Commodity Research Report 21 December 2015 Ways2Capital

✍ MCX DAILY LEVELS DAILY

EXPIRY

R4

R3

R2

R1

PP

S1

S2

S3

S4

31 DEC 2015 104. 103.05 101.25 100.45 99.45 85

98.60

97.65

95.85

94.05

29 FEB 2016 337. 328.70 319.90 316.60 60

311

307.70 302.20 293.30

284.50

19 JAN 2016 266 2584 6

2420

DATE

ALUMINIUM COPPER CRUDE OIL

2502

2452

2370

2338

2256

2174

GOLD

05 FEB 2016 261 25816 25434 25258 25052 24876 24670 24288 98

23906

LEAD

31 DEC 2015 123. 119.45 114.95 113.40 110.45 108.90 105.95 101.45 95

96.95

NATURAL GAS 28 DEC 2015 134. 128.60 122.90 120.10 117.20 114.40 111.50 105.80 30

100.10

NICKEL

31 DEC 2015 611. 601.30 591.10 50

580.90 575.80 570.70 560.50

550.30

SILVER

04 MAR 2016 368 35793 34762 34347 33731 33316 32700 31669 24

30638

31 DEC 2015 105. 103.20 101.35 100.55 99.50 05

93.95

ZINC

586

98.70

97.65

95.80

S1

S2

S3

✍ MCX WEEKLY LEVELS WEEKLY

ALUMINIUM COPPER CRUDE OIL

EXPIRY

R4

R3

R2

R1

PP

31 DEC 2015 107.7 104.90 102.10 100.85 99.30 0

96.50 93.70

90.90

29 FEB 2016 361.9 345.20 328.50 320.90 311.80 304.20 295.10 278.40 0

261.70

1974

1723

GOLD

05 FEB 2016 27797 26914 26031 25556 25148 24673 24265 23382

22499

LEAD

31 DEC 2015 140.3 130.90 121.40 116.60 111.90 107.10 102.40 92.90 5

83.40

NATURAL GAS 28 DEC 2015 176.3 158 139.70 128.50 121.40 110.20 103.10 84.80 0 31 DEC 2015 648.7 626.40 604.20 592.60 582 570.40 559.90 537.60 NICKEL 0 04 MAR 38097 36667 35237 34585 33807 33155 32377 30947 SILVER 2016

66.50

ZINC

19 JAN 2016 3229

2978

2727

2564

2476

98.05

S4

2313

31 DEC 2015 121.3 114.40 107.50 103.60 100.60 96.75 0

2225

93.70 86.80

515.40 29517 79.95

WEEKLY MCX CALL BUY ZINC DEC ABOVE 101 TGT 103 SL 99

PREVIOUS WEEK CALL BUY GOLD FEB ABOVE 25750 TGT 25900 SL 25594 - NOT EXECUTED. SELL ZINC DEC BELOW 102.20 TGT 100.20 SL 104.60 - TGT ACHIVED

✍ FOREX DAILY LEVELS DAILY

EXPIRY

R4

R3

R2

R1

PP

S1

S2

S3

S4

DATE

USDINR

29 DEC 2015 67.2 66.95 0

66.75

66.60

66.50

66.35

66.25

66

65.75

GBPINR

29 DEC 2015 73.6 73.10 5

72.60

72.30

72

71.70

71.50

70.95

70.40

EURINR

29 DEC 2015 100. 100.15 99.70 65

99.50

99.25

99

98.80

98.30

97.85

JPYINR

29 DEC 2015 57.9 56.75 0

55.60

55.20

54.45

54.05

53.30

52.20

51.05

R2

R1

PP

S1

S2

S3

S4

✍ FOREX WEEKLY LEVELS DAILY

EXPIRY

R4

R3

DATE

USDINR

29 DEC 2015 69.4 68.55 5

67.60

67

66.70

66.10

65.75

64.83

63.90

GBPINR

29 DEC 2015 80.1 77.60 0

75.10

73.45

72.60

70.95

70.10

67.60

65.15

EURINR

29 DEC 2015 109. 106.40 103.20 101.10 50

100

97.95

96.90

93.75

90.60

JPYINR

29 DEC 2015 60.3 58.40 5

54.40

53.10

52.40

50.40

48.40

56.40

55.10

WEEKLY FOREX CALL BUY EURINR DEC ABOVE 72.63 TGT 73.25 SL 71.98 PREVIOUS WEEK CALL SELL GBPINR DEC BELOW 101.80 TGT 101 SL 103.10 - TGT ACHIEVED SELL JPYINR DEC BELOW 55.30 TGT 55 SL 54.05 - NOT EXECUETED.

✍ NCDEX DAILY LEVELS DAILY

EXPIRY

R4

R3

R2

R1

PP

S1

S2

S3

S4

DATE

SYOREFIDR

20 JAN 2016

637

630

623

620

616

613

609

602

595

SYBEANIDR

20 JAN 2016 4152

4019

3886

3839

3753

3706

3620

3487

3354

RMSEED

20 JAN 2016 4923

4798

4673

4616

4548

4491

4423

4298

4173

20 JAN 2016 15640 15295 14950 14805 14605 14460 14260 13915

13570

CHANA

20 JAN 2016 5171

5057

4943

4895

4829

4781

4715

4601

4487

CASTORSEED

20 JAN 2016 4143

4059

3975

3931

3891

3847

3807

3723

3639

R4

R3

R2

R1

PP

S1

S2

S3

S4

JEERAUNJHA

✍ NCDEX WEEKLY LEVELS WEEKLY

EXPIRY DATE

SYOREFIDR

20 JAN 2016

702

675

648

632

621

605

594

567

540

SYBEANIDR

20 JAN 2016 4238

4073

3908

3850

3743

3685

3578

3413

3248

RMSEED

20 JAN 2016 5318

5064

4810

4685

4556

4431

4302

4048

3794

20 JAN 2016 17593 16648 15703 15181 14758 14236 13813 12868

11923

CHANA

20 JAN 2016 4152

4019

3886

3839

3753

3706

3620

3487

3354

CASTORSEED

20 JAN 2016 4322

4176

4030

3959

3884

3813

3738

3592

3446

JEERAUNJHA

WEEKLY NCDEX CALL BUY TMC APR ABOVE 10700 TGT 10900 SL 10500 BUY JEERA JAN ABOVE 14700 TGT 15000 SL 14400 PREVIOUS WEEK CALL SELL TMC APR BELOW 10300 TGT 9950 SL 10502 - NOT EXECUTED BUY RM SEED JAN ABOVE 4756 TGT 4860 SL 4652 - NOT EXECUTED

MCX - WEEKLY NEWS LETTERS INTERNATIONAL NEWS � PRECIOUS METAL � Gold Gold slipped on Thursday, giving back some of its overnight gains, in choppy trading after the Federal Reserve raised US interest rates for the first time in nearly a decade. The US central bank's policy-setting committee raised the range of its benchmark interest rate by a quarter of a percentage point, ending a lengthy debate about whether the economy was strong enough to withstand higher borrowing costs.Gold has slumped nearly 10% this year, largely on uncertainty around the timing of the US rate hike and on fears that higher rates would hit demand for the non-interest-paying precious metal. Though the Fed decision removes an overhang for gold prices, the focus now shifts to the central bank's pace of future rate increases.

Spot gold dipped 0.2% to $1,070.70 an ounce by 0037 GMT. The metal had rallied before the Fed decision on Wednesday and managed to hold on to most gains post the central bank statement, ending the day up 1.2%. US gold fell 0.6% to $1,070.50, following a 1.4 gain in the previous session. "Gold has been extraordinarily sensitive to perceived changes in monetary policy for many months," said HSBC analyst James Steel. "The rate rise may finally clear the deck and remove rate-related uncertainty from the bullion market." The Fed action leaves gold positioned for some gains, largely from short covering, but only modestly, he said.Investors had increased their short positions on gold to record levels this month, although they have since edged back from that peak. The dollar jumped nearly 1% against a basket of major currencies on Thursday, a factor that could limit any short covering gains. The US central bank made clear the rate hike was a tentative beginning to a "gradual" tightening cycle, and that in deciding its next move it would put a premium on monitoring inflation, which remains mired below target.

Wall Street's top banks expect the Fed to next raise US rates in the first quarter of next year, according to a Reuters poll. The rate forecasts, or dot points, from Fed members were a little higher than many expected with 100 basis points of hikes pencilled in for next year and a terminal rate of 3.5%. The divergence between the Fed forecasts and the market could hurt gold prices as investors begin to align their views with the central bank.

� Silver Amid a weakening trend overseas, silver prices tumbled Rs 392 to Rs 34,008 per kg in futures trade today as speculators cut their holdings. Silver for delivery in March next year was trading sharply lower by Rs 392, or 1.14%, at Rs 34,008 per kg in a business turnover of 812 lots in futures trading at Multi Commodity Exchange (MCX).On similar lines, the white metal for delivery in far-month May slumped Rs 396, or 1.14%, at Rs 34,401 per kg, with a business turnover of 23 lots. In the international market, silver traded 0.92% lower at $14.04 an ounce in Singapore. Market analysts said a weak trend in precious metals in global markets after the US Federal Reserve ended the zero-interest-rate era and flagged a quartet of increases in 2016, boosting the dollar and reducing demand for the precious metals as an alternate.

� Crude Oil Crude prices sank deeper in Asian trading today after the US oil benchmark closed at its lowest level since February 2009 on worsening oversupply concerns and a stronger dollar. At around 0220 GMT, West Texas Intermediate (WTI) for January delivery was trading at $34.77 per barrel, 18 cents off its close of $34.95 in New York.European benchmark Brent crude for February was down nine cents to $36.97. Oil is trading near levels last seen at the height of the last global financial crisis as producers including the OPEC group continue pumping despite depressed prices and anemic global demand. Adding to the commodity's woes is the US Federal Reserve's decision on Wednesday to raise benchmark interest rates for the first time in nine years, boosting the dollar and thus making crude more expensive for buyers with weaker currencies. "WTI sinking further below $35 in the morning is likely the result of the strengthening dollar," Daniel Ang, investment analyst at Phillip Futures in Singapore, said. "In addition to this, Brent's January 2016 contract has expired, which is causing spread traders to close off their WTI January 2016 contract positions."

Crude

futures

were

mixed in Asian trading on Friday as fresh signs of inventory building and the Federal Reserve's rate hike this week kept prices under pressure amid a global glut of oil that shows no sign of abating. U.S. crude's West Texas Intermediate (WTI) futures were down 13 cents at $34.82 a barrel by 0350 GMT. The contract fell 1.6 percent to $34.95 a barrel on Thursday. Brent was up by 3 cents at $37.09 a barrel. It fell 33 cents to $37.06 a barrel on Thursday. "It's the usual story. We have plenty of oil and oil demand is weak," said Avtar Sandu, Senior Commodities Manager, Phillip Futures in Singapore. "Everything is bearish, there is a bottom but for oil we

don't see anything yet." Both contracts are on track to post a third week of losses, with U.S. crude down 2.2 percent and Brent off by 2.1 percent. Sandu said the bears won't be satisfied till they test lows reached during the global financial crisis of $32.40 for WTI and $36.20 for Brent in December 2008. "That's the first target the bears are gunning for," Sandu said. "I think they will test those and once they hit them, see whether they can press below $30 for WTI." Market intelligence company Genscape reported an inventory increase of 1.4 million barrels at the Cushing, Oklahoma delivery hub for WTI futures, traders who saw the data said on Thursday.

That came a day after the U.S. Energy Information Administration (EIA) said crude stockpiles across the United States rose by 4.8 million barrels last week, compared with analysts expectations for a draw.

� Copper Copper prices were up 1.49% to Rs 309.10 per kg in futures trading today as speculators raised their bets, tracking a firm trend overseas. Besides, pick-up in demand from consuming industries supported the upside.At the Multi Commodity Exchange, copper for delivery in February month shot up by Rs 4.55, or 1.49% to Rs 309.10 per kg in business turnover of 12,249 lots. Likewise, the metal for delivery in far-month April contracts traded higher by Rs 4.25, or 1.37% to Rs 313.35 per kg in 265 lots.Market analysts attributed the rise in copper futures to a firming trend in base metals in global markets as Chinese copper smelters may build inventories to support prices after they announced plans to cut production next year.Meanwhile, copper increased 1.5% at the London Metal Exchange.

� Aluminium Aluminium prices were down 0.45% to Rs 100 per kg in futures trade today as investors offloaded positions amid weak global cues and muted demand at spot markets. At the Multi Commodity Exchange, aluminium for delivery in January next year eased by 45 paise, or 0.45%, to Rs 100 per kg, in a business turnover of four lots. Similarly, the metal for delivery this month was trading lower by 40 paise, or 0.40%, at Rs 99.15 per kg in 185 lots. Market men said the fall in aluminium prices at futures trade was mostly in tune with a weak trend at London Metal Exchange as industrial metals retreated as investors refocused on poor demand, following gains made in the wake of the US Federal Reserve's increase in rates for the first time in nearly a decade.

✍ Zinc Zinc futures fell by 0.65% to Rs 99.95 per kg today as speculators indulged in reducing positions after industrial metals retreated in global market. Zinc for delivery in December shed 65 paise, or 0.65%, to Rs 99.95 per kg at the Multi Commodity Exchange. It clocked a business turnover of 359 lots. Likewise, the metal for delivery in January softened by 40 paise, or 0.39%, to Rs 101.15 per kg in 11 lots. Analysts attributed fall in zinc futures to a weak trend at the London Metal Exchange (LME).

✍ NCDEX - WEEKLY NEWS LETTERS Since the start of 2014, the average landed cost of crude imported by Indian refiners has fallen from $ 108.76 to $ 36.65 a barrel. The same period has seen the London Metal Exchange Index that tracks prices of six primary non-ferrous metals — aluminium, copper, zinc, lead, nickel and tin — shed nearly a third of its value, even as benchmark US Midwest hot rolled coil steel rates have collapsed from around $ 680 to $ 365 per tonne.

But it’s not just energy and industrial metals. The same holds true for precious metals and agricultural commodities. Gold on Friday traded in London at $ 1,072.5 per ounce, compared to $ 1,225 in early 2014, and the peak of $ 1,895 reached on September 5, 2011. The UN Food and Agriculture Organisation’s food price index, at 156.7 in November, is also down from its December 2013 level of 206.2, and the all-time-high of 237.7 for February 2011.

There are broadly three reasons for this commodity meltdown, of which two are relatively easy to understand.

Edible oil refineries claim losses of Rs 3,000 a tonne, up threefold in six months, in the wake of rising imports of refined, bleached and diodised (RBD or refined edible oil) palmolein.The apex industry body, Solvent Extractors’ Association (SEA), says refined oil import quadrupled to 231,672 tonnes in November from 55,815 tonnes in the same month last year. The share of RBD olein jumped to 17 per cent in November from five per cent in the same month of 2014. It has urged the government to raise the import duty on refined oil. Processing of CPO generates jobs, increases the operating capacity of local refineries and adds economies of scale to the entire value chain, it has argued.The differential duty, therefore, needs to be raised to 15 per cent immediately, to protect the interest of local refineries, SEA. At present, the total levy on CPO and RBD works out to 12.5 per cent and 20 per cent, respectively, a 7.5 per cent differential duty. The processors want the import duty on refined oils to be raised from 20 per cent to at least 27.5 per cent.

This will ensure full value addition is done in India, with refining, packaging, trading and marketing of edible oil in-country. This will also ensure a farmer gets a remunerative price for his produce in the ensuing rabi harvest, with a small increase in oilseed prices.

Eight per cent decline in rabi oilseeds’ sowing area at 6.6 million hectares so far this season, against 7.1 mn ha by the same time last year. The inventory of edible oil at various ports and in the import pipeline was a record high of 2.43 mt as of December 1, estimates the industry.

✍ Chana Chana prices fell 0.91% to Rs 4,963 per quintal in futures trade on friday as speculators booked profits amid increased supplies from major producing states.

In futures trading at the National Commodity and Derivatives Exchange, chana for December declined by Rs 46, or 0.91%, to Rs 4,963 per quintal, with an open interest of 22,250 lots.Similarly, chana for delivery in January 2016 was trading lower by Rs 34, or 0.70%, to Rs 4,764 per quintal, with an open interest of 25,920 lots.

Besides profit-booking by speculators, increased supplies and subdued demand in the spot market at existing higher levels, mainly led to the fall in chana prices at the futures trade.

✍ Mustard seed Mustard seed prices closed higher by 1.61 per cent on Friday at the National Commodity & Derivatives Exchange Limited (NCDEX) as a result of the decline in the supply for the commodity in the major markets. At the NCDEX, mustard seed futures for January 2015 contract closed at Rs. 4,545 per quintal, up by 1.61 per cent, after opening at Rs. 4,502 against the previous closing price of Rs. 4,473. It touched the intra-day high of Rs. 4,605.

✍ Jeera Jeera prices closed higher by 0.73 per cent on Thursday at the National Commodity & Derivatives Exchange Limited (NCDEX) as the investors increased their holdings in the commodity in the midst limited arrivals from growing regions. At the NCDEX, jeera futures for December 2015 contract closed at Rs. 14,540 per quintal, up by 0.73 per cent, after opening at Rs. 14,310 against the previous closing price of Rs. 14,435. It touched the intra-day high of Rs. 14,650. Sentiment improved further as a result of reduced domestic supplies in the physical markets and some export enquiries.

� Castorseed Castorseed prices rose by 0.34 per cent on Tuesday at the National Commodity & Derivatives Exchange Limited (NCDEX) as a result of the rise in demand from consuming industries against restricted arrivals in domestic markets which in turn encouraged the investors to enlarge their holdings. At the NCDEX, castor seed futures for December 2015 contract were trading at Rs. 3,849 per quintal tonnes, up by 0.34 per cent, after opening at Rs. 3,842 against the previous closing price of Rs. 3,836. It touched the intra-day high of Rs. 3,872 till the trading.

(At 12.30 PM today)

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