Commodity report ways2capital 23 march 2015

Page 1


✍ NCDEX DAILY LEVELS DAILY

EXPIRY DATE

R4

R3

R2

R1

PP

S1

S2

S3

S4

SYOREFIDR

20 APR 15

604

596

588

585

580

577

572

564

556

SYBEANIDR

20 APR 15

3,407

3,384

3,361

3,352

3,338

3,329

3,315

3,292

3,269

RMSEED

20 APR 15

3,510

3,471

3,432

3,415

3,393

3,376

3,354

3,315

3,276

JEERAUNJHA

20 APR 15

15,306

15,086 14,866 14,738 14,646 14,518 14,426 14,206

13,986

CHANA

20 APR 15

3,755

3,704

3,653

3,633

3,602

3,582

3,551

3,500

3,449

CASTORSEED

20 APR 15

3,825

3,755

3,685

3,641

3,615

3,571

3,545

3,475

3,405

✍ NCDEX WEEKLY LEVELS WEEKLY

EXPIRY DATE

R4

R3

R2

R1

PP

S1

S2

S3

S4

SYOREFIDR

20 APR 15

631

614

597

589

580

572

563

546

529

SYBEANIDR

20 APR 15

3,534

3,473

3,412

3,377

3,351

3,316

3,290

3,229

3,168

RMSEED

20 APR 15

3,632

3,554

3,476

3,437

3,398

3,359

3,320

3,242

3,164

JEERAUNJHA

20 APR 15

17,623

16,708 15,793 15,201 14,878 14,286 13,963 13,048

12,133

CHANA

20 APR 15

4,205

4,019

3,089

3,833

3,723

3,647

3,537

3,461

3,275


✍ MCX DAILY LEVELS DAILY

R4

R3

R2

R1

PP

s1

s2

s3

s4

ALUMINIUM

EXPIRY DATE 31 MAR 15

118

115

113

112

111

110

109

106

104

COPPER

30 APR 15

429

412

395

388

378

371

361

344

327

CRUDE OIL

20 APR15

3,382

3,228

3,074

3,008

2,920

2,854

2,766

2,612

2,458

GOLD

03APR 15

27,112

26,776

26,440

26,309

26,104

25,973

25,768

25,432

25,096

LEAD

31 MAR 15

123

119

114

113

110

108

105

100

96

NATURAL GAS 26 MAR 15

204

195

185

180

176

170

166

157

147

NICKEL

31 MAR 15

961

932

903

891

873

861

844

815

786

SILVER

05 MAY 15 42,049

40,463

38,877

38,343

37,291

36,757

35,705

34,119

32,533

ZINC

31 MAR15

132

130

129

127

126

124

121

118

135

✍ MCX WEEKLY LEVELS WEEKLY

R4

R3

R2

R1

PP

s1

s2

s3

s4

ALUMINIUM

EXPIRY DATE 31 MAR 15

119

117

115

113

112

111

107

105

103

COPPER

30 APR 15

457

429

402

392

374

364

347

319

292

CRUDE OIL

20 APR15

3,886

3,543

3,200

3,071

2,857

2,728

2,514

2,171

1,828

GOLD

03APR 15

28,179

27,443

26,707

26,442

25,971 25,706

25,235 24,499

23,763

LEAD

31 MAR 15

129

122

116

113

109

107

103

96

90

NATURAL GAS

26 MAR 15

218

204

190

182

175

168

161

147

133

NICKEL

31 MAR 15

1,008

963

918

898

873

853

828

783

738


✍ MCX - WEEKLY NEWS LETTERS ✍ INTERNATIONAL NEWS ✍ Fed bows to market's more dovish view of soaring dollar : The US central bank's far more modest inflation predictions, released on Wednesday, suggest that the strong currency and sagging oil prices are spooking policymakers more than they have let on. It sets the stage for later rate hikes than they expected, but which many investors have long anticipated. The Federal Reserve's back-pedaling on how aggressively it plans to raise interest rates acknowledges that the more dovish financial markets were right all along: turns out, the soaring dollar has stalled its policy-tightening plan. The US central bank's far more modest inflation predictions, released on Wednesday, suggest that the strong currency and sagging oil prices are spooking policymakers more than they have let on. It sets the stage for later rate hikes than they expected, but which many investors have long anticipated. A stronger dollar hurts US exporters and, along with cheap oil, puts further pressure on already weak inflation. In effect, it tightens financial conditions even while the Fed keeps its key policy rate near zero. "The Fed did not have to say it. The forecasts tell the story. The FOMC cares about the dollar," Jens Nordvig, global head of FX at Nomura, said of the policy-setting Federal Open Market Committee. Forecasts published after a two-day meeting show that Fed policymakers expect rates to rise to only about 0.6 percent by year end, down from a median of 1.1 percent in December. The 17 officials also slashed predictions for economic growth and inflation over the next two years. The dollar has spiked 22 percent against a basket of currencies since the Fed published its December forecast, continuing a trend since last summer. Oil prices have fallen about 25 percent in that time. The central bank's revisions effectively align policymakers with investors, who have mostly refused to believe a rate hike will come until September or later. Wall Street's top economists, who have long called for a June rate hike, now point to September, according to a Reuters poll. The Fed has, in effect, tied policy to the dollar. "It is now clear the bond market is not moving towards the Fed; the Fed is moving towards the bond market," said Tim Duy, a professor at the University of Oregon and a former US Treasury economist. He added that the Fed recognised the negative effects of a rising currency. ✍ US monetary policies making emerging economies weak : IMF Speaking at the opening of China Development Forum here, Christine Lagarde said, the world has yet to achieve full economic recovery as global growth continues to be weighed down by high debt, high unemployment and lacklustre investment. The tightening of monetary policies by the US at a time when other countries are easing theirs could make emerging economies "vulnerable" as many of their firms and banks have sharply increased their borrowings in dollars in the last five years, the IMF Chief warned on Sunday. Speaking at the opening of China Development Forum here, Christine Lagarde said, the world has yet to achieve full economic recovery as global growth continues to be weighed down by high debt, high unemployment and lacklustre investment. Referring to IMF's recent forecast to cut global


growth to 3.5 percent and 3.7 percent in 2015 and 2016 despite the boost from cheaper oil and stronger US growth, she said the global recovery remained fragile because of significant risks.

� Euro-dollar parity may be more elusive after Fed : The dollar index slumped as much as 3 percent in the worst selloff in six years, after a dovish US central bank on Wednesday pared back its own forecasts for interest rate hikes, cut its outlook for inflation and warned the economy has been moderating. The Fed tripped up the dollar's rally and may have pushed the greenback into a short-term correction with its forecasts for a slower pace of interest rate hikes, strategists say. The dollar index slumped as much as 3 percent in the worst selloff in six years, after a dovish US central bank on Wednesday pared back its own forecasts for interest rate hikes, cut its outlook for inflation and warned the economy has been moderating. The euro hit a high of about USD1.10 to the dollar, in Wednesday afternoon trading, from a low point of USD1.05. As the dollar fell, stocks rallied and bond yields declined. The strengthening greenback has been a key factor in markets, sending ripples through US equities, as traders worry about its impact on the profits of multinationals. The strong dollar has also fanned fears about deflation, as it pounded commodities markets, like oil and gold and weighed on emerging markets.

BULLION � Gold prices likely to trade positive: Gold prices are likely to trade positive on the back of dovish US fed statements. Gold prices hit two-week highs on Friday and were poised for their biggest weekly jump since mid-January, after the U.S. Federal Reserve's cautious note on interest rates arrested a dollar rally and sparked broadbased buying of commodities. Spot gold has risen over 2 percent this week, recovering from a fourmonth low touched on Tuesday under pressure from expectations that the U.S. central bank is on track for its first interest rate increase in nearly a decade. Such a move would boost the dollar and lift the opportunity cost of holding non-yielding bullion. The Fed, however, indicated it preferred a more gradual path. � Gold at near two-week high as dollar tumbles: Spot gold gained 0.6 percent to USD 1,174.26 an ounce by 0041 GMT, after earlier climbing to USD 1,175.05, its highest since March 9. The metal gained 1.6 percent on Wednesday, its biggest one-day jump since Jan. 30. Gold extended gains on Thursday to its highest level in nearly two weeks as the dollar tumbled after the Federal Reserve signalled a slower pace of US interest rate hike and caution on US economic growth. FUNDAMENTALS Spot gold gained 0.6 percent to USD 1,174.26 an ounce by 0041 GMT, after earlier climbing to USD 1,175.05,


its highest since March 9. The metal gained 1.6 percent on Wednesday, its biggest one-day jump since Jan. 30. The Fed on Wednesday moved a step closer to hiking rates for the first time since 2006, but downgraded its economic growth and inflation projections, signalling it is in no rush to push borrowing costs to more normal levels. The US central bank removed a reference to being "patient" on rates from its policy statement, opening the door wider for a hike in the next couple of months while sounding a cautious note on the health of the economic recovery. It also slashed its median estimate for the federal funds rate. Fed Chair Janet Yellen also sounded uncomfortable with the strength of the dollar, saying it would be a "notable drag" on exports and a downward force on inflation. The dollar has gained nearly 8 percent this year against a basket of major currencies as strong US economic data boosted expectations the Fed would soon start raising interest rates. Diverging global monetary policies have also helped. Gold, on the other hand, fell to a four-month low earlier this week as fears mounted regarding higher interest rates. The Fed's caution brought some bullion investors back on board.

ENERGY � Crude oil surges amid weak dollar and new federal standards on fracting: Crude oil futures soared on Friday afternoon, amid a weaker U.S. dollar and the release of new standards for fracking on federal lands by the White House. On the New York Mercantile Exchange, WTI crude oil for April delivery surged more than 5% or 2.21 to $46.17 a barrel, before settling at $45.87 at Friday's close. Future contracts for May delivery of Texas Light Sweet crude also increased 1.16 or 2.54% to 46.69. Oil prices shot up as the dollar continued to weaken in the wake of relatively dovish comments from Federal Reserve chair Janet Yellen earlier in the week. While the Fed removed its stance of remaining patient on its timing of a potential interest rate hike, Yellen appeared to strike a dovish tone with lower forecasts on inflation and GDP growth. The U.S. central bank also forecasted that interest rates will rise at a slower pace than had previously been expected. Yellen's comments have sent the dollar spiraling from 11-year highs reached last week. The euro rose nearly 2% against the dollar in U.S. afternoon trading to 1.0867, while the U.S. Dollar Index fell 1.35% to 98.11. Speculative oil traders used the weakening dollar to hedge their positions in crude. Meanwhile, the U.S. Interior Department on Friday approved the most comprehensive set of rules to date on how to govern drilling on Federal lands using hydraulic fracturing, a process where high-pressured fluid composed of water, chemicals and sand is injected into deep-rock formations creating cracks wide enough in the rocks to allow shale gas to flow more freely. The new regulations could impact approximately 100,000 oil and gas wells on Federally managed land throughout the country. Among the new standards, the Interior Department will require firms to disclose the chemicals they use in the fracking process, improve standards for storing waste and construct stronger cement barriers to prevent oil leaks. In response two oil industry groups filed a lawsuit to challenge the regulatory changes, Politico.com. As oil prices have headed on a


downward trend in recent months, Saudi Arabia's oil minister last week blamed shale producers in the U.S. for the precipitous drop. On the Intercontinental Exchange (ICE), brent crude for May delivery rose 0.85 or 1.56% to $55.28 a barrel. It came one day after Ali al-Omair, Kuwait's oil minister, indicated that current market conditions have forced Opec to maintain its production level. While al-Omair said Kuwait "will be very happy if other producers cut output," he added that the world's 10th largest oil producer can't afford to "lose its share in the market." Kuwait currently produces crude oil at a rate of approximately 3 million barrels per day. Crude oil futures remained relatively unchanged after oil services firm Baker Hughes (NYSE:BHI) released its weekly rig count on Friday afternoon. U.S. oil rigs for the week ending Mar. 6 declined by 41 to 825. The report comes one day after the Energy Information Administration (EIA) said in a report that oil is being pumped in the U.S. at its fastest rate in nearly 30 years. � Oil prices drop after Saudi says it'll not cut output alone: Oil prices dropped around a percentage point in early Asian trade on Monday after Saudi Arabia said over the weekend that it would not unilaterally cut its output to defend prices. Since oil prices started to fall in June 2014, many analysts have expected Saudi Arabia, OPEC's biggest producer, to curb its output. Yet Riyadh has so far opted to keep output stable in a move to defend market share against non-OPEC producers like Russia and the United States, where production has soared as a result of the shale exploration boom. "We tried, we held meetings and we did not succeed because countries (outside OPEC) were insisting that OPEC carry the burden and we refuse that OPEC bears the responsibility," Naimi said. "The production of OPEC is 30 percent of the market, 70 percent from non-OPEC ... everybody is supposed to participate if we want to improve prices," Saudi oil minister Ali al-Naimi said on Sunday. Benchmark Brent crude oil futures was trading at USD 54.79 a barrel at 0123 GMT, down 53 cents from their last settlement. USD WTI crude was down 58 cents at USD 45.99 a barrel.


NCDEX - WEEKLY NEWS LETTERS ✍ Govt launches scheme to promote start-ups in agro industry : On Wednesday, government launched a scheme to promote start-ups in the agro industry sector with a corpus of Rs 200 crore. Under the scheme, a framework for start-up promotion will be created through the Small Industries Development Bank of India (SIDBI) by using means of finance, such as equity, quasi-equity, angel funds, venture capital funds, impact funds, among others. The Ministry announced the setting up of 500 new incubation centres across India by next year. Launching the scheme here, MSME Minister Kalraj Mishra said the scheme was formulated to set up a network of technology and incubation centres to accelerate entrepreneurship and promote start-ups for innovation and entrepreneurship in agro-industry. As a first step, the scheme will create a database of technologies available with various Government/private agencies and set up a Network of Technology Centres for handholding of prospective entrepreneurs of MSME sector, Mishra said. The second component is to develop the required skilled human resources necessary for mentoring and handholding incubatees. Under this, special efforts will be made to identify, support and expand the role of competitive Indian MSMEs in a global economy. Capacity building including awards, surveys, studies, exposure visits, engagement of consultants including monitoring and evaluation will be conducted with an estimated expenditure of Rs 17.75 crore. The third component is to set up Livelihood Business Incubators (LBI) under the National Small Industries Corporation (NSIC), KVIC or Coir Board among others to replicate the NSIC’s model of "Rapid Incubation Centres", which is a mix of "promotion of entrepreneurship and skill development" and involves setting up of live "demo projects". The total allocated budget under this head would be Rs 62.50 crore for setting up 80 LBIs, skilling a targeted 10,400 youth over three years. ✍ Agri Ministry assigns officials to assess crop damage : The Agriculture Ministry has assigned officials to different States for assessing the damage to crops due to hailstorm and heavy rains. R.P. Singh, Director, Directorate of Cotton Development, will assess the damage in Maharashtra, A.K. Tiwari, Director, Directorate of Pulses Development, in Madhya Pradesh, M


C Diwakar, Director, Directorate of Sugarcane Development, in Uttar Pradesh, Narender Kumar, Director-in-charge, Directorate of Wheat Development, in Haryana, A. Ansari, Statistical Investigator, Directorate of Millets Development in Rajasthan, Subhash Chander, Joint Director, Directorate of Millets Development, in Gujarat and Mahesh Kumar, Assistant Director, Directorate of Wheat Development, will survey Punjab. A team under a Joint Secretary has been appointed to survey/ assess the loss in drought-affected areas in districts of Rayalseema.

✍ Edible oil imports can cross 1.25 cr tonnes in marketing year ’14-15 With edible oil imports increasing by 22.7 per cent in the first four months of the current oil marketing year, India’s total edible oil imports are expected to be around 1.25 crore tonnes due to lower production estimates. Edible oil imports in the first four months of the current oil marketing year, from November 2014 to February 2015, rose by 22.7 per cent from 34.2 lakh tonnes to 41.9 lakh tonnes. Production of nine oilseeds during 2014-15 is estimated at 2.98 crore tonnes . This shows a drop of around 9.7 per cent compared to 3.27 crore tonnes of production during 2013-14, according to final official estimates. These oilseeds include groundnut, castorseed, sesamum, nigerseed, rapeseed, linseed, safflower, sunflower, and soybean. Imports are growing despite a shrinking edible oil import basket. “India has completely stopped imports of cottonseed oil since the last five years due to abundant cotton supply. Import of other edible oils such as safflower and coconut oil has also fallen to nil since the last couple of years. Despite lower production estimates, domestic prices of edible oils, excluding groundnut, have fallen drastically in the last few months owing to a drop in the price of these oils in the global market.International prices of these oils have fallen as there is abundant supply from markets such as Brazil, Argentina, the US, Indonesia and Malaysia. ✍ Edible oils rule steady In edible oils market, barring palmolein which gained 3, all other oils ruled steady on back of thin volatility in futures amid slack demand. Picking up in arrivals of oilseeds kept indigenous oils under pressure. Quoting palmolein Rat 500, super palmolein 520 and soyabean refined oil 580. Ruchi traded palmolein at 500, soyabean refined oil 575 and sunflower refined oil 625 March-April. Allana’s rates: palmolein 500, super palmolein 525, soyabean refined oil576 and sunflower oil 630.


� Chana falls by 0.5% on WEAK spot demand Chana prices fell by 0.50% to Rs 3,613 per quintal in futures trade on friday due to a weak trend at spot market on subdued demand. Also, adequate stocks position in the physical market on higher supplies from major producing belts fuelled the downtrend. At the National Commodity and Derivative Exchange, chana for delivery in May fell by Rs 18, or 0.50%, to Rs 3,613 per quintal with an open interest of 1,01,970 lots. Likewise, the commodity for delivery in April traded lower by Rs 17, or 0.47%, to Rs 3,587 per quintal in 1,45,090 lots. The offloading of positions by speculators amid subdued demand in spot market against adequate stocks position mainly kept pressure on chana prices at futures trade.


LEGAL DISCLAIMER This Document has been prepared by Ways2Capital (A Division of High Brow Market Research Investment Advisory Pvt Ltd). The information, analysis and estimates contained herein are based on Ways2Capital Equity/Commodities Research assessment and have been obtained from sources believed to be reliable. This document is meant for the use of the intended recipient only. This document, at best, represents Ways2Capital Equity/Commodities Research opinion and is meant for general information only. Ways2Capital Equity/Commodities Research, its directors, officers or employees shall not in any way to be responsible for the contents stated herein. Ways2Capital Equity/Commodities Research expressly disclaims any and all liabilities that may arise from information, errors or omissions in this connection. This document is not to be considered as an offer to sell or a solicitation to buy any securities or commodities. All information, levels & recommendations provided above are given on the basis of technical & fundamental research done by the panel of expert of Ways2Capital but we do not accept any liability for errors of opinion. People surfing through the website have right to opt the product services of their own choices. Any investment in commodity market bears risk, company will not be liable for any loss done on these recommendations. These levels do not necessarily indicate future price moment. Company holds the right to alter the information without any further notice. Any browsing through website means acceptance of disclaimer.


Turn static files into dynamic content formats.

Create a flipbook
Issuu converts static files into: digital portfolios, online yearbooks, online catalogs, digital photo albums and more. Sign up and create your flipbook.