Commodity Research Report 24 October 2016 Ways2Capital

Page 1


✍ MCX DAILY LEVELS DAILY

R4

R3

R2

R1

PP

S1

S2

S3

S4

ALUMINIU 31-OCT-2016 111 M

110

109

108

108

107

107

106

105

30-NOV-2016 319

316

313

312

310

309

307

304

301

CRUDE OIL 19-OCT-2016 3553

3502

3451

3426

3400

3375

3349

3298

3247

GOLD

05-DEC-2016 30405 30240 30075 30011 29910 29846 29745 29580

29415

LEAD

31-OCT-2016 140

138

136

134

134

132

132

130

128

NATURAL 26-OCT-2015 225 GAS

218

211

206

204

199

197

190

183

691

680

673

669

662

658

647

636

COPPER

EXPIRY

NICKEL

31-OCT-2016 702

SILVER

05-DEC-2016 42703 42451 42199 42079 41947 41827 41695 41443

ZINC

31-OCT-2016 160

157

154

152

151

149

148

145

41191 142

✍ MCX WEEKLY LEVELS WEEKLY

R4

R3

R2

ALUMINIUM 31-OCT-2016

114

113

112

112

111

111

110

109

108

COPPER

30-NOV-2016

359

345

331

322

317

308

303

289

275

CRUDE OIL

19-OCT-2016

3865

3707

3549

3475

3391

3317

3233

3075

2917

GOLD

05-DEC-2016 31259 30796 30333 30139 29870 29676 29407 28944

28481

LEAD

31-OCT-2016

148

143

138

136

133

131

128

123

118

NATURALGA 26-OCT-2015 S 31-OCT-2016 NICKEL

268

248

228

215

208

195

188

168

148

785

749

713

690

677

654

641

605

569

SILVER ZINC

EXPIRY

R1

PP

S1

S2

S3

05-DEC-2016 44571 43721 42871 42414 42021 41564 41171 40321 31-OCT-2016

163

159

155

153

151

149

147

143

Monday, 24 October 2016

S4

39471 139


WEEKLY MCX CALL SELL CRUDEOIL NOV BELOW 3349 TGT 3286 SL 3401 BUY GOLD DEC ABOVE 30013 TGT 30346 SL 29724 PREVIOUS WEEK CALL SELL CRUDE OIL OCT BELOW 3300 TGT 3240 SL 3351 - NOT EXECUTED BUY ZINC OCT ABOVE 151 TGT 153 SL 149 - TGT ACHEIVED ✍ FOREX DAILY LEVELS DAILY

EXPIRY

R4

R3

R2

R1 67

PP

S1

S2

S3

S4

USDINR

26-OCT2016 67.60 67.40 67.20

66.80 66.60 66.40 66.20

66

EURINR

26-OCT2016 73.70 73.50 75.30 73.10 72.90 72.70 72.50 72.20

72

GBPINR

26-OCT2016 82.75 82.55 82.35 82.15

JPYINR

26-OCT2016 65.25 64.05 64.75 64.55 64.35 64.20

82

81.80 81.60 81.40

81.20

64

63.80

63.60

S2

S3

S4

✍ FOREX WEEKLY LEVELS DAILY

EXPIRY

R4

R3

R2

R1

PP

S1

USDINR

26-OCT2016 67.95 67.65 67.35 67.05 66.80 66.50 66.20 65.90

65.60

EURINR

26-OCT2016

71.60

GBPINR

26-OCT2016 83.10 82.80 82.50 82.20 81.90 81.60 81.30

JPYINR

26-OCT2016 65.50 65.20 64.90 64.60 64.30

74

73.70 73.40 73.10 72.80 72.50 72.20 71.90

64

81

63.70 63.40

WEEKLY FOREX CALL BUY GBPINR NOV ABOVE 82.80 TGT 83.50 SL 82.20 BUY JPYINR NOV ABOVE 64.70 TGT 65.20 SL 64.30 PREVIOUS WEEK CALL BUY GBPINR OCT ABOVE 81.70 TGT 82.60 SL 80.90- MADE HIGH OF 82.36 BUY JPYINR OCT ABOVE 64.35 TGT 65 SL 63.75 - CLOSED AT 64.4850

80.70 63.10


✍ NCDEX DAILY LEVELS DAILY

EXPIRY DATE

R4

R3

R2

R1

PP

S1

S2

S3

S4

SYOREFIDR

18-NOV-2016

676

673 669 667

665

664

662

658

654

SYBEANIDR

18-NOV-2016

3210 3183 3156 3141 3129

3114

3102

3075

3048

RMSEED

18-NOV-2016

4649 4618 4587 4568 4556

4537

4525

4494

4463

JEERAUNJHA

18-NOV-2016 18153 1769 1723 1706 16773 16607 3 3 7

16313 15853

15393

GUARSEED10

18-NOV-2016

3581 3538 3495 3470 3452

3427

3409

3366

3323

TMC

18-NOV-2016

7508 7398 7288 7236 7178

7126

7068

6958

6848

✍ NCDEX WEEKLY LEVELS WEEKLY

R4

R3

R2

R1

PP

S1

S2

S3

S4

DATE SYOREFIDR 18-NOV-2016 702

689

676

671

663

658

650

637

624

SYBEANIDR 18-NOV-2016 3594 3423 3252

3189

3081

3018

2910

2739

2568

18-NOV-2016 4892 4770 4648

4598

4526

4476

4404

4282

4160

JEERAUNJHA 18-NOV-2016 19500 18535 17570 17235 16605 16270 15640

14675

13710

GUARSEED10 18-NOV-2016 3827 3692 3557

3500

3422

3365

3287

3152

3017

18-NOV-2016 8555 8131 7707

7445

7283

7021

6859

6435

6011

RMSEED

TMC

EXPIRY

WEEKLY NCDEX CALL BUY REFSOYA NOV ABOVE 670 TGT 680 SL 661 SELL TMC NOV BELOW 7090 TGT 6886 SL 7352 PREVIOUS WEEK CALL BUY SOYABEAN NOV ABOVE 3160 TGT 3220 SL 3095 - NOT EXECUTED BUY RM SEED NOV ABOVE 4600 TGT 4660 SL 4547 - NOT EXECUTED


MCX - WEEKLY NEWS LETTERS � BULLION Gold steadied on Thursday after three days of gains as the European Central Bank left interest rates unchanged and maintained the parameters of its 1.74 trillion euro asset buying scheme. The ECB has provided extraordinary stimulus in recent years in response to high unemployment, weak growth and ultra low inflation, cutting interest rates into negative territory and pushing the cost of credit to all-time lows. rates tend to support gold, though that is often offset by the impact of a weaker euro. The single currency fell 0.3 percent against the dollar on Thursday. Spot gold XAU= was at $1,268.98 an ounce at 1407 GMT, little changed from late on Wednesday, having earlier risen as hgh as $1,273.81. U.S. December gold futures GCv1 were up 30 cents at $1,270.20. The precious metal has regained some technical momentum after closing on Wednesday above its 200-day moving average of $1,267. Gold saw good buying at the time of the ECB release, "The ECB will continue to have a very accommodative policy at least until December," U.S. Treasury prices rose as ECB chief Mario Draghi said there was no discussion at the bank's latest policy meeting on possible changes to its 1 trillion-plus euro bond purchase program. The euro EUR= edged lower, but stocks rose after the third and final U.S. presidential debate, which was judged not to have improved Donald Trump's election hopes. That could also weigh on gold. A win for Democrat Hillary Clinton is now clearly predicted by polls, and is seen as easing the way for a rise in interest rates, heavily tipped by a number of Federal Reserve policymakers for December. India's overseas purchases of gold likely hit a nine-month high in October as a flip in domestic prices to a premium prompted banks and refiners to resume imports ahead of the festival season, industry officials told Reuters. gold exports to China hit their highest since January last month, Swiss customs data showed on Thursday, though a sharp drop in shipments to Hong Kong meant exports to the two combined were sharply lower than a year earlier. more gold was shipped directly to China," Research Note. "What is more, Swiss gold exports to India climbed to their highest level since January, which points to demand recovering there." Gold steadied after three days of gains on Wednesday as traders took to the sidelines ahead of a European Central Bank meeting later in the day which is expected to give clues about the outlook for euro zone monetary policy. While the bank is not expected to make any changes to its asset purchase programme until December, investors are seeking more clarity from President Mario Draghi about speculation that it could begin tapering its bond purchases. Spot gold XAU= was at $1,269.20 an ounce at 0935 GMT, little changed from $1,268.90 late on Wednesday, while U.S. December gold futures GCv1


were up 20 cents at $1,270.10. "The focus today will be the ECB meeting where the market is looking for clarification on a number of issues," Saxo Bank's head of commodity research Ole Hansen said. " bond tapering and further signs that additional measures are off the table." Gold prices are up 1.5 percent this week, on track to snap three weeks of losses. The precious metal has regained some technical momentum after closing on Wednesday above its 200-day moving average of $ 1,267. The euro EUR= held near a three-month low against the dollar ahead of the ECB meeting, offering little direction to gold. Stocks inched higher after the third and final U.S. presidential debate, which was judged not to have improved Donald Trump's election hopes. That weighed on gold. A win for Democrat Hillary Clinton is now clearly predicted by polls, and is seen as easing the way for a rise in interest rates, heavily tipped by a number of Federal Reserve policymakers for December. India's overseas purchases of gold likely hit a nine-month high in October as a flip in domestic prices to a premium prompted banks and refiners to resume imports ahead of the festival season, industry officials told Reuters. gold exports to China hit their highest since January last month, Swiss customs data showed on Thursday, though a sharp drop in shipments to Hong Kong meant exports to the two combined were sharply lower than a year earlier. more gold was shipped directly to China," Research note. "What is more, Swiss gold exports to India climbed to their highest level since January, which points to demand recovering there." Among other precious metals, silver XAG= was flat at $17.63 an ounce, while platinum XPT= was down 0.2 percent at $941 an ounce and palladium XPD= was down 0.5 percent at $632.95 an ounce. � ENERGY Oil prices were stable on Friday, weighed down by a stronger dollar but supported by signs fuel markets are balancing after two years of oversupply. The dollar rose to its highest level since March against a basket of other leading currencies .DXY on Thursday, potentially crimping demand as fuel becomes more expensive for countries using other currencies. West Texas Intermediate crude CLc1 was trading at $ 50.62 a barrel at 0050 GMT, 1 cent below its last settlement. International Brent crude oil futures LCOc1 were up 3 cents at $ 51.41 per barrel. Crude prices fell over 2 percent the previous session on the back of the soaring dollar. the falls, overall sentiment in oil markets was confident as financial investors are still keen to pour more money into crude futures, and there are also mounting signs of a tightening physical oil market. "The near term fundamentals in the oil market have turned positive. Demand is stabilizing, OPEC production has peaked , and global inventory declines imply that the market is more balanced than many believe," Neil Beveridge of Bernstein Energy said in a note to clients. The Organization of the Petroleum Exporting Countries plans to implement a 0.5 to 1 million barrels per day


production cut after a meeting on Nov. 30. Oil prices rose early on Wednesday, pushed up by a report of a fall in U.S. crude inventories and an OPEC statement saying a planned production cut was achievable, although analysts warned that Chinese economic data could erode the bullish momentum. U.S. West Texas Intermediate crude oil futures CLc1 were trading at $ 50.81 per barrel at 0011 GMT, up 52 cents, or 1 percent, from their last settlement. International Brent crude futures LCOc1 were at $ 52.14 a barrel, up 46 cents, or 0.9 percent. "The American Petroleum Institute crude inventory numbers were released . this has given early Asian trading a bullish start," Crude stockpiles fell 3.8 million barrels in the week to Oct. 14, to 467.1 million barrels, the API reported late on Tuesday. U.S. Energy Information Administration is due to release official fuel storage data later on Wednesday. Traders said oil was also being supported by Mohammed Barkindo, secretary general of the Organization of the Petroleum Exporting Countries , expressing confidence about the prospects of a planned production cut following an OPEC meeting on Nov. 30. The Barkindo said “ optimistic about the decision. In its first output cut since 2008, OPEC plans to reduce production to a range of 32.50 million barrels per day to 33.0 million barrels per day , compared with record output of 33.6 million bpd in September PRODNTOTAL . The group hopes that non-OPEC producers, especially Russia, will cooperate in a cut. Beyond the immediate oil market, OANDA's Halley said that "plenty of event risk lurks over the next 24 hours," including Chinese gross domestic product figures, due at 0200 GMT. economy is forecast to have expanded by 6.7 percent in the year to September, underpinned by government stimulus and a hot property market. Oil Prices was up 1% Wednesday after weekly industry figures showed a surprise fall in U.S. crude stocks. U.S. crude was up 69 cents, or 1,37%, at $ 50.98 at 07:00 ET, while Brent crude gained 1.35% to $52.38. American Petroleum Institute figures Tuesday showed a drop in U.S. crude inventories of 3.8 million barrels to 467.1 million. Energy Information Administration figures are due out later Wednesday. Chinese oil output fell in September, while third-quarter GDP grew 6.7%, lending further support. OPEC secretary general Mohammed Barkindo said he was optimistic of the cartel agreeing to a planned output cut next month.The dollar index was lower. A weaker dollar supports demand for oil. � BASE METAL The Comex copper price continued its descent Friday, October 21 due to the same combination of a multi-month high dollar and questions over Chinese demand. Copper for December settlement on the Comex division of the New York Mercantile Exchange


fell 0.55 cents or 0.3% to $2.0905 per pound. The contract has now declined nine consecutive sessions.Yesterday, the International Copper Study Group said the refined copper market was in a surplus of around 133,000 tonnes in July, although it was in a deficit of around 264,000 tonnes in January-July. The trade group added that Chinese refined copper imports were at the lowest monthly total since April 2013, raising concerns that despite economic expansion of 6.7% in the third quarter, the world’s largest end-user of copper isn’t consuming as much red metal as expected.But the country is still producing at a high rate with Chinese refined copper metal output in September coming in at 725,000 tonnes, a year-on-year increase of 7.2%, according to data from the country’s National Bureau of Statistics. Lead prices were down 0.29 per cent to Rs 135.50 per kg in futures trading today as participants reduced their exposure, triggered by subdued demand from consuming industries in the spot market and weak global cues. At the Multi Commodity Exchange, lead for delivery in November month declined by 40 paise, or 0.29 per cent to Rs 135.50 per kg in business turnover of 24 lots. Likewise, the metal for delivery in current month contracts shed 25 paise, or 0.19 per cent to Rs 134.85 per kg in 483 lots. Marketmen said the weakness in lead futures was due to a sluggish demand from batterymakers at the domestic markets, apart from weak global cues after China's exports unexpectedly declined, raising global demand outlook. Zinc futures fell by 0.30 per cent to Rs 150.45 per kg today as speculators indulged in reducing positions amid a weak trend in base metals overseas and low spot demand. Zinc for delivery in current month shed 45 paise or 0.30 per cent to Rs 150.45 per kg at the Multi Commodity Exchange. It clocked a business turnover of 734 lots. The metal for delivery in November too fell by a similar margin to trade at Rs 151.10 per kg in 23 lots. Analysts attributed the fall in zinc futures to cutting down of bets by participants, tracking weakness in base metals pack at the London Metal Exchange amid concerns over China's economy. Zinc prices declined by Rs 3 per kg at the non-ferrous metal market due to reduced offtake by consuming industries. Traders attributed the fall in zinc prices to easing demand from consuming industries. In the national capital, zinc ingot declined by Rs 3 to Rs 100-106 per kg. Following are today's metal rates : Zinc ingot Rs 100-106, Nickel plate Rs 823-828, gun metal scrap Rs 227, Bell metal scrap Rs 229, copper mixed scrap Rs 360, chadri deshi Rs 295. Lead ingot Rs 85, lead imported Rs 91, aluminium ingots Rs 158, aluminium sheet cutting Rs 154, aluminium wire scrap Rs 154 and aluminium


utensils scrap Rs 152. Nickel futures traded 1.34 per cent down at Rs 697.10 per kg on Thursday as speculators reduced their exposure, tracking a weak trend in base metals at the London Metal Exchange amid muted demand at the domestic spot markets. At the Multi Commodity Exchange, nickel for delivery this month shed Rs 9.50 or 1.34 per cent to Rs 697.10 per kg in a business turnover of 2,451 lots.The metal for delivery in November too fell by Rs 8.90 or 1.25 per cent to trade at Rs 703 per kg in 114 lots. Market analysts said the fall in nickel prices was mostly in tune with a weak trend in the base metals pack at the LME as an unexpected drop in Chinese exports spurred concern about the outlook for the global economy.China's exports plummeted 10.0 percent year-on-year to $184.5 billion in September, government data showed on Thursday.Besides, muted demand from alloymakers at the domestic spot markets weighed on metal prices in futures trade here.Globally, nickel prices retreated by 1.6 per cent at the LME, reversing earlier gains. NCDEX - WEEKLY MARKET REVIEW

� Global Updates ICE raw sugar futures fell to the lowest last week, breaking below a twoweek , trading range and triggering technical selling after falling below recent session lows. March raw sugar settled down 0.87 cent, the lowest since Sept. 26. Brazil's main center-south cane belt will likely turn out a smaller crop next season, despite a bright market outlook for sugar, industry group Unica said, as the lack of investment in fields in recent years takes its toll on the crop's potential. As per CFTC data, Speculators again cut their huge sugar net long stance on ICE Futures U.S. in the week to Oct. 18. Robobank projected a global deficit of 7.2mt in the upcoming 2016/17 season after a 7.9mt shortfall in the current season. Meanwhile, Platts Kingsman raised its forecast for an anticipated global sugar deficit in the 2016/17 season (October/September) by 570,000 tonnes to 6.45mt. Earlier, the International Sugar Organization , forecast a global sugar deficit of 7.05 mt.

� Domestic update However, the Cotton Association of India , has retained the cotton crop estimates for the year 2016-17 season at 336 lakh bales of 170 kg each. The projected balance sheet drawn by CAI estimated total cotton supply for the cotton season 2016-17 at 398 lakh bales, while the domestic consumption is estimated at 309 lakh bales thus leaving an available surplus of 89 lakh bales. As per officials of the Nagpur-based Central Institute for Cotton Research ,


the sudden spell of heavy rains in cotton-growing regions of Maharashtra, Gujarat, Telangana and Karnataka during the last 10 days may lift the yield by an additional 10 %. According to USDA, production in India is forecast at 26.5 million bales 5.77 million tonnes, up marginally from 2015/16. A rebound in India’s yield is expected to offset a 10percent reduction in cotton area this season.

✍ Soybean Soybean futures traded sideways to higher on lower level buying by the stockists and solvent extractor for new season crop. The mostactive Nov’16 delivery contract closed 0.39% higher for the week to settle at Rs. 3,125 per quintal. The harvesting of soybean in full swing and supplies are strong in the physical market. As per SEA recent survey soybean production in 2016-17 forecasted at 10.9 mt, up 58% from the last year. ✍ Rape/mustard Seed Mustard seed futures closed higher last week due to lower level buying and pickup in industrial demand. The Nov’16 contract ended 0.29% higher last week to settle at Rs. 4,549/quintal. The demand for mustard may pickup in physical market due to approaching winter. The prices were at lower levels as demand is not picking up from stockists and oil mill. The country's production of rapeseed is expected to increase by 12.5% to 6.3 mt from a year earlier. There is expectation ofhigher production in the next season, which encourage traders to sell their stored mustard. ✍ Refined Soy Oil Refined soy oil futures traded quite volatile but closed steady due to higher supplies and good festive demand in the physical market. The most active Ref Soy oil Nov’16 expiry contract closed 0.02% higher last week to settle at Rs. 666.0 per quintal. Earlier the prices have touched higher levels for the month as government increase the base import prices for crude soyoil by 2.18 % to $845 per tonnes. This is the second increase in a month by the government. Since January 2016, the base import prices for crude soyaoil increase by more than 17 % from $720 per tonnes. Government fixes the tariff value every fortnight. As per SEA data, India September crude soyoil import 469,564 tonnes, an increase of 46 % compared to 321,062 tonnes year ago while, India Nov-Sep crude soyoil import 3.96 mt vs 2.58 mt – an increase of 53% y/y for the current oil year NovOct. Earlier, India has cut import taxes on both crude palm oil and refined edible oils by 5% points to 7.5 and 15 % respectively. ✍ Crude Palm Oil


CPO Futures traded sideways to lower due to sufficient stocks in the physical market against steady demand. The most active CPO Oct’16 expiry closed down by 0.09% last week to settle at Rs. 532.4 per 10 kg. As per SEA data, imports of RBD palmolein increase to 2.40 mt vs 1.43 mt for Nov-Sep period. India's palm oil imports in 2016/17 are likely by rise 9% to 9.24mt from a year earlier, as a growing population and higher income levels drive up edible oil consumption. However, palm oil imports by India fell for a fifth month in September dropped by 5.5% to 564,912 tons in September from a year earlier. While for the current oil year, CPO imports pegged at 5.23 mt in Nov-Sep, compared with 6.85 mt a year ago. However, data showed The tariff value of RBD palmolein decrease 8.2% for the 2nd half of October compared to previous fortnight.Malaysian palm oil closed higher last week as supported by weaker ringgit and weaker palm oil production due to delayed result of last year’s El Niño. The output is expected to see lower-than-average gains, as it is still impacted by the lingering effects of the crop-damaging El Nino. According to cargo surveyor data, exports of Malaysia’s palm oil products during October 1 to 20 fell 12.4 % to 800,854 tonnes compared with 914,264 tonnes during September 1 to 20. ✍ Turmeric Turmeric futures closed lower last week due to higher arrivals from the last year stocks. However, early in the week, the prices have increase due to fresh upcountry demand as festival season approaching. Turmeric Nov’16 delivery contract on NCDEX closed 0.80% down last week to settle at Rs 7,184 per quintal. The demand from the industrial buyers will support the prices just before new season harvesting. On the export front, country exported about 42,923 tonnes of turmeric during April-July period up by 34.5% compared last year, as per department of commerce data. Expectations of increasing production in coming harvesting season and lowering export demand in recent months are putting pressure on turmeric prices at higher levels. Turmeric acreage in Telangana and Andhra Pradesh was higher this year as compared last year. Sowing of turmeric is over and up by 107 % of normal sowing area.


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