Commodity Mantra

Metals & Energy

June 02, 2011 Pre-Market

Trade recommendation
Commodity Gold Aug. Silver July. Copper June. Zinc June. Aluminum June. Nickel June. Lead June. Crude Oil June. Natural Gas June. Strategy Buy Sell Sell Sell Sell Sell Sell Sell Sell Levels 22,650 57,100 410 101 118.50 1,050 113 4,530 210 Target 22,800 56,500 406 99 116.50 1,020 111 4,470 206 Stop-Loss 22,575 57,350 412 102 119.50 1,065 114 4,560 212

Precious metals
High MCX Gold(Jun) (Rs/10 gm) Silver(Jul) (Rs/kg) NCDEX Gold (Rs/10 gm) Silver (Rs/kg) COMEX (US$/oz) Gold(Jun) Silver(Jul) 1,552 38.5 1,530 36.4 1,543 37.7 0.4 (1.6) 330,819 58,872 22,485 57,647 22,485 56,500 22,487 57,153 0.0 (1.4) 6 5,970 22,494 57,810 22,230 56,452 22,460 56,838 0.2 (1.9) 992 13,071 Low Close %Chg OI

Base metals
High MCX (Rs/kg) Alum.(May) Copper(Jun) Lead(May) Nickel(May) Zinc(May) LME(3mths) (US$/ton) Aluminum Copper Lead Nickel Tin Zinc 2,685 9,247 2,526 23,530 27,950 2,278 2,636 9,049 2,485 23,100 27,325 2,234 2,668 9,102 2,500 23,250 27,595 2,258 (0.3) (1.2) (0.8) (1.5) (1.2) (0.4) 5,019 2,389 1,219 593 285 1,259 120 417 114 1,062 102 118 408 113 1,044 100 118 409 113 1,047 101 (0.7) (2.1) (1.2) 0.1 (0.3) 3,364 23,343 2,407 10,131 5,822 Low Close %Chg OI

Market Commentary Gold on the Comex division of the New York Mercantile Exchange moved higher Wednesday as a deluge of negative US economic indicators had investors speculating that the Federal Reserve could soon pursue additional monetary stimulus. The Federal Reserve has kept its benchmark interest rate at 0-0.25% since December 2008 and is about to end its programme (QE2) of buying $600bn in Treasuries at the end of June. The ADP non-farm employment report showed only a 38,000 payrolls gain for May while economists expected 175,000 in gains. Meanwhile, the May ISM Manufacturing PMI fell to 53.5. While that still indicates expansion, the pace has slowed significantly from the previous month and came in below expectations. London copper fell on Thursday, extending the previous session's losses, under pressure from disappointing manufacturing and jobs data from the United States, which heightened anxiety that the global economic recovery may hit a soft spot. Copper inventories tracked by the London Metal Exchange climbed to the highest level since June 2010 Stockpiles rose 3,075 metric tons to 470,850 tons. They are up 35% from the 2010 low on Dec. 10. The biggest increases were registered in Singapore and Johor, Malaysia. Orders to draw copper from LME stocks, or canceled warrants, fell 575 tons to 19,525 tons. Oil futures prices fell to almost $100 a barrel Wednesday, after disappointing readings on US manufacturing and employment levels spurred concerns about oil demand. US crude futures extended declines on Thursday after an unexpected jump in US crude inventories, also hurt by an industry report that OPEC may increase oil output at its meeting next week.

Energy
High MCX Cr. oil(May) (Rs/bbl) Nat.gas(May) (Rs/mmBtu) NCDEX (Rs/bbl) Sweet Cr.oil NYMEX Cr. oil(May) (US$/bbl) Nat.gas(May) (US$/mmBtu) 103.3 4.7 99.6 4.6 100.3 4.6 (2.3) (0.8) 365,230 214,222 4,647 4,508 4,514 (1.7) 428 4,648 211 4,503 207 4,512 210 (2.6) (0.9) 15,875 4,902 Low Close %Chg OI

Currency
Close INR/US$ US$/EUR US$/GBP JPY/US$ 44.84 1.43 1.63 80.95 Prev close 45.06 1.44 0.00 81.52 %Chg (0.5) (0.5) (0.7) (0.7)

LME Inventory levels

('000 tons) Aluminum Copper Lead Nickel Tin Zinc Close 4,691 471 323 115 22 854 Prev close 4,699 468 322 114 22 855 Chg (7.9) 3.1 1.1 0.8 (0.2) (0.3)

Metals & Energy

Pivot table
MCX Levels Commodity Gold Silver Aluminum Copper Lead Nickel Zinc Crude oil R2 22,724 58,196 121 417 115 1,065 103 4,657 R1 22,690 57,224 119 409 113 1,049 101 4,521 Pivot 22,460 56,838 118 409 113 1,047 101 4,512 S1 22,426 55,866 116 401 111 1,031 100 4,376 S2 22,196 55,480 116 400 111 1,029 99 4,367 R2 1,564 39.8 2,717 9,300 2,541 23,680 2,303 104.0 International Levels R1 1,556 39.0 2,700 9,155 2,515 23,400 2,283 101.0 Pivot 1,543 37.7 2,668 9,102 2,500 23,250 2,258 100.3 S1 1,535 36.9 2,651 8,957 2,474 22,970 2,238 97.3 S2 1,522 35.5 2,619 8,904 2,459 22,820 2,214 96.6

Nat. Gas 214 212 210 208 205 4.7 4.7 4.6 4.6 4.5 A pivot is a level at which the market direction changes for the day. These points can be critical support and resistance levels for that day. Pivot levels are only broad indicators and not necessarily our view on the commodity.

Important data to watch

Date Country / Currency USD USD USD 01-Jun USD USD USD USD 02-Jun USD Event ADP Non-Farm Employment Change ISM Manufacturing PMI Construction Spending m/m ISM Manufacturing Prices Unemployment Claims Factory Orders m/m Natural Gas Storage Crude Oil Inventories IST 17:45 19:30 19:30 19:30 18:00 19:30 20:00 20:00 Actual 38K 53.5 0.40% 76.5 Cons. 177K 58.4 0.40% 81.9 427K -0.30% 92bn -1.7mn Previous 179K 60.4 1.40% 85.5 424K 3.40% 105bn 0.6mn

Precious metals
1,600 1,500 1,400 1,300 1,200 1,100 1,000 900 Jun-10 Aug-10 Nov-10 Feb-11 US$/oz
Gold Silver

Currency
US$/oz 50 45 40 35 30 25 20 15 10 May-11 1.8 1.7 1.6 1.5 1.4 1.3 1.2 1.1 1.0 Jun-10 Aug-10 Nov-10 Feb-11 42 May-11 44 46
Euro (L) Pound (L) Rupee (R)

48

Base metals
Aluminium (L) Zinc (L) Copper (R)

Energy
Crude oil Natural gas

2,900 2,700 2,500 2,300 2,100 1,900 1,700

US$/ton

US$/ton

11,000 10,000 9,000 8,000 7,000 6,000

120

US$/bbl

US$/ mmbtu

100 4 80

1,500 Jun-10

Aug-10

Nov-10

Feb-11

5,000 May-11

60 Jun-10

Aug-10

Nov-10

Feb-11

2 May-11

Commodity Mantra

Commodity Mantra
Agri-products
June 02, 2011 Pre-Market

Trade recommendation
Commodity Pepper June Jeera June Turmeric June Chana June Guar gum June Guar seed June Soya bean June Soya oil June Mustardseed- June Mentha oil June CPO June Strategy Buy Buy Buy Buy Buy Buy Sell Sell Buy Sell Sell Levels Above 29,210 Below 14,046 Above 7,610 Above 2,535 Above 10,050 Above 3,249 Below 2,343 Below 654 Above 2,879 Below 868 Below 526 Target 29,880-30,000 14,320-14,400 7,720-7,770 2,600-2,630 10,160-10,230 3,315-3,340 2,278-2,300 648-650 2,945-2,970 850-858 520-522 StopLoss 28,860 13,896 7,550 2,500 9,990 3,214 2,378 660 2,844 878 530

Spices
Commodity Chilli (Rs/qntl) NCDEX June NCDEX July Jeera (Rs/qntl) NCDEX June NCDEX July Pepper (Rs/qntl) NCDEX June NCDEX July Turmeric (Rs/qntl) NCDEX June NCDEX July Cardamom (Rs/kg) NCDEX June NCDEX July 748 803 725 779 731 790 (1.8) (0.3) 2,392 1,402 7,654 7,600 7,352 7,330 7,622 7,552 2.5 2.0 7,890 3,860 29,250 28,900 28,505 28,430 29,211 28,900 1.2 0.5 10,986 2,577 14,200 14,644 13,888 14,362 14,051 14,520 (0.3) (0.2) 12,732 19,746 8,156 8,390 7,950 8,204 8,148 8,366 1.1 0.8 10,300 6,875 High Low Close %Chg OI

Market commentary The area under soyabean, which is grown only in the kharif season, was around 9.3mn hectares in the 2010-11 crop years (JulyJune), Madhya Pradesh is the largest producing state, with a soyabean acreage of 5.51mn hectares in 2010-11. Farmers in Maharashtra could shift to cotton crop due to more market gains, but that deficit would be filled by increased sowing in Tamil Nadu, Karnataka, Andhra Pradesh, Rajasthan and Uttar Pradesh. The size of the Indonesian crop is still not clear. It is expected to be around 30,000 tons. But, seeing the exports of Pepper from Indonesia to U.S. which corners around 50% it is unclear to state the production and carry overstocks held by them. Exports of black pepper from Indonesia during January to April 2011 stood at 10,821 Mt (7025), increase of 54% as compared to previous year. Low stock levels are supporting the turmeric prices to some extent Good rains in the growing areas of AP and Karnataka raised possibilities of a better crop this year. However, most of the farmers are waiting for June month prices performance and if prices remain below Rs.8000 per quintal they might shift to some other crop. The prices of Akola quality at Delhi mandi were at Rs. 2425 per quintal while Annagiri quality chana were at Rs. 2500 per quintal, unchanged from the previous session.

Oil Seeds
Commodity Soyabean (Rs/qntl) NCDEX June NCDEX July CPO (Rs/10kg) NCDEX June NCDEX July 534 532 526 525 527 527 (1.3) (1.2) 3,967 3,934 2,373 2,392 2,333 2,343 2,344 2,358 (1.2) (1.4) 109,020 123,400 High Low Close %Chg OI

Guar Complex
Commodity Guar seed (Rs/qntl) NCDEX June NCDEX July Guar Gum (Rs/qntl) NCDEX June NCDEX July 10,090 10,308 9,840 10,050 10,070 10,285 0.3 0.4 9,705 48,395 3,271 3,320 3,220 3,275 3,251 3,305 (0.8) (0.6) 195,240 70,500 High Low Close %Chg OI

Others
Commodity Mentha Oil (Rs/kg) MCX June MCX July 877 866 863 857 868 860 (0.2) 0.0 1,502 2,164 High Low Close %Chg OI

Spot prices
Commodity Chilli (Rs/qntl) Jeera (Rs/qntl) Pepper (Rs/qntl) Turmeric (Rs/qntl) Soyabean (Rs/qntl) Soyaoil (Rs/kg) Chana (Rs/qntl) Guar seed (Rs/qntl) Guar gum (Rs/qntl) Mustard seed (Rs/20kg) Close 8,238 14,443 28,407 7,879 2,338 652 2,466 3,222 10,075 2,880 Pr. Close 8,148 14,470 28,431 7,686 2,346 653 2,445 3,238 10,163 2,897 % Chg 1.1 (0.2) (0.1) 2.5 (0.3) (0.2) 0.9 (0.5) (0.9) (0.6)

Agri-products

Pivot table
Commodity Chilli June Jeera June Pepper June Turmeric June Cardamom June Soya bean June Soya oil June CPO June Guar seed June Guar gum June R3 8,425 14,517 30,217 8,035 767 2,407 667 540 3,326 10,410 R2 8,291 14,358 29,734 7,845 757 2,390 664 537 3,298 10,250 R1 8,219 14,120 29,164 7,614 740 2,359 658 531 3,259 10,059 Pivot 8,085 14,046 28,989 7,543 735 2,350 656 529 3,247 10,000 S1 8,013 13,893 28,727 7,431 722 2,327 651 524 3,224 9,910 S2 7,879 13,734 28,244 7,241 712 2,310 648 521 3,196 9,750 S3 7,807 13,581 27,982 7,129 699 2,287 643 516 3,173 9,660

Mentha Oil June 889 883 872 869 862 855 848 A pivot is a level at which the market direction changes for the day. These points can be critical support and resistance levels for that day. Pivot levels are only broad indicators and not necessarily our view on the commodity.

Chilli
Rs/qntl 11,600 10,600 9,600 8,600 7,600 6,600 5,600 4,600 3,600 Mar- Apr- Jun- Jul-10Sep- Oct- Dec- Jan- Mar10 10 10 10 10 10 11 11
Price Agg open int.

Guar seed
25,000 20,000 15,000 10,000 5,000 0 Rs/qntl Price Agg open int. 3,200 3,000 2,800 2,600 2,400 2,200 2,000 1,800 1,600 Mar- Apr- Jun- Jul-10Sep- Oct- Dec- Jan- Mar10 10 10 10 10 10 11 11 400,000 350,000 300,000 250,000 200,000 150,000 100,000

Jeera
Rs/qntl 20,000 17,000 14,000 11,000 8,000 Mar- Apr- Jun- Jul-10Sep- Oct- Dec- Jan- Mar10 10 10 10 10 10 11 11
Price Agg open int.

Pepper
40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 0 Rs/qntl 29,000 26,000 23,000 20,000 17,000 14,000 11,000 Mar- Apr- Jun- Jul-10Sep- Oct- Dec- Jan- Mar10 10 10 10 10 10 11 11 10,000 5,000 0
Price Agg open int.

25,000 20,000 15,000

Soya bean
Rs/qntl 2,700 2,500 2,300 2,100 1,900 1,700 1,500 Mar- Apr- Jun- Jul-10Sep- Oct- Dec- Jan- Mar10 10 10 10 10 10 11 11
Price Agg open int.

Turmeric
600,000 500,000 400,000 300,000 200,000 100,000 0 Rs/qntl Price Agg open int. 18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 Mar- Apr- Jun- Jul-10Sep- Oct- Dec- Jan- Mar10 10 10 10 10 10 11 11 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 0

Note: Ideas given under the Commodities section are for intraday purpose or up to a period of three trading sessions. Recommendations under this heading are not necessarily part of our fundamental buy or sell list.

Commodity Mantra

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