Commodity Research Report 28 September 2015 Ways2Capital

Page 1


✍ MCX DAILY LEVELS DAILY

EXPIRY DATE R4

R3

R2

R1

PP

S1

S2

S3

S4

ALUMINIUM

30 SEP 2015

30 SEP

108

107

106

104

103

102

102

100

COPPER

30 NOV 2015

30 NO

355

350

344

341

339

335

333

328

CRUDE OIL

21 SEP 2015

19 3303 OCT

3214

3125

3078

3036

2989

2947

2858

GOLD

05 OCT 2015

05 27320 OCT

27123

26926

26830

26729

26633

26532

26335

LEAD

30 SEP 2015

30 SEP

115

114

112

110

110

109

108

106

NATURAL GAS

25 SEP 2015

27 OCT

184

181

178

176

175

173

171

168

NICKEL

30 SEP 2015

30 SEP

681

673.07

664

660

655

651

646

637

SILVER

04 DEC 2015

04 37580 DEC

37068

36556

36314

36044

35802

35532

35020

ZINC

30 SEP 2015

30 SEP

113

110

108

107

106

105

102

115

✍ MCX WEEKLY LEVELS WEEKLY

EXPIRY

R4

R3

R2

R1

PP

S1

S2

S3

S4

ALUMINIUM

30 SEP 2015

30 SEP

116

112

108

105

104

101

100

96

COPPER

30 NOV 2015

30 NOV

395

378

360

349

343

331

325

308

CRUDE OIL

21 SEP 2015 212015

19 OCT

3667

3454

3241

3136

3028

2923

2815

2602

GOLD

05 OCT 2015

05 OCT

29428

28509

27590

27162

26671

26243

25752

24833

LEAD

30 SEP 2015

30 SEP

121

117

114

111

110

108

107

103

NATURAL GAS

25 SEP 2015

27 OCT

187

183

179

177

175

173

171

167

NICKEL

30 SEP 2015

30 SEP

726

700

675

666

649

640

624

598

SILVER

04 DEC 2015

04 DEC

39536

38315

37094

36583

35873

35362

34652

33431

ZINC

30 SEP 2015

30 SEP

122

117

113

110

108

105

103

98


✍ NCDEX DAILY LEVELS DAILY

EXPIRY DATE

R4

R3

R2

R1

PP

S1

S2

S3

S4

SYOREFIDR

20 OCT 2015

611

600

589

584

578

573

567

556

545

SYBEANIDR

20 OCT 2015

3585

3490

3395

3352

3300

3257

3205

3110

3015

RMSEED

20 OCT 2015

4548

4457

4366

4329

4275

4238

4184

4093

4002

JEERAUNJHA

20 OCT 2015

16771 16521

16271

16143

16021 15893 15770 15521

15271

CHANA

20 OCT 2015

5005

4870

4735

4686

4600

4551

4465

4330

4195

CASTORSEED

20 OCT 2015

4325

4283

4241

4213

4199

4171

4157

4115

4073

✍ NCDEX WEEKLY LEVELS WEEKLY

EXPIRY DATE

R4

R3

R2

R1

PP

S1

S2

S3

S4

SYOREFIDR

20 OCT 2015

627

610

593

586

576

569

559

542

525

SYBEANIDR

20 OCT 2015

3734

3583

3432

3371

3281

3220

3130

2979

2828

RMSEED

20 OCT 2015

4647

4519

4391

4341

4263

4213

4135

4007

3879

JEERAUNJHA

20 OCT 2015

18308 17553

16798

16406

16043 15651 15288 14533

13778

CHANA

20 OCT 2015

5287

5046

4805

4721

4564

4480

4313

4082

3841

CASTORSEED

20 OCT 2015

4484

4387

4290

4238

4193

4141

4096

3999

3902


MCX - WEEKLY NEWS LETTERS INTERNATIONAL NEWS

PRECIOUS METAL � GOLD Gold continued to witness a massive sell off. The yellow metal settled at its lowest price this year, nearing the $1200 per ounce mark and logged its third straight weekly decline. Other precious metals also dropped heavily amid soaring equities and continued strength in the US dollar. Silver tumbled to a four year low, Platinum fell to a fresh 2014 lows while palladium slumped to a three-month low. Gold fell as the US dollar rallied post the Fed decision where it noted that that there is sufficient underlying strength in the broader economy to support ongoing improvement in labor market conditions. The FOMC noted that it currently judges that there is sufficient underlying strength in the broader economy to support ongoing improvement in labor market conditions. In light of the cumulative progress toward maximum employment and the improvement in the outlook for labor market conditions since the inception of the current asset purchase program, the Committee decided to make a further measured reduction in the pace of its asset purchases.However, the Fed reassured that a key interest rate will stay near zero for a considerable time after its bond purchases end next month, deferring for now a clear signal on when it will begin to shift away from low-rate policies in place since the 2008 financial crisis. The US dollar broke under 1.2900 mark against the Euro after the Fed statement, testing its highest level against the Euro in 14 months. Dollar also cruised to a six year high against the Japanese Yen and the broad dollar index hit a fresh 15 month high. Demand worries continue to dominate sentiments for gold. China`s gold imports from Hong Kong in July fell by 42% from a month earlier, according to the Hong Kong Census and Statistics Department, media reports quoted. As per the latest Gold Demand Trends report released by World Gold Council, world gold demand for Q2 2014 was 964 tonnes, down 16%year on year from 1,148 tonnes, central bank purchases rose 28 % year on year, to 118 tonnes from 92 tonnes, total bar and coin demand fell by 56% year on year to 275 tonnes from 628 tonnes, ETF outflows were 40 tonnes, a tenth of the outflows seen in the same period last year. Gold rose to a two-month peak on Tuesday as equity market, Iraqi insurgency, Weaker Dollar, and soft German business sentiment data and Softer US Data helped bullion build gains. There was a heavy slate of U.S. economic data released Tuesday, including the S&P/Case-Shiller home price index, the monthly house price index, new residential sales, the Richmond Fed business survey, and the consumer confidence index. However, these reports were not big markets-movers. The yellow metal climbed as investors switched out of equities after Germany's Ifo index of business sentiment fell more than expected in June. The German Ifo consumer sentiment survey came in weaker than expected. The Ifo reading was 109.7 in June versus 110.4 in May. A figure of 110.2 was expected. Worries about the Iraq and Ukraine crisis


weighed on German consumer sentiment. The downbeat Ifo report adds more weight to the notions that the European Union’s economy remains in serious trouble. This is also an underlying supportive factor for the safe-haven gold market. August Comex gold was last up $1.20 at $1,319.60 an ounce. Spot gold was last quoted up $1.20 at $1,320.00. July Comex silver last traded up $0.135 at $21.15 an ounce. In total, 30 companies reduced their delta-adjusted hedge books during the period. This activity was only partially countered by new hedges from other gold miners. Also, little new hedging activity has been reported to have taken place since the end of June. After a brief recovery during the first week of April, gold failed to break above $1220 an oz as the Fed hinted of a June rate hike the following week. Speculation rose marginally amongst money managers, but as cumulative turnover of COMEX gold futures remained subdued, gold came under pressure causing it to trade range bound between $1190 an oz and $1220 an oz. During the first week of July, gold struggled to close above $1170 an oz despite worries Greece would leave the Euro zone. Weak safe-haven bids carried into the second week as fears failed to spillover the US equity market. Over this period, the S&P500 held above a 4-month low, damping gold volatility, the report said.

BASE METALS London copper futures were flat on Tuesday after three days of gains, coming under pressure from renewed signs of economic weakness in Europe but offset by encouraging global growth prospects elsewhere. On Tuesday, the US Consumer Confidence Index rose to 85.2 in June, the highest since January 2008, and new home sales for May also hit a six-month high of 504,000, well above the 440,000 expected. Notably, the upbeat housing data were largely contributed by sharp increase in sales in northeast US. In the euro zone, however, Germany's Ifo index of business sentiment fell to its lowest this year, leaving trading subdued. Nickel fell to a one-week low in London as rising stockpiles signaled ample supplies. Inventories monitored by the London Metal Exchange rose 0.3 percent to 305,388 metric tons, within 0.2 percent of an all-time high reached last week. Three-month copper on the London Metal Exchange was to $6,885($3.12 a pound) a tonne by 0915 GMT from $6,885 at the close on Monday, its highest close in three weeks. On the Comex in New York, copper futures for delivery in September gained 0.1 percent to $3.145 a pound. Nickel for delivery in three months fell 1.6 percent to settle at $18,130 a ton at 5:50 p.m. on the LME, after reaching $18,096, the lowest since June 16. Copper prices rose by 0.28 per cent on Thursday after Japan’s all industries activity index rose more-than-expected last month signaling improving sentiment in the region which raised the demand for the metal. In a report, Japanese Ministry of Economy, Trade and Industry said that Japan’s All Industries Activity Index rose to a seasonally adjusted 0.2 per cent, from 0.5 per cent in the preceding month whose figure was revised up from 0.3 per cent. At the MCX, copper futures for November 2015 contract were trading at Rs.341.10 per 1 kg, up by 0.28 per cent, after opening at Rs. 341.10 against the previous closing price of Rs. 340.15. It touched the intraday high of Rs. 341.70 till the trading.


✍ NICKEL Nickel prices gained 0.74% to Rs 639.50 per kg in futures market today as traders enlarged positions amid a firming trend in the spot market on increased demand from alloy makers. However, a weak trend in select base metals overseas capped the gains. At the Multi Commodity Exchange, nickel for delivery this month gained Rs 4.70, or 0.74%, to Rs 639.50 per kg in a business turnover of 888 lots.Similarly, the metal for delivery in October rose by Rs 5.30, or 0.70%, to Rs 646 per kg in 61 lots. Analysts said besides rising demand from alloy makers at domestic spot markets, covering-up of short positions by speculators also influenced nickel futures here.

✍ LEAD Lead prices weakened by 0.46% to Rs 111 per kg in futures trading today as participants reduced their exposures. Furthermore, sluggish demand from battery makers in the spot market weighed on prices. At the Multi Commodity exchange, lead for delivery in October eased by 45 paise, or 0.46%, to Rs 111 per kg in a business turnover of 17 lots. The metal for delivery in current month shed 35 paise, or 0.32%, to Rs 110 per kg in 485 lots . Market analysts said besides sluggish demand from battery makers in the spot market, a weak trend in copper and other base metals was seen at the London Metal Exchange (LME) after a private gauge of manufacturing in China for September fell to the lowest since March 2009. At the LME, lead declined 1%.

✍ ZINC Zinc futures rose by 1.34 per cent to Rs 109.50 per kg in futures trade today due to the decline in the zinc stockpiles at the London Metal Exchange (LME) on account of the strong demand for the commodity. LME zinc stocks fell by 2200 metric tonnes to 597000 metric tonnes as on September 24, 2015. Zinc futures for September 2015 contract, at MCX, were trading at Rs 109.50 per kg, up by 1.34 per cent after opening at Rs. 109.60 against the previous closing price of Rs. 108.05. It touched the intraday high of Rs.109.95 till the trading. (At 4.15 PM today). Sentiment improved further as speculators increased positions in the midst of a strong nd overseas. Besides, high demand in domestic spot markets fulled the uptrend.

✍ ENERGY West Texas Intermediate oil futures ticked higher on Tuesday, after the Wall Street Journal said the Obama administration has cleared the way for exports of a type of ultra-light U.S. oil called condensate. The U.S. Commerce Department has approved plans by two companies, Pioneer Natural Resources Co and Enterprise Product Partners LP, to export condensate in a private ruling, the Wall Street Journal reported on Tuesday. U.S. crude inventories rose by 4 million


barrels to 382.6 million barrels in the week to June 20, while gasoline stocks also climbed data from industry group the American Petroleum Institute showed on Tuesday. Analysts had expected a decrease in crude inventories of 1.6 million barrels, according to a Reuter’s poll. OPEC's commercial oil stocks stand at 57.5 days of forward demand, OPEC Secretary General Abdullah al-Badri said on Tuesday, adding there was no shortage of oil in market. Top oil exporter Saudi Arabia would increase crude oil production to meet demand if there are disruptions in oil supplies, a Saudi oil official said on Tuesday. Saudi Arabia, which currently produces around 9.7 million barrels per day (bpd), has the ability to pump to its full capacity of 12.5 million bpd, the official told Reuters. WTI for August delivery climbed as much as $1.47 to $107.50 a barrel in electronic trading on the New York Mercantile Exchange and was at $106.95 at 10:02 a.m. Sydney time. Brent for August settlement slipped 42 cents, or 0.4 percent, to $114.04 a barrel on the London-based ICE Futures Europe exchange. The European benchmark crude traded at a premium of $7.29 to WTI from $8.43 yesterday. Crude oil futures edged higher by Rs 3 to Rs 3,045 per barrel today as speculators went about creating positions amid a firm trend overseas. In futures trading at the Multi Commodity Exchange, crude oil for delivery in November was up by Rs 3, or 0.10%, at Rs 3,045 per barrel, with a business turnover of 122 lots. The oil for delivery in October gained Rs 2, or 0.07%, to Rs 2,985 per barrel in a turnover of 2,443 lots. Analysts said the rise in crude oil futures was largely in tandem with a firming trend in Asia after taking a hit in the previous session in response to a mixed US stock report. Meanwhile, West Texas Intermediate crude prices rose $44.88 while Brent added $0.67% to $48.07 per barrel at the New York Mercantile Exchange.

✍ NCDEX - WEEKLY NEWS LETTERS With the Securities and Exchange Board of India (Sebi) set to regulate commodity derivatives from Monday, it is considering strengthening the norms relating to risk management for agricultural commodities derivatives, which account for a fifth of the overall volumes.The regulator has identified various focus areas, including exchanges playing a bigger role in settlement and delivery, forward trading, spot exchanges and special delivery-based settlements. All commodity exchanges shall ensure guarantee for the settlement of trades, including good delivery. It wants exchanges to become the central counterparty to all deals and guarantee settlements. This is possible when exchanges set up clearing corporations, for which the regulator has given them three years.For agri commodities, exchanges ensure good delivery and settlement but aren’t the central counterparty because of several government norms such as stock limits, as well as quality issues. The National Commodity & Derivatives Exchange (NCDEX), the market leader in agri commodities trading, has a subsidiary called NCDEX e-Markets, earlier known as the NCDEX Spot Exchange. NCDEX e-Markets isn’t a spot exchange; it is an auction platform or a service provider. Both equity exchanges have subsidiaries that offer similar services and should be viewed in that


context. Government enterprises also use the services of such platforms to procure commodities for market operations. Another issue Sebi is understood to have raised is the forwards segment launched by NCDEX and the National Multi-Commodity Exchange of India. In the forwards segments, there are no standardised contracts; buyers and sellers report deals on the exchange’s platform. In case of a default, the loss to other party is made good by paying 90 per cent of the margin collected. Sebi has sought the exchange be made the central counterparty in this case.In the equity derivatives segment, lot sizes have been increased to ensure small investors stay away. The regulator is thinking of taking similar measures for commodity derivatives, too. If that is done, mini contracts of commodities might lose attractiveness, as their size will increase. Some contracts are providing good liquidity and participation from small traders.

✍ CHANA Chana prices fell by 0.86 per cent to Rs 4,521 per quintal in futures trade on monday as participants trimmed positions, triggered by easing demand at prevailing levels in the spot market against adequate stocks.At the National Commodity and Derivative Exchange, chana for delivery in October fell Rs 39, or 0.86 per cent, to Rs 4,521 per quintal with an open interest of 75,000 lots Likewise, the commodity for delivery in November shed Rs 4, or 0.09 per cent, to Rs 4,551 per quintal in 56,870 lots.Offloading of positions by speculators, driven by weak cues from spot market on easing demand against adequate stocks position, mainly led to fall in chana prices in futures trade.

✍ JEERA Jeera futures moved up as traders covered position following tight supply in producing states. Moreover, expectation of fresh export demand too pushed up jeera price in spot. Jeera futures surged due to limited stocks in local mandies coupled with weak monsoon rainfall in major producing states. At the unjha mandi of Gujarat, arrival of the spice was reported at 2,000 bags and price was up by 30 to 2,200-3,200 per 20 kg. About 300 bags arrived in Rajkot APMC and price increased by 25 to 2,450-3,100. On the NCDEX, jeera October contract gained 115 to 16,050 a quintal.

✍ RM SEED Mustard Seed prices closed lower by 0.14 per cent on Tuesday 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 October 2015 contract closed at Rs. 4,226 per quintal, down by 0.14 per cent, after opening at Rs. 4,225 against the previous closing price of Rs. 4,232. It touched the


intraday low of Rs. 4,214. Sentiment weakened further due to the sluggish export demand as a result of the weak demand for the commodity.

� CASTORSEED Castor seed prices fell by 0.64 per cent on Tuesday 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 October 2014 contract was trading at Rs. 4,214 per quintal tonnes, down by 0.64 per cent, after opening at Rs. 4,245 against the previous closing price of Rs. 4,241. It touched the intraday low of Rs. 4,190 till the trading. (At 12.40 PM today). Castor oil, extracted from castor seed is the largest vegetable oil exported out of India.

� SOYABEAN Chinese leaders pledged to buy 13.18 million metric tons of U.S. soybeans or about 484 million bushels in deals that represent about $5.3 billion.Iowa farmers are expected to harvest 525.8 million bushels of soybeans this year, about 4 percent more than 2014. It would be Iowa's largest soybean crop, making the state the nation's second-largest soybean producer. Altogether, U.S. farmers will harvest 3.94 billion bushels of soybeans.The size of Thursday's deals was larger than expected and represents about half of China's annual purchases. The Chinese deals comes at a critical time, say experts, shoring up demand for a bin-busting harvest at the same time concerns grow over weakening economies in China and Europe. "This business is valuable to the U.S. soy industry, especially when another bumper is being harvested right around the corner.It probably won't spur prices higher. Even though it's a big buy, it's not that big from China


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