for the second consecutive week on fears of crop damage due to excessive rains in Madhya Pradesh, the main soybean growing region. Also tight supplies in the spot markets towards the end of the season supported prices. However, higher sowing has boosted prospects of a record yield this season, thus, capping sharp gains. The Spot as well as the Futures settled 3.9 and 3.28% higher on a weekly basis. CBOT Soybean futures settled 0.73% higher last week. Incessant rains in the past three 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 121.06 lh , up by 15.63 percent compared to the same period last year. Ministry of Agriculture released its fourth Advance estimates of Food grain production on Monday wherein it pegged Soybean output significantly higher at record 14.6 mn tn in the current season 2012-13 compared with 12.2 mn tn in 201112. Total nine Oilseeds production is pegged at 31 MT in 2012-13, slightly higher than 29.79 MT achieved in the previous year. Soybean prices traded higher due to tight supplies as well as demand from China. However, cool weather capped gains and kept prices under check at higher levels. Soybean is expected to trade on a mixed note this week. Higher sowing thereby prospects of higher production may pressurize prices. However, prices may find support if excessive rains continue in the coming week raising crop damage fears. NCDEX Soybean Oct Trend Sideways- S1 - 2940, S2 - 2830, R1 - 3110, R2 - 3200

Higher Soy acreage to offset losses caused due to heavy rains

Soybean 2012-13 output revised up Fourth Advance Estimates

Cool weather keeps soybean prices under check

Outlook

Strategy

Commodities Weekly Tracker

Monday | August 12, 2013

Refine Soy Oil and Crude Palm Oil

Weekly price performance
Soy oil as well as MCX CPO continued to trade on a positive note last week and settled 0.99% and 0.95% higher respectively on account of festive demand coupled overall weakness in the Rupee. Also, higher soybean prices also supported prices. However, weak international prices coupled with comfortable imported edible oil stocks capped sharp upside. Prices on KLCE declined by 0.65% on expectations of increase in the output during the seasonally higher yield period. 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. Malaysia, the world's No.2 palm oil producer, has set its crude palm oil export tax for August at 4.5 %. 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.. Buy NCDEX Refined Soya Oil Sep between 648 643, SL 630, Target 670. Buy MCX CPO Aug between 500 495, SL 485, Target 515/520 .

Global Scenario

Domestic Scenario

Strategy

Commodities Weekly Tracker

Monday | August 12, 2013

Sugar

Weekly Price Performance

Sugar prices gained marginally last week expecting demand to emerge at lower levels amid series of festival ahead. However, ample supplies limited upside in the prices. 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. According to the Ministry of Agriculture, Sugarcane has been planted in 48.53 lakh ha as compared to 50.06 lakh ha last year. Food Ministry has moved a cabinet proposal to give freedom to state governments to hike the retail price of sugar sold in ration shops. At present, sugar is being sold at Rs 13.50 per kg in the PDS. This price has not been revised since 2002 despite increase in open market price to Rs 35-40 per kg.

Sugarcane acreage down 3.06 percent as on 2nd August

Centre Plans to give freedom to hike PDS sugar prices

Brazilian mills raise ethanol output over sugar -Unica

Cane mills in center-south Brazil raised their output of sugar and ethanol in late July from the first half of the month, but favored production of the biofuel more. Sugar output in the region in the second half of July was still not at full speed, however, with mills' output down 15 percent from the 2.97 million tonnes produced in the same fortnight a year ago.
Sugar may trade with positive bias in the coming weeks on expectations demand to emerge at lower levels to meet the festive season demand. Sharp upside may however, be capped on account of ample supplies. Buy NCDEX Sugar Sep between 3010 3005, SL 2980, Target 3045/3050

Outlook

Strategy

Commodities Weekly Tracker

Monday | August 12, 2013

Cotton
Weekly Price Performance
MCX Cotton gained sharply by 4.08% last week as the relaxation in cotton exports norm for CCI by the government helped boost positive market sentiments. Weak rupee also supported an upside in the prices. ICE cotton traded on a bullish note last week and settled 4.37% higher as heavy rains in the Southeast US and arid conditions for western Texas and China may damage crops. 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.

Kharif Cotton Planting up at 7.3 percent yoy

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.
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. Crop damage reports and relaxation in export policy norms for CCI may continue to support an upside in the cotton prices. However, if weather conditions turn favorable this week, then we may see some correction at higher levels.

World Inventory Forecast by 7%

Outlook

Strategy
Buy MCX Cotton Oct between 20700 - 20650, SL -20400, Target 21100/21200

Commodities Weekly Tracker

Monday | August 12, 2013

Thank You!

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