Commodity Research Report 26 September 2016 Ways2Capital

Page 1


✍ MCX DAILY LEVELS DAILY

EXPIRY DATE

R4

R3

R2

R1

PP

S1

S2

S3

S4

122

111

110

109

109

108

108

107

106

31-SEP-2015

336

333

330

328

327

325

324

321

318

CRUDE OIL 19-SEP-2016

3461

3314

3167

3072

3020

2925

2873

2726

2579

GOLD

05-OCT-2016 31714 31569 31424 31352 31279 31207 31134 30989

30844

LEAD

30-SEP-2016

134

132

130

128

128

126

126

124

122

NATURAL GAS

26-AUG-2016

215

209

203

200

197

194

191

185

179

NICKEL

30-SEP-2016

744

731

718

712

705

699

679

666

SILVER

04-SEP-2015 49160 48431 47702 47259 46973 46530 46244 45515

ALUMINIUM 30-SEP-2016 COPPER

ZINC

05-DEC-2016

160

157

154

153

151

692

150

148

145

44786 142

✍ MCX WEEKLY LEVELS WEEKLY

EXPIRY

R4

R3

R2

R1

PP

S1

S2

S3

ALUMINIUM

30-SEP-2016

122

117

112

110

105

102

97

92

COPPER

31-AUG-2015

346

339

332

330

325

323

318

311

304

CRUDE OIL

19-AUG-2015

3621

3414

3207

3092

3000

2885

2793

2586

2739

GOLD

05-OCT-2015 32784 32245 31706 31494 31167 30955 30628 30089

29550

LEAD

30-SEP-2015

144

139

134

130

129

125

124

119

114

NATURAL GAS 26-AUG-2015

241

227

213

204

199

190

185

171

157

NICKEL

30-SEP-2016

864

806

748

727

690

669

632

574

516

SILVER

05-DEC-2016 52736 50721 48706 47761 46691 45746 44676 42661

ZINC

30-SEP-2016

168

162

156

154

150

148

144

138

S4

40646 132

Monday, 26 September 2016


WEEKLY MCX CALL BUY GOLD OCT ABOVE 31402 TGT 31709 SL 31098 PREVIOUS WEEK CALL BUY GOLD OCT ABOVE 31117 TGT 31444 SL 30797- MADE HIGH OF 31380 BUY CRUDEOIL OCT ABOVE 2999 TGT 3091 SL 2914 - TGT ACHEIVED ✍ FOREX DAILY LEVELS DAILY

EXPIRY DATE R4

R3

R2

R1

PP

S1

S2

S3

S4

66

65.80

USDINR

29 AUG 2016 67.40 67.20

EURINR

29 AUG 2016 75.45 75.25 75.05 74.85 74.65 74.45 74.25 74.05

GBPINR

29 AUG 2016 87.60 87.40 87.20

JPYINR

29 AUG 2016 66.85 66.65 66.45 66.25

67

66.80 66.60 66.40 66.20

87

86.80 86.60 86.40 86.20 66

65.80 65.60 65.40

73.85 86 65.20

✍ FOREX WEEKLY LEVELS DAILY

EXPIRY DATE R4

R3

R2

R1

PP

S1

S2

S3

S4

USDINR

29 AUG 2016 67.80 67.50 67.20 66.90 66.60 66.30

66

65.70

65.40

EURINR

29 AUG 2016 75.80 75.50 75.20 74.90 74.60 74.30

74

73.70

73.40

GBPINR

29 AUG 2016

87.70 87.40 87.10 86.80 86.50 86.20 85.90

85.60

JPYINR

29 AUG 2016 67.20 66.90 66.60 66.30

88

66

65.70 65.40 65.10

WEEKLY FOREX CALL BUY EURINR OCT ABOVE 75.63 TGT 76.26 SL 74.98 SELL JPYINR OCT BELOW 66.10 TGT 65.40 SL 66.80 PREVIOUS WEEK CALL BUY GBPINE SEP ABOVE 88.90 TGT 89.60 SL 88.20 - NOT EXECUTED BUY EURINR SEP ABOVE 75.15 TGT 75.65 SL 74.64 - NOT EXECUTED

64.80


✍ NCDEX DAILY LEVELS DAILY

EXPIRY DATE

R4

SYOREFIDR 20-OCT-2016

706

R3

R2

R1

PP

S1

S2

S3

S4

691

676

668

661

653

646

631

616

SYBEANIDR 20-OCT-2016

3416

3349

3282

3241

3215

3174

3148

3081

3014

20-OCT-2016

4878

4820

4762

4730

4704

4672

4646

4588

4530

JEERAUNJHA 20-OCT-2016 18342 17967 17592 17368 17217 16993 16842

16467

16092

GUARSEED10 20-OCT-2016

3867

3795

3723

3679

3651

3607

3579

3507

3435

20-OCT-2016

7264

7138

7012

6948

6886

6822

6760

6634

6508

RMSEED

TMC

✍ NCDEX WEEKLY LEVELS WEEKLY

R4

R3

R2

R1

PP

S1

S2

S3

S4

DATE SYOREFIDR 20-OCT-2016 713

696

679

669

662

652

645

628

611

SYBEANIDR 20-OCT-2016 3692

3542

3392

3297

3242

3147

3092

2942

2792

20-OCT-2016 5141

5003

4865

4781

4727

4643

4589

4451

4313

JEERAUNJHA20-OCT-2016 20748 19988 19228 18902 18468

18142

17708

16948

16188

GUARSEED1020-OCT-2015 4183

4026

3869

3792

3712

3635

3555

3398

3241

20-OCT-2016 8815

8457

8099

7909

7741

7551

7383

7025

6667

RMSEED

TMC

EXPIRY

WEEKLY NCDEX CALL BUY JEERA OCT ABOVE 17600 TGT 18000 SL 17200 PREIOUS WEEEK CALL BUY JEERA OCT ABOVE 18000 TGT 18500 SL 17500 - NOT EXECUTED SELL GUARSEED OCT BELOW 3648 TGT 3544 SL 3751 - CLOSED AT 3636


MCX - WEEKLY NEWS LETTERS ✍ BULLION The finance ministry is considering introducing measures to stop malpractices of importing pure gold under that garb of dore bars or unrefined gold. It may ask jewellers and refiners to follow know your supplier, clients norms prescribed by the Organisation for Economic Co-operation and Development and adhere to the anti-money laundering law. The move comes after some instances came to light where pure gold was imported as dore. Indian Bullion and Jewellers Association also wrote to the government to address this issue. Customs duty on dore is of 8.75 per cent while for pure gold it is 10 per cent. IBJA has proposed, “that gold refiners follow stringent client acceptance procedures. Refiners shall be asked to commit to gold supply chain policy consistent with Annex II of OECD due-diligence guidelines.” It said gold dore should be sourced only from mining companies that comply with the guidelines and this should be made an integral part of the import license issued by Directorate General of Foreign Trade. Demand for gold in India remained lacklustre this week as higher prices hampered consumer purchases, but discounts narrowed due to a correction in overseas rates. The safe-haven bullion has fallen over one per cent this week despite a mixed bag of US economic data ahead of next week’s US Federal Reserve policy meeting. In India, the world’s second-biggest gold consumer, discounts on official domestic prices came down this week to $ 20 an ounce, from last week's $ 32. “Some customers are replacing old jewellery for new, but fresh demand is still weak,” said Kumar Jain, vicepresident, Mumbai Jewellers Association. In the past few months, demand in India has remained sluggish due to higher prices and as droughts hit purchases in some rural areas. India’s gold imports in August plunged 77.5 per cent from a year earlier to $1.12 billion. Gold prices in India are trading around Rs 30,865 per 10 grams on Friday, after it fell 1.6 per cent in the previous eight sessions. “People are waiting for a correction. By this month-end, retail demand is likely to improve,” Jain said. Demand for gold is expected to strengthen in the final quarter as India gears up for the wedding season as well as festivals such as Diwali and Dussehra, when buying the precious metal is considered auspicious.“Jewellers are slowly building inventory for festive season. Some jewellers are postponing purchases, hoping prices will fall below $1,300 ,” said a Mumbai-based bank dealer. Buyers in China and Hong Kong stayed away from the market as a mid-Autumn Festival holiday shuttered trade on Thursday and Friday. In Singapore, premiums rose about 80 cents from 50-60 cents last week.“With prices going down we hope that some demand will emerge. We have started seeing some queries and movement in the metal, but these are early days,” a Singapore-based metals trader said. The Tokyo market, too, remained quiet as public interest was very limited this week, keeping the premium at zero, traders said. Last week, spot gold prices rose by 1.8 percent to close at $1337.2 per ounce after the U.S. Federal


Reserve decision to keep interest rates on hold sent the dollar to its lowest level since the start of last week. The Fed stayed pat on rates but indicated it could still tighten monetary policy in the world's biggest economy by the end of the year. Holdings of SPDR Gold Trust, the world's largest goldbacked exchange-traded fund, rose 0.69 percent to 950.92 tonnes last week. On the MCX, gold prices rose by 1.2 percent to close at Rs.31281 per 10 gms. Spot silver prices rose by 2.7 percent last week to close at $19.7 per ounce in line with rise in gold prices and weakness in dollar index. On the MCX, silver prices rose by 1.7 percent to close at Rs.46817 per kg

✍ ENERGY Oil prices climbed on Wednesday, supported by a reported draw in US crude inventories and by firm import data from Japan. US West Texas Intermediate crude futures were up 1.8 per cent, or 81 cents, at $ 44.86 a barrel at 0403 GMT. The October contract expired yesterday at $ 43.44 a barrel and the front-month has now rolled over to November delivery. Traders said that the main WTI price driver had been American Petroleum Institute data showing a 7.5 million barrel draw to 507.2 million barrels in US crude inventories, the third weekly stock draw.Market participants had expected an increase of 3.4 million barrels, according to a Reuters poll.Official storage data is due to be published by the US Energy Information Administration later on Wednesday, and traders said they were also eagerly anticipating a meeting by the US Federal Reserves Federal Open Market Committee which might influence US interest rates. WTI oil prices rose by 1.7 percent last week to close at $44.5 per barrel boosted as U.S. government data showed a surprising crude inventory drop. U.S. Energy Information Administration showed that crude stockpiles fell 6.2 million barrels last week, bringing the draw to more than 21 million barrels for this month Also, Oil prices got more support from the dollar's slide a day after the Federal Reserve kept U.S. interest rates unchanged. However, Crude futures gave back some gains after Reuters reported that a two-day expert-level meeting of the Organization of the Petroleum Exporting Countries on production cooperation had yielded no major breakthrough. The meeting was held in advance of Sept. 26- 28 talks in Algeria between OPEC and other major oil producers to discuss a potential output freeze. Also, news that Saudi may cut supply if Iran freezes output was supportive. The Saudis pumped a record 10.69 million barrels a day in August, compared with 10.2 million in January, Algeria wants major producers to cut their collective output by 1 million barrels a day.On the MCX, oil prices rose by 2.8 percent to close at Rs.2978 per barrel

✍ BASE METAL Chinese Copper Output Jumps to Six-Month High as Capacity Grows China, the world’s top producer of refined copper, boosted output to the highest level in at least six months as domestic smelters


expanded capacity amid favourable margins. Production climbed to 743,000 metric tons in August from 722,000 tons a month earlier and 663,000 tons last year, according to data from the National Bureau of Statistics on Monday. Output rose 8.7 percent to a record 5.5 million tons in Jan - Aug, data showed. Copper futures traded 0.62 per cent higher at Rs 324.70 per kg today as speculators widened positions

amid

firm

global

trend

and

higher

domestic

demand.

At the Multi Commodity Exchange, copper for delivery in November traded higher by Rs 2, or 0.62 per cent, at Rs 324.70 per kg, in a business turnover of 1,458 lots. Metal for delivery in far-month February next year also rose by Rs 1.85, or 0.56 per cent to trade at Rs 330.60 per kg in 8 lots. Nickel prices rose 1.04 per cent to Rs 702.70 per kg in futures trade today as speculators enlarged positions on positive cues from global markets. Besides, increased demand from alloy-makers in the domestic spot market, supported the up trend. At the Multi Commodity Exchange, nickel for delivery in October traded higher by Rs 7.20, or 1.04 per cent, to Rs 7,092.70 per kg, in a business turnover of 115 lots.

NCDEX - WEEKLY MARKET REVIEW The National Commodity & Derivatives Exchange has said on Tuesday that 12 per cent of coriander stock failed to pass the test in an independent audit commissioned by the exchange. Stored in NCDEX accredited warehouses in Ramganj Mandi and Kota, these storages are managed by National Bulk Handling Corporation. Responding to the concerns around quality of the coriander stocks deposited in the approved warehouses, NCDEX conducted a 100 per cent sampling and audit of the stocks deposited at the NBHC warehouses at Kota and Ramganj Mandi. Testing of all the 2240 tonnes has shown that 1410 tonnes conforms to the exchange specifications on all parameters. Out of the remaining 830 tonnes, 270 tonnes failed on the parameter of damaged / discolour seeds and 10 tonnes had splits above the acceptable level, while 10 tonnes had weevil led seeds marginally above 0.5 per cent. The balance stocks of 540 tonnes showed moisture slightly exceeding permissible level of 9 per cent. "NCDEX is fully committed to ensuring good delivery of commodities. We remain vigilant about the stocks deposited in our warehouses and have suitable checks and controls in place to ensure adherence to our norms. The trust of our participants and the safety and quality of our deliveries is our foremost priority. There is absolutely nothing to worry for the buyer on the quality front. Having completed the independent audit, we find that there isn't a quality issue at the level as it as was made out to be. We have found some issues which we will ensure will get addressed through the remat testing process of the buyers," said Samir Shah, MD & CEO, NCDEX. Edible Oils mayTurn 9% Cheaper by Jan’17 The reduction in import duty of crude and refined palm oils means consumers could see retail price of palm oil, the largest consumed cooking medium, fall at least ₚ 6.4/litre by January 2017, futures market price trends on the weekend indicated. That’s around


9% lower in Mumbai and Chennai from ₚ 70 73/litre currently. The government on Friday cut import duty on crude palm and refined palm oil by 5 percentage points to 7.5% and 15%. The move upset the edible oil industry which asked for a 15% differential to protect the local refining industry but will provide respite to householders. Of the total imports at 15 million tonnes, palm accounts for 9 million tonnes, soya oil, sunflower oil, etc, the rest, said Atul Chaturvedi, presi d e nt o f t he S o l ve nt Extractors’ Association, the nodal industry body India cuts import taxes on wheat, palm oil, refined oils India has cut import taxes on wheat, crude palm oil and refined vegetable oils, a finance ministry order showed on Friday, as part of efforts to curb food inflation. New Delhi lowered the wheat import tax to 10 percent from 25 percent and cut the import duty on both crude palm oil and refined edible oils by five percentage points to 7.5 and 15 percent respectively, the order on a government website, showed. Wheat output in India, the world's second-biggest producer, has fallen well below the peak of 2014/15, reducing stocks to the lowest level in nearly a decade and pushing domestic prices close to record highs. Private trade in India has already imported about 600,000 tonnes of wheat in 2016, the most in nine years. MSP hike may induce farmers to expand cultivation area The government has finally reduced the import duty on wheat to 10 per cent from 25 per cent, probably after a late realisation that everything is not that rosy as projected by the agriculture ministry. The government in August released the fourth advance estimates of crops output wherein wheat production was pegged at 93.5 million tonne for 2015-16. The previous estimate, released in May, had estimated the harvest at 94.04 million tonne. The government is not inclined to accept private reports that have estimated wheat production at about 85 million tonne. Last year, the government had released its first wheat estimate at 95.76 million tonne, which was revised downwards to 90.78 million tonne. Again it was cut to 88.94 million tonne and finally to 86.53 million tonne. On the other hand, private traders and industry had maintained their forecast at about 85 million tonne throughout the year. NCDEX to levy 25% special margin on sugar buy side from The National Commodity and Derivatives Exchange will impose a 25% special cash margin on buy positions of all running and yetto-belaunched sugar contracts barring the October contract, effective Thursday, the exchange said in a circular late Tuesday. The exchange will also levy a 10% cash margin on sugar long positions of October contract from Thursday, a senior official with the bourses said. On Aug 11, the bourses had hiked the margin to 51% from 20% earlier. The total margin-- additional, special margin including cash margin--for buying sugar on the exchange now stands at 61% for the October contract and 75% for other contracts, while the margin on selling sugar on all contracts is 21%, the official added. Tuesday, October delivery sugar on NCDEX settled at 3,582 rupees per 100 kg, down 0.4% from previous close, while December contract ended at 3,698 rupees, down 0.2%..


Cotton futures gained almost 50 per cent between March and July, triggered by short supply in the domestic market. The price had touched a peak of ₚ23,570/bale in July and is currently at Rs.20,530/bale. Cotton prices moderated in August on reports of favourable weather in top producing nations such as India and the US. However, concerns over depleting stocks, higher consumption demand and prospects of better US exports limited the extent of price correction. The USDA puts global cotton output at 20.99 million tonnes for 2015-16, 19 per cent down over 2014-15. With lower production and almost the same level of consumption, carry-forward stocks have reduced noticeably to 21.45 mt in 2015-16, down for the first time since 2010-11. However, the global output situation is expected to go up to 22.31 mt in 2016-17 with likely higher produce from the US, Pakistan and Australia. Agri-commodities to see mixed price trend A better monsoon and record output estimate of kharif crop are likely to bring in bearishness in the agri-commodity counters. On the other hand, festive demand can lend some support for prices. Analysts expect mixed trend in agri-commodities for the near- to medium-term. The Indian meteorological department had earlier predicted above-normal monsoon this year. But as per the latest data available, the rainfall has been four per cent deficient, but much better than past two years of drought. “Some of the kharif crops have seen considerable bearishness in the past few months. But the impact of monsoon on prices is over for most of them. Rainfall could continue to impact only select commodities like cardamom and turmeric. Turmeric is down 12.7 per cent between June and September. The prices were up 5.6 per cent in June, but they India is working on an agreement with South Africa to import pulses to meet its domestic consumption requirements and curb price rise. South Africa had sent a draft memorandum of understanding to the Indian government regarding procurement of pulses and lentil. It also urged neighbouring China, part of the five-nation BRICS grouping to import a wide range of items from it such as rice, sugar, maize and dried grapes.


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