Commodity report Ways2Capital 09 june 2015

Page 1


✍ NCDEX DAILY LEVELS DAILY

EXPIRY DATE

R4

R3

R2

R1

PP

S1

S2

S3

S4

SYOREFIDR

20 AUG 2015

630

621

612

607

603

598

594

585

576

SYBEANIDR

20 AUG 2015

4168

4076

3984

3927

3892

3835

3800

3708

3616

RMSEED

20 JUL 2015

4439

4378

4317

4280

4256

4219

4195

4134

4073

JEERAUNJHA

20 JUL 2015

19596 18856

18116

17623

17376 16883 16636 15896

15156

CHANA

20 JUL 2015

4968

4888

4808

4767

4728

4687

4648

4568

4488

CASTORSEED

20 JUL 2015

4541

4398

4255

4173

4112

4030

3969

3826

3683

✍ NCDEX WEEKLY LEVELS WEEKLY

EXPIRY DATE

R4

R3

R2

R1

PP

S1

S2

S3

S4

SYOREFIDR

20 AUG 2015

657

640

623

913

606

596

589

572

555

SYBEANIDR

20 AUG 2015

4562

4352

4142

4006

3932

3796

3722

3512

3302

RMSEED

20 JUL 2015

4769

4609

4449

4346

4289

4186

4129

3969

3809

JEERAUNJHA

20 JUL 2015

21863 20443

19023

18076

17603 16656 16183 14763

13343

CHANA

20 JUL 2015

5598

5329

5060

4893

4791

4624

2522

4253

3984

CASTORSEED

20 JUL 2015

4874

4631

4388

4240

4145

3997

3902

3659

3416


✍ MCX DAILY LEVELS DALLY

EXPIRY DATE R4

R3

R2

R1

PP

S1

S2

S3

S4

ALUMINIUM

30 JUN 2015

116

114

112

111

110

109

108

106

104

COPPER

30 JUN 2015

399

393

387

384

381

378

375

369

363

CRUDE OIL

19 JUN 2015 4028 3925

3822

3782

3719

3679

3616

3513

3410

GOLD

05 AUG 2015 2766 27349 1

37037

26879

26725

26567

26413

26101

25789

LEAD

30 JUN 2015

131

128

125

123

122

120

119

116

113

NATURAL GAS 25 JUN 2015

176

173

170

168

167

165

164

161

158

905

882

859

850

836

827

813

790

767

37560

37285

37005

36790

36450

35895

35340

139

138

136

135

133

130

127

NICKEL

30 JUN 2015

SILVER

03 JUL 2015 3867 38115 0

ZINC

30 JUN 2015

142 145

✍ MCX WEEKLY LEVELS WEEKLY

EXPIRY

R4

R3

R2

R1

PP

S1

S2

S3

S4

ALUMINIUM

30 JUN 2015

119

116

113

111

110

108

107

104

101

COPPER

30 JUN 2015

416

405

394

388

383

377

372

361

350

19 JUN 2015 4614

4335

4056

3899

3777

3620

3498

3219

2940

GOLD

05 AUG 2015 29128 28376

27624

27172

26872

26420

26120

25368

24616

LEAD

30 JUN 2015

134

130

126

124

122

120

118

114

110

NATURAL GAS 26 MAY 2015

198

188

178

172

168

162

158

148

138

964

919

874

857

829

812

784

739

694

40453

38731

37728

36006

35003

32278

29553

CRUDE OIL

NICKEL

30 JUN 2015

SILVER

05 JUL 2015 45903 43178


MCX - WEEKLY NEWS LETTERS INTERNATIONAL NEWS � China import tax cuts no remedy for retail slowdown: China's economic policymakers clearly didn't consult mother-of-one Chen Xuejun when they decided to try stimulating consumer demand by slashing import tariffs on sneakers to skincare. The 28-year-old speaks for many Chinese shoppers when she says the move last week won't make her shift her purchases back home from overseas, suggesting the economic upside may be less than Beijing has bargained for. The tariff cuts, effective from June 1, are the latest in a string of measures to stimulate domestic consumption and bolster economic growth, which hit a 24-year low last year. Private consumption now accounts for over half of China's GDP growth, but lags far behind levels in markets like the United States. A Reuters analysis suggests shoppers may be right to be sceptical. High Street prices of imported goods can be about 40 percent higher in China than overseas, and data shows the tariff cuts are unlikely to make much difference.

� China May services PMI up to 53.5, new biz up since 2012: The headline HSBC/Markit Purchasing Managers' Index (PMI) for May was 53.5, up from 52.9 in April and well above the 50-point level that separates expansion from contraction. The May figure represented the fourth straight month of acceleration. Activity in China's services sector accelerated in May as new business rose at the fastest pace in three years, a private survey showed on Wednesday, a rare piece of good news for policymakers struggling to reviving a cooling economy. Still, economists remain cautious on China's overall economic outlook, as credit growth remains weak and manufacturing stagnates, reinforcing views that authorities will have to roll out more stimulus to avert a sharper slowdown. The headline HSBC/Markit Purchasing Managers' Index (PMI) for May was 53.5, up from 52.9 in April and well above the 50-point level that separates expansion from contraction. The May figure represented the fourth straight month of acceleration. The new business sub-component was at 54.4, up from 52.8 in April and the highest reading since 54.7 in May 2012. Employment at services firms grew at the fastest rate since January 2013, the survey showed, another encouraging sign for policymakers as layoffs continue in the manufacturing sector, China's traditional jobs engine. "Overall, growth momentum appears relatively weak, weighed down by an ongoing deterioration in manufacturing operating conditions," said Annabel Fiddes, economist at Markit. "Therefore, further stimulus measures may be required to keep up with (the government's) annual GDP growth target of 7 percent." A news release did not give specific reasons for the strong pick-up in business in May.


✍ Greece and Ukraine crises drown out G7 agenda : Leaders from the Group of Seven (G7) industrial nations meet on Sunday in the Bavarian Alps for a summit overshadowed by Greece’s debt crisis and ongoing violence in Ukraine. Host Angela Merkel is hoping to secure commitments from her G7 guests to tackle global warming to build momentum in the run-up to a major United Nations climate summit in Paris in December. The German agenda also foresees discussions on global health issues, from Ebola to antibiotics and tropical diseases. But on the evening before the German chancellor welcomes the leaders of Britain, Canada, France, Italy, Japan and the United States, she and French President Francois Hollande were forced into their fourth emergency phone call in 10 days with Greek Prime Minister Alexis Tsipras to try to break a deadlock between Athens and its international creditors.

Merkel is due to hold talks with US President Barack Obama on Sunday morning before the summit gets underway, with Ukraine, Middle East turmoil and the TTIP free trade agreement being negotiated between Washington and the European Union at the top of the agenda.

✍ BULLION ✍ Gold Gold futures ticked down on Friday extending losses from earlier this week, as optimistic U.S. jobs data increased the possibility that the Federal Reserve could raise interest rates sooner than previously expected. On the Comex division of the New York Mercantile Exchange,gold futures for August delivery fell 7.00 or 0.60% to 1,168.20 a troy ounce. Gold futures plummeted to a monthly-low of 1,162.20 before rising slightly on a choppy day of trading. At one point, gold hit a session-high of 1,178.00. Gold prices plunged early on Friday morning after the U.S. Bureau of Labor Statistics released better than expected job figures for the month of May. Last month, U.S. non-farm payrolls soared by 280,000, far exceeding analysts' low end of forecasts for a 220,000 gain. Private payrolls increased by 262,000 in May, as professional business services added 63,000 positions on the month. The labor market also added 17,000 construction position, following a significant gain of 35,000 a month earlier. The Fed's decision to tighten monetary policy is viewed as bearish for gold. The precious metal is not attached to dividends or interest rates and struggles to compete with high-yield bearing assets in periods of rising rates. Separately, Federal Reserve of New York president William Dudley reiterated on Friday that the Fed will likely raise rates at some point this year. It is widely expected that the Fed could


wait until September before raising its benchmark Fed Funds Rate, though it has not ruled out lift-off in June. On Thursday, the International Monetary Fund suggested that the Fed should wait until the first half of 2016 for lift-off unless the U.S. economy improves dramatically over the next several months. As expected, the two sides in the Greek Debt negotiations failed to reached an agreement on Friday. Earlier this week, France president Francois Hollande said Greece and its international creditors appeared to be hours from reaching a deal on agreement that could unlock critical aid to the beleaguered nation. Greece prime minister Alexis Tsipras, though, may have rankled creditors on Thursday by bundling four separate obligations to the IMF into one repayment at the end of this month. In doing so, Greece delayed repayment of a EUR 300 million payment due on Friday.

ENERGY � Crude Oil Crude futures rose steadily on Friday, halting a midweek slump as OPEC expectedly kept production levels unchanged from their current level at approximately 30 million barrels per day.On the New York Mercantile Exchange, WTI crude for July delivery gained 1.12 or 1.94% to 59.12 a barrel ending a two-session losing streak. U.S. Crude futures plunged roughly 5% over the previous two session in advance of Friday's meeting in Vienna. Texas Long Sweet futures plunged more than 1% ahead of Friday's announcement to a daily-low of $56.86, before reversing course after the world's largest oil cartel decided to keep production levels steady for the second time in six months.While crude prices are down dramatically from their peak of $115 last summer, they are still up more than 10% from touching down to a 52-week low of $45 a barrel in January. At Friday's meeting Iran oil minister, Bijan Namdar Zanganeh indicated that he expects crude prices to reach $75 by year's end.Although the majority of OPEC's smaller nations have advocated for a slash in production output to boost prices, they have been overruled by Saudi Arabia which is looking to undercut U.S. shale producers by depressing prices. On the Intercontinental Exchange (ICE), brent crude for July delivery rose 1.32 or 2.14% to 63.35 a barrel, ending a two-session skid. Brent futures also fell before the meeting dropping below $61 before rallying later in the session. The spread between the international and U.S. benchmarks for crude stood at 4.23, slightly above Thursday's level.In the U.S., oil services firm Baker Hughes (NYSE:BHI) said that the number of oil rigs nationwide fell last week by


four to 642, the lowest level since August, 2010. It marked the 26th consecutive week of weekly rig declines. Though U.S. shale producers have been forced to slash drilling due to the lower price of crude, they have responded by keeping their more efficient rigs online.The U.S.Dollar Index, which measures the strength of the greenback versus six other major currencies, surged 0.86% to 96.32 amid strong U.S. jobs data.Dollar-denominated commodities such as crude become more expensive for foreign purchasers when the dollar appreciates.

� Natural gas Natural gas futures fell for the third consecutive session on Friday to settle near a five-week low as forecasts for mild weather across the U.S. in the week ahead and concerns over ample supplies weighed.On the New York Mercantile Exchange, Natural gas for delivery in July fell 3.6 cents, or 1.37%, on Friday to end at $2.590 per million British thermal units by close of trade. A day earlier, natural gas prices hit $2.556, a level not seen since April 30.For the week, the July natural gas contract declined 2.5 cents, or 1.97%, the third straight weekly loss. Futures were likely to find support at $2.556, the low from June 4, and resistance at $2.675, the high from June 4.Weather forecasting models called for mostly normal temperatures across the U.S. through mid-June, suggesting little demand for the fuel and paving the way for additional hefty inventory builds in the weeks ahead.Spring usually sees the weakest demand for natural gas in the U.S, as the absence of extreme temperatures curbs demand for heating and air conditioning.Meanwhile, the U.S. Energy Information Administration said in its weekly report on Thursday that natural gas storage in the U.S. rose by 132 billion cubic feet, above expectations for an increase of 121 billion and following a build of 112 billion cubic feet in the preceding week. Supplies rose by 118 billion cubic feet in the same week last year, while the five-year average change is an increase of 92 billion cubic feet. Total U.S. natural gas storage stood at 2.233 trillion cubic feet as of last week, 50.7% higher than during the same week a year earlier and 1.0% above the five-year average for this time of year.Last spring, supplies were 55% below the five-year average, indicating producers have made up for all of last winter’s unusually strong demand.The EIA's next storage report slated for release on Thursday, June 4 is expected to show a build of approximately 110 billion cubic feet for the week ending June 5.Supplies rose by 109 billion cubic feet in the same week last year, while the five-year average change is an increase of 89 billion cubic feet.Elsewhere on the Nymex, Crude oil for July delivery settled at $59.13 a barrel by close of trade on Friday, down $1.16, or 1.94%, on the week, while heating oil for July delivery dropped 4.11% on the week to settle at $1.869 per gallon.


BASE METAL ✍ Copper Copper prices were lower on Wednesday, as traders eyed the release of key U.S. economic data later in the day for fresh indications on the timing of a rate increase. On the Comex division of the New York Mercantile Exchange, copper for July delivery slipped 0.9 cents, or 0.32%, to trade at $2.727 a pound during European morning hours. Prices held in a range between $2.726 and $2.748. Futures were likely to find support at $2.710, the low from June 1, and resistance at $2.784, the high from May 29.A day earlier, copper prices tacked on 1.6 cents, or 0.59%, to close at $2.736, supported by a broadly weaker U.S. dollar.The U.S dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was at a more than one-week low of 96.05.The greenback dropped after data on Tuesday showed that factory orders fell 0.4% in April, confounding expectations for a 0.2% increase. On a year-over-year basis, factory orders dropped 6.4%, the sixth straight monthly decline. The unexpectedly weak data sparked fresh fears over the outlook for second quarter growth after data last month showed that the U.S. economy contracted 0.2% in the first quarter.Meanwhile, hopes that Greece will soon reach an agreement with its international lenders on a cash-for-reforms deal boosted the Euro.Greece is due to make a €305 million payment to the International Monetary Fund on Friday but has warned that it will be unable to make the repayment if a deal is not reached by then.Elsewhere, gold futures for August delivery dipped $5.20, or 0.44%, to trade at $1,189.20 a troy ounce, while silver futures for July delivery shed 13.9 cents, or 0.83% to trade at $16.66 an ounce.

✍ Nickel Nickel futures ended lower in the domestic market on Friday as investors and speculators exited positions in the industrial metal amid weak physical demand for nickel in the domestic spot market. Moreover, a slowdown in the world economy as the OECD pared its global growth forecast for 2015 from 3.7 per cent to 3.1 per cent darkened the outlook for the industrial metal. Record stockpiles of the base metal also soured sentiment, with stockpiles of Nickel on the London Metal Exchange (LME) rising a whopping 66 per cent in the past year to a record 470,118 metric tons. At the MCX, Zinc futures for June 2015 contract is trading at Rs 827.40 per 1 kg, down by 0.49 per cent after opening at Rs 829.30, against the previous closing price of Rs 831.50.


✍ Zinc Zinc futures succumbed to significant losses in the domestic market on Friday as investors and speculators exited positions in the industrial metal amid weak physical demand for zinc in the domestic spot market. Further, caution ahead of the US jobs data and fears over Greece kept investors edgy. Greece has asked for a deferral on its debt payments to the IMF, becoming the first country since the 1980s to delay a loan repayment to the Washington-based institution, taking it closer to a catastrophic default that threatens to shake up the euro. At the MCX, Zinc futures for June 2015 contract is trading at Rs 135.70 per 1 kg, down by 1.06 per cent after opening at Rs 137, against the previous closing price of Rs 137.15.

✍ NCDEX - WEEKLY NEWS LETTERS ✍ Monsoon forecast Prices of agricultural commodities have started spiraling in the spot market, ahead of kharif sowing, due to the lower production estimates following a deficient monsoon forecast by the India Meteorological Department (IMD) this year.A little over 60 per cent of the country’s cultivable land is only rain-fed and 70 per cent of the annual rainfall takes place during the monsoon. The firmness in agri commodity prices began mid–April, when IMDfirst came out with a rainfall forecast of 93 per cent of the long-period average (LPA). In May, prices rose up to 30 per cent in wholesale markets. The rise has been more in the past three week.According to the Union government's department of consumer affairs, wheat rose 30 per cent in May to trade currently at Rs 2,138 a quintal as against Rs 1,650 a qtl on May 1. There has been a lower percentage of increase in pulses, potatoes and edible oils.“The price rise is only because of lower production fear. A further rally in the short term looks unlikely. Future movement would depend on the progress of actual rainfall. The government’s response to deficient rain would also have a significant bearing on commodity prices.IMD's current forecast is 88 per cent of the LPA and this has worried all, including the government, the Reserve Bank of India (RBI), farmers, traders and consumers. The RBI governor has already raised concern over inflationary pressure due to less rain. Union finance minister Arun Jaitley has sought to reassure on these concerns. Addressing journalists in Delhi on Thursday, he said, “The forecast rainfall pattern is similar to last year. Hence, food grain production might not have a significant impact. We have an abundance of food grain and our management was efficient last year, with no inflationary pressure (on this count).”The Food and Agriculture Organization (FAO) of the United Nationshas lowered India’s milled riceproduction forecast by 1.4 per cent to 94.5 million tonnes this year, as against 95.8 mt last year. However, added FAO, in a report issued on Thursday, “Cerealproduction is forecast to remain close to the record outputs of the previous year. Favorable weather and


sufficient input supplies in India, including irrigated water and fertilizer, are expected to contribute to average yields in 2015, negating a small reduction in the area planted.”

✍ Global commodity prices Major food commodity prices declined again in May, hitting an almost six-year low as cereal prices fell substantially, amid a favorable outlook for this year's harvests globally.The Food Price Index compiled by the Food and Agricultural Organization (FAO) of the United Nations averaged 166.8 points in May, down 1.4 per cent from April and as much as 20.7 per cent from a year earlier. Cereals and dairy products were responsible for much of last month’s decline, although meat quotations also fell. By contrast, the oils and sugar markets firmed up. The May average puts the Food Price Index at its lowest level since September 2009. The agency has revised upwards its global cereal production outlook for 2015, to 2,524 million tonnes (including rice in milled terms), almost 15 mt higher than reported in May. At this level, world production would be one per cent or 25.6 mt lower than the record in 2014.

✍ Chana Continuing its slide for the second day, chana prices fell further by 0.59% to Rs 4,741 per quintal in futures market on Friday, as participants reduced holdings, prompted by higher supplies from producing belts.However, lower output estimates capped the losses.At the National Commodity and Derivative Exchange, chana for delivery in July contracts declined Rs 28, or 0.59%, to Rs 4,741 per quintal with an open interest of 1,83,850 lots.

✍ Refined soya oil Falling for the second straight day, refined soya oil prices fell 0.27 per cent to Rs 608.30 per 10 kg in futures trade on Friday amid subdued demand in the spot market.At National Commodity and Derivatives Exchange, refined soya oil for delivery in August eased Rs 1.65, or 0.27 per cent, to Rs 608.30 per 10 kg with an open interest of 1,97,430 lots.Similarly, the oil for delivery in June contracts edged down Rs 1.30, or 0.21 per cent, to Rs 619.75 per 10 kg in 40,300 lots.Market analysts said offloading of positions amid lower demand in the spot market against adequate stock position mainly kept pressure on refined soya oil prices.

✍ Castorseed Castorseed prices fell by 0.32 per cent on Friday at the National Commodity & Derivatives Exchange Limited (NCDEX) as a result of fresh supply of the commodity in the major mandies as well as strong production estimates. At the NCDEX, castor seed futures for June 2015 contract was trading at Rs. 4,003 per quintal tonnes, down by 0.32 per cent, after opening at Rs. 4,016 against the previous closing price of Rs. 4,016.Castor oil, extracted from castor seed is


the largest vegetable oil exported out of India.

� Mustard seed Mustard Seed prices closed lower by 0.66 per cent on Friday at the National Commodity & Derivatives Exchange Limited (NCDEX) as a result of the profit booking by the traders on account of the weak crushing and export demand of mustard meal. At the NCDEX, Mustard Seed futures for June 2014 contract closed at Rs. 4,243 per quintal, down 0.66 per cent, after opening at Rs. 4,272 against the previous closing price of Rs. 4,271. It touched the intra day low of Rs. 4,236. Sentiment weakened further due to the sluggish export demand as a result of the weak demand for the commodity. EU-27 accounts to about 34 per cent of worlds RM seed production.


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.


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