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Commodities & Currencies Weekly Tracker

Commodities Weekly Tracker


Monday| September 16, 2013

Contents
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

Commodities Weekly Tracker


Monday | September 16, 2013

Global Equities Performance (%)


4.0 3.5 3.9

3.0
3.0 2.5 2.0 1.5

3.0

2.9

2.8 2.4 2.0 2.0 1.6 1.3

1.0

Commodities Weekly Tracker


Monday | September 16, 2013

Currencies Weekly Performance


2.0 1.5 1.0 0.5 0.0 (0.5) (1.0) (1.5) (2.0) (2.5) (3.0) (3.5) 1.6 0.9 0.2

(0.9) (1.4)

(2.0) (2.9)
(3.1)

Commodities Weekly Tracker


Monday | September 16, 2013

Non-Agri Commodities Weekly Performance


4.1 3.0 1.0 (1.0) (3.0) (0.6)

(1.1)

(1.3)

(1.5)

(2.1)

(2.8) (4.6)

(5.0)
(7.0)

(6.8)

Commodities Weekly Tracker


Monday| September 16, 2013

*Weekly Performance for October contract CPO and Mentha Oil - September contract *Kapas- April 2014 Contract

Commodities Weekly Tracker


Monday | September 16, 2013

Gold
Weekly Price Performance
Week-on-week fall in gold prices on the MCX has been around 7.2 percent, with the yellow metal touching a low of Rs29,501/10 gms on the futures market. Rupee appreciation is the major factor that is adding downside pressure. During the last week, Spot Gold prices have dropped around 4.6 percent and tested a low of $1304.56/oz. While overall international factors are acting as a negative factor in gold prices in the short-term, it is the currency factor that is exerting downside pressure in gold prices in the domestic markets. While gold prices in dollar terms are down by more than 20 percent over the year, on the other hand, MCX gold prices are down by just around 4 percent. In the Indian markets, over the year Rupee depreciation has acted as a catalyst capping sharp fall in prices. Holdings in the SPDR Gold Trust witnessed a decline by 8.11 metric tonnes to 911.12 tonnes on 13th September13 , marking a fall of around 0.9 percent in the last week. On a year-to-date basis, holdings have slipped sharply by 439.7 tonnes, making a drop of 32.5 percent. South Africa is the sixth largest producer of gold and has the biggest reserves of platinum and chrome Bullion output rose 0.9 percent from a year earlier, leading to 0.6 percent gain in the total mining production that had slumped by 5.4 percent a month earlier The country lost output of around $1.5 billion due to labor unrest in platinum mines in August last year that spread to gold, iron-ore, chrome and coal producers later. As per the US Commodity Futures Trading Commission (CFTC) data, net-long position in gold held by hedge funds and speculators fell 16 percent to 84,929 contracts.
1,650 84.0 1,550 83.0
1,450

MCX and Comex Gold Price Performance


35,000 34,000 33,000 32,000 31,000 30,000 29,000 28,000 27,000 26,000 25,000 1,300 1,200 1,500 1,400 1,700 1,600 1,900 1,800

Year-to-date Price Performance


MCX- Near Month Gold Futures - Rs/10 gms

Comex Gold Futures - $/oz

SPDR Gold Holdings



Spot Gold Vs Dollar Index
85.0

South Africas gold production rose for the first time in 27 months in July

82.0
81.0

1,350

1,250

80.0
79.0

1,150

CFTC Data

Spot Gold -$/oz

US Dollar Index

Commodities Weekly Tracker


Monday | September 16, 2013

Gold
Gold demand in India to fall in H2 2013 - Gold Field Mineral Services (GFMS)
Indian gold demand is expected to fall as the Indian government introduced a series of measures to curb gold imports, in order to curb the widening trade deficit as per London based GFMS. In the first half of 2013, Indian jewelry fabrication jumped by 25 percent to almost 350 tonnes. However, China is now poised to overtake India by 100 tonnes this year due to physical buying of as high as 620 tonnes in the first six months of the year GFMS sees gold demand falling in the second half of 2013 due to drop in bar buying and lesser addition of gold to reserves by the central banks. Total demand will slide to 2,237 metric tons this half from 2,533 tons in the first six months of 2013 and 2,309 tons a year earlier Jewelry demand in the first half of 2013 reached a six year high as demand in China surged 41 percent to a record 345 tons and Jewelry usage jumped 23 percent to 1,137 tons in the first half from a year earlier. Central banks added 191 tons to reserves in the first half, 32 percent less than a year earlier, and buying is predicted to slow down to 170 tons in the second half of 2013. It further added that the Bar purchases rose 52 percent to 725 tons in the first half and will ease to 441 tons in the six months through December Over the week, gold prices are likely to take cues from the outcome of the FOMC monetary policy review that is scheduled for the 17-18th Sep13. Ahead of the FOMC monetary policy review, gold prices in the international and domestic markets are expected to remain under pressure and post that the trend in the yellow metal will be largely dependent on the decision the Federal Reserve takes towards the QE taper.

World Gold demand to slide before prices gain in 2014 - GFMS


Outlook

Weekly Technical Levels

Spot Gold : Support $1290/$1253 Resistance $1350/$1380 (CMP: $1327.10) Sell MCX Gold October between 30,500-30,600, SL-31,501, Target -29,100. (CMP: Rs.30060)

Commodities Weekly Tracker


Monday | September 16, 2013

Silver
Weekly Price Performance Declining around 10 percent on the MCX near-month futures contract, silver prices touched a low of Rs49,160/kg. Rupee appreciation coupled with negative cues from gold prices led to the fall in silver. Spot Silver prices during the last week fell 6.8 percent and tested a low of $21.35/oz.
MCX and Comex Silver Price Performance
58,500 32
30

53,500

28

26 48,500 24 22 20 38,500 18

ETF Performance
The iShares Silver Trust rose in the last week on account of positive economic data from advanced economies, that led to increased interest in silver Tonnage of silver bullion bars held by the US silver ETF increased around 30 tonnes, i.e. 0.3 percent to 10,536.70 tonnes till 12th September 2013. On a year-to-date basis, ETF holdings rose by 478.74 tonnes making an increase of 4.75 percent. Factor affecting the silver prices Fall in Gold prices. Downside trend in base metal prices acted negative factor to the white metal. However, sharp fall in prices was cushioned as a result of weakness in the DX coupled with bounce back in holdings of the iShares Silver Trust ETF. Outlook Over the week, the price trend in silver is expected to be mixed as world markets await the decision by the Federal Reserve towards its QE pullback decision. If the Fed goes ahead with the tapering, then prices are expected to correct sharply, while on the other hand no decision could provide respite to falling prices. Weekly Technical Levels Spot Silver: Support $21.02 /$19.82 Resistance $22.50/$23.65. (CMP:$22.20) Sell MCX Silver December between 51,450-51,550, SL-52,501, Target -48,300. (CMP: Rs.50,510)

43,500

MCX- Near Month Silver Futures - Rs/ kg

Comex Silver Futures - $/oz

Spot Silver Vs US Dollar Index


32.0 30.0 28.0 85.0 84.0 83.0 82.0 81.0 80.0 79.0

26.0
24.0 22.0 20.0 18.0

Spot Silver -$/oz

US Dollar Index

Commodities Weekly Tracker


Monday | September 16, 2013

Copper

Weekly Price Performance


Copper prices on the LME slipped around 1.3 percent in last week and touched a low of $7024/tonne on Friday. Prices declined during the later part of the week on the back of favorable economic data from the US that increased concerns of QE tapering from the Federal Reserve in its meeting next week. Further, decline in industrial production data from Euro Zone exerted downside pressure on prices. In the early part of the week, prices rose on account of positive economic data from Chinese economy. In the Indian markets, appreciation in the Rupee acted as a negative factor.
LME and MCX Copper Price Performance
8,300
8,100 7,900 7,700 525 505 485 465 445 425 405

7,500
7,300 7,100 6,900

385 365

6,700

Copper Inventories
On the LME last week, copper inventories declined around 3.8 percent to 577,525 tonnes as on 13th September 2013 from 600,275 tonnes last week. While Shanghai inventories rose 3.6 percent to 157,164 tonnes during the same period. Chinese Refined copper production rises in August Chinese production rose 4.9 percent in August, reversing a fall the previous month, as some smelters likely stepped up operations ahead of seasonal demand hike in September-October The August output of refined copper was 560,515 tonnes in August, the third-highest this year and 11.2 percent up from last year Seasonal demand as seen in the previous years had risen in September to November, leading to increased buying as orders are expected to rise
LME Copper Future ($/tonne) MCX Near Month Copper Contract (Rs/kg)

LME Copper v/s LME Inventory


668,000 618,000
568,000

8,300 8,100 7,900 7,700 7,500

518,000 468,000

7,300

Outlook
Despite falling inventories and supportive economic indicators, copper prices could witness a mixed trend over the week on the back of uncertainty surrounding the FOMC QE tapering decision.
LME Copper: Support $6975/$6870 Resistance $7120/$7200. (CMP: $7064) Sell MCX Copper November between 465-467, SL-477.10, Target -449. (CMP: Rs 459.90)

418,000 368,000 318,000

7,100 6,900 6,700

Weekly Technical Levels


Copper LME Inventory (tonnes)

LME Copper Future ($/tonne)

Commodities Weekly Tracker


Monday | September 16, 2013

Crude Oil

Weekly Price Performance


Easing Geopolitical tensions in Syria led to drop in crude oil prices that touched a low of $106.39/bbl, with prices on the Nymex contract declining by more than 2 percent during the week. The MCX near-month crude oil contract witnessed fall due to Rupee appreciation and the commodity fell around 5 percent over the week, touching a low of Rs6778/bbl. As per the US Energy Department (EIA) report, US crude oil inventories declined by 0.2 million barrels to 360.0 million barrels for the week ending on 6th September 2013. The American Petroleum Institute (API) report showed, US crude oil inventories declined by 2.9 million barrels to 359.5 million barrels for the week ending on 6th September 13. US crude oil production jumped to the highest level since 1989 last week which led to the US cutting consumption of foreign fuel Energy Information Administration said fracking pushed crude output up by 124,000 barrels, or 1.6 percent, to 7.745 million barrels a day in the seven days ended September 6 US has become the worlds largest exporter of refined fuels including gasoline and diesel due to Rising crude supplies from fields including North Dakotas Bakken shale and the Eagle Ford in Texas WTI fluctuated between gains and losses as the US and Russia discussed plans for Syria to surrender its chemical weapons Concerns about the Syria crisis spreading to other Middle east countries has fuelled supply concerns During the week, concerns were eased by the US deciding to plan limited military strikes against Syria, which can be cancelled completely if Syria surrenders its chemical weapons as proposed by Russia The swing in the Crude price continues as the US and Russia are yet to come up with a well defined surrender plan for Syria
Nymex and MCX Crude Oil Price Performance

7,700

114.0 110.0 106.0

7,200

6,700 102.0 6,200


98.0

Oil Inventories

5,700 94.0 5,200 90.0


86.0

4,700

US Crude oil output highest since 1989 on Fracking



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
376.4 385.9 394.9 394.6 397.6

395 390 385 380 375 370 365 360


363.1 361.3
360.3

394.1

388.9 388.6 387.6

394.1

391.3 383.8

Crude fluctuated throughout the week on Syria concerns

382.7 377.53
372.2

371.7

373.9 367 364.2 363.3 364.6 360.5 360.21 360

369.1

Commodities Weekly Tracker


Monday | September 16, 2013

Crude Oil
WTI Crude swung between gains and losses on declining Cushing stockpiles, ample Saudi output
Crude fluctuated as stockpiles at Cushing, Oklahoma, declined to the lowest level since February 2012 along with rise in refinery utilization and amply supply from Saudi Arabia Cushing inventories, slid for a 10th week, the longest stretch in two years and refineries ran at 92.5 percent of capacity, the highest level for this time of year since 2006 according to EIA Ali Al-Naimi, Saudi Arabias oil minister, said the nation will meet additional demand as geopolitical concerns dominate the market and that the global oil market is well supplied As per the CFTC report, bullish bets on crude oil fell around 5.2 percent to 290,058 contracts the lowest since 9th July 2013. During the week, crude oil prices are expected to trade lower on the back of easing Syrian concerns. Further, US and Russia are planning diplomatic actions towards Syria and with no military actions around the corner, the stress of oil supply disruptions has reduced, thus leading to downside pressure on oil prices In the Indian markets, Rupee factor will play a crucial role in determining the prices movement of the commodity. Nymex Crude: Support $106.40/$104.30 Resistance $110.50/$112.50. (CMP: $108.60) Sell MCX Crude September between 7020-7040, SL-7201, Target -6750.(CMP: Rs 6923)

CFTC Data

Outlook

Weekly Technical Levels

Commodities Weekly Tracker


Monday | September 16, 2013

Rupee
Weekly Price Performance During the last week, the Rupee appreciated around 3 percent on the back of favorable industrial production and manufacturing output data from the country. Further, decline in countrys inflation data supported an upside in the currency. Additionally, expectations of new measures to be declared by Reserve Bank of India (RBI) Governor acted as a positive factor. The Indian Rupee touched a weekly high of 62.91 and closed at 63.37 on Friday. Capital inflows strengthen Rupee For the month of September 2013, FII inflows totaled at Rs.6372.20 crores ($986.41 million) as on 13th September 2013. Year to date basis, net capital inflows stood at Rs.66542 crores ($12569.70 million) till 13th September 2013. Indias Economic Data during the week Indias Industrial Production gained by 2.6 percent in July as against a decline of 2.2 percent a month ago. Manufacturing Output rose by 3 percent in July from fall of 2.2 percent in prior month. Consumer Price Index (CPI) dropped to 9.5 percent in August with respect to 9.6 percent in July. Cabinet Ministry Approval for infrastructure bonds Cabinet Ministry on Thursday has approved for purchase of $4.3 billion infrastructure bonds issued by World Bank. The countrys main aim is to develop infrastructure projects and is targeting $1 trillion investment by foreign funds till 2017. The Reserve Bank of India (RBI) would invest in the bonds floated by the International Bank for Reconstruction and Development (IBRD) that is a lending arm of the World Bank. As per World Economic Forum, Indias infrastructure is ranked worse than Kazakhstan and Guatemala.
$/INR - Spot
69.0 67.0
65.0

63.0 61.0 59.0 57.0 55.0 53.0

Outlook While sentiments and recently announced measures by the RBI indicate a supportive trend for the Rupee, risks to depreciation in the currency remain as the Indian inflation scenario worsens at a time when the country is grappling with domestic and global economic issues. Also, during the week the decision by the FOMC and the RBI will help set a clearer trend for the Rupee. Considering the rising inflation and risks to further weakness in the Rupee, the RBI is not likely to take a stance of reducing interest rates.

Weekly Technical Levels


USD-INR August Contract: Support 61.80/60.30 Resistance 64.20/65.70 (CMP: 62.85)

Commodities Weekly Tracker


Monday | September 16, 2013

Dollar Index
Weekly Price Performance Over the week, the Dollar Index weakened on the back of rise in risk appetite in the global market sentiments. Further, decline in US jobless claims data which was at lowest level since April 2006 acted as a negative factor. However, sharp downside in the currency was cushioned as a result of unfavorable retail sales and consumer sentiments data from US. Additionally, decline in jobless claims data increased concerns of QE tapering from Federal Reserve in its meeting during the week.
US Dollar Index
85.0 84.0 83.0 82.0 81.0 80.0 79.0

Likely Scenarios with respect to the FOMC Decision


Scenario 1: At the start of the month in our Economic Report dated 4th Sep13, we were expecting the QE taper to be delayed as Syrian tensions had heightened and had hit the world markets by a storm. However, this view may not apply in the current context as diplomatic decision making is seen towards Syria, thus reducing the risk of a war. Scenario 2: The US unemployment rate has dipped to 7.3 percent and unemployment claims have fallen to the lowest levels since April 2006. a positive jobs market report could lead the Fed towards making the pullback

Outlook The Dollar Index is expected to trade on a weaker note as mixed sentiments and expectations revolve around the FOMC QE taper decision. In case of Scenario 2, the Dollar Index would strengthen, while the Scenario 1 would be negative and could lead to weakness in the currency.

Weekly Technical Levels


Dollar Index: Support 80.40/79.00 Resistance 81.70/82.70 (CMP: 81.11)

Commodities Weekly Tracker


Monday | September 16, 2013

Euro
Weekly Price Performance The Euro appreciated around 1 percent in the last week due to weakness in the DX. The currency touched a weekly high of 1.3324 and closed at 1.3292 on Friday. Further, optimistic global market sentiments supported an upside in the currency. However, sharp upside in the currency was restricted as a result of unfavorable economic data from the region. Economic data from the Euro Zone comes negative French Industrial Production declined by 0.6 percent in July as against a fall of 1.4 percent a month ago German Wholesale Price Index (WPI) declined by 0.6 percent in August as against a fall of 0.3 percent in July. French Consumer Price Index (CPI) rose by 0.5 percent in last month from drop of 0.3 percent in July. Italian Industrial Production declined by 1.1 percent in July with respect to rise of 0.2 percent in earlier month. European Industrial Production dropped by 1.5 percent in July when compared with increase of 0.6 percent in prior month. Outlook The Euro is expected to trade on a positive note on the back of upbeat economic indicators from the Euro Zone and the fact that the region has exited recession, is a major supportive factor for the currency. Weekly Technical Levels EURO/USD SPOT: Support 1.3170/1.3000 Resistance 1.3530/1.3700. (CMP: 1.3360)
Euro/$ - Spot
1.365 1.355 1.345 1.335 1.325 1.315 1.305 1.295 1.285 1.275

EURO/INR - Spot
94.0

89.0

84.0

79.0

74.0

69.0

Commodities Weekly Tracker


Monday| September 16, 2013

Chana
Weekly Price Performance
Chana futures opened lower last week extending preceding weeks losses on prospects of a better sowing in the rabi season due to good rains in chana growing regions. However, prices recovered from lower levels on account of festive season demand. The spot as well as the October Futures settled 1.72% and 0.61% higher w-o-w. As on 13th September 2013, Pulses sowing is up 5.6 percent at 103.76 lakh ha. Increase in acreage under kharif pulses this year and above average monsoon has raised hopes of bumper Pulses output for second straight year in row. Renewed buying interest from dal millers to meet the festive season demand have supported chana prices higher despite sufficient supplies. A series of festivals shall commence in the coming weeks and thus demand side fundamentals shall remain strong offsetting higher supplies. 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. Prospects of a higher sowing in the coming season along with comfortable supply scenario may exert downside pressure on the prices. However, improvement in demand by the dal millers due to upcoming festivals may restrict sharp fall. Sell NCDEX Chana Oct between 3190 3210, SL 3350, Target 3000 (CMP 3150).

Pulses output heading for second year of bumper output

Festive season demand to offset higher supplies

Chana output at record high in 2012-13

Outlook

Weekly Strategy

Commodities Weekly Tracker


Monday | September 10, 2013

Turmeric

Weekly Price Performance


Turmeric Futures declined last week on the back of huge carryover stocks and favorable weather conditions. However, fresh overseas as well as domestic demand ahead of the upcoming festival supported prices at lower levels. The spot as well as the October Futures settled 3.91% and 3.68% lower w-o-w.

Postponement of launch of contract


According to a circular released by the regulator, launch of April 2014 expiry contract in Turmeric has been postponed till further notice.
The area covered under Turmeric in A.P. as on 11/09/2013 is reported at 0.53 lakh ha against 0.54 lakh ha last year and a normal sowing of 0.66 lakh ha. Normal sowing for the season is 0.68 lakh hectares. Turmeric exports in 2012-13 stood at 80,050 tn as against 79,500 tn in 2011-12. 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 are expected to trade on a negative note this week as huge carryover stocks as well as favorable weather conditions may boost the yield this season. However, overseas as well as domestic demand may restrict a sharp decline and support prices at lower levels. The withdrawal of monsoon needs to be watched carefully at this stage, as this may affect the acreage as well as the yield of the crop. Sell NCDEX Turmeric Oct between 4900 4920, SL 5150, Target 4600/4500 (CMP 4820)
Source: Agriwatch & Reuters

Sowing of Turmeric for the 2013-14 season

Better than expected exports



Source: Reuters & Angel Research.

Lower production in the 2012-2013 season

Outlook

Weekly Strategy

Commodities Weekly Tracker


Monday| September 16, 2013

Weekly Price Performance


Jeera futures traded with a negative bias last week on account of easing tensions in Syria coupled with good rains in the jeera belt in Gujarat that have increased prospects of a better sowing in the upcoming season. However, good overseas as well as domestic demand supported prices at lower levels. . The spot as well as the October Futures settled 0.68% and 1.53% lower w-o-w. The ongoing tensions in Syria one of the largest exporters of the spice has led to global supply concerns, and thus, increased exports demand from India. Jeera exports in 2012-13 stood at 79,900 tn, as against 45,500 tn last year. 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. 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 $2,200/tn (FOB Mumbai) while for Europe at $2,325/tn (CNF) (Source: Agriwatch).

Jeera

Global supply concerns boost Jeera exports

Second consecutive year of higher output

Source: Reuters & Angel Research.

International Scenario

Outlook
Jeera may trade on a mixed note with a negative bias on easing tensions in Syria coupled with prospects of a better sowing in the upcoming season. Higher production last year may also keep prices under check. However, overseas as well as domestic demand ahead of the festive season may support prices.
Sell NCDEX Jeera Oct between 13600 13630, SL 13930, Target 13100/13000 (CMP 13460)
Source: Ministry of Agriculture, Gujarat.

Weekly Levels

Commodities Weekly Tracker


Monday| September 16, 2013

Soybean

Weekly price performance


Soybean futures traded on a mixed note last week. expectations of new season arrivals to commence soon pressurized prices initially. However, crop damage concerns in India as well as the US led to a recovery and supported prices at lower levels. The spot settled as well as the Futures settled 0.87% and 0.32% higher w-o-w. CBOT Soybean September futures gained 3.6% last week due to weather concerns coupled with lower output forecast in the USDA monthly crop report. Receding rains in Central India and IMDs expectations that withdrawal of monsoon to start this week from the north-west part of India may ease the fears of damage to the standing soy crop. The acreage is higher at record 191.64 lh, up by 12.86% compared to the same period last year. The USDA monthly crop report kept the acreage to 77.2 mn acres unchanged from its earlier estimates. Harvest estimates have been trimmed to 3.149 bn bushels from the earlier estimates of 3.255 bn bushels. Forecast of 2013-14 ending stocks have also been slashed from 220 mn bushels in August to 150 mn bushels. Ministry of Agriculture released its fourth Advance estimates of Food grain production earlier in July 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 futures are expected trade on a negative note this week on expectations of higher output coupled with commencement of arrivals of the new crop in the coming days. Weak international markets may also pressurize prices. However, tight supplies coupled with strong meal export demand may support prices. Sell NCDEX Soybean Oct between 3440 3460, SL 3600, Target 3230/3200

Withdrawal of monsoon

Lower harvest and ending stocks

Soybean 2012-13 output revised up Fourth Advance Estimates

Outlook

Strategy

Commodities Weekly Tracker


Monday| September 16, 2013

Refine Soy Oil and Crude Palm Oil


Weekly price performance
Edible oil complex traded on a negative note last week due to an appreciation in the Rupee coupled with weakness in edible oil prices in the international markets. Soy oil as well as MCX CPO settled 2.25% and 2.9% lower respectively last week Prices on KLCE declined 2.96% on expectations of increase in the output during the seasonally higher yield period. However, export demand supported prices at lower levels. Exports of Malaysian palm oil products in August increased 7.5% to 1,511,755 tons tonnes from 1,406,935 tonnes shipped in July. Indonesia has cut export tax on crude palm oil to 9% in September from 10.5% in August.

Global Scenario

Domestic Scenario
As per the data released by the Solvent Extractors' Association of India, imports of vegetable oils, including non-edible oils, declined 15.52% to 757,830 tn in August, a weak Rupee has made imports more expensive. India's refined palm oil imports declined 33.03 per cent in August to 213,853 tn from 213,853 tn in July due to overall weakness in the Rupee, which has made imports expensive. Monthly soy oil imports rose 69% as local supplies are almost before the soybean crop enters the markets. Stockpiles of edible oil at ports on September 1 stood at 505,000 tn, the trade body said, higher than 610,000 tn on August 1.
Sell NCDEX Refined Soya Oil Oct between 660 665, SL 680, Target 630/625 (CMP 652.70) Sell MCX CPO Sept between 530 535, SL 550, Target 510/500 (CMP 523.50)

Strategy

Commodities Weekly Tracker


Monday| September 16, 2013

Sugar

Weekly Price Performance


Sugar futures traded with a negative bias last week on account of ample supplies coupled with selling pressure from the millers. upward revision of output forecast also pressurize prices. However, festive demand has supported prices at lower levels. The spot as well as the Futures settled 0.01% and 0.33% lower w-o-w. LIFFE as well as ICE Sugar settled 0.16% and 1.79% higher on account of improved physical demand coupled with weather concerns in in Brazil. According to the Ministry of Agriculture, Sugarcane has been planted in 48.74 lakh ha as compared to 50.06 lakh ha last year. Excess rains in current season have raised hopes of higher output in the coming season that shall begin in October 2013. Indian Sugar Mills Association (ISMA) has projected 2013-14 sugar production at 23.7 million tonne as against the domestic requirement of 23.5 million tonne. According to the Trade Ministry of Brazil, raw sugar exports in August increased to 2.68 mn tn against 1.85 mn tn in July on the back of strong Dollar and weak Real. According to a USDA report, US Sugar processors have forfeited about 85,000 tonnes sugar worth about US $ 35 million due to default at the end of August on the back of lower global prices.

India's sugar output seen up next year


Higher exports from Brazil

Forfeiture of sugar from processors

Outlook
Sugar are expected to trade on a mixed note with a negative bias as ample supplies coupled with selling pressure from the millers to clear their arrears may keep prices under check. However, expectations of improvement in the physical demand to meet the festive season requirements may support prices at lower levels.
NCDEX Sugar Oct S1 2965, S2 2950, R1 3005,R2 3025 (CMP 2987)

Strategy

Commodities Weekly Tracker


Monday| September 16, 2013

Cotton
Weekly Price Performance
Cotton prices on MCX declined last week by 0.84% on the back of an appreciation in the Rupee. Prices have earlier gained due to incessant rains, a weak Rupee and expectations of delay in arrivals by about 15 days. Kapas Futures on the NCDEX however, settled unchanged. ICE cotton futures traded on positive note last week and settled 2.37% higher as the USDA report revised lower the output projection coupled with stockpiling from China. However, higher end stock estimate capped sharp gains. The Cotton Association of India has placed the cotton crop for the 2013-14 season beginning October 1 at 375 lakh bales (of 170 kg each). The association revised the 2012-13 crop estimate from the previous 356.75 lakh bales due to conducive weather conditions. India has proposed a 10% duty on cotton exports as it wants to boost overseas sale of value added textiles taking advantage of the weak rupee. The move would encourage more textiles & garments to be shipped overseas, generating more money than simple cotton exports. China started its cotton purchase and reserve plan for the 2013-14 crop year from Monday as market prices have been lower than the protective price of 2,0400 yuan/metric ton (tonne). Cotton prices are expected to remained under downside pressure on expectations harvesting to commence soon in Northern states of India. Sell MCX Cotton Oct between 21300 - 21400, SL -21850, Target 20700

Cotton Association pegs 2013-14 crop higher


India eyes cotton export duty to boost value added textile sales

China starts cotton stockpiling program from Sept. 9

Outlook:

Strategy

Commodities Weekly Tracker


Monday| September 16, 2013

Thank You!

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