Commodities Weekly Tracker, 29th July 2013

7/27/2019 Commodities Weekly Tracker, 29th July 2013

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Commodities & Currencies

Weekly Tracker


2/27

Commodities Weekly TrackerContents

Returns

Global Equities

Currencies

Non Agri Commodities

Agri Commodities

Global Manufacturing Economic Data

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 | July 29, 2013


3/27

Commodities Weekly TrackerMonday | July 29, 2013

2.84

2.111.84

1.11

0.10

(0.03)

(1.04)

(1.99)(2.37)

(3.15)(3.5)

(3.0)

(2.5)

(2.0)

(1.5)

(1.0)

(0.5)0.0

0.5

1.0

1.5

2.0

2.5

3.0

Global Equities Performance (%)


4/27


2.92.5

0.5

(0.8) (0.9)

(1.6)(2.4)

(3.1)

(5.9)(6.0)

(5.0)

(4.0)

(3.0)

(2.0)

(1.0)

0.0

1.0

2.0

3.0

Non-Agri Commodities Weekly Performance


5/27


1.9

1.00.7

0.50.2

(0.5)

(1.2)

(2.4)(2.5)

(2.0)

(1.5)

(1.0)

(0.5)0.0

0.5

1.0

1.5

2.0 Currencies Weekly Performance


6/27

*Weekly Performance for August contract

*Soybean, Cotton October contract

*Kapas- April Contract



7/27


US Economic DataExisting Home Sales

US Existing Home Sales declined to 5.08 million in June as against a rise

of 5.14 million a month ago.New Home Sales

New Home Sales rose by 38,000 to 497,000 in June which is at highest

level in five years from 459,000 in May.

Unemployment Claims

US Unemployment Claims increased by 7,000 to 343,000 for the

week ending on 19th July as against a rise of 336,000 in prior week.

320000

330000

340000

350000

360000

370000

380000

390000

US Unemployment Claims

4400000

4500000

4600000

4700000

4800000

4900000

5000000

5100000

5200000

US Existing Home Sales

335000

355000

375000

395000

415000

435000

455000

475000

495000

US New Home Sales


8/27


Global Manufacturing Economic Data

European Manufacturing PMI

French Flash Manufacturing Purchasing Managers' Index (PMI) increased by 1.4 points to 49.8-mark in July as against a rise of 48.4-level in June.

German Flash Manufacturing PMI gained by 1.7 points to 50.3-mark in July as compared to 48.6-level in June.

European Flash Manufacturing PMI increase by 1.3 points to 50.1-mark in July as compared to 48.8-level in previous month.

ChinasHSBC Manufacturing PMI

Chinas HSBC Flash Manufacturing Purchasing Managers' Index (PMI) declined by 0.5 points to 47.7-mark in July from previous 48.2-level in June.

US Manufacturing PMI

US Flash Manufacturing Purchasing Managers' Index (PMI) increased by 1.3 points to 53.2-mark in July as against a rise of 51.9-level in June.

48.8

51.9

48.2

50.1

53.2

47.7

45

46

47

48

49

50

51

52

53

54

Euro Zone US China

Manufacturing Growth - July'13

June'13 July'13


9/27


GoldWeekly Price Performance

Week-on-week, Spot Gold prices have increased around 3 percent. In the last week,

Spot Gold had tested a high of $1347.69/oz.

In the Indian markets, prices on the MCX gained 2.7 percent over the week, testing a

high of Rs27716/10gm

Factors that supported a bounce back in prices

Fed Chairman Ben Bernanke said last week that the central bank would begin the

tapering only once the unemployment and job market scenario stabilizes.

Peoples Bank of China ended floor on lending rates which will offer consumer more

spending power.

Weakness in the Dollar Index, thus supporting prices in dollar terms. Further, upbeat

global market sentiments acted as a positive factor for prices.SPDR Gold Holdings

The SPDR Gold Trust holdings have declined more than 31 percent this year. Holdings

have slipped to 927.35 tonnes and declined around 0.5 percent in the last week.

RBI links gold imports to export volumes

Gold imports into India are tightened further as the RBI moved further by tying gold

imports to export volumes. The RBI said that 20 percent of imports should be used for

overseas sales, thereby assuring gold exporters a scenario of guaranteed supplies

It is now mandatory for importers to retain 20 percent of the gold imported in

custom-bonded warehouses and further purchases of the metal will be allowed only

after exports equivalent to 75 percent.

Central Banks Buying

Gold futures have rose around 8 percent in July biggest gains since January 2012 on

account of attractive lower prices.

Russia and Kazakhstan increased their bullion for ninth straight month in June.

As per the World Gold Council (WGC), central banks over the globe will buy around

400 metric tons in 2013 after adding 535 tons in 2012 which was highest since 1964.

1,200

1,300

1,400

1,500

1,600

1,700

1,800

25,000

26,000

27,000

28,000

29,000

30,000

31,000

MCX and Comex Gold Price Performance

MCX-Near Month Gold Futures -Rs/10 gms Comex Gold Futures -$/oz

79.0

80.0

81.0

82.0

83.0

84.0

85.0

1,150

1,250

1,350

1,450

1,550

1,650

Spot Gold Vs Dollar In dex

Sp ot G ol d -$ /o z US D ol lar I nd ex


10/27


GoldIndian gold imports fall 80 percent in June13

Aggressive and stringent measures applied by the RBI and the

government led to a sharp fall in gold imports For the month ofJune13, gold imports fell sharply by 80 percent to

just 32 tonnes as against 162 tonnes seen in May13

When compared to imports in June12, the decline was 36 percent

Fall in gold imports will help to curb the CAD and in effect also have

a positive impact on the Rupee

Gold is Indias second-largest import after crude oil and for the

month ofApril13, golds import bill touched $7.5 billion

During April-May13, gold and silver imports accounted for $15.8billion in the import bill

Combined Indian gold-silver imports in June13 were $2.5 billion

Gold ETFs in India also witness correction

Value of gold ETFs in India fell for the third straight month in June13

Holdings fell to Rs96.1 billion ($1.6 billion), marking a fall of more

than 9 percent

In terms of value, assets have declined 20 percent Global gold ETF holdings have fallen below 2000 metric tonnes to

1993.8 metric tonnes for the first time since May 2010. Over the

year, assets have slumped 24 percent, falling by 638.2 tonnes and

are headed for the first annual drop since introduction in 2003

Data by the mutual funds association in India showed that for the

month of June13, net redemptions from gold ETFs were Rs2.06

billion

Gold Demand

Japan's biggest gold retailer Tanaka Kikinzoku Kogyo K.K sales

increased by three times in 1st quarter of 2013 as compared to

previous quarter.

As per the World Gold Council (WGC) forecasts imports from India may

rise to 900 metric tons in 2013 from 860 tons in 2012.

Chinas purchases might also shoot up to 1000 tons in current year

with respect to 817 tones in 2012 as per WGC.

Gold Scrap Supply

According to the World Gold Council, Gold supply from recycled

materials may fall by 25 percent this year as lower prices prevent

holders from selling the metal at times when physical demand is rising.

It is estimated that supply from bullion scrap may fall by 300 to 400

metric tons in 2013 from 1,600 tons in last year.Outlook

Over the week, gold prices in dollar terms are expected to trade higher

on the back of expectations of purchasing of the metal from central

banks.

Further, expectations that US Federal Reserve will not pullback its

stimulus measures and announcement regarding the same in Federal

Reserve meeting during the week will exert downside pressure on DX.

This factor will support an upside in dollar denominated commodities.

Appreciation in the Rupee will cap sharp gains in prices on the MCX.

Weekly Technical Levels

Spot Gold : Support 1,325/1,303 Resistance 1,356/1,378. (CMP:

$1327.60)

Buy MCX Gold October between 27,420-27,380, SL-27,100, Target -

27,850/28,200 (CMP : Rs.27720)


11/27


SilverWeekly Price Performance

Last week, Spot Silver prices increased sharply around 4 percent and touched

a high of $20.60/oz mark On the MCX, prices witnessed gains of 2.7 percent as Rupee appreciation

impacted sharp gains in Indian prices

ETF Performance

Holdings in the iShares Silver Trust rose around 1.3 percent last week to

10419.04 tonnes.

Month-to-date, iShares Silver Trust Holdings gained around 5.2 percent and

year-to-date are increased about 3.3 percent.

Factor affecting the silver prices Upside in gold prices.

Positive movement in base metals complex.

Weakness in the DX.

Favorable economic data from US, Euro Zone and rise in UKs GDP.

Outlook A bullish trend is expected in silver prices over the week, taking cues from fall

in gold prices.

Further, weakness in the DX will support an upside in prices.

However, sharp upside in prices will be capped as a result of downside in base

metals group.

In the Indian markets, appreciation in the Rupee will cap sharp gains in prices

on the MCX.


Spot Silver: Support 19.72/19.45 Resistance 20.28/21.08. (CMP:$19.83)

Buy MCX Silver March Between 40,700-40,650, SL-40,100, Target -41,700.

(CMP: Rs.40,867)

18

20

22

24

26

28

30

32

38,500

43,500

48,500

53,500

58,500

MCX and Comex Silver Price Performance

M CX - Ne ar M on th Si lv er F ut ur es - Rs/ kg C om ex Si lv er F u tu res - $ /o z

79.0

80.0

81.0

82.0

83.0

84.0

85.0

18.0

20.0

22.0

24.0

26.0

28.0

30.0

32.0

Spot Silver Vs US Dollar Index

Spot Silver -$/oz US Dollar Index


12/27


CopperWeekly Price Performance

Copper prices gained almost 1.3 percent on the LME last week and touched a high of

$/tonne for the week ending on 26th

July,2013. On the MCX increased only around 0.8 percent as Rupee appreciation capped gains.

Copper Inventories

On the LME inventories declined around 2.7 percent to 621,175 tonnes.

SHFE inventories fell 3.5 percent to 161,564 tonnes respectively.

Factors affecting the upside in copper prices

Rise in New Home Sales data from US which is ay highest level in last five years.

Peoples Bank of China ended a floor on borrowing costs previously set at 30 percent

below the benchmark in a move to boost growth in the long run.

Statement from Chinese Premier that it wont allow economy to grow below 7 percent

and necessary steps will be taken to boost the economic growth.

Favorable manufacturing data from the Euro Zone and US indicating an industrial

growth thereby leading to expectations of rise in demand for the metal in future.

However, sharp upside in prices was capped on account of contraction in Chinese

manufacturing activity.

China which is the major consumer of base metals saw a decline which indicated a slow

economic growth in China.

Further, statement from International Monetary Fund (IMF) that Chinese economy will

not be able to meet its target of 7.5 percent growth in current year.

Surplus Production

As per the report from Goldman, Copper is forecasted to be at a surplus of 500,000

tons in 2015 from 257,000 tons in current year.

365

375

385

395

405

415

425

435

445

455

6,700

6,900

7,100

7,300

7,500

7,700

7,900

8,100

8,300

LME and MCX Copper Price Performance

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

6,700

6,900

7,100

7,300

7,500

7,700

7,900

8,100

8,300

318,000

368,000

418,000

468,000

518,000

568,000

618,000

668,000

LME Copper v/s LME Inventory

Copper LME Inventory (tonnes) LME Copper Future ($/tonne)


13/27


Copper

Net position in Copper CFTC data showed that net positions in copper rose in last week, after signs of slow economic growth in China.

Copper net position of short holding was at 12,974 contracts from 15,673 contract a week earlier.

Outlook

Copper prices during the week expected to trade lower on the back of slow economic growth in Chinese economy thereby affecting the demand

for the metal.

Further, expectations of decline in advance GDP and consumer confidence from US will exert downside pressure on prices.

Additionally, forecast of surplus production will add more downside pressure on prices.

However, estimates that US Federal Reserve will not pullback its stimulus measures and announcement regarding the same in Federal Reserve

meeting during the week will exert downside pressure on DX. This factor will cushion fall in prices.

In the Indian markets, appreciation in the Rupee will act as a negative factor for prices on the MCX.


LME Copper: Support 6755/6655 Resistance 6935/7045. (CMP: $6837.75)

Sell MCX Copper August between 412-413, SL-419.50, Target -402.50/397. (CMP: Rs 407.45)


14/27


Crude OilWeekly Price Performance

Nymex crude oil prices declined around 2.4 percent in the last week. Crude

prices drop will be biggest fall in this month. Oil prices touched a weekly low of

$105.39/bbl on Wednesday.

On the domestic bourses, prices slipped 3.2 percent as a result of appreciation

in the Indian Rupee and touched a low of Rs.6174/bbl in the last week.

Inventories

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

more than expectations by 2.8 million barrels to 364.20 million barrels for the

week ending on 19th July 2013.

The American Petroleum Institute (API) reported, US crude oil inventories

declined by 1.4 million barrels to 369.66 million barrels for the week ending on

19th July 2013

Difference between WTI and Brent widens

The spread between WTI and Brent crude oil prices increased by more than $2

during the week on account of decline in WTI prices as a result of rise in US

crude oil output. Further, decline in Chinas manufacturing activity also lead to

expectations of fall in demand for the fuel.

On the hand, positive manufacturing data from Euro Zone increased the Brent

prices and thereby widen the spread.

US Crude Output As per the EIA reports, US Crude output rose around 1 percent for week ending

on 19th July 2013 which is at highest level in 22 years.

US crude production shoot up due to the combination of horizontal drilling and

hydraulic fracturing, or fracking, which unlocked supplies trapped in shale

formations.

Crude stockpiles fell 29.9 million barrels for week of 19th July 2013 which is the

biggest four week drop in data from 1982 as per the EIA report.

US consumer around 21 percent of oil in 2012 which was followed by China

around 11 percent as per the IEA report.

361.3

360.3

363.1369.1

371.7

372.2

376.4

377.53

381.4

384

382.7

385.9

388.6 388.9

387.6

388.6

395.3 395.5

394.9 394.6

397.6

391.3

393.8

394.1

394.1

383.8

373.9

367

364.2

360

365

370

375

380

385

390

395

400

Crude Oil Inventories (mn barrels)

86.0

90.0

94.0

98.0

102.0

106.0

110.0

114.0

4,700

4,900

5,100

5,300

5,500

5,700

5,900

6,100

6,300

6,500

Nymex and MCX Crude Oil Price Performance

M CX cr ud e o il (Rs/ bb l) NY MEX Cr ud e Oi l ($/b bl)


15/27


Crude OilNet Position in Crude Oil

As pet the CFTC data, net-long positions in crude oil rose around 9.8 percent to 334,094 contract which is at highest level since June 2006.

Outlook

Crude oil prices in the coming week expected to fall on account of rise in the US crude oil output as a result of invention of new technology of

fracking and cracking.

Further, slow economic growth in China will affect the demand for the fuel also exerted downside pressure on prices.

Additionally, expectations of decline in advance GDP and consumer confidence from US will add downside pressure on prices.

However, estimates that US Federal Reserve will not pullback its stimulus measures and announcement regarding the same in Federal Reservemeeting during the week will exert downside pressure on DX. This factor will cushion fall in prices

In the Indian markets, appreciation in the Rupee will act as a negative factor for prices on the MCX.


Nymex Crude Oil: Support: 102.75/100.95 Resistance 105.65/107.45. (CMP:$104.22)

Sell MCX Crude August between 6280-6300, SL-6402, Target -6090. (CMP:Rs. 6198)


16/27


RupeeWeekly Price Performance

The Indian Rupee appreciated around 0.6 percent in the last week.The currency touched a

weekly high of 58.725 on Thursday.

Capital Flows

For the month of July 2013, FII outflows totaled at Rs.6393.60 crores ($1066.90 million) as

on 26th July 2013. Year to date basis, net capital inflows stood at Rs.65,8784.70 crores

($12,433.90 million) till 26th July 2013.

Factors that affected currency movement

Measures taken by RBI.

Expectations of foreign inflows after government hoping to sale bonds to NRI investors or

allowing companies to raise debt in foreign markets.

Rise in risk appetite in domestic market sentiments coupled with weakness in the DX. However, sharp upside in currency was cap as result of dollar demand from importers and

outflow of foreign funds along with failure of bond auction.

Reserve Bank of India Moves

RBI issued a statement that importers need to retain 20 percent of the gold they import in

customs-bonded warehouses, and will only be able to buy more only after exports

equivalent to 75 percent of the retained amount have been shipped.

The central bank last month had ruled out any credit transactions for imports unless they

were intended for making jewelry for exports purposes was eased in this week.

The RBI bisect the daily funds available from it to banks and raised the cash reserverequirement (CRR).

Governor Duvvuri Subbarao cut the funds RBI lends to individual banks under the Liquidity

Adjustment Facility (LAF) to 0.5 percent of the deposits of a bank. This compared with 1

percent or Rs 75,000 crore, available for the entire financial system that has now been

brought down to Rs 37500 crore .

RBI also raised the minimum daily average holding of the mandated 4 percent cash reserve

requirement to 99 percent from previous 70 percent.

The government ruled out selling of sovereign bonds to offshore investors dampening hopes

for dollar inflows.

53.0

54.0

55.0

56.0

57.0

58.0

59.0

60.0

61.0

$/INR - Spot


17/27


18/27


Dollar Index

Weekly Price Performance

US Dollar Index (DX) depreciated around 0.8 percent in the previous week.

The currency touched a low of 81.71-mark in the last week.

Factors that affected currency movement

Rise in risk appetite in the global market sentiments led to fall in demand for the

currency.

Further, favorable new home sales data which is at highest level in five years showed

signs of economic growth adding downside pressure on currency.

Additionally, increase in manufacturing data from US also lead to economic expansion

in the country. However, sharp downside in the currency was cushioned as a result of favorable

economic data lead to expectations of pullback in stimulus measures from the Federal

Reserve.

Also, US jobless claims data rose for the week ending on 19 th July thereby providing

some respite to fall in the currency.

Outlook

In the coming week, we expect the currency to weaken on account of estimates that

US Federal Reserve will not pullback its stimulus measures and any announcementregarding the same in Federal Reserve meeting will act as a negative factor.

However, sharp downside in currency will be cushioned on account of expectations of

unfavorable economic data from the country.


US Dollar Index: Support 81.10/80.60 Resistance 82.40/83.10. (CMP: 81.59)

79.0

80.0

81.0

82.0

83.0

84.0

85.0

US Dollar Index


19/27


EuroWeekly Price Performance

The currency appreciated around 1 percent in the last week.

The Euro touched a weekly high of 1.3295 on Thursday.

Economic data impressed

More than expected rise in the manufacturing data from the region showing

signs of progress in the debt ridden Zone.

Further, decline in Spanish unemployment rate ease concerns of Euro Zone debt

crisis.

Additionally, weakness in the DX and upbeat global market sentiments

supported an upside in the currency. Also German Business climate data came on a favorable note acting as a positive

factor.

Outlook

Over the week, a weaker Dollar Index will continue to support upside in

the Euro

Further, expectations of favorable economic data from the region will

support an upside in the currency. Additionally, ECB press conference during the week and any major

announcement will act as a positive factor.


EURO/USD SPOT: Support 1.3174/1.3071 Resistance 1.3340/1.3403. (CMP:

1.3278)

1.275

1.285

1.295

1.305

1.315

1.325

1.335

1.345

1.355

1.365

Euro/$ - Spot

69.0

70.0

71.0

72.0

73.0

74.0

75.0

76.0

77.0

78.0

79.0

EURO/INR - Spot


20/27

Chana



Chana Futures declined sharply and hit contract lows for four consecutive

sessions last week on account of abundant supplies and lack of buying interest.

However, prices recovered sharply towards the end as an impact of the marginimposed on the selling side by the market regulator.

Chana August futures settled 1% lower w-o-w.

Imposition of special margin on short Positions

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.

Chana output estimated at record high Fourth Advance Estimates

Ministry of Agriculture released its fourth Advance estimates of Food grainproduction 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 compared to the third

advance estimates of 18 mn tn and 17.09 mn tn produced in 2011-12 season.

Kharif Pulses sowing up 86 percent yoy

As per the data released by the ministry of Agriculture, area under kharif Pulses

stood at 73.62 lakh ha as on 26th July 2013, up by 86 percent compared to the

corresponding period last year.

Outlook

Although recovery in the prices may be seen in the initial part of current week

as a result of imposition of special margin on short positions and expectations

of demand to emerge at lower levels ahead of festivals, but, higher supplies

would keep the upside capped.

Weekly Strategy

NCDEX CHANA Aug S1 - 2550, S2 -2430, R1 -2820, R2 - 2930 (CMP 2680)


21/27

Turmeric

Source: Agriwatch & Reuters

Commodities Weekly Tracker


Turmeric Futures traded on a bearish note last week as huge carryover stocks

mounted downside pressure on the prices. Good sowing as well as rains in the

Turmeric growing regions have also pressurized prices. Demand from theupcountry markets is also reported to be weak.

The spot as well as the Futures settled sharply lower by 2.48% and 11.2% w-o-w.

Better than expected exports

Turmeric exports in 2012-13 stood at 80,050 tn as against 79,500 tn in 2011-12.

Pickup in sowing of Turmeric for the 2013-14 season

The area covered under Turmeric in A.P. as on 24/07/2013 is reported at 0.35

lakh ha against 0.31 lakh ha last year and a normal sowing of 0.41 lakh ha. Sowing

last year commenced late due to drought conditions. Normal sowing for theseason is 0.68 lakh hectares.

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.

Outlook

Turmeric is expected to continue to trade lower this week extending previous

weeks losses on the back of huge carryover stocks as well as good sowing ofturmeric this season. Good rains are also expected to increase the yield in the

coming season. However, prices may recover from lower levels on account of

overseas demand for the spice. Overseas demand for turmeric is usually good

around Ramadan. Also, expectations of improvement in the domestic demand in

the coming days ahead of the upcoming festive season ma support prices. The

progress of monsoon needs to be watched carefully as this may affect the acreage

as well as the yield of the crop.

Weekly Strategy

Sell NCDEX Turmeric Aug between 5330 5350, SL 5600, Target 5000/4950 .


Source: Reuters & Angel Research.


22/27

Jeera

Source: Ministry of Agriculture, Gujarat.

Commodities Weekly Tracker


Jeera futures traded with a negative bias last week as higher than expected

arrivals coupled with good rains in the main jeera sowing belt pressurized prices.

However, good export demand for Indian Jeera support prices at lower levels.

The spot as well as the July Futures settled 0.62% and 2.62% lower w-o-w.

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.

Global supply concerns boost Jeera exports

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.

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-

2,400/tn (FOB Mumbai) while for Europe at $2,750-2,850/tn (FOB Mumbai)..

Outlook

Jeera is expected to trade on a mixed note with a negative bias this week. Higher

than expected arrivals, coupled with higher production this year and good rains in

the jeera sowing belt may continue to pressurize prices. However, sustained

overseas demand may support prices at lower levels as other exporting nations

are not supplying.

Weekly Levels NCDEX Jeera Aug Trend Sideways- S1 - 12620, S2 - 12900, R1 - 13380, R2 - 13650.


Source: Reuters & Angel Research.

d kl k


23/27

Soybean


Weekly price performance

Favorable crop conditions in the soy growing belts of central India and a sharp fall in

the international markets led domestic soybean prices to settle 6.13% lower w-o-w.

After hitting a 10 month high on CBOT last week, CBOT soybean declined sharply on

the back of improvement in weather conditions in top growing belt.

Sharp decline in the International Markets

Soybean Futures on the CBOT declined sharply by 9.46% last week as cash bids

collapsed in US Midwest and lack of buying interest. Selling of the old crop by farmer

also added to the downside pressure.

Soybean 2012-13 output revised up Fourth Advance Estimates

Ministry of Agriculture released its fourth Advance estimates of Food grain

production on Monday wherein it pegged Soybean output signifincalty higher atrecord 14.6 mn tn in the current season 2012-13 compared with 12.2 mn tn in 2011-

12. Total nine Oilseeds production is pegged at 31 MT in 2012-13, slightly higher

than 29.79 MT achieved in the previous year.

Oilseeds sowing up at 135.99 lakh hectares

Monsoon which slowed its pace and was flat to below average in the previous two

weeks, recovered significantly during the week ending 24th July 2013. As per the

IMD, Cumulative rainfall as on 28th July in the central India (major soy belt), were 45

percent above the LPA, while in the week ending 24th July they rains were recorded

up by 43% in Central India.

According to the ministry of agriculture, as on 26th July 2013, oilseeds were planted

on 167.15 lakh ha, an increase of 20.9 percent compared to last year.

Outlook Soybean may trade with negative bias this week on expectations of good yield and

early start to harvesting. However, short covering may be witnessed in the later

part. Prolonged excessive rains may damage the crops, thus supporting the prices.

Strategy

Sell NCDEX Soybean Oct between 2980 - 3000, SL - 3150, Target 2800/2750

C di i W kl k


24/27

Refine Soy Oil and Crude Palm Oil


Weekly price performance

Soy oil declined as well as MCX traded on a negative note last week and

settled 3.39% and 1.26% lower on the back of comfortable imported edibleoil coupled with an appreciation in the Rupee. Weak oilseeds prices also

added to the downside pressure. However, lower levels buying as well as

festive demand limited the downside and supported prices at lower levels

Global Scenario

Exports of Malaysian palm oil products from July 1 to 25 fell 7 percent to

1,085,392 tonnes from 1,167,266 tonnes shipped during June 1 to 25.

Exports of Malaysian palm oil products in June rose 7% to 1,350,311 tonnes

from 1,262,281 tonnes shipped during May. Malaysia, the world's No.2 palm

oil producer, has set its crude palm oil export tax for July at 4.5 %.Domestic Scenario

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..

Strategy

Sell NCDEX Ref Soya Oil Aug between 650 655, SL 675, Target 625/620 .

Sell MCX CPO Aug between 485 490, SL 505, Target 465/460.

C di i W kl T k


25/27

Sugar



Sugar prices traded on a mixed note with a negative bias last week as ample

supplies in the domestic markets coupled with good rains in the major sugarcane

belts have eased cane output concerns. However, export demand as well as anincrease in the import duty on sugar supported prices at lower levels.

ICE as well as LIFFE Sugar recovered from lower levels last week and settled 1.1%

and 2.57% on account of short coverings on the back of rains in Brazil. Demand

for ethanol in Brazil has increased, leading to diversion of cane towards ethanol.

Sugarcane acreage down 3.17 percent as on 26th July

According to the Ministry of Agriculture, Sugarcane has been planted in 48.48

lakh ha as compared to 50.04 lakh ha last year.

Government notifies increase in import duty on Sugar to 15 percent The Government has notified its decision to raise the import duty on the

sweetener to 15 percent from 10 percent currently, to discourage overseas

buying amid a drop in local prices due to ample supplies.Increase in Sugar output in Brazil

According to UNICA, due to dry weather, production in Brazil increased in the first

half of July by 60% to 2.4 mn tn as against 1.5 mn tn in second half of June.

Increase in demand for Ethanol

According to fuel distributors, Brazils Ethanol demand increased by 24 percent in

June, leading to diversion of more cane towards production of Ethanol.

Outlook

Sugar may trade in a range bound manner with a negative bias as higher supplies

in the domestic markets coupled with an increase in the estimate of sugar

production may pressurize prices. However, export orders, festive demand as well

as an increase in the duty on imports may support prices at lower levels.

Strategy

Sell NCDEX Sugar Aug between 3035 - 3040, SL - 3065, Target 3000/2990

C diti W kl T k


26/27

Cotton



Above average rains in central India during the last week and higher sowing led to

a fall in Cotton prices last week. Weak international markets also exerted downsidepressure on the markets. NCDEX April Kapas as well as MCX Oct Cotton settled

1.57% and 2.93 lower w-o-w.

ICE Cotton contract settled 1.32% lower w-o-w as signs of slowing economic

growth in China stirred worry of reduced demand from world's top textile market.

Kharif Cotton Planting up at 8 percent yoy

Cotton sowing is nearing its end and almost 90 percent of sowing is completed till

last week. As per the ministry of agriculture, cotton is covered under 105 lakh ha

area as on 26th July, up 8 percent compared to the same period last year.

U.S. cotton prices seen likely to fall in late 2013-14- Reuters

China's cotton stockpiling policy & lower U.S. inventories will underpin 2013-14 ICE

cotton futures, though prices could fall some 10% later in the season as supplies

increase. 2013-14 prices will likely trade in a range of 75 to 92 cents/ lb. Prices will

fall as new global supplies are harvested, but price declines below about 72 cents

will likely spur even higher Chinese demand.

World Cotton stocks continue to soar

The ICAC lowered its production estimates by 5.4% to 24.95 mn tn for 2013-14

season (Aug-July). Consumption will continue to rise in 2013-14 season and is

pegged at 24.3 mn tn. Despite of increase in consumption by 2.3% and drop in

production, inventories are forecast up by 3.5% at 18.51 mn tn by end of July 2014.

Outlook

Cotton prices may remain under pressure due to higher cotton planting in the

domestic markets coupled with good progress of monsoon. Further, expectations

of drop in international prices may also turn domestic sentiments weak.

Strategy

Sell MCX Cotton Oct between 19700-19750, SL -20100, Target 19200/19100

C diti W kl T k


27/27

Thank You!

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Documents

Commodities Weekly Tracker, 29th July 2013