Commodity report ways2capital 23 feb 2015

Page 1

✍ NCDEX DAILY LEVELS


✍ NCDEX DAILY LEVELS DAILY

EXPIRY

R4

R3

SYOREFIDR

20 APR 15

629.83

620.33 610.83 604.67

SYBEANIDR

20 APR 15

3,512.67 3,474.6 3,436.67 3,413.33 3,398.6 3,375.3 3,360.6 3,322.6 3,284.67 7 7 3 7 7

RMSEED

20 APR 15

3,485.67 3,447.6 3,409.67 3,392.33 3,371.6 3,354.3 3,333.6 3,295.6 3,257.67 7 7 3 7 7

JEERAUNJHA

20 MAR 15 16,236.67 15,896. 15,556.6 15,423.3 15,216. 15,083. 14,876. 14,536. 14,196.6 67 7 3 67 33 67 67

CHANA

20 APR 15

CASTORSEED

20 MAR 15 3,996.00 3,922.0 3,848.00 3,806.00 3,774.0 3,732.0 3,700.0 3,626.0 3,552.00 0 0 0 0 0

✍ NCDEX WEEKLY

R2

R1

PP

S1

S2

S3

S4

601.33 595.17 591.83 582.33 572.83

3,790.67 3,750.6 3,710.67 3,691.33 3,670.6 3,651.3 3,630.6 3,590.6 3,550.67 7 7 3 7 7

LEVELS

WEEKLY

EXPIRY

R4

R3

R2

R1

PP

S1

S2

S3

S4

SYOREFIDR

20 APR 15

649.85

634.35 618.85 608.70

SYBEANIDR

20 APR 15

3,674.00 3,586.0 3,498.00 3,444.00 3,410.0 3,356.0 3,322.0 3,234.0 3,146.00 0 0 0 0

RMSEED

20 APR 15

3,682.33 3,583.3 3,484.33 3,429.67 3,385.3 3,330.6 3,286.3 3,187.3 3,088.33 3 3 7 3 3

JEERAUNJHA

20 MAR 15 19,016.67 17,711. 16,406.6 15,848.3 15,101. 14,543. 13,796. 12,491. 11,186.67 67 7 3 67 33 67 67

CHANA

20 APR 15

4,025.33 3,908.3 3,791.33 3,731.67 3,674.3 3,614.6 3,557.3 3,440.3 3,323.33 3 3 7 3 3

CASTORSEED

20 MAR15

4,342.67 4,164.6 3,986.67 3,875.33 3,808.6 3,697.3 3,630.6 3,452.6 3,274.67 7 7 3 7 7

603.35 593.20 587.85 572.35 556.85


✍ MCX

DAILY LEVELS

ALUMINIUM

27 FEB 15 116.32

114.77

113.22

112.28

111.67

110.73

110.12

108.57

107.02

COPPER

27 FEB 15 375.43

369.28

363.13

359.97

356.98

353.82

350.83

344.68

338.53

CRUDE OIL

19 MAR15 3,521.67 3,426.67 3,331.67 3,273.33 3,236.67 3,178.33 3,141.67 3,046.67 2,951.67

GOLD

03APR 15 27,019.6 26,771.6 26,523.6 26,400.3 26,275.6 26,152.3 26,027.6 25,779.6 25,531.67

LEAD

27 FEB 15 117.95

115.25

112.55

110.80

109.85

108.10

107.15

104.45

101.75

NATURAL GAS 24 FEB 15 217.33

205.33

193.33

188.67

181.33

176.67

169.33

157.33

145.33

NICKEL

27 FEB 15 927.17

908.77

890.37

881.63

871.97

863.23

853.57

835.17

816.77

SILVER

05 MAR 15 38,032.6 37,499.6 36,966.6 36,640.3 36,433.6 36,107.3 35,900.6 35,367.6 34,834.67 27 FEB 15 135.73

ZINC

✍ MCX

WEEKLY

WEEKLY

133.03

130.33

128.62

127.63

125.92

124.93

122.23

S1

S2

S3

119.53

LEVELS

EXPIRY

R4

R3

R2

R1

PP

S4

ALUMINIUM

27 FEB 15

122.82

119.32

115.82

113.58

112.32 110.08

108.82 105.32

101.82

COPPER

27 FEB 15

392.83

380.83

368.83

362.82

356.83 350.82

344.83 332.83

320.83

CRUDE OIL

19 MAR15 4,057.00 3,787.00 3,517.00 3,366.00 3,247.00 3,096.00 2,977.00 2,707.0 2,437.00

GOLD

03 APR 15 28,805.6 28,005.6 27,205.6 26,741.3 26,405.6 25,941.3 25,605.6 24,805. 24,005.67

LEAD

27 FEB 15

128.12

122.37

116.62

112.83

110.87 107.08

105.12

99.37

93.62

NATURAL GAS 24 FEB 15

233.33

215.33

197.33

190.67

179.33 172.67

161.33 143.33

125.33

NICKEL

27 FEB 15 1,042.00 989.10

936.20

904.60

883.30 851.70

830.40 777.50

724.60

SILVER

05 MAR 15 38,564.6 38,260.6 37,956.6 37,135.3 37,652.6 36,831.3 37,348.6 37,044. 36,740.67

ZINC

27 FEB 15

152.23

144.58

136.93

131.92

129.28 124.27

121.63 113.98

106.33


� MCX - WEEKLY NEWS LETTERS

India Budget 2015-16: Oil and Gas sector hopes for clarity on subsidy sharing formula This is an important period in the India oil sector given the falling global crude prices. The upcoming Union budget would be critical in this regard. Falling crude prices have resulted in lower under-recoveries and working capital requirements for oil marketing companies (OMC). However, it has affected the profitability of upstream companies such as ONGC and OIL.The oil ministry has proposed a new subsidy sharing proposal by which upstream companies would not make any contributions towards subsidy burden if crude prices are at or below $60 per barrel, would bear 85% subsidy burden when crude oil prices exceed $60 a barrel and is less than or equal to $100 a barrel, and would bear 90% subsidy burden if crude oil price exceeds $100 per barrel. A concrete subsidy sharing formula would provide visibility over earnings of upstream oil companies and hence, it would be positive for them (ONGC, Oil India and GAIL), the report said.The government is also likely to re-introduce 2.5-5% customs duty on import of crude oil, which will be positive for Cairn India and negative for private refiners and OMCs.

� Gold drops to 1-1/2 month low on sliding demand; silver gains Gold prices drifted to hit its lowest levels in 1-1/2 month at the domestic bullion market here due to sluggish demand from jewellery stockists as well as poor local buying sentiment. On the other hand, silver moved up marginally on the back of stray industrial demand. Standard Gold (99.5 purity) declined by Rs 95 to end at Rs 26,625 per 10 grams from Wednesday's closing level of Rs 26,720. Pure gold (99.9 purity) also fell by a similar margin to finish at Rs 26,775 per 10 grams compared to Rs 26,870. However, price of silver (.999 fineness) edged up by Rs 25 to settle at Rs 37,685 per kg as against Rs 37,660 previously. On the global front, the shiny-metal regained some lost ground on safe-haven demand amid continued uncertainty over Greece. Spot gold was bid higher at USD 1,211.45 an ounce in early European trade, while silver inched up to 16.42 an ounce.


✍ Gold Holding Above $1,200 as Macro Uncertainties Abound The U.S. Comex gold futures rose 0.62% on Thursday to $1,207.60 after dropping to an intraday low of $1,197.20 on Wednesday. Week-to-date, the gold futures fell 1.59% while the S&P 500 Index was flat, the Euro Stoxx Index rose 1.17%, and the CRB Commodities Index fell 1.28%. The Dollar Index continues to be in a narrow range of 93.80 to 94.50 all week. The U.S. ten-year Treasury yield rose 6bp to 2.1142% while the German ten-year Bund yield rose 4bp this week to 0.38% on Thursday. Macro and Political Events The market will monitor the discussions among the finance ministers in Brussels on Friday on the Greeceôs request to extend the loan agreement with fewer conditions. At the same time, the ECB plans to ask the Greek banks to lower their holdings of government bonds if the talks fail, thus putting more pressure on the Greek government. The Fed minutes released on Wednesday had a dovish tone given many Fed governors preferred not to hike interest rates prematurely as the strong dollar hurts net exports while the economic recovery is still moderate. Dealersô expectations of a June rate hike declined from 23% a week ago to 18% after the Fed minutes release according to Bloomberg. Elsewhere in Japan, the central bank has decided not to ease monetary policy further saying that the inflation expectations have not dropped more because of the lower oil prices. InvestorsôDemand The holdings of the largest gold-backed ETF, the SPDR Gold Trust, rose about eight percent this year by 60 metric tons to 769.46 metric tons on Wednesday, down about 30 tons since a year ago. The gold investorsô sentiments have rebounded somewhat this year given the uncertainty in the currencies, interest rates, and politics around the world. Dealers are expecting the physical demand to rise starting at the end of February when the Chinese New Year holidays end. The gold prices may jump on the positive expectations of a cut in Indiaôs gold import duty. A lifting of the ban on consignment deals by the Indian government has also given hope to more gold imports in the coming months.


Greece, euro zone agree four-month loan extension, avert crunchFinance ministers agreed in principle on Friday to extend Greece么s financial rescue by four months, averting a potential cash crunch in March that could have forced the country out of the currency area. The deal, to be ratified once Greece's creditors are satisfied with a list of reforms it will submit next week, ends weeks of uncertainty since the election of a leftist-led government in Athens which pledged to reverse austerity. "Tonight was a first step in this process of rebuilding trust," Jeroen Dijsselbloem, chairman of the 19-nation Eurogroup, told a news conference. "We have established common ground again to reach agreement on this statement." The agreement, clinched after the third ministerial meeting in two weeks of acrimonious public exchanges, offers a breathing space for the new Greek government to try to negotiate longerterm debt relief with its official creditors. But it also forced radical young Prime Minister Alexis Tsipras into a major climbdown since he had vowed to scrap the bailout, end cooperation with the "troika" of international lenders and roll back austerity. European Union paymaster Germany, Greece's biggest creditor, had demanded "significant improvements" in reform commitments by Athens before it would accept an extension ofeuro zone funding. The two main combatants around the table put a radically different gloss on the result. "Being in government is a date with reality, and reality is often not as nice as a dream," German Finance Minister Wolfgang Schaeuble told reporters, stressing Athens would get no aid payments until its bailout programme was properly completed. "The Greeks certainly will have a difficult time to explain the deal to their voters," the conservative veteran said. Greek Finance Minister Yanis Varoufakis said the talks had shown elections could bring change to Europe. He insisted he had averted "recessionary measures" and said the government still hoped to raise the minimum wage and rehire some public sector workers. "Nobody is going to ask us to impose upon our economy and society measures that we don't agree with," Varoufakis said. The euro rebounded against the dollar and global equity markets surged to record closing highs while Greek government bond yields fell on optimism for a debt deal.


� REFORM LIST The accord requires Greece to submit by Monday a letter to the Eurogroup listing all the policy measures it plans to take during the remainder of the bailout period. If the European Commission, the European Central Bank and the International Monetary Fund are satisfied, euro zone member states will ratify the extension, where necessary through their parliaments. Euro finance ministers may sign off on the deal on Tuesday via a teleconference. However, if there are doubts they would reconvene in Brussels, officials said, a conditions insisted upon by Spain, whose government also faces a radical leftist insurgency at an election later this year and is keen that Tsipras gets no special treatment. Irish Finance Minister Michael Noonan voiced caution, telling reporters: "It's an important first step that we hope will lead to a successful second step on Monday night/Tuesday morning, but then of course there's a third step with ratifications in parliament." With the 240 billion euro (178 billion pounds) EU/IMF bailout programme due to expire in little more than a week, Tsipras had requested a six-month extension of a loan agreement but Germany and its allies objected to the initial formulation of the request. Greece's partners insisted on the shorter period and tied further disbursements to a satisfactory review at the end. They also obliged Athens to commit to fully funding any new spending measures and obtaining approval from its lenders. The ECB said there would be no need for Greece to impose capital controls restricting cash withdrawals after the deal. An ECB source said the bank's governing council was ready to resume accepting Greek government bonds as collateral for lending once necessary steps were taken for the extension and the bank determined there was a "great likelihood" that Greece would achieve a "positive conclusion" to its rescue programme.

� TRUST IN SHORT SUPPLY The complex document was crafted in preliminary talks among Varoufakis, Schaeuble, Dijsselbloem and IMF Managing Director Christine Lagarde.


Finance ministers from other euro zone states insisted on more guarantees that Greecewould meet the bailout's strict conditions on budget discipline and economic reforms. Tsipras had a long telephone call with Germany's Angela Merkel on Thursday and has spoken repeatedly to the leaders of France and Italy in the search for a solution that allows his radical government to fulfil election promises. Euro zone officials said Greece's track record and the combative behaviour of its new leaders had undermined their confidence in whether Athens would deliver what it agrees to in talks with the other countries sharing the euro. That drove ministers to make Greece hand over custody of nearly 11 billion euros in aid earmarked for stabilising its banks to the euro zone's rescue fund. Some pointed comments were directed at Varoufakis, an outspoken Marxist economist and blogger, and his casual style. "Even hardliners like us have to give the benefit of the doubt to a communist in a Burberry scarf," an official of one hawkish European country joked. Adding to pressure to reach a deal, Greek savers have withdrawn their money from the banks at an accelerating pace despite government assurances that there is no plan to introduce capital controls to stem the outflows.

China么s crude steel production for January 2015 was 65.5 Mt, a decrease of -4.7% compared to January 2014. The crude steel capacity utilisation ratio for the 65 countries in January 2015 was 72.5%. World crude steel production for the 65 countries reporting to the World Steel Association (worldsteel) was 133 million tonnes (Mt) in January 2015, a -2.9% decrease compared to January 2014. China么s crude steel production for January 2015 was 65.5 Mt, a decrease of -4.7% compared to January 2014. Elsewhere in Asia, Japan produced 9.0 Mt of crude steel in January 2015, a decrease of -4.0% compared to January 2014. In the EU, Germany produced 3.7 Mt of crude steel in January 2015, an increase of 0.5% compared to January 2014. Italy produced 1.9 Mt of crude steel, down by -11.3% on January 2014. France么s crude steel production was 1.3 Mt, a decrease of -10.6% compared to January 2014. Spain produced 1.3 Mt of crude steel, up by 11.8% compared to January 2014.


Turkey么s crude steel production for January 2015 was 2.6 Mt, down by -10.4% on January 2014. In January 2015, Russia produced 6.1 Mt of crude steel, up by 6.0% over January 2014. Ukraine produced 1.9 Mt of crude steel, down by -25.2% compared to the same month 2014. The US produced 7.4 Mt of crude steel in January 2015, an increase of 0.4% compared to January 2014. Brazil么s crude steel production for January 2015 was 3.0 Mt, up by 7.7% on January 2014. The crude steel capacity utilisation ratio for the 65 countries in January 2015 was 72.5%. It is 4.4 percentage points lower than January 2014. Compared to December 2014, it is -0.4 percentage points lower.


Chinese housing data sideswipes copper price Declining properties values in China are hammering copper. The release on Tuesday of Chinese government data showed the prices of new homes fell in 64 of 70 cities. Saw the biggest drop since Feb. 10, with copper futures for May delivery falling 1 percent to $2.85 a pound on the Comex in New York. Copper, lead, aluminum, tin and nickel also fell on the LME, with nickel dropping for a seventh straight session in the worst slump since November 2013. ñMore and more reports are indicating that the slowdown is not getting any better,ò Mike Dragosits, a senior commodity strategist at TD Securities in Toronto, told the news outlet. ñPrices will probably remain under pressure until we see China taking some aggressive steps to boost growth.ò 2015 is turning out to be an ugly year for the red metal, having declined 8.7 percent so far on concerns of an oversupplied market and ebbing demand for key consumption markets China and Europe.

✍ NCDEX - WEEKLY NEWS LETTERS ✍ India Budget 2015-16: The expectations for Agri commodities As the budget is around the corner India's farm sector will be waiting to see what is in its store for them. These are a critical times for the sector as agriculture is witnessing its importance diminishing in the economy. One big relief is that the new government under Narendra Modi has given special stress on the farm sector while it took charge at the office last year. The agriculture sector contributes to 15 percent of India's Gross Domestic Product (GDP). But it is important to note that over 50 percent of the population is still dependent on it. Union Budget Expectations for Agri Commodities: . Exemption of CTT for processed agricultural commodities to ensure a pickup in volumes in the futures market . Passing on benefits of a fall in petrol/diesel prices to ensure reduction in freight charges . Investment funds in warehousing sector to prevent wastage of food . Bank accounts for farmers for each and every household for direct transfer of subsidies and loans . Subsidized loans to farmers and safeguarding them from crop losses through crop insurance . Availability of quality agri inputs like fertilizers, seeds and advanced technology inputs . Providing irrigation facilities and electricity at cheap rates to farmers


. Upgrading weather forecasting system ï IMD, for accurate monsoon forecasts which could enable farmer to take informed decisions. . Investments in transportation and infrastructure like roads and railways to reduce transportation costs for farmers for their produce Soybean April contract is likely to trade bullish for short term and sideways for intra day. Short term support is seen at 3320 and resistance at 3530. Soybean April contract is likely to trade bullish for short term and sideways for intra day. Short term support is seen at 3320 and resistance at 3530. ñIntra day support is seen at 3400 and and resistance at 3450. Global oilseed production for 2014/15 is projected at a record 532.1 million tons, down slightly from last month. Global soybean production is raised 0.7 million tons to a record 315.1 million. Prospects for the Argentina soybean crop have improved with ample moisture and mild temperatures. As a result, the crop is projected at a record 56.0 million tons, up 1.0 million. Soybean production is also raised for China, Russia, and Ukraine. Soybean production for Brazil is projected at 94.5 million tons, down 1.0 million on lower yields reflecting the impact of limited rainfall in eastern growing areas. soybean supplies are increased 10 million bushels to 4,086 million on higher projected imports. Exports for 2014/15 are projected at 1,790 million bushels, up 20 million. Soybean crush is raised 15 million bushels to 1,795 million on increased domestic soybean meal disappearance. Soybean oil production gains from additional crush are mostly offset with a lower extraction rate. With increased production and reduced exports, soybean oil ending stocks are project-ed at 1.505 billion pounds, up 75 million. Soybean ending stocks are projected at 385 million bushels, down 25 million from last month. Soybean output may rise by 40 lakh tons this year. It has estimated 31.20 crore tons output globally in 2014-15. Previously, it is estimated 30.8 crore tons in its projection released in November. ✍ Castor seed futures trade lower on increased supplies Castor seed futures traded marginally lower on NCDEX on account of increased supplies of new crops in the markets. Besides, fall in demand at domestic as well as export markets also weighed on castor seed prices. The contract for February delivery was trading at Rs 3770.00, down by 0.19% or Rs 7.00 from its previous closing of Rs 3777.00. The open interest of the contract stood at 3530 lots. The contract for March delivery was trading at Rs 3792.00, down by 0.13% or Rs 5.00 from its


previous closing of Rs 3797.00. The open interest of the contract stood at 102960 lots on NCDEX.

� Chana futures decline on sluggish demand Chana futures traded lower on NCDEX due to sluggish demand in spot market against adequate stocks position. However, expected lower output from the new crop capped some losses in chana prices. The contract for April delivery was trading at Rs 3665.00, down by 0.79% or Rs 29.00 from its previous closing of Rs 3694.00. The open interest of the contract stood at 174130 lots. The contract for May delivery was trading at Rs 3673.00, down by 0.97% or Rs 36.00 from its previous closing of Rs 3709.00. The open interest of the contract stood at 83110 lots on NCDEX.

� Jeera future edge lower on subdued demand Jeera future traded down on NCDEX due to subdued demand from retailers and stockists at existing levels. Further, weakening trend at futures market also put pressure on prices at future trade. The contract for March delivery was trading at Rs 15240.00, down by 0.26% or Rs 40.00 from its previous closing of Rs 15280.00. The open interest of the contract stood at 17547.00 lots. The contract for April delivery was trading at Rs 15515.00, down by 0.29% or Rs 45.00 from its previous closing of Rs 15560.00. The open interest of the contract stood at 4983.00 lots on NCDEX.


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