Commodity research report ways2capital 22 june 2015

Page 1


✍ MCX DAILY LEVELS DALLY

EXPIRY DATE R4

R3

R2

R1

PP

S1

S2

S3

S4

ALUMINIUM

30 JUN 2015

111

109

107

106

105

104

103

101

99

COPPER

30 JUN 2015

389

380

371

365

362

356

353

344

335

CRUDE OIL

19 JUN 2015 4120 4015

3910

3852

3805

3747

3700

3595

3490

GOLD

05 AUG 2015 2758 27424 6

27262

27176

27100

27014

26938

26776

26614

LEAD

30 JUN 2015

119

117

115

114

113

112

111

109

107

NATURAL GAS 25 JUN 2015

195

189

183

181

177

175

171

165

159

842

830

818

811

806

799

794

782

770

37342

37019

36634

36311

35926

34218

34510

132

131

130

129

128

126

124

NICKEL

30 JUN 2015

SILVER

03 JUL 2015 3875 38050 8

ZINC

30 JUN 2015 136

134

✍ MCX WEEKLY LEVELS WEEKLY

EXPIRY

R4

R3

R2

R1

PP

S1

S2

S3

S4

ALUMINIUM

30 JUN 2015

118

114

107

106

103

102

98

94

90

COPPER

30 JUN 2015

422

403

384

372

365

353

346

327

308

19 JUN 2015 4377

4195

4013

3904

3831

3722

3649

3467

3285

GOLD

05 AUG 2015 28545 28038

27531

27310

27024

26803

26517

26010

25503

LEAD

30 JUN 2015

135

128

121

117

114

110

107

100

93

NATURAL GAS 26 MAY 2015

225

210

195

187

180

172

165

150

135

932

893

854

829

815

790

776

737

698

38040

37368

36809

36137

35578

34347

33116

CRUDE OIL

NICKEL

30 JUN 2015

SILVER

05 JUL 2015 40502 39271


✍ NCDEX DAILY LEVELS DAILY

EXPIRY DATE

R4

R3

R2

R1

PP

S1

S2

S3

S4

SYOREFIDR

20 AUG 2015

585

583

581

580

579

578

577

575

573

SYBEANIDR

20 AUG 2015

3850

3743

3636

3571

3529

3464

3422

3315

3208

RMSEED

20 JUL 2015

4345

4259

4173

4123

4087

4037

4001

3915

3829

JEERAUNJHA

20 JUL 2015

17570 17045

16520

16170

15995 15645 15470 14945

14420

CHANA

20 JUL 2015

4736

4582

4428

4333

4274

4179

4120

3966

3812

CASTORSEED

20 JUL 2015

4582

4385

4188

4090

3991

3893

3794

3597

3400

✍ NCDEX WEEKLY LEVELS WEEKLY

EXPIRY DATE

R4

R3

R2

R1

PP

S1

S2

S3

S4

SYOREFIDR

20 AUG 2015

586

584

581

580

579

577

576

574

571

SYBEANIDR

20 AUG 2015

4067

3895

3723

3614

3551

3442

3379

3207

3035

RMSEED

20 JUL 2015

4651

4473

4295

4184

4117

4006

3939

3761

3583

JEERAUNJHA

20 JUL 2015

18836 17931

17026

16423

16121 15518 15216 14311

13406

CHANA

20 JUL 2015

5503

5119

4735

4486

4351

4102

3967

3583

3199

CASTORSEED

20 JUL 2015

4694

4469

4244

4118

4019

3893

3794

3569

3344


MCX - WEEKLY NEWS LETTERS INTERNATIONAL NEWS � Russian central bank cuts key rate Russia's central bank cut its key interest rate once again on Monday, in a further bid to stimulate economic growth in the country. Led by Governor Elvira Nabiullina, the Central Bank of Russia (CBR) cut interest rates by 100 basis points to 11.5 percent, in line with analyst expectations. It is the fourth consecutive month that it has opted to do so. In a statement, the bank said it was, "taking account of lower inflation risks and persistent risks of considerable economy cooling." It comes after the bank raised the rate to a lofty 17 percent in December 2014 in an attempt to deal with the runaway inflation brought about by the weakened ruble.

� Greek Issue International Monetary Fund chief Christine Lagarde warned Greece it would get no leeway on a huge debt payment as EU ministers warned they were looking at a "plan B" for a possible default. Eurozone finance ministers holding a crisis meeting in Luxembourg pressed Athens to finally present a credible reform plan and end the five-month standoff between Greece's anti-austerity government and its creditors. But with Athens owing a 1.6-billion-euro payment to the IMF at the end of June and Greece's international bailout due to expire the same day, they were pessimistic about the chances of a deal today. "There will be no period of grace" for the loan payment, Lagarde told reporters before she joined the ministers for their Eurogroup meeting. "I have a term of June 30 - if it's not paid by July 1, it's not paid." Greece's creditors are withholding the last 7.2 billion euros of its bailout until Athens caves in, but leftist Prime Minister Alexis Tsipras has refused to make changes to pensions and VAT rates. Europe's most powerful leader, German Chancellor Angela Merkel, weighed in on the issue earlier today when she told German lawmakers in the Bundestag she was "still confident" that a deal was possible. But the mood was darker in an overcast Luxembourg, where ministers were openly broaching scenarios such as a Greek exit from the euro if it defaults on its debts. "The next step to make the deal credible, also financially sustainable, will have to come from the Greek side," the Dutch Eurogroup chief Jeroen Dijsselbloem told reporters. He added that he did "not have a lot of hope" that the Greeks would present a new plan today. No deal at the Eurogroup meeting means the issue will likely go to the wire at an EU leaders' summit in Brussels on June 25 and 26.


✍ China China's outbound direct investment soared in the first five months to 278.4 billion yuan (USD 44.84 billion), official data showed, closing a gap with foreign direct investment inflows as local firms flock overseas for growth opportunities. The 47.4 percent jump in outbound investment, made by non-financial firms, built on the 36.1 percent rise in the first four months. In the first five months of the year, FDI grew 10.5 percent from a year earlier to 331.0 billion yuan, marking a slight slowdown from 11.1 percent growth in January-April, the Commerce Ministry said on Thursday. The government has been encouraging firms to invest abroad to slow down the rapid build-up of foreign exchange reserves and help local firms become more competitive internationally. Analysts expect outbound investment will soon match and overtake the weakening investment inflows, reflecting a cooling economy which in turn seems to have prompted a large jump in outbound flows as businesses looked for growth elsewhere. "The outbound investment is quickening. It's very likely to surpass foreign direct investment this year," said Han Xiushen, a researcher at the commerce ministry's think-tank.

✍ BULLION ✍ Gold One day after surging more than $25 an ounce, gold futures were relatively flat on Friday amid a stronger dollar and ongoing concerns of a Greek default on its sovereign debt.On the Comex division of the New York Mercantile Exchange, gold for August delivery lost 0.10 or 0.01% to $1,201.90 a troy ounce. Gold futures traded in a tight range of 1,198.10 and 1,203.90, ending the week up more than 1.7%. Gold finished with its best five-day period since the week ending on May 15 when it surged more than 3%. The precious metal then fell by more than 1.2% for three consecutive weeks before rallying to close last week up 0.95%.Gold likely gained support at 1,184.00, the low from June 1 and was met with resistance at 1,208.90, the high from May 25.One day after high-level talks in Luxembourg broke-off without a deal in the five-month long Greek debt negotiations, the European Central Bank reportedly increased the cap on its Emergency Liquidity Assistance fund for banks in Greece by €3.3 billion. It came days after depositors took out a reported €2.0 billion from Greek banks in a 72-hour period, underscoring their lack of trust in the teetering economy.Greece is running out of time before it owes the International Monetary Fund a bundled loan payment of €1.5 billion on June 30. At the same time, the remaining €7.2 billion of a €240 billion stimulus package from its international creditors is set to expire at the month. On Monday, all 27 members of the European Union are scheduled to be present at an emergency summit in what could be Greece's final opportunity to avoid a default. During an appearance in St. Petersburg, Greece prime minister Alexis Tsipras indicated that he will be "working for success" at Monday's summit, while adding that "those who invest in crisis and


terror scenarios will be proven wrong."Meanwhile, a spokesperson for Germany chancellor Angela Merkel said it isn't too late for Greece to complete a deal as long as it agrees to the reforms required. Gold is considered a safe haven for investors in periods of severe economic instability. It could also be an alternative for European investors concerned with the value of equities and government bonds if Greece leaves the euro zone. Elsewhere, Federal Reserve Bank of San Francisco president John Williams reiterated on Friday that an interest rate hike could be appropriate in 2015, while adding that waiting too long for lift-off poses added risk. The remarks were the first public comments by a Fed governor since the Federal Open Market Committee opted not to issue any definitive wording on the timing of a rate hike on Wednesday.The U.S Dollar Index ,which measures the strength of the dollar versus a basket of six other major currencies, reached a session-high of 94.70 in U.S. morning trading before falling slightly back to 94.39, up 0.20%. Dollar-denominated commodities such as gold become more expensive for foreign purchasers when the dollar appreciates.

� ENERGY � Natural gas Natural gas futures extended losses on Thursday, despite data showing that U.S. natural gas supplies rose less than expected last week.On the New York Mercantile Exchange, Natural gas for delivery in July shed 2.8 cents, or 1.0%, to trade at $2.827 per million British thermal units during U.S. morning hours. Prices were at around $2.842 prior to the release of the supply data.A day earlier, natural gas prices rose to $2.955, the most since May 22, before turning lower to close at $2.855, down 3.9 cents, or 1.35%. Futures were likely to find support at $2.764 per million British thermal units, the low from June 15, and resistance at $2.955, the high from June 17.The U.S. Energy Information Administration said in its weekly report that Natural gasin the U.S. in the week ended June 12 rose by 89 billion cubic feet, compared to expectations for an increase of 93 billion and following a build of 111 billion cubic feet in the preceding week. Supplies rose by 112 billion cubic feet in the same week last year, while the five-year average change is an increase of 87 billion cubic feet. Total U.S. natural gas storage stood at 2.433 trillion cubic feet as of last week. Stocks were 730 billion cubic feet higher than last year at this time and 46 billion cubic feet above the five-year average of 2.387 trillion cubic feet for this time of year.Meanwhile, updated weather forecasting models pointed to warmer-than-average temperatures in the eastern third of the U.S. through June 24, boosting near-term demand expectations for the heating fuel.Demand for natural gas tends to fluctuate in the summer based on hot weather and air conditioning use.Approximately 49% of U.S. households use natural gas for heating, according to the Energy Department.Elsewhere on the Nymex, Crude oil for delivery in August tacked on 22 cents, or 0.36%, to trade at $60.55 a barrel, while heating oil for July delivery dipped 0.05% to trade at $1.908 per gallon.


✍ Crude Oil Crude oil futures tumbled over 1% on Friday, as the U.S. dollar recovered from the Federal Reserve's latest policy statement and was boosted by some of Thursday's U.S. economic reports. On the New York Mercantile Exchange, crude oil for July delivery hit $59.97 during European early afternoon hours, down 87 cents, or 1.44%. A day earlier, Nymex oil prices gained 49 cents, or 0.81%, to end at $59.95. The dollar found support after data on Thursday showed that U.S. Initial jobless claims fell by 12,000 to 267,000 last week, pointing to ongoing strengthening in the labor market.A separate report showed that factory activity in the U.S.mid Atlantic region expanded at the fastest rate in six months in June.Data also showed that showed that U.S. Consumer prices increased at the fastest rate in more than two years in May, climbing 0.4% after a 0.1% gain in April. But economists had forecast an increase of 0.5% and inflation was still well below the Fed’s 2% target. Demand for the safe-haven dollar was also boosted after a meeting between Greek and euro area officials broke down on Thursday. The current bailout for Greece expires on 30 June when Athens is also due to repay the International Monetary Fund around €1.6 billion.IMF Chief Christine Lagarde said if the payment is not made on time, Greece will be declared to be in default and would disqualify itself from receiving any further IMF funds.The U.S. Dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.42% at 94.61 in European afternoon hours, off Thursday's one-month lows of 93.30. The greenback had come under broad selling pressure after the Federal Reserve lowered both its U.S. growth forecast and its interest-rate projections at its policy meeting on Wednesday, prompting investors to push back expectations on the timing of an initial rate hike. Elsewhere in metals trading, copper for July delivery slumped 3.7 cents, or 1.42%, on Friday to settle at $2.569 a pound after hitting a daily low of $2.558, a level not seen since March 18.

✍ BASE METAL ✍ Copper Copper prices bounced off a three-month low on Thursday, as the U.S. dollar weakened after the Federal Reserve lowered both its U.S. growth forecast and its interest-rate projections, prompting investors to push back expectations on the timing of an initial rate hike.On the Comex division of the New York Mercantile Exchange, copper for July delivery climbed 2.1 cents, or 0.82%, to trade at $2.625 a pound during European morning hours.A day earlier, copper hit $2.598, a level not seen since March 19, before ending at $2.604, down 1.1 cents, or 0.44%. Futures were likely to find support at $2.595, the low from March 19, and resistance at $2.681, the high from June 15.The U.S.Dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.55% at 93.96, the lowest level since May 18.


A weaker dollar boosts demand for raw materials as an alternative investment and makes dollar-priced commodities cheaper for holders of other currencies.Fed Chair Janet Yellen said Wednesday that the central bank wanted to see “more decisive evidence” of sustained growth before raising rates, but acknowledged that the economy has “expanded moderately” after a weak first quarter.Market players now looked ahead to the release of key U.S. data later in the session for further indications on the strength of the economy and the future path of monetary policy.The U.S. is to release a string of data, including reports on consumer prices, initial jobless claims and manufacturing activity in the Philadelphia region.Elsewhere, gold future for August delivery rallied $18.90, or 1.61%, to trade at $1,195.90 a troy ounce, while silver futures for July delivery jumped 31.6 cents, or 1.98% to trade at $16.26 an ounce.Meanwhile, investors continued to monitor developments surrounding talks between Greece and its international creditors, amid growing concerns that the country could default on its debt be forced out of the euro zone. Europe wants Greece to make spending cuts in order to secure a deal that will unlock €7.2 billion in bailout funds and prevent Athens defaulting on its debts when its bailout expires at the end of the month.European finance ministers were to hold talks in Brussels later Thursday, but expectations for a deal were not high. Failure to strike a deal would result in Greece defaulting on payments and exiting the euro zone. ✍ Zinc Zinc futures fell 0.91 per cent to Rs 129.95 per kg today as speculators reduced positions amid sluggish domestic demand and profit-booking. Zinc futures for June 2015 contract, at MCX, were trading at Rs 129.95 per kg, down by 0.91 per cent after opening at Rs. 131.40 against the previous closing price of Rs. 131.15. It touched the intra-day low of Rs. 129.60 till the trading. (At 4.15 PM today). Traders said the fall in zinc prices in futures trade was due to sluggish domestic demand in the spot market amid profit-booking at prevailing levels by speculators. However, losses were curbed due to the weak in the zinc stockpiles at the London Metal Exchange (LME) on account of the strong demand for the commodity. LME zinc stocks fell by 2150 metric tonnes to 468550 metric tonnes as on June 19, 2015.

And On Wednesday at the domestic markets due to the surge in the zinc stockpiles at the London Metal Exchange (LME) on account of the weak demand for the commodity. LME zinc stocks rose by 4675 metric tonnes to 472150 metric tonnes as on June 17, 2015. Zinc futures for June 2015 contract, at MCX, were trading at Rs 133.70 per kg, down by 0.34 per cent after opening at Rs. 134.15 against the previous closing price of Rs. 134.15. It touched the intra-day low of Rs. 133.05 till the trading. (At 3.50 PM today). Major refined zinc exporting countries are Canada, Australia and Rep. of Korea, while major refined zinc importing countries are China, USA and Germany.


✍ Lead Lead prices fell 1.05 per cent to Rs 113.20 per kg in futures trade today after participants reduced exposure amid a weak trend at the spot market on sluggish domestic demand. At the MCX, Lead futures, for the June 2015 contract, is trading at Rs 113.20 per kg, down by 1.05 per cent, after opening at Rs 114.75, against a previous close of Rs 114.40. It touched an intra-day low of Rs 112.90 till the trading. (At 3.26 PM today) Traders said besides subdued demand from battery-makers in the domestic spot market, profit-booking at current levels by speculators weighed on lead futures. However, losses were curbed due to the decline in the lead stockpiles at the London Metal Exchange (LME) on account of the strong demand for the commodity. LME zinc stocks fell by 750 metric tonnes to 173400 metric tonnes as on June 19, 2015.

✍ NCDEX - WEEKLY NEWS LETTERS ✍ GM mustard developed by DU under fire The Genetic Engineering Appraisal Committee (GEAC) under the environment ministry is about to approve commercialization of a genetically modified (GM) variant of mustard food crop developed by Delhi University (DU), civil society groups said on Wednesday."DU's GM mustard is essentially a backdoor entry for herbicide-tolerant crops into India, in the guise of a public sector GM crop.Commercialization would serve no purpose other than to increase profits for corporate food manufacturers. India is the third largest producer of the crop internationally. The GM mustard - Dhara Mustard Hybrid 11 or DMH 11 - has been developed by DU's Centre for Genetic Manipulation of Crop Plants with support from the Department of Biotechnology and National Dairy Development Board.The entire bio-safety assessment of this GM mustard is shrouded in secrecy with repeated efforts including RTI requests to seek information on the statutory safety assessments having remained unanswered from GEAC.

✍ Chana Chana prices fell further by 1.35 per cent to Rs 4,322 per quintal in futures trade on friday, triggered by higher supplies at the spot markets from producing belts.At the National Commodity and Derivative Exchange, chana for delivery in July moved down by Rs 59 or 1.35 per cent to Rs 4,322 per quintal with an open interest of 1,54,230 lots.Also, the commodity for delivery in August contracts traded lower by Rs 51, or 1.14 per cent to Rs 4,421 per quintal in 86,620 lots. Offloading of positions by speculators amid higher supplies from producing belts against sluggish demand at the spot market kept chana prices lower at futures trade. Where as Chana prices were down by 1.60 per cent to Rs 4,430 per quintal in futures trade on thursday as speculators indulged in booking profits after recent gains amid low demand at the spot market.However, lower output estimates capped the fall.At the National Commodity and


Derivative Exchange, chana for delivery in July was trading lower by Rs 72, or 1.60 per cent to Rs 4,430 per quintal with an open interest of 1,47,700 lots.Likewise, the commodity for delivery in June contracts fell by Rs 61, or 1.36 per cent to Rs 4,421 per quintal in 1,410 lots. Apart from profit-booking by speculators at existing levels, fall in demand at the spot markets, mainly pulled down chana prices in futures trade.

� Refined soya oil Refined soya oil prices were up by 0.39 per cent to Rs 586.50 per 10 kg in futures trading on tuesday as speculators indulged in creating fresh positions, taking positive cues from spot market on pickup in demand.In addition, restricted supplies from producing regions in the physical market supported the upside. At the National Commodity and Derivatives Exchange, refined soya oil for delivery in August moved up by Rs 2.30, or 0.39 per cent to Rs 586.50 per 10 kg with an open interest of 2,26,945 lots.Similarly, the oil for delivery in June contracts traded higher by Rs 1.90, or 0.31 per cent to Rs 609.10 per 10 kg in 12,145 lots. Strong demand in the spot markets against restricted supplies from growing regions, influenced refined soya oil prices at futures trade.

� Mustardseed Tracking a firming trend at the physical market on rising demand, mustardseed prices spurted Rs 64 to Rs 4,169 per quintal in futures tradeon wedeneday as speculators created positions.At the National Commodity and Derivatives Exchange, mustardseed for delivery in June contracts rose Rs 64, or 1.56 per cent, to Rs 4,169 per quintal, with an open interest of 17,250 lots.Also, most-active July month contracts were trading higher by Rs 60, or 1.45 per cent, to Rs 4,193 per quintal, in an open interest of 77,380 lots.Firming trend at the spot market on strong demand from oil mills and vanaspati units against tight supplies from growing regions led to the rise in mustardseed prices.

� Castorseed Castorseed futures traded lower by Rs 81 to Rs 4,340 per quintal in the national capital on monday amid a weak trend at spot markets due to slackened demand at prevailing levels.At the National Commodity and Derivatives Exchange, castorseed prices for October contracts tumbled Rs 81, or 1.83 per cent to Rs 4,340 per quintal and open interest stood at 110 lots.Castorseed for delivery in July lost Rs 59, or 1.42 per cent to Rs 4,102 per quintal, with an open interest of 2,04,900 lots. June delivery shed Rs 56, or 1.39 per cent to Rs 3,980 per quintal, having an open interest of 12,430 lots.Weak trend at the markets due to absence of buying support at prevailing levels against increased supplies in the market, mainly dragged down the castorseed prices at futures trade.


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