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Contents
Returns Non Agri Commodities Currencies Agri Commodities Non-Agri Commodities Gold Silver Copper Crude Oil
3.0
3.0 2.5 2.0 1.5
3.0
2.9
1.0
(0.9) (1.4)
(2.0) (2.9)
(3.1)
(1.1)
(1.3)
(1.5)
(2.1)
(2.8) (4.6)
(5.0)
(7.0)
(6.8)
*Weekly Performance for October contract CPO and Mentha Oil - September contract *Kapas- April 2014 Contract
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
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
US Dollar Index
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.
Outlook
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)
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:$22.20) Sell MCX Silver December between 51,450-51,550, SL-52,501, Target -48,300. (CMP: Rs.50,510)
43,500
26.0
24.0 22.0 20.0 18.0
US Dollar Index
Copper
7,500
7,300 7,100 6,900
385 365
6,700
Copper Inventories
On the LME last week, copper inventories declined around 3.8 percent to 577,525 tonnes as on 13th September 2013 from 600,275 tonnes last week. While Shanghai inventories rose 3.6 percent to 157,164 tonnes during the same period. Chinese Refined copper production rises in August Chinese production rose 4.9 percent in August, reversing a fall the previous month, as some smelters likely stepped up operations ahead of seasonal demand hike in September-October The August output of refined copper was 560,515 tonnes in August, the third-highest this year and 11.2 percent up from last year Seasonal demand as seen in the previous years had risen in September to November, leading to increased buying as orders are expected to rise
LME Copper Future ($/tonne) MCX Near Month Copper Contract (Rs/kg)
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)
Crude Oil
7,700
7,200
Oil Inventories
4,700
394.1
394.1
391.3 383.8
382.7 377.53
372.2
371.7
369.1
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
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
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.
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
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.
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
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).
Outlook
Weekly Strategy
Turmeric
Outlook
Weekly Strategy
Jeera
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
Soybean
Withdrawal of monsoon
Outlook
Strategy
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
Sugar
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
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
India eyes cotton export duty to boost value added textile sales
Outlook:
Strategy
Thank You!
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