Chilli slumps on arrival pressure, jeera support seen at Rs.14300

Chilly prices caved in staging minor losses settling below the psychological level of Rs6,000. Jeera too followed suit as prices dipped towards the key support of Rs14,300.

Pepper made its first ever gain since Monday while respecting the resistance of Rs30,300- 30,500. Volatility continues to trouble Mentha oil prices as prices find stiff resistance above Rs1,600.

BMD CPO futures fell during the previous session pressured by a dip in crude oil and a stronger MYR/USD, which made CPO a more expensive feedstock for Malaysian refiners. Palm oil has declined 5% since the beginning of the year and could fall further in coming weeks if demand remains tepid.

Trading executives have said Malaysian exports are weakening as buyers shift orders to top producer Indonesia due to lower export taxes.

Indonesia reduced its export tax on refined palm products last August, which allowed its refiners to sell products at a steep discount compared with Malaysia. But palm oil's downside is likely limited at least for the rest of the week, as traders may square off positions ahead of the long weekend on Friday.

Expectations for Malaysian output to fall as much as 12% in January may keep stocks unchanged from December's level of 2.03mn tons is acting as a lateral support.

US soy complex futures ended modestly higher, trading in tandem with movement in the US dollar. Prices traded in both sides of unchanged with USD fluctuations in focus as uncertainty about South American output offset fundamental pressure from sluggish export demand.

Without a fundamental event to direct prices, participants eyed outside markets, playing more of a waiting game in the absence of directives to break futures out of their recent trading range.

NCDEX and MCX edible oil counters extended their southward journey making fresh multi month lows depressed by a stronger rupee.

Courtesy: IIFL

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Precious metals to remain higher on Greek debt worries

Current tensions at the European front as well as weaker greenback could not hold back the industrial numbers around the globe. China and India produced better than expected indices while Europe and US also got certain positives from the industrial side. US Employment scenario became somewhat dusky.

Gloomy outlook at the European front as well as weaker Greenback continued pushing heaven demand for precious metals. Gold gained to eight week high breaching $1750 while Silver could not break $34.

Investors bought 127,000 ounces of American Eagle gold coins from the U.S. Mint in January, the most in a year, data on its website showed. China produced a record 360.96 tons of the yellow metal in 2011, a 5.9% increase which makes it world’s no.1 gold producer.

Estimates have suggested that China's total gold imports for 2011 will have been some 490 tonnes ‐ double that of 2010. Considering the current profit booking at the Bullion desk as well as ongoing EU problem, it is advisable not to take huge positions on either side unless certain decisive steps occur. But having stop loss is necessary.

Courtesy: Edelweiss Comtrade Limited Research

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NCDEX pepper to decline on weak export demand

Pepper February delivery dropped Rs 175 and settled at Rs 29300/quintal on subdued export demand and on expectations fresh arrivals from the new season crop will improve in coming days.

Supplies from the new season crop have started arriving in small quantities in southern Kerala and Karnataka states.

Local supplies are expected to improve in coming days.

New crop arrivals from Vietnam is also likely to start by Feb. end or March.

However with Indian production expected lower due to ad-verse weather, lower acreage and a fall in productivity, any rise in exports could support the prices at these lower levels.

There are expectations of some more corrections in the short term as higher production estimates are keeping pressure on the market sentiments.

Medium term trend however looks positive on expected rise in export demand.

As per IPC latest estimates, global Pepper production expected to rise to 3,20,000 tonnes in 2012 vs 2,98,000 tonnes this year a rise of 7.2%.

Global exports expected to rise to 2.46 lakh tonnes vs 2.42 lakh tonnes in 2011.

Spot pepper dropped -136.2 rupees to 30861.15 rupees per 100 kg in Kochi market. The contract touched the intra day high of Rs 29800/quintal while low of Rs 28880/quintal.

Now support for the pepper is seen at 28853 and below could see a test of 28407. Resistance is now likely to be seen at 29773, a move above could see prices testing 30247.

Trading Ideas:

Pepper trading range is 28407-30247.

Pepper dropped on subdued export demand and on expectations fresh arrivals from new season crop will improve

New crop arrivals from Vietnam is also likely to start by Feb. end or March

NCDEX accredited warehouses pepper stocks dropped by 26 tonnes to 4032 tonnes.

Spot pepper dropped -136.2 rupees to 30861.15 rupees per 100 kg in Kochi market.
 
Courtesy: Kedia Commodities

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NCDEX chana to extend uptrend on fresh buying

Chana gained Rs 48 and settled at Rs 3233 per quintal on buying by local traders, who expect lower harvest in the current season.

The government data shows chana harvest could fall in Maharashtra, Karnataka and Rajasthan, and this is providing support to prices.

Chana sowing has declined 4 percent in ongoing rabi (winter sowing) season to 8.9 million hectares as of Jan 27, government data showed. Lesser winter rain in key growing areas has impacted the yields and this could result in a decline in overall harvesting of the pulse.

Lower Pulses production prospect reports kept supporting prices while lack of significant demand prevented a major uptrend.

Reports of decline in Pulses production especially Tur from states like AP, Maharashtra and Karnataka due to reported lower rainfall activities there, could support Chana rates in medium term but short term trend looks weak.

As per IPGA latest reports, Pulses production during current fiscal is expected to fall by 5-7% from 18.3 million tonnes in 2010-11 due to inadequate rains in some growing areas.

The total daily arrivals of chana were hovering at the levels of around 100000 bags in the entire major mandies. In Delhi spot market, chana jump up by 84.4 rupee to end at 3300 rupee per 100 kgs.

The volume was noted at 85250 lots. Support for chana is at 3192 below that could see a test of 3150. Resistance is now seen at 3270 above that could see a resistance of 3306.

Trading Ideas:

Chana trading range is 3150-3306.

Chana rose on buying by local traders, who expect lower harvest in the current season

The government data shows chana harvest could fall in Maharashtra, Karnataka and Rajasthan

NCDEX accredited warehouses chana stocks dropped by -2284 tonnes to 23496 tonnes.

In Delhi spot market, chana jump up by 84.4 rupee to end at 3300 rupee per 100 kgs.

Courtesy: Kedia Commodities

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Precious metals gain on Euro debt concerns, crude falls on rising inventories

Precious metals extended its northward journey, with gold prices managing to settle above the significant levels of US$1,750/ounce.

In European bond markets, Spain sold 4.56bn euros of 3-5 year government bonds at lower yields. French yields also fell amid strong demand.

About 8bn euros of long-term French bonds were sold against bids worth over 19bn euros. On Greece front, government has promised to avert the collapse of a second rescue package, promising that talks would be completed by this week.

Greek PM has stated that he would push for a bigger debt write-down by investors and deeper budget cuts by his government. Private creditors are told to accept an average coupon of as low as 3.6% on new 30-year bonds, down from 4.25%.

On US macroeconomic front, market participants will keep an eye on nonfarm employment numbers, where they are expected to have risen by 150,000 after increasing 200,000 in December.

LME base metals moved lower, with losses witnessed across the board. Uncertainty regarding Greece debt negotiations took a toll on the base metals pack.

Meanwhile, Markit Economics reported that its purchasing managers’ index for January rose to 48.8 from 48.7 in the prior month.

On supply front, workers of one union at Teck Resources Ltd's Chilean Quebrada Blanca copper mine, ratified strike action after contract negotiations with the firm broke down.

In respect with demand for Lead, North American shipments of replacement automotive batteries slipped by 2.2% in December from November.

Crude oil futures declined further, suppressed by the huge jump in US oil inventories and weakening demand in the world’s largest economy.

EIA reported in it’s weekly report that U.S. commercial crude oil inventories increased by 4.2mn barrels to 338.9mn barrels last week, as compared with a forecast of a 2.6mn barrel gain.

U.S. oil consumption declined to a 13-year average daily low of 17.653mn barrels a day.

Demand was 6% below a year ago levels. Gasoline demand fell 1.6% from a week earlier and 6.8% from a year ago.

Courtesy: IIFL

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MCX zinc to edge higher on positive global cues

Zinc yesterday traded with the positive node and settled 0.19% up at 104.7 yesterday LME zinc prices once dipped to USD 2,070/mt ahead of manufacturing PMI for major economies was better than expected, with European economic data showing the manufacturing activity is improving.

Meanwhile, US economic data shows that the employees in US private sector grew steadily, and construction spending increased as well.

As a result, LME zinc prices climbed gradually to above the 10dma, with prices finally closing at USD 2,117.5/mt, up USD 12.5/mt. January PMI announced by global major economies was better than market expectation, indicating that global economy is recovering.

The US PMI announced by ISM was 54.1, and the PMI was 50.5 from China, 51.0 from Germany, indicating expansion of manufacture activities.

In addition, the US private sector payrolls for January increased by 170,000, in line with market expectation.

The global manufacture data and the US employment data both advanced, boosting market expectation over demand for industrial commodities and risk appetite.

For today's session market is looking to take support at 103.4, a break below could see a test of 102 and where as resistance is now likely to be seen at 105.7, a move above could see prices testing 106.6.

Trading Ideas:

Zinc trading range is 102-106.6.

Zinc gained with European economic data showing the manufacturing activity is improving

US economic data shows that employees in US private sector grew steadily, and construction spending increased as well

Workers at Peruvian miner Milpo's El Porvenir zinc and lead unit ended a strike after six days off the job

Courtesy: Kedia Commodities

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NCDEX turmeric to jump on rising overseas demand

Turmeric yesterday we have seen that market has moved 1.51% as overseas demand for the new season crop outweighed fresh supplies and estimates of higher output. Buying is good from the overseas and local buyers.

Fresh supplies have started coming in spot but it is not weighing on sentiment because of high moisture content.

Supplies from the new season crop have started coming in the spot market in small quantities and are likely to improve in coming days.

Turmeric cultivation in India usually starts by the end of May and continues until August and a lengthy harvesting season begins in January.

Higher production prospects and better stocks could however keep pressure on the market sentiments as markets trade with high volatility.

Good Monsoon reports in AP has reportedly keeping the sowing activities proper.

The area sown would however depend on market rates and if falling trend continues, traders expect the sowing area may fall as farmers may shift to other lucrative crops like cotton, soybean etc.

In Nizamabad, a major spot market in AP, the price ended at 4733.35 rupees gained by 25.9 rupees. Market has opened at 4638 & made a low of 4610 versus the day high of 4736.

The total volume for the day was at 5390 lots and the open interest was at 10525.Support for turmeric is at 4625 below that could see a test of 4555.

Resistance is now seen at 4751 above that could see a resistance of 4807.

Trading Ideas:

Turmeric trading range is 4555-4807.

Turmeric rose as overseas demand for new season crop outweighed fresh supplies

Fresh supplies have started coming in spot but it is not weighing on sentiment because of high moisture content

Supplies from the new season crop have started coming in the spot market in small quantities

In Nizamabad, a major spot market in AP, the price ended at 4733.35 rupees gained by 25.9 rupees.
 
Courtesy: Kedia Commodities

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India silver to remain higher on global economic concerns

Silver prices rose by nearly 0.72% as surprisingly robust manufacturing figures out of the US, Europe and China sparked hopes that green shoots of recovery were sprouting in the global economy, which wetted an appetite for risk that sent the greenback falling and silver rising.

The ISM’s U.S. mfg index jumped to 54.1 vs 53.1 in Dec, and while slightly below some market expectations, the figure did break even further away from the 50 mark, the boundary between economic growth and contraction.

The Markit Economics mfg data based on a survey of PMI in the euro region rose to 48.8 in Jan from 46.9 in Dec.

 Positive output figures in Germany, the UK and China emerged as well, fueling the risk-on session. Mfg figures prompted investors to sell their dollar positions and go long on stocks and currencies worldwide, thus ditching greenback positions in the process.

Since bullion often trades inversely with the dollar, the risk-on session prompted a run to the silver throughout the early portions of the day. Some market watchers warned, however, that the silver  rally could cool.

Now technically market is trading in the range as RSI for 18days is currently indicating 61.59, where as 50DMA is at 53970 and silver is trading above the same and getting support at 56404 and below could see a test of 55974 level, And resistance is now likely to be seen at 57216, a move above could see prices testing 57598.

Trading Ideas:

Silver trading range is 55974-57598.

Silver prices rose as surprisingly robust manufacturing figures out of the U.S., Europe and China sparked hopes.

The ISM’s U.S. mfg index jumped to 54.1 vs 53.1 in Dec, and while slightly below some market expectations

Positive output figures in Germany, the UK and China emerged as well, fueling the risk-on session

Courtesy: Kedia Commodities

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India cardamom gains in export demand, chilli under pressure

Cardamom futures may trade higher & continue to post gains. Export demand is reported higher and domestic demand may increase in the coming days as stockists and buyers have no stocks at current period.

Chilli futures may trade with a weak bias & remain below 6145 levels. Anticipation of higher production may continue to put pressure on prices.

Turmeric futures may trade with a positive bias tracking export enquiries from spot markets. Though farmers are having huge stock of old turmeric with them, brought very limited stocks to the market for sales as they still expect that the price may improve to Rs 8,000-10,000 a quintal and the Government may announce minimum support price of Rs 10,000. Pepper futures may trade sideways with a negative bias.

Some new pepper is arriving at the terminal market from Pathanamthitta and some parts of Kollam. As it was had moisture content, buyers were quoting Rs 280-285 a kg, but the sellers were not interested to sell at that rate.

Courtesy: SMC Global

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