commodities weekly tracker, 12th august 2013

7/27/2019 Commodities Weekly Tracker, 12th August 2013

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Commodities & Currencies

Weekly Tracker


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Commodities Weekly Tracker

ContentsReturns

Non Agri Commodities

Currencies

Agri Commodities

Services & Manufacturing Activity in Emerging Economies

European Services PMI & US non-manufacturing PMI

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

Monday | August 12, 2013


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Commodities Weekly TrackerMonday | August 12, 2013

2.4

0.8

(0.8) (1.1)(1.5) (1.7) (2.0) (2.0) (2.2)

(5.9)(6.0)(5.5)(5.0)

(4.5)(4.0)(3.5)(3.0)(2.5)(2.0)(1.5)(1.0)(0.5)

0.00.51.01.52.02.5

Global Equities Performance (%)


4/25


2.2

1.4

0.70.5

(0.2)

(0.7)(1.0)

(2.8)(3.0)

(2.0)

(1.0)

0.0

1.0

2.0

Currencies Weekly Performance


5/25


5.3

3.9 3.83.2 3.2 3.0

0.2

(0.9)

(3.9)(4.0)

(3.0)

(2.0)

(1.0)

0.0

1.0

2.0

3.0

4.0

5.0

Non-Agri Commodities Weekly Performance


6/25


5.3

3.9 3.83.2 3.2 3.0

0.2

(0.9)

(3.9)(4.0)

(3.0)

(2.0)

(1.0)

0.0

1.0

2.0

3.0

4.0

5.0

Non-Agri Commodities Weekly Performance


7/25

*Weekly Performance for August contract

*Soybean, Cotton October contract

*Kapas- April 2014 Contract



8/25


Services and Manufacturing Activity Slows in Emerging Economies

Services PMI in the emerging economies like BRIC (Brazil, Russia, India

and China) countries declined in the month of July.

While on the other hand, advance economies like Euro Zone, Japan and

US showed an improved numbers for the last month.

Any reading of Services PMI below 50-mark in not good for the

economy and shows signs of slowdown in the economic growth.

But on the other hand, a reading above 50-level indicates economic

growth in the country.

A sharp rise in US non-mfg PMI was seen to 56-mark in July from

earlier rise of 52.2-level in June.

Indias Service PMI fell the most by 3.8 points to 47.9-mark in the

month of July.

Indias Private Sector output fell to the lowest in the month of July.

Output had fallen the most in the last month since the beginning of

the 2013.

From January 2013, onwards output was seen on a declining trend

till April 2013 thereafter a recovery was seen in May 2013.

But from June 2013 the trend again continued to be bearish and

dropped sharply to 48.4-level in the last month.


9/25


European Services PMI Rises

European Services PMI

Spanish Services PMI for the month of July rose to 48.5-mark from

47.8-level in the month of June.

Italian Services PMI for July increased to 48.7-level from 45.8-mark in

June Euro zone services PMI rose from 49.6-mark in June to 49.8-level in

July

Data from the Euro Zone indicated improvement in the economy,

however expansion is yet to be seen

Improvement can be attributed to the fact that the rate of decline in

new orders has slowed down for the first time in July 2013 after

witnessing a sharp decline since August 2011

US ISM NON-MANUFACTURING ACTIVITY

ISM Non-Manufacturing PMI for the month of July showed a

significant increase to 56-mark in the month of July from 52.2-level

in the month of June

Services industry registered the highest growth in five months,

showing that the economy is gaining momentum

This 3.8 point gain in July is the highest rise since February 2008

Since the US is a service oriented economy, this growth becomes an

even more important indicator pointing towards improvement in

the economy

40

41

42

43

44

45

46

47

48

49

50

Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13

Advance Economies Services PMI Data

Spanish Italian Euro Zone

50

51

52

53

54

55

56

Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13

US ISM Non-Manufacturing PMI


10/25


GoldWeekly Price Performance

Spot Gold prices gained around 0.2 percent last week, after touching a weekly high of

$1319.30/oz on Monday. During the week prices traded on a mixed note and keptfalling in early part of the week on account of fall in SPDR gold holdings.

The yellow metal bounced back on Thursday as a result of rise in US jobless claims

that eased concerns over the Federal Reserve pullback of its stimulus measures.

On the MCX however, the yellow metal prices fell around 2.1 percent in last week as

Rupee appreciation exerted downside prices. Prices touched a low of Rs27,342/10gm

on Wednesday but recovered over the period.

The currency factor is playing a crucial role in prices on the MCX due to Rupee

appreciation and this is acting as a negative factor for gold prices in the domestic

markets.SPDR Gold Holdings

During the week, Holdings in the SPDR Gold Trust continued to decline and slipped to

909.33 tonnes on Thursday but recovered and closed at 911.13 tonnes as on 9 th

August 2013.

However, when compared to the last week gold holdings fell around 0.8 percent from

previous level of 918.64 tonnes as on 2nd August 2013.

On a year till date basis, SPDR gold holdings fell around 32.5 percent from 1350.82

tonnes in last trading session of the previous year.Chinese gold imports from Hong Kong decline

Net gold imports of China from Hong King declined around 5 percent in June13 as

lower prices prevented investors from buying gold.

Additionally, the Chinese government also reduced the use of bullion in financing

deals.

As per the Hong Kong Statistics department, China imported around 101 tonnes of

gold in June as compared to 106 tonnes a month ago.

1,200

1,300

1,400

1,500

1,600

1,700

1,800

25,000

26,000

27,000

28,000

29,000

30,000

31,000

MCX and Comex Gold Price Performance

MCX-Near Month Gold Futures -Rs/10 gms Comex Gold Futures -$/oz

79.0

80.0

81.0

82.0

83.0

84.0

85.0

1,150

1,250

1,350

1,450

1,550

1,650

Spot Gold Vs Dollar Index

Spot Gol d -$ /oz US Dol lar Inde x


11/25


GoldGold Premiums in India Seen Extending Climb to Record on Curbs

India which was the world's biggest gold consumer in last year saw

an increase in gold premiums which extended its advances in thecountry.

Fees paid by jewelers to banks jumped from $30 in the week ended

on 2nd August to $40 an ounce over the London cash price.

This is due to the RBI efforts to curb gold imports by linking imports

to exports, leading to a significant decline in imports

CTFC data

As per the Commodity Futures Trading Commission (CFTC) data,

money managers has cut their long position by 27 percent to 48,103futures and options.

Holdings of short contracts have gained around 26 percent.

Outlook

Over the week, we expect gold prices to trade higher on the back of

upbeat global market sentiments and due to recovery in SPDR gold

holdings

In the Indian markets, appreciation in the Rupee will cap gains.

Weekly Technical Levels

Spot Gold : Support 1,303/1,284 Resistance 1,333/1,351. (CMP:

$1329.5)

Buy MCX Gold October between 27,840-27,800, SL-27,500, Target -

28,270/28,600 (CMP: Rs.28,333)


12/25


SilverWeekly Price Performance

Week-on-week, silver prices gained around 3.2 percent and witnessed a

bullish trend. Over the week, prices in dollar terms touched a high of

$20.58/oz in the last trading session of the week.

Prices on the MCX gained more than 1 percent but appreciation in the Rupee

capped sharp gains in prices on domestic bourses.

ETF Performance

Holdings in the iShares Silver Trust remained unchanged at 10,396.73 tonnes

in the last week.

Month-to-date, iShares Silver Trust Holdings fell around 0.2 percent from

10,419.04 tonnes as on 31st July 2013.

While on a year-to-date, holdings have gained by more than 3 percent from10,084.96 tonnes in the last trading session of the prior year.

Factor affecting the silver prices

Positive economic data from major global economies.

Weakness in the DX along with positive movement in gold prices and base

metals complex.

Rupee appreciation capped sharp gains in prices in the Indian markets

Outlook

During the week, we expect Silver prices to trade higher on the back of rise ingold prices coupled with upside in base metals complex.

Further, expectations of favorable economic data from major global

economies will support an upside in prices.

In the Indian markets, appreciation in the Rupee will cap sharp gains.


Spot Silver: Support 20.08/19.58 Resistance 21.04/21.54. (CMP:$21.01)

Buy MCX Silver September between 42,250-42,200, SL-41,500, Target -

43,350/43,800. (CMP: Rs.43,834)

18

20

22

24

26

28

30

32

38,500

43,500

48,500

53,500

58,500

MCX and Comex Silver Price Performance

MCX-Near Mon th Si lver Fut ures -Rs/ kg Comex Si lver Fut ures -$/ oz

79.0

80.0

81.0

82.0

83.0

84.0

85.0

18.0

20.0

22.0

24.0

26.0

28.0

30.0

32.0

Spot Silver Vs US Dollar Index

Spo t Silve r -$ /oz US Do llar Inde x


13/25


CopperWeekly Price Performance

LME copper prices gained around 3.8 percent in the last week, while prices on the MCX

stood at a 3 percent as appreciation in Rupee prevented further upside in Indian prices.

The red metal traded above crucial $7000/tonne in the last week on the back of

favorable economic data from China showing signs of economic growth.

Copper Inventories

On the LME last week, copper inventories declined 2.3 percent to 594,500 tonnes, thus

acting as a support to prices.

While on the Shanghai, Copper inventories fell sharply around 7.6 percent to 151,148

tonnes for the week ending on 9 th August 2013.

Chinas imports and exports increased

Imports in Chinese economy rose by 10.9 percent in the last month which beat the

estimates.

Further, exports also grew by 5.1 percent in July which came more than forecast of 2

percent.

Industrial production in China increase showing signs of economic growth which has

the main demand for metals.

Net short positions in copper increase

The latest CFTC report indicated that investors trimmed its net short holdings in copper

to 14,660 contracts from 26,924 contracts, last week . The decline in net shortpositions is on the back of rise in copper prices around 4 percent in prior week.

Outlook

A bullish trend is expected in case of copper on the back of favorable economic data

from China in the last week

Further, favorable economic data from the US and Euro Zone will also support upside.


LME Copper: Support 7160/7020 Resistance 7410/7550. (CMP: $7258.0)

Buy MCX Copper August between 437-435, SL-430, Target -448. (CMP: Rs 443.0)

6,700

6,900

7,100

7,3007,500

7,700

7,900

8,100

8,300

318,000

368,000

418,000

468,000

518,000

568,000

618,000

668,000

LME Copper v/s LME Inventory

Copper LME Inventory (tonnes) LME Copper Future ($/tonne)

365

375

385

395

405

415

425

435

445

455

6,700

6,900

7,100

7,300

7,500

7,700

7,900

8,100

8,300

LME and MCX Copper Price Per formance

LME Copper Future ($/tonne) MCX Near Month Copper Contract (Rs/kg)


14/25


Crude OilWeekly Price Performance

Nymex crude oil prices declined around 1 percent and closed at $105.97/bbl lastweek. Expectations of over supply from Libya exerted downside pressure on prices

along with weak global market sentiments which led to estimates of decline indemand for fuel.

The MCX near-month crude oil contract slipped around 2 percent on account ofappreciation in the Indian Rupee to close at Rs.6394/bbl on Friday.

Inventories

As per the US Energy Department (EIA) and American Petroleum Institute (API)report, US crude oil inventories declined by 1.32 million barrels and 3.66 millionbarrels respectively for the week ending on 2nd August 2013.

Libya signals rise in crude oil production & IEA cuts demand outlook

Libyas Oil Minister Abdulbari Al-Arusi said that country will increase in its production

for the next month. It is expected that country will pump around 800,000 barrels aday in next month from 700,000 in July.

The International Energy Agency (IEA)has cut the global oil demand for current as wellas next year on account of forecast of slow global economic growth.

The agency cut the global oil demand by 30,000 barrels per day to 895,000 barrels perday in current year and reduced 100,000 barrels a day to 1.1 million barrels a day for2014.

CFTC data

As per the CFTC report, net long positions for crude oil fell for second straight week by2.5 percent to 310,827 contracts.

Outlook

Crude oil prices are expected to trade with a positive bias over the week on the backof favorable economic data from China in the last week and expectations of upbeateconomic data from major global economies.

Sharp upside will be capped as a result of forecast for rise in Libyas production and

cut in global oil demand by IEA.Weekly Technical Levels

Nymex Crude Oil: Support: 105.30/102.90 Resistance 108.40/110.80. (CMP:$105.97)

Buy MCX Crude August between 6365-6345, SL-6300, Target -6550. (CMP:Rs 6437)

86.0

90.0

94.0

98.0

102.0

106.0

110.0

114.0

4,700

4,900

5,100

5,300

5,500

5,700

5,900

6,100

6,300

6,500

6,700

Nymex and MCX Crude Oil Price Performance

MCX crude oil (Rs/bbl) NYMEX Crude Oi l ($/bbl)

361.3

360.3

363.1369.1

371.7

372.2

376.4

377.53

381.4

384

382.7

385.9

388.6 388.9

387.6

388.6

395.3 395.5

394.9 394.6

397.6

391.3

393.8

394.1

394.1

383.8

373.9

367

364.2

364.6

363.3

360

365

370

375

380

385

390

395

400

Crude Oil Inventories (mn barrels)


15/25


Rupee and Dollar IndexWeekly Rupee Performance

Rupee tested new all-time low of 61.866 on Tuesday but recovered and appreciated

around 0.7 percent in the last week.

Capital Flows

For the month of August 2013, FII inflows totaled at Rs.1153.10 crores and net capital

inflows stood at Rs.67245.50 crores as on 8th August 2013.

Reserve bank of India and Government Measures

Reserve bank of India (RBI) will auction 220 billion rupees of government cash

management bills every Monday. The central bank has not specified the period for

which it will continue with auction of these bills.

Further, there were expectations that Indian government will relax its norms for External

Commercial Borrowings (ECB) to enable debt burden companies to tap foreign markets. The measure will include allowing repayment of rupee loans from ECB proceeds and wil l

let companies to raise up to $300 million by external debt with tenure of less than three

years as against with current limit of $20 million.

Additionally, ECB under automatic route will double to 1.5 billion from $750 million now

for debt with a maturity of up to five years. It will also allow state run banks to raise

capital consisting of equity plus free reserves from overseas markets under ECB

category.

Dollar Index Weekly Performance

The US Dollar Index (DX) declined around 1 percent in the last week and touched a lowof 80.895 on Thursday.

The DX declined on the back of favorable ISM non-manufacturing data from the US

exerted downside pressure on the currency.

Further, rise in the initial jobless claims eased the concerns that Federal Reserve will

pullback its stimulus measures thereby acting as a negative factor.

FOMC Member Speech

FOMC member Evans said in a statement on Tuesday that Federal Reserve is most likely

to taper its QE program in the current year. It also stated that pullback in stimulus

measures can be seen as early as from September of this year.

53.0

54.0

55.0

56.0

57.0

58.0

59.0

60.0

61.0

62.0

$/INR - Spot

79.0

80.0

81.0

82.0

83.0

84.0

85.0

US Dollar Index


16/25


Rupee and Dollar Index

Outlook

Over the week, the Rupee is expected to strengthen due to

measures taken by RBI along with expectations of favorableindustrial production data. However, sharp upside in currency will

be capped as a result of forecast for rise in countrys inflation data.

In the coming week, Dollar Index is expected to decline on account

of estimates of positive economic data from the US.

Core Retail Sales, Building Permits and Prelim UoM Consumer

sentiments data is expected to come on a positive note.

While on the other hand, sharp downside in the currency will be

capped as a result of forecast for decline in retail sales and Phi lly Fed

Manufacturing data.


USD-INR August Contract: Support 60.30/59.45 Resistance

61.30/62.10 (CMP: 60.85)

Dollar Index: Support 80.60/79.80 Resistance 82.0/82.80 (CMP:

81.25)


17/25


EuroWeekly Price Performance

The Euro appreciated around 0.5 percent in the last week on the back of

sharp fall in the DX. The currency touched a weekly high of 1.34 on Thursday on the back of

favorable economic data from the region.

Factors affecting the upside in currency

Favorable services PMI data from Spain, Italy and Euro Zone.

Additionally, we saw rise in German factory orders and German industrial

production data acted as a positive factor.

Further, investor confidence in the Euro Zone recovered which alsosupported an upside in the currency.

Outlook

Over the week the Euro is expected to trade on a positive note on the

back of upbeat global markets.

Further, expectations of rise in economic sentiments from Germany and

Euro Zone along with increase in the GDP data of Germany and France

will support an upside in the currency.

Additionally, forecast for rise in Euro Zone industrial production will act as

a positive factor.


EURO/USD SPOT: Support 1.325/1.3170 Resistance 1.3405/1.3520. (CMP:

1.3323)

1.275

1.285

1.295

1.305

1.315

1.325

1.335

1.345

1.355

1.365

Euro/$ - Spot

69.0

71.0

73.0

75.0

77.0

79.0

81.0

EURO/INR -Spot


18/25

Chana


Weekly Price Performance

Chana Futures recovered in the early part of the week on reports of crop

damages due heavy rains in kharif pulses going states. However, higher

supplies continued to exert downside pressure on the prices.

Chana August futures settled marginally lower by 0.48 w-o-w.

Incessant rains to cause marginal yield losses for kharif pulses

As on 2nd August, Pulses sowing is up 26 percent at 79.5 lakh hectares.

Increase in acreage under kharif pulses this year and above average monsoon

has raised hopes of bumper kharif output this season.

Although, incessant rains in the past 2 week in the kharif pulses growing belts

may damage standing crop to some extent, but still kharif pulses output may

stand above last years levels.Imposition of special margin on short Positions

Considering a significant drop in Chana prices, FMC imposed special margin of

5% on short positions on in all running and yet to be launched contract with

effect from Saturday, 27th July, 2013.

Chana output estimated at record high Fourth Advance Estimates

Ministry of Agriculture released its fourth Advance estimates of Food grain

production last week wherein it pegged Chana significantly higher at record 8.8

mn tn in the current season 2012-13. compared with 7.5 mn tn.

According to estimates released on 22nd July 2013, Total pulses output for

2012-13 season has been pegged at record 18.45 mn tn.

Outlook

Chana prices are expected to recover as a result of imposition of special

margin on short positions and expectations of demand to emerge at lower

levels ahead of festivals.

Weekly Strategy

Buy NCDEX CHANA Sep between 2800 2780, SL 2610, Target 3050/3100


19/25

Turmeric

Source: Agriwatch & Reuters



After touching a fresh contract low of `4556, Turmeric Futures recovered fromlower levels last week on account of short coverings. Prices have declined sharply

over the last few week on the back of huge carryover stocks coupled with goodsowing as well as rains in the Turmeric growing regions.

The spot settled 3.34% lower while the Futures settled 0.29% higher w-o-w.

Imposition of Margins on the short side

The regulator has increased margins on the short side of all the running and yet to

be launched contracts w.e.f 6th August 2013.

Better than expected exports

Turmeric exports in 2012-13 stood at 80,050 tn as against 79,500 tn in 2011-12.

Sowing of Turmeric for the 2013-14 season

The area covered under Turmeric in A.P. as on 07/08/2013 is reported at 0.43

lakh ha against 0.44 lakh ha last year and a normal sowing of 0.49 lakh ha. Normal

sowing for the season is 0.68 lakh hectares.

Lower production in the 2012-2013 season

Turmeric production in 2012-13 was around 50% lower compared to 2011-12 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 may trade on a mixed note this week. Short coverings coupled

with lower level demand may support prices at lower levels. Domestic demand

may also improve in the coming days ahead of the festive season. However, huge

carryover stocks as well as good sowing of turmeric this season may continue to

mount pressure on the prices at higher levels. Good rains are also expected to

increase the yield in the coming season. The progress of monsoon needs to be

watched carefully as this may affect the acreage as well as the yield of the crop.

Weekly Strategy NCDEX Turmeric Aug- Trend Sideways S1 - 4700, S2 -4550, R1 - 5100, R2 - 5330 .


Source: Reuters & Angel Research.


20/25

Jeera

Source: Ministry of Agriculture, Gujarat.



Jeera futures traded on a positive note last week on account of good export as

well as domestic demand coupled with declining arrivals at lower levels. However,

good rains in the main jeera sowing belt capped sharp upside in the prices.

The spot as well as the July Futures settled 0.44% and 0.83% lower w-o-w.

Second consecutive year of higher output

Indias 2013 Jeera output is estimated at 40-45 lakh bags (of 55kgs each), higher

than 40 lakh bags in 2012. However, increase in the exports due to supply

concerns in the global markets offset the impact of higher supplies on the prices

and thus, medium term fundamentals remain supportive for the upside.

Global supply concerns boost Jeera exports

Jeera exports in 2012-13 stood at 79,900 tn, as against 45,500 tn last year.

The ongoing tensions in Syria and Turkey, coupled with output concerns has led to

supply concerns, and thus, exports have been diverted to India.

International Scenario

According to reports, production in Turkey is reported around 8,000-10,000

tonnes while production in Syria is expected to be lower, raising supply concerns

in the international markets.

Currently, 1% Jeera of Indian origin is being offered for Singapore at $2,350/tn

(FOB Mumbai) while for Europe at $2,500/tn (CNF).Outlook

Jeera is expected to trade with a positive bias this week supported by overseas

demand as well as domestic demand. However, good rains in the jeera sowing

belt may pressurize prices at it may increase prospects of higher sowing and a

better yield in the coming season. higher production last year may also cap sharp

gains and pressurize prices at higher levels.

Weekly Levels Buy NCDEX Jeera Sep between 13320 13300, SL 13050, Target 13800.


Source: Reuters & Angel Research.


21/25

Soybean


Weekly price performance

Soybean prices traded on a positive note for the second consecutive week on fears

of crop damage due to excessive rains in Madhya Pradesh, the main soybean

growing region. Also tight supplies in the spot markets towards the end of theseason supported prices. However, higher sowing has boosted prospects of a record

yield this season, thus, capping sharp gains. The Spot as well as the Futures settled

3.9 and 3.28% higher on a weekly basis.

CBOT Soybean futures settled 0.73% higher last week.

Higher Soy acreage to offset losses caused due to heavy rains

Incessant rains in the past three weeks in the major soy growing belt of MP and

Maharashtra have caused damaged to the standing soy crop. However, marginal

losses may not impact much on the output as acreage is significantly higher at record

121.06 lh , up by 15.63 percent compared to the same period last year.

Soybean 2012-13 output revised up Fourth Advance Estimates

Ministry of Agriculture released its fourth Advance estimates of Food grain

production on Monday wherein it pegged Soybean output significantly higher at

record 14.6 mn tn in the current season 2012-13 compared with 12.2 mn tn in 2011-

12. Total nine Oilseeds production is pegged at 31 MT in 2012-13, slightly higher

than 29.79 MT achieved in the previous year.

Cool weather keeps soybean prices under check

Soybean prices traded higher due to tight supplies as well as demand from China.However, cool weather capped gains and kept prices under check at higher levels.

Outlook Soybean is expected to trade on a mixed note this week. Higher sowing thereby

prospects of higher production may pressurize prices. However, prices may find

support if excessive rains continue in the coming week raising crop damage fears.

Strategy

NCDEX Soybean Oct Trend Sideways- S1 - 2940, S2 - 2830, R1 - 3110, R2 - 3200


22/25

Refine Soy Oil and Crude Palm Oil


Weekly price performance

Soy oil as well as MCX CPO continued to trade on a positive note last week

and settled 0.99% and 0.95% higher respectively on account of festivedemand coupled overall weakness in the Rupee. Also, higher soybean prices

also supported prices. However, weak international prices coupled with

comfortable imported edible oil stocks capped sharp upside. Prices on KLCE

declined by 0.65% on expectations of increase in the output during the

seasonally higher yield period.

Global Scenario

Exports of Malaysian palm oil products in July increased 4.2 percent to

1,406,935 tonnes from 1,350,311 tonnes shipped during June.

Malaysia, the world's No.2 palm oil producer, has set its crude palm oil exporttax for August at 4.5 %.

Domestic Scenario

As per the data released by the Solvent Extractors' Association of India

Imports of vegetable oils, including non-edible oils, rose 3.2% to 947591 tn in

June, supported by sunflower and soy oil imports ahead of Ramadan.

India's refined palm oil imports declined 20.7 per cent in June to 296, 230 tn,

from a record high 373,837 tonnes in May as overall weakness in the Rupee

made imports expensive.

Monthly soy oil imports rose 2.7% as local supplies are almost exhausted

before the new planting season for soybean.

Stockpiles of edible oil at ports on July 1 stood at 690,000 tn, the trade body

said, higher than 675,000 tn on June 1..

Strategy

Buy NCDEX Refined Soya Oil Sep between 648 643, SL 630, Target 670.

Buy MCX CPO Aug between 500 495, SL 485, Target 515/520 .

d kl k


23/25

Sugar



Sugar prices gained marginally last week expecting demand to emerge at lower

levels amid series of festival ahead. However, ample supplies limited upside in the

prices.

ICE as well as LIFFE Sugar traded on a higher last week gaining 1.94% and 2.13%

on reports that frost damaged sugarcane in Brazil. Increasing demand for ethanol

in has lead to diversion of more cane towards ethanol.

Sugarcane acreage down 3.06 percent as on 2nd August

According to the Ministry of Agriculture, Sugarcane has been planted in 48.53

lakh ha as compared to 50.06 lakh ha last year.

Centre Plans to give freedom to hike PDS sugar prices

Food Ministry has moved a cabinet proposal to give freedom to state

governments to hike the retail price of sugar sold in ration shops. At present,

sugar is being sold at Rs 13.50 per kg in the PDS. This price has not been revised

since 2002 despite increase in open market price to Rs 35-40 per kg.

Brazilian mills raise ethanol output over sugar -Unica

Cane mills in center-south Brazil raised their output of sugar and ethanol in late

July from the first half of the month, but favored production of the biofuel more.

Sugar output in the region in the second half of July was still not at full speed,

however, with mills' output down 15 percent from the 2.97 million tonnesproduced in the same fortnight a year ago.

Outlook

Sugar may trade with positive bias in the coming weeks on expectations demand

to emerge at lower levels to meet the festive season demand. Sharp upside may

however, be capped on account of ample supplies.

Strategy

Buy NCDEX Sugar Sep between 3010 3005, SL 2980, Target 3045/3050

C di i W kl k


24/25

Cotton



MCX Cotton gained sharply by 4.08% last week as the relaxation in cotton exports

norm for CCI by the government helped boost positive market sentiments. Weakrupee also supported an upside in the prices.

ICE cotton traded on a bullish note last week and settled 4.37% higher as heavy

rains in the Southeast US and arid conditions for western Texas and China may

damage crops.

Kharif Cotton Planting up at 7.3 percent yoy

As per ministry of agriculture, cotton sowing was done on 108.52 la ha as on 2nd

Aug 2013 as against 144.87 la ha last year. Acreage is reported higher mainly in

Gujarat, where sowing is up at 26.13 la ha as on 29th July 2013 as against 21.92 la

ha during the same period last year.India allows CCI to export cotton in 2012-13 season

Government has relaxed restrictions on the export of cotton by the state-run

Cotton Corporation of India (CCI) in the current season to end-September.

The Indian government, through the CCI and farmers' cooperative NAFED, has

bought 2.5-3.0 million bales of cotton in the current crop year. CCI has a stockpile

of around 900,000 bales.

World Inventory Forecast by 7%

Global cotton stockpiles in 2013-14 will be 7 percent higher than estimated in Julyand will reach 19.81 mn tn. Inventories stood at 18.22 mn in 2012-13. production

in the 2013-2014 season will drop 3.1% from a year earlier to 25.59 mn tn.

Outlook

Crop damage reports and relaxation in export policy norms for CCI may continue to

support an upside in the cotton prices. However, if weather conditions turn

favorable this week, then we may see some correction at higher levels.

Strategy

Buy MCX Cotton Oct between 20700 - 20650, SL -20400, Target 21100/21200

C di i W kl T k


25/25

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commodities weekly tracker, 12th august 2013

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