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Weekly Tracker
Contents
Returns Non Agri Commodities Currencies Agri Commodities Non-Agri Commodities Gold Silver Copper Crude Oil Currencies DX, Euro, INR Agri Commodities Chana Black Pepper Turmeric Jeera Soybean Refine Soy Oil & CPO Sugar Kapas
3.9
3.2
1.7 0.8
(2.1) (2.9)
0.78
(4.00)
(5.00) (6.00) (7.00)
(6.51)
1.6
1.1
(0.2)
(0.6)
(1.4)
(1.7)
(2.6) (3.9)
*Weekly Performance for July contract, Mentha Oil Cotton & CPO- June Conyract,
ETF Performance
1,700
1,650 1,600 1,550
1,500
1,450 1,400 1,350 81.0 80.0 79.0
US Dollar Index
Gold
Gold Import Duty Structure
Year Jan 2012 Feb 2012 Jan 2013 Jun 2013
Source: BS, Angel Research
Duty (%) 2 4 6 8
Jewelers React
Gold
US Commodity Futures Trading Commission Data (CFTC)
Speculators have raised the long position by 19 percent to 57,113 futures and options as on 4th June. The holdings have gained by 60 percent in past two weeks. An expected normal monsoon along with a host of auspicious occasions during the wedding and festival season will boost gold demand during the second-half of the year. Immediately after the move by Reserve Bank of India (RBI) to curb gold imports, WGC said this move will only have a short term impact on the precious metal prices and demand. The trend in gold prices for this week is expected to be up in the Indian markets. The yellow metal in the domestic markets will take upside support from depreciation in the Rupee along with expectations of lower supply of the metal due to the Governments measures to curb supply. Prices in dollar terms are expected to witness downside pressure due to strength in the Dollar Index and the decline in ETF holdings. Spot Gold : Support 1,366/1,348 Resistance 1,398/1,420. (CMP: $1,377.20) Sell MCX Gold August between 27,800-27,850, SL-28,175, Target -27,100. (CMP: Rs 27,615)
Outlook
Silver
Weekly Price Performance
Spot silver declined 2.6 percent in the last week and prices touched a low of $21.51 /oz, closing at $21.64/oz in at the end of the week. Spot Silver prices slumped to a 32-month low of Friday due to Fed worries.
60,000 58,000
56,000
54,000 52,000 50,000 48,000 46,000 44,000
30
28 26 24
ETF Performance
Holdings in the iShares Silver Trust declined marginally by 0.05 percent to 9,988.42 tonnes on 7th June 2013 from 9,992.92 tonnes on 31st May 2013.
Downside in gold prices. Mixed Performance in the base metals complex. Expectations of cut in the stimulus spending by the Fed. However, sharp fall in prices was cushioned on account of weakness in the DX. Weak cues from gold prices along with an overall grim market scenario, silver prices are expected to witness pressure. Dollar Index strength would be negative for the commodity. Rupee depreciation however will help support upside in silver in the Indian markets. Spot Silver: Support 21.20/20.62 Resistance 22.07/22.63. (CMP:$21.41) Sell MCX Silver July between 43,500-43,550, SL-44,251, Target 42,300/41,700. (CMP: Rs.42,748)
42,000
22
Outlook
32.0 30.0
26.0
24.0
81.0 80.0
22.0
79.0
US Dollar Index
Copper
Weekly Price Performance
LME Copper prices slipped 0.6 percent last week, while prices on the MCX near-month contract gained 0.4 percent, owing to Rupee depreciation in the last week that cushioned downside. Despite supply-side concerns, copper prices came under pressure over the second-half of the week on the LME due increase in inventories on the LME and the SHFE. After testing a high of $7500/tonne on the LME during mid-week due to supply worries on account of a shutdown at the worlds second-biggest mine, prices corrected to a weekly low of $7221/tonne on Friday as demand-side concerns loomed. Copper inventories over the week increased marginally by 0.2 percent on the LME to 609,875 tonnes and on the SHFE, inventories increased sharply by 1.2 percent to 181,472 tonnes.
LME and MCX Copper Price Performance
8,400 8,200 8,000 7,800 7,600 455 445 435 425 415 405 395 385 375 365
7,400
7,200 7,000 6,800
Copper Inventories
Supply-side factors
Production at Freeport-McMoran Copper and Gold Inc. in Indonesia is expected to remain closed for almost 3 months on the back of a government probe due to an accident at its Grasberg mine. Current supply-side factors that could be supportive to prices suspension of output at Grasberg, reduced output at Collahuasi in Chile and lack of production at Bingham Canyon at Utah. The open-pit mine at Grasberg produces around 140,000 tonnes of copper ores per day, while underground operations produce 80,000 tonnes. A supply crunch amid a seasonally strong period for demand could be supportive for copper prices in the medium-term.
LME Copper v/s LME Inventory
8,400 618,000
8,200
8,000 7,800 7,600 7,400
568,000
518,000 468,000 418,000 368,000 318,000
Copper
Important Developments
Chilean copper exports increased to $4.4 billion in May13 from $3.2 billion during the same period last year. Russian exports of aluminum, copper and nickel fell during Jan-April13 due to a fall in demand for metals in the world markets.
Outlook
Subdued price activity is expected in Copper this week as Chinese markets are closed for holiday for the first-half of the week. Supply-side worries will continue to provide upside direction to prices. The currency factor will also affect prices, with the stronger Dollar Index putting pressure on LME prices, while a weaker Rupee will support gains domestically.
Crude Oil
Weekly Price Performance
Nymex WTI crude oil prices jumped 4.4 percent last week to close at $96/bbl and on the MCX, the near-month contract gained 4.5 percent to close at Rs5512/bbl. Decline in inventories, upbeat US jobs report, weakness in the Dollar Index along with threat of a Hurricane affecting oil production in the Gulf of Mexico region supported gains in the commodity. Both, American Petroleum Institute and the US Energy Department reported a decline in oil inventories by 7.8 mb and 6.3 mb for the week ending 31st May13. In both the inventory reports, gasoline inventories slipped while distillate stockpiles increased. However, the overall correction in inventories supported an upside in prices. Tropical storm Andrea did form in the Gulf Coast but is not expected to impact the oil and gas production the region. However, threat of the same caused an upward impact on prices last week. More reports of storms that could intensify and halt production in the US could trigger an upside in prices. South Sudan exports are threatened due to tensions over rebels in the territory. Companies in South Sudan have been ordered to close pipelines carrying oil from South Sudan fields to Port Sudan. The countrys economy depends heavily on oil export revenues. However, this could happen anytime in the next 60 days and negotiations would take place but currently exports havent been affected. South Sudan has to rely on a 1400-km pipeline through Sudan in order to export its crude and the issue of transit fees usually causes supply trouble. In this case too, the export cut could hamper the fees obtained by South Sudan to Sudan, thereby keeping the exports halt as the last option to resolve issues. This closure comes after a recent 15-month oil supply shutdown which had affected its economy. From mid-May, South Sudan has produced 200,000 bpd and aims to ramp-up production to 350,000 bpd by year-end.
Nymex and MCX Crude Oil Price Performance
5,600 5,500 5,400 5,300 5,200 5,100 5,000 4,900 4,800 4,700 98.0 96.0 94.0 92.0 90.0 88.0 86.0
388.6 384
381.4
388.9 387.6
385.9 382.7
Crude Oil
Saudi Arabian Output
Crude oil production Saudi Arabia stood at 9.6 mbpd in May13, up from 9.3 mbpd in April13. The country typically increases output during the hot summer months in order to meet a rise in air-conditioning demand. Data showed that Chinese crude oil imports stood at 23.95 million tonnes in May13, falling 6 percent y-o-y. During the first five months of 2013, imports are down by 2 percent y-o-y to 116 million tonnes. Exports from China too were affected as for May12 falling 39 percent y-o-y to 110,000 tonnes. From Jan-May13, exports slumped 29 percent y-o-y to 830,000 tonnes. May13 crude oil demand was up around 1 percent to 9.48 mbpd, marking the lowest since Sept12. Refinery throughput in the country falls to a 9-month low at 9.2 mbpd. A mixed trend is expected to be seen in crude oil this week. Bullish factors like falling inventories, threat of the Hurricane season and worries over a an expected cutback in Saudi Arabian oil output will be supportive to prices. But bearish factors like increase in Saudi Arabian oil output and slowing Chinese output will keep a check on rise in prices. Nymex Crude Oil: Support: 94.65/92.80 Resistance 98.05/99.85. (CMP:$95.68) Buy MCX Crude June between 5465-5455, SL-5390, Target -5625. (CMP:Rs 5530)
Outlook
Economy
India
HSBC Manufacturing PMI fell to a 50-month low of 50.1 in May13, standing hardly a point mark higher that divides the line between expansion from contraction. Output growth witnessed contraction on account of slow order growth, power outages, high interest rates and slowing global demand. Bank of America-Merill Lynch have lowered Indias GDP forecast to 5.8 percent for the FY2013-2014 and to 6.8 percent for the FY2014-15 on account of a tight liquidity scenario and slow industrial progress. Gross Domestic Product (GDP) grew as expected by 4.8 percent in Q4 of 2012 as against a rise of 4.5 percent in Q3 of 2012. Finance Ministry officials hinted that India is expected to raise the cap on foreign investment in sovereign debt by $5 billion soon. The HSBC Purchasing PMI showed that Indias service sector expanded to a three-month high in May13. Services PMI rose to 53.6 points in May13 from 50.7 in April13. Activity in the Service sector increased last month on the back of strong order flows and launch of new products.
China
Factory activity in China witnessed a decline for the first time in seven months in May13 and growth in the services sector also cooled. The HSBC Markit PMI for May13 declined to 49.2, marking the lowest level since October 2012 and down from 50.4 seen in April13. Fall in factory activity in China was backed by a weakening domestic demand scenario. Chinas Trade Balance was at surplus of $20.4 billion in May as against a previous surplus of $18.2 billion in April. Consumer Price Index (CPI) declined to 2.1 percent in last month from rise of 2.4 percent in April. Industrial Production grew at slower pace of 9.2 percent in May with respect to rise of 9.3 percent in April.
Japan
Capital Spending declined by 3.9 percent in Q1 of 2013 from earlier fall of 8.7 percent in Q4 of 2012. Monetary Base rose by 31.6 percent in May from previous increase of 23.1 percent in April. Current Account was at a surplus of 0.85 trillion Yen in April as against a surplus of 0.34 trillion Yen a month ago. Final Gross Domestic Product (GDP) rose to 1 percent in Q1 of 2013 from earlier increase of 0.9 percent in Q4 of 2012. Consumer Confidence increased by 1.2 points to 45.7-mark in May as compared to rise of 44.5-level in April. Economy Watchers Sentiment declined by 0.8 points to 55.7-level in last month with respect to increase of 56.5-mark in April.
Economy
US
Consumer Sentiment increased by 0.8 points to 84.5-level in May as compared to earlier gain of 83.7-mark a month ago. ISM Manufacturing Purchasing Managers' Index (PMI) declined by 1.7 points to 49-mark in May as against a rise of 50.7-level in April. Final Manufacturing PMI gained by 0.5 points to 48.3-mark in May with respect to rise of 47.8-level a month ago. Automatic Data Processing, Incs. (ADP) Non-Farm Employment Change increased by 22,000 to 135,000 in May as against a rise of 113,000 in April. The Institute for Supply Management (ISM) Non-Manufacturing Purchasing Managers' Index (PMI) gained by 0.6 points to 53.7-mark in May with respect to rise of 53.1-level in April. Unemployment Claims declined by 11,000 to 346,000 for week ending on 31st May as against a rise of 357,000 in prior week. Trade Balance was at a deficit of $40.3 billion in April as against a earlier deficit of $37.1 billion a month ago. Non-Farm Employment Change increased by 26,000 to 175,000 in May as against a rise of 149,000 in April. Unemployment Rate rose to 7.6 percent in last month from earlier increase of 7.5 percent a month ago.
Euro Zone
Unemployment Rate grew to 12.2 percent in April from rise of 12.1 percent in March. European Producer Price Index declined by 0.6 percent in April from previous decline of 0.2 percent a month ago. Spanish Unemployment Change declined by 98,300 in May as against a earlier fall of 46,100 in April. German Factory Orders declined by 2.3 percent in April as against a rise of 2.3 percent a month ago. German Industrial Production rose by 1.8 percent in April with respect to previous rise of 1.2 percent in former month.
Rupee
Weekly Price Performance
The Indian Rupee depreciated around 0.8 percent on a weekly basis. Rupee has become the worst performing currency in Asia. Depreciation is related to the fundamental weakness of the Indian economy. Weakness in the currency is not only relative to the Dollar Index but also against other major currencies, thereby indicating inherent domestic economic drawbacks. At the start of the week, the Rupee hit an 11-month low of 56.76 on the back of dollar buying and capital outflows. RBI Governor D Subbarao said that a weaker Rupee should not be the criteria for the exporter community and that exporters should improve their business and product competitiveness in order to gain higher remittances, rather than depending on the currency factor to boost revenues. Hence, this statement too is a negative trigger and would cause further sentimental havoc in the domestic economy. Rupees all-time low was of 57.33 breached on Monday 10th June13 as the Spot Rupee tested a low of 58.05, raising further worries over the impact of the same on the Indian economy. For the month of June 2013, FII inflows totaled at Rs.117.70 crores ($20.91 million) as on 7th June 2013. Year to date basis, net capital inflows stood at Rs.83,322.80 crores ($15,373.90 million) till 7th June 2013. Depreciation bias is expected to be seen in the Rupee during the week. RBI intervention is unlikely as last weeks statement by RBI officials indicate the same. Exporter selling however is expected and Dollar Index strength would be fatal for the currency movement further. USD/INR MCX June Support 57.30/56.60 Resistance 58.30/59.00. (CMP: 57.90)
$/INR - Spot
56.0 55.5 55.0 54.5
54.0
53.5 53.0
FII Inflows
Outlook
US Dollar Index
83.0
82.0 81.0 80.0 79.0
Outlook
Euro
Weekly Price Performance
The Euro appreciated 1.7 percent last week, touching a weekly high of 1.3304. Favorable economic data from the region supported an upside in the currency. Further, optimistic statement from European Central Bank (ECB) President Mario Draghi, that the regions economy will gain momentum over a period of time also added further support. But the ECB has cut its economic outlook for the region to -0.6 percent for 2013 compared to earlier estimates of -0.5 percent prevented sharp positive movement in the currency. Movement in the Euro will be largely dependent on the quality of economic data releases. Negative data could trigger downside pressure and strength in the Dollar Index will additionally lead to further decline in the currency. EURO/USD SPOT: Support 1.3010/1.2800 Resistance 1.3360/1.3500. (CMP: 1.3224)
1.365
1.355 1.345 1.335 1.325 1.315 1.305 1.295 1.285 1.275
Euro/$ - Spot
Outlook
EURO/INR - Spot
76.0
75.0 74.0 73.0 72.0 71.0 70.0 69.0
Chana
Outlook
Weekly Strategy
Turmeric
Weak exports
Turmeric exports during Apr-Jan 2013 declined by 4% to 66,550 tn. (Source Factiva)
NCDEX issued a circular earlier this month that it will modify the tick as well as the lot size in the Turmeric contract. However the exchange later announced that it has kept the circular issued earlier has been kept in abeyance till further notice. Production of turmeric declined in 2012-2013 season due to weak monsoon as well as lower turmeric prices. The area covered under Turmeric in A.P. as on 10th October, 2012 was been reported at 0.58 lakh hectares. The area covered was lower as compared to the previous year (0.81 lha), as well as normal as on date (0.67 lha). Sowing is reported to be 30-35% lower compared to the previous year. Turmeric production in 2012-13 is expected around 50% lower compared to last year and is expected around 45-50 lakh bags. Production in 2011-12 is reported at historical high of 90 lakh bags/ 10.62 lakh tns.
Outlook
Turmeric prices are expected to trade on a weak note this week as huge stocks as well as weak demand may continue to pressurize prices. Arrivals of monsoon may also lead to commencement of sowing of the new crop. However, farmers may hold back their stocks. Also export demand may emerge at lower levels ahead of Ramadan, which may support prices at lower levels.
Sell NCDEX Turmeric July between 5560-5600, SL -5800, Target - 5250 / 5200.
Source: Agriwatch & Reuters
Weekly Strategy
Jeera
International Scenario
Outlook
Weekly Levels
Soybean
Outlook
Strategy
Global Scenario
Domestic Scenario
Strategy
Sugar
Outlook
Strategy
Kapas/Cotton
Outlook
Strategy
Thank You!
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