Commodities Weekly Tracker, 4th March 2013

7/29/2019 Commodities Weekly Tracker, 4th March 2013

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Commodities & Currencies

Weekly Tracker


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Commodities Weekly TrackerContents

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

Monday | March 04, 2013


3/20

Commodities Weekly TrackerMonday | March 04, 2013


4/20



5/20

*Weekly Performance for March contract; Chana, Turmeric and Kapas - April 2013 contract;



6/20


GoldWeekly Price Performance

Spot gold prices declined 0.3 percent in the last week. The yellow metal

touched a weekly low of $1,564.44/oz and closed at $1,574.86/oz in the lasttrading session.

On the MCX, April contract declined by 0.8 percent on account of

depreciation in Indian Rupee and closed at Rs.29,717/10 gms on Friday after

touching a low of Rs. 29,455/10 gms in the last week.

Factors that influenced gold prices

Slow growth of US GDP data for Q4 of 2012

Comments from US Federal Reserve supporting to continue Bond buying

program and comments from ECB president Darghi that central banks has nointentions of tightening monetary policy reduced the demand for safe

heaven.

The worlds largest gold backed exchange traded fund New Yorks SPDR Gold

Trust dropped by 609680 oz in a week time due to sharp fall in the prices.

Rise in risk aversion in the global market sentiments.

Strength in the DX .

Outlook

In the coming week, we expect gold prices to trade on a negative note on theback of weak global market sentiments coupled with strength in the DX.

Additionally, US GDP data in the previous week showed that the world largest

economy is growing at a slow pace coupled with unfavorable manufacturing

data from china. Depreciation in the Indian Rupee will cushion major downfall

in the prices on the MCX.

Weekly Technical Levels

Spot Gold : Support 1,553/1,531 Resistance 1,608/1642. (CMP: $1577.7)

Sell MCX Gold April between 29,900-29,930, SL-30,141, Target -

29,550/29420. (CMP:29683)


7/20


SilverWeekly Price Performance

Spot silver declined 0.5 percent in the last week. The white metal prices

touched a weekly low of $27.94/oz and closed at $28.55/oz in the last

trading session of the week.

On the domestic front, prices increased by 0.8 percent as a result of

depreciation in the Indian Rupee and closed at Rs.53,711/kg on Friday

after touching a low of Rs.52,621/kg in the prior week.

Factors that influenced silver prices

Fall in the gold prices coupled with downside in the base metals pack.

Strength in the DX.

Unfavorable economic data from Euro Zone region.

However, sharp downside in the prices was cushioned as a result of offavourable economic data from US, positive statements from US Fed

Chairman Ben Bernanke and European Central Bank (ECB) President

Mario Draghi. In the Indian Markets, depreciation in Indian rupee

prevented fall in prices.

Outlook In the coming week, we expect silver prices to trade lower taking cues

from weak global market sentiments coupled with strength in the DX.

Additionally, US GDP data in the previous week showed that the world

largest economy is growing at a slow pace coupled with unfavorablemanufacturing data from china.

In the domestic markets depreciation in the Rupee might cushion

downside in the prices on MCX platform.


Spot Silver: Support 27.84/27.10 Resistance 29.41/30.24. (CMP:28.72)

Sell MCX Silver May Between 55,500-55,600, SL-56210 Target -

54,600.(CMP:54973 )


8/20


CopperWeekly Price Performance

Copper prices fell by 1.2 percent in the previous week. The red metal touched a

low of $7,652/tonne in the last week and closed at $7,720.5/tonne in the last

trading session.

On the domestic front, prices fell by 1.6 on the back of depreciation in the Indian

Rupee and closed at Rs. 430.45/kg on Friday after touching a low of Rs. 417.8

/kg in the last week.

Copper Inventories

LME copper inventories gained 8.1 percent week on week and stood at 458,775

tonnes as on 1st March, 2013 as against 424,350 tonnes as on 22nd February,

2013.

Copper inventories in the warehouse monitored by the Shanghai rose by 8.9percent and stood at 226,201 tonnes for the week ending on 1st March, 2013.

Factors that influenced copper prices.

Slow growth of US GDP data for Q4 of 2012. Further, weak global market

sentiments coupled with strength in the DX.

Unfavorable economic data from Euro Zone region and China.

Rise in the LME Copper and Shanghai inventories.

Outlook

Copper prices are expected to trade on a negative on the back of weak globalmarket sentiment, rise in copper inventories coupled with strength in DX.

Further, unfavorable economic data from euro zone last week may continue to

add downside pressure on the prices. Additionally, US GDP data in the previous

week showed that the world largest economy is growing at a slow pace coupled

with unfavorable manufacturing data from china. Depreciation in the Rupee may

cushion sharp downfall in the prices on MCX platform


Sell MCX Copper April between 435-437, SL-441.1, Target -426. (CMP:428.70)

LME Copper: Support 7605/7490 Resistance 7880/8045 (CMP: $7712)


9/20


Crude OilWeekly Price Performance

On a weekly basis, Nymex crude oil prices declined by 2.6 percent.

On the domestic bourses, prices declined by 1.2 percent and closed at

Rs.5,010/bbl on Friday after touching a low of Rs.4,986/bbl in the last week.Depreciation in the Indian Rupee cushioned sharp fall in the prices on the MCX.

US Energy Department Facts and Figures

As per the US Energy Department (EIA) report, US crude oil inventories roseless than expectations by 1.13 million barrels to 377.53 million barrels for theweek ending on 22nd February 2013.

Gasoline stocks declined by 1.86 million barrels to 228.54 million barrels andwhereas distillate stockpiles fell by 0.56 million barrels to 124.10 million barrelsfor the last week.

Factors that influenced crude oil prices Slow growth of US GDP data for Q4 of 2012.

Negative statement from International Monetary Fund (IMF) spokesman that itwill lower the growth forecast for US as a result of appropriation.

Strength in the DX.

Additionally, unfavorable economic data from Euro Zone and China alsoexerted downside pressure on the crude prices.

Outlook

We expect crude oil prices to trade downside due to weak global market

sentiment coupled with strength in dollar. Further, overall rise in oilinventories, unfavorable economic data from euro zone added downsidepressure on the prices. Additionally, unfavorable US GDP data coupled withdecline in manufacturing data from china supported weakness. Depreciation inthe Rupee may cushion sharp downfall in the prices on MCX platform.


Nymex Crude Oil: Support: 89.15/87.40 Resistance 93.55/96.25 (CMP:90.55)

Sell MCX Crude March between 5040-5050, SL-5110, Target 4950/4920(CMP:4980 )


10/20


DX/ INRWeekly Price Performance

US Dollar Index (DX) appreciated by 0.9 percent in the last week. It touched a weekly

high of 82.58 and closed at 82.36 on Friday.

The Indian Rupee depreciated around 1.2 percent on weekly basis.Factors that influenced movement in the DX

Rise in risk aversion in the global market sentiments which led to increase in demand

for the low yielding currency. In addition, US GDP grew at slower pace than

expectations which also supported an upside in the DX . Further, unfavorable

economic data from China and Euro Zone also supported an upside in the DX.

However, sharp upside in the currency was capped as a result of consumer

confidence, core durable goods orders along with housing data and manufacturing

PMI coming on a positive note in the last week.

Factors that influenced movement in the Rupee On a weekly basis, Indian Rupee appreciated by 1.2 percent. The currency

depreciated after 2013-14 fiscal budget increased spending. Further, slow rise in the

countrys GDP coupled with strength in the DX added downside pressure on the

currency. Additionally, weak domestic market sentiments also acted as a negative

factor for the currency.

FII Inflows

For the month of March 2013, FII outflows totaled at Rs.1,274.60 crores ($237.04

million) as on 1st March 2013. Year to date basis, net capital inflows stood at

Rs.45,223.60 crores ($8,397.60 million) till 1st March 2013.Outlook

We expect rupee to depreciate in the current week on back of strength in DX.

Additionally, Slow GDP growth in India, Increased spending in 2013-14 fiscal budget

coupled with weak global market sentiments may add to the weakness in the prices.

sharp downside in the currency may be capped as a result of forecast to keep the

fiscal deficit lower at 4.8 percent in 2013-14.


USD/INR MCX March Support 54.75/54.00 Resistance 55.85/56.30 (CMP: 54.93)

US Dollar Index: Support 81.90/81.40 Resistance 82.90/83.4 (CMP: 82.42)


11/20


EuroWeekly Price Performance

The Euro depreciated by 1.3 percent in the last week. The Euro touched a

weekly low of 1.2965 and closed at 1.302 against dollar on Friday.

Factors that influenced movement in the Euro

Uncertainty in the Italy. Further, negative unemployment change and prelim

CPI from Germany and rise in Unemployment rate from Euro area also added

downside pressure.

However, smooth auction of Italian 10 year government bonds around $5

billion and comments from European Central Bank (ECB) President that central

banks has no intentions of tightening monetary policy cushioned the sharp

depreciation in the currency.

News German Retail Sales grew by 3.1 percent in January as against a decline of 1.6

percent in December.

Italian Manufacturing PMI declined by 2 points to 45.8-level in February as

compared to rise of 47.8-mark a month ago.

Consumer Price Index (CPI) Flash Estimate increased at slow pace of 1.8

percent in February as against a rise of 2 percent in January. Unemployment

Rate rose by 11.9 percent in January from earlier rise of 11.8 percent in

previous month.

Outlook

We expect the Euro to trade on negative note due to strength in DX,

expectation of decline in factory orders from Germany, Uncertainty in Italy

coupled with unfavorable data from Italy. Further, expectation of unchanged

monetary policy may also put downside pressure. Sharp depreciation may be

cushioned on the back of expectations of positive Service PMI from Spain and

positive Retail sales data from Europe.


EURO/USD SPOT: Support 1.280/1.266 Resistance 1.32/1.342 (CMP: 1.2990)


12/20

Chana


Weekly Price Performance

Chana April futures hit a fresh contract low of Rs 3318 last week and settled

3.21% lower w-o-w. Higher supplies in the domestic markets amidst ongoing

harvesting coupled along with bumper output expectations have pressurized

chana prices in the last week. Sharp downside was however, cushioned on the

back of demand from the stockiest at lower price levels.

Government may take steps to augment supplies- Budget 2013-14

In the union budget 2013-14, although no direct move was considered for

Pulses, still The Finance Minister expressed concern about the supply-demand

mismatch in pulses. He said that the aggregate demand is a concern. Stating that

food inflation is worrying, he said the government would take all steps to

augment the supply side.

Bumper Chana output estimated for 2012-13 season

According to the final figures from ministry of agriculture dated 22nd February

2012, Chana sowing is 3.6% higher at 95.15 lakh ha compared to previous year.

Higher returns earned in 2012, coupled with a hike in minimum support prices

(MSP), have helped expand overall acreage in 2012-13 season. The Centre has

hiked the MSP by 14 per cent to Rs 3,200 a quintal for chana.

Chana output is expected to breach its 2010-11 record of 8.2 mn tn and is

estimated at 8.57 mn tn for 2012-13.

Arrivals have commenced from MP, the largest chana producing state and isexpected to increase further in the coming weeks.

Outlook

Chana futures may continue to trade on a negative note in the current week on

account of supply pressure of new crop. However, sharp downside may be

capped as demand will emerge at lower levels. Also, prices may not sustain

below Rs 3200 as farmers will not liquidate their produce below these levels.

Weekly Strategy

Sell NCDEX CHANA April between 3380-3420, SL -3515, Target - 3230 / 3210


13/20

Black Pepper

Source: Reuters & Angel Research



Pepper March Futures declined sharply last week on account of improvement in

arrivals of the new crop from Karnataka and reducing demand in the domesticmarkets. Prices have gained sharply over the last few weeks on the back of low

stocks and delay in harvesting of the fresh crop due to lack of skilled labor.

The Spot as well as the Futures settled 4.84% and 3.36% lower w-o-w.

Indian Pepper is being offered at $7,700/tn (C&F New York). Vietnam and Brazil

Austa is quoted at $6,925-6,975/tn and $6,600/tn, Indonesia GM-1 is quoted at

$6,900/tn

Averages daily arrivals stood at 55 tn while offtakes stood at 56 tn last week.

Expectations of higher output in 2012-13

According to IPC, Pepper production is expected around 55,000 tn in 2013 and

carryover stocks of about 15,066 tn.

According to market sources India exported 12,000 tn of pepper in 2012.

Global updates

Global pepper production in 2012 is projected at 3.27 lk tn vis--vis 3.17 lk tn in

2011. Vietnam pepper exports in 2012 stood at 116,962 mt. Pepper production

from Vietnam decreased to 1.05 lk tn in 2012 from 1.1 lk tn in 2011. Harvesting of

the fresh crop from Vietnam will commence in the coming days.

Exports from Brazil during Jan-Nov 2012 are reported at 25900 tn, as against32650 tn in the same period last year, down by about 20%.

Outlook

Pepper Futures is expected to decline initially due to arrival pressure. However,

prices are expected to bounce back from lower levels as farmers may not sell at

low prices. Also, stockists who have liquidated their stocks at higher prices may

stock their inventories at lower levels. Low stocks for delivery due to lock up of

pepper in the NCDEX accredited warehouses may also support prices.

Weekly Strategy Buy NCDEX Pepper April between 34400-34500, SL -33500, Tgt- 35830 /36020.

Source: Reuters & Angel Research.


14/20

Turmeric

Source: Agriwatch & Reuters

Commodities Weekly Tracker


Turmeric Futures continued to decline last week on account of huge carryover

stocks and the arrivals of the fresh crop. However, the downside in the spot

market was partially cushioned as overall output for 2012-13 is lower on the back

of poor sowing. Sowing is reported to be 30-35% lower compared to last year.

The farmers are reportedly keeping around 12 lakh bags of turmeric with them.

Stocks in Nizamabad reported around 6.5 lakh bags, which is lower than Erode.

According to the weather department, rainfall in the key grown region (Southern

Peninsula) is reported at 10% below normal. The spot as well as the Futures

settled 0.47% and 2.01% lower w-o-w.

Lower acreage of Turmeric for the 2012-13 season

Production of turmeric may decline in 2012-2013 season due to weak monsoon aswell as lower turmeric prices. The area covered under Turmeric in A.P. as on 10th

October, 2012 has been reported at 0.58 lakh hectares. The area covered is lower

as compared to last year (0.81 lha), as well as normal as on date (0.67 lha).

Lower production in the 2012-2013 season

Turmeric production in 2012-13 is expected around 50% lower compared to last

year 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 decline from higher levels for the third week

on improvement of arrivals of the new crop. Huge carryover stocks may also

pressurize prices from higher levels. However, any improvement in demand from

stockists at lower levels may support prices. Traders expect export orders also to

start in the coming weeks which may cushion a sharp downside. Arrivals of good

quality crop may also support prices at lower levels.

Weekly Strategy Sell NCDEX Turmeric April between 6250-6300, SL -6580, Target - 5830 / 5770.




15/20

Jeera

Source: Ministry of Agriculture, Gujarat.

Commodities Weekly Tracker


Jeera declined sharply last week as arrival pressure of the new crop weighed on

the prices. However, demand from the domestic markets prevented a sharp

decline. Sowing in Gujarat was reported at 3.244 lk ha till Jan 13. Last 3 years

average sowing is 3.189 lk ha. Stocks are reported at around 5-6 lk bags.

The Spot as well as the Futures settled 3.93% and 1.73% lower w-o-w.

Effect of higher production offset by higher exports

Indias 2013 Jeera output is estimated at 38-40 lakh bags (of 55kgs each), at par

with the production 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 to boost Jeera exports According to market sources, the exports target of 45,000 tn has already been

achieved. Total exports for 2012-13 season is now estimated at 60,000 tn.

Due to lower production in Syria and Turkey, coupled with the ongoing tensions

between them, exports are not taking place and have been diverted to India. They

have stopped shipments. Turkey may start offering its Jeera in the coming days.

International Scenario

According to reports, production in Syria is reported around 22,000 tons while

production in Turkey is reported between 5000-7000 tons, lower by 20% and

around 50% respectively, raising supply concerns in the international markets.

Indian Jeera in the international market is being offered at $2,975/tn (c&f).

Outlook

Jeera is expected to decline further this week on account of improvement in

arrivals of the new crop. However, fresh overseas enquiries/demand may support

prices. Farmers may not also sell their stocks at such low prices.

Weekly Levels Sell NCDEX Jeera Apr between 13300-13400, SL -13900, Target - 12550 / 12450.




16/20

Soybean


Weekly price performance

Soybean futures traded on a mixed note last week. Lower domestic supplies

supported the prices while expected increase in global supplies pressurized prices at

higher levels. At CBOT, soybean futures declined initially as the USDA projected

record soybean crop in 2013. However, prices declined towards the end on concerns

that dry weather in Argentina may hurt Soy yield.

India's edible oil stocks seen at record

Edible oil stocks in India are expected to have hit a record in February to 1.857 mn tn

up 1 lakh tn from January as buyers rushed to purchase ahead of a widely

anticipated hike in import taxes.

Oil meal exports up 40 percent in January 2012

Oil meal exports rose 40% to 7.68 lakh tn in January 2012. The export of oil meals,however declined by 18% to 36.79 lakh tn in the first 10 months of this fiscal.

Oilseeds output down 1.1% , soybean and mustard up 3.2% & 11.52%

According to the second advance estimates, 2012-13 oilseed output is pegged at

29.4 mn tn, down by 1.1%, while soybean and mustard seed output is pegged

higher at 12.9 mn tn and 7.36 lakh tn.

Brazil soy exports 959,600 tonnes soybeans in February

Brazil's exports surged to 9.59 lakh tn in Feb 2013 compared to 284 tn in Jan 2013.

Oil World cuts Argentine 2013 soybean crop forecast Oil World cut its forecast of the 2013 soybean harvest in Argentina by 2 mn tn to 50

mn tn from its Jan estimates because of dry weather.

Outlook

Soybean prices may trade with upward bias on dwindling supplies in the domestic

markets. However, higher soy oil stocks may cap sharp upside in the prices.

Strategy

Buy NCDEX Soybean April between 3200-3240, SL -3100, Target - 3390 / 3420


17/20

Refine Soy Oil and Crude Palm Oil


Weekly price performance

Edible oil complex traded on a negative last week on account of higher edible

oil stocks in the domestic markets coupled with record palm oil stocks inChina. Crude palm oil prices at MCX and KLCE settled 0.2% and 5.1% lower

respectively While, Soy oil declined sharply, both in NCDEX and CBOT to

settle 3% & 1.7% respectively w-o-w. Investors keep an eye on an industry

conference for more clues on the vegetable oil's outlook.

Global Scenario

China's palm oil stocks most probably rose to a record 1.4 million tonnes in

February as imports surged late last year ahead of stricter quality regulations

from Jan. 1.

Stronger palm oil purchases from China may lead to better Malaysian exportnumbers in March. In February, exports from Malaysia declined about 9

percent, cargo surveyors' data showed.

Global palm oil output is estimated at 55.3 mn tn in 2012-13, up by 3.4 mn tn.

U.S. soybean processors say they have been pleasantly surprised by the high

oil content of the latest U.S. soybean harvest.

Domestic Scenario

India's edible oil shipments in January hit a record 1.12 million tonnes as

buyers stocked up on expectations the government would use its budget in

late February to announce a hike in import tariffs.

Stocks in the world's top buyer of edible oils will rise by 100,000 tonnes from

January to 1.857 million tonnes, weighing on domestic prices and making it

less lucrative for farmers to plant more oilseeds.

Strategy:

Sell NCDEX Ref Soya Oil April between 685-690, SL -701, Target - 668 / 665

Buy MCX CPO March between 446-451, SL -434, Target - 470 / 473


18/20

Sugar



Sugar futures declined last week owing to rising supplies in the physical markets

and delay in lifting curbs on the controlled sector by the government. March

futures hit a fresh contract low of Rs. 2994 last week.

Liffe sugar settled higher by 1.7% last week on expectations that lower prices will

boost Brazilian millers to make more biofuel and less of the raw sugar from cane.

India's Oct-Feb sugar output down 60,000 T on year

Sugar output which was up by 3% during Oct-Jan period, is now down by 60000 tn

during Oct 2012- Feb-2013.

Maharashtra produced 6.53 mn tn during the period. While, output in Uttar

Pradesh, fell to 5.0 mn tn against 5.3 mn tn a year earlier.

No sugar exports expected for up to 3 years India, the world's biggest sugar producer after Brazil, is unlikely to export the

sweetener for up to three years as high production costs price shipments out of

the global market and a drought in major growing regions squeezes output

Brazil's CS kicks off 2013/14 sugar cane harvest early

Brazil's main center-south cane region, which accounts for 90% of sugar and

ethanol output, may begin crushing about a month before crushing began last

season. Officially the 2013/14 season begins on April 1.

The International Sugar Organization (ISO) last week had forecasted a global sugarsurplus of 8.526 mn tn in 2012/13, up from 6.479 mn tn in 2011-12.

Outlook

Although supplies continue to remain high in the domestic markets , we expect

sugar prices to consolidate at lower levels as demand will now reemerge to meet

the summer season requirement. Further, crushing will now start declining amid

lower cane availability this season.

Strategy

SUGAR March may find support at Rs 3010/2970 and resistance at Rs 3105/3160


19/20

Kapas/Cotton



NCDEX Kapas declined last week by 2.74% on account of profit taking at higher

levels. However, MCX Cotton settled higher by 0.22% last week as government

decided to continue with current cotton exports policy. ICE Cotton futures witnessedits first weekly gains in last four weeks and settled 2.8% higher w-o-w on positive

weekly sales data.

Budget 2013-14 scrapped excise duty on cotton, spun yarn

The Union Budget has proposed to do away with excise duty on cotton and

manmade sector (spun yarn) at the yarn, fabric and garment stages. The industry

has been battling weak demand for one and half years.

No Change in Cotton export policy

Committee of secretaries of union commerce, agriculture and textile ministry havein their meeting decided to continue with current cotton exports policy.

CAB has raised exports target for current year to 8 mn bales. Since the beginning of

the year, export registrations have increased to 58 lakh bales from 38 lakh bales.

US may harvest smallest cotton crop in four year in 2013-14 season

At its annual Outlook, USDA projected a crop of 14 mn bales from planted acreage of

10 mn acres. Plantings would be the smallest in 4 years & down 19% from last year.

The International Cotton Advisory Committee revised down its forecast for global

production by 2.8% and reduced estimated stocks by 0.8%. Output in the cotton

season starting 1st Aug is expected to be at 22.56 mn tn as compared to last months

estimate of 23.2 mn , as per the ICAC report.

Outlook

Kapas futures are expected to trade on a positive on expected higher exports in the

coming months as government has decided to continue with its current export

policy. Also expectations of fresh import quota from China may support an upside in

the prices.

Strategy

Buy NCDEX KAPAS April'13 between 920-940, SL -880, Target - 1000 / 1015

Source: Reuters * 2013 figs are as per Reuters survey


20/20

Thank You!

Angel Commodities Broking Pvt. Ltd.

Registered Office: G-1, Ackruti Trade Centre, Rd. No. 7, MIDC, Andheri (E), Mumbai - 400 093. Tel: (022) 3083 7700Corporate Office: 6th Floor, Ackruti Star, Central Road, MIDC, Andheri (E), Mumbai - 400 093. Tel: (022) 2921 2000

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Disclaimer: The information and opinions contained in the document have been compiled from sources believed to be reliable. The company does not warrant its accuracy, completeness and correctness.

The document is not, and should not be construed as an offer to sell or solicitation to buy any commodities. This document may not be reproduced, distributed or published, in whole or in part, by any

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Documents

Commodities Weekly Tracker, 4th March 2013