Commodity Online
Silver prices are expected to continue the bull run which began in October 2008 while Copper prices are riding high on falling inventories in LME. MCX Silver prices made huge gains at Rs 31,321 while US Silver futures prices rose to $19.9 levels targeting a possible $21 plus levels soon. Gold prices have continued to hover around $1254, $10 short of the alltime high of $1264 set in June.

Global Wheat harvest largest ever
A U.N. agency says the 2010 global wheat harvest is one of the largest ever but experts say a less stable climate will mean bigger food supply fluctuations.

The United Nations reported a 5 percent rise in food prices in August, The New York Times said. Contributing factors included a Russian ban on wheat exports because drought has cut the harvest by 20 percent and flooding in Canada and Argentina.
In Mozambique, 10 people died and 300 were hurt in recent riots at least partly caused by a sharp jump in bread prices. The unrest was a reminder of the situation in 2008 when riots occurred in several countries.
This year's wheat harvest is the third-biggest ever and food prices are still about 30 percent below 2008 levels.

Other nations can make up for Russia grain loss
The U.N. Food and Agriculture Organization, based in Rome, has scheduled a Sept. 24 conference of agricultural experts. Abdolreza Abbassian, an FAO economist, said Friday other grain suppliers can make up for the loss of wheat from Russia but psychological factors come into play when supplies are disrupted.

Professor Per Pinstrup-Anderson of Cornell University said climate change will bring more extreme weather in many areas.
"We are going to have much bigger fluctuations in weather and therefore the food supply than we had in the past, so we are going to have to learn how to cope with fluctuating food prices," he said.

India Sugar production
Sugar production in India, the biggest consumer, may jump 17 percent as rains improve yields, helping the nation meet domestic demand, Agriculture Minister Sharad Pawar said.

India’s sugar output may rise to 22 million metric tons, news reports quoting him in New York said. India’s monsoon rainfall, the main source of irrigation for the nation’s 235 million farmers, was 1 percent below normal from June 1 to Aug. 30, the Indian Meteorological Department said.

India has been a net buyer since 2008 after a drought ravaged crops, pushing prices in New York to a 29-year high of 30.4 cents in February. Increased production from the Asian country may weigh on prices that have slumped 24 percent this year on bets that rising supplies may erase a global deficit.

India forex reserves up
India's foreign exchange reserves rose to $282.842 billion as on Aug. 27, from $282.549 billion in the previous week, the central bank said in its weekly statistical supplement on Friday.
Changes in foreign currency assets, expressed in dollar terms, include the effect of appreciation or depreciation of other currencies held in its reserves such as the euro, sterling and yen, the central bank said.
Foreign exchange reserves include India's Reserve Tranche position in the International Monetary Fund (IMF), the central bank said.

India’s food inflation up
India's food and fuel inflation accelerated in the third week of August, maintaining pressure on the Reserve Bank of India (RBI) to tighten monetary policy.

Despite a muted global economic recovery and signs that India's booming growth may have peaked, the RBI is expected to raise rates by another 50 basis points in 2010. Data released on Friday showed that the food price index, which has a weightage of over 15 percent in the wider wholesale price index, rose an annual 10.86 percent in the week to Aug. 21, more than its 10.05 percent rise in the previous week.

Gold
US Gold prices rose to $1254 an ounce on economic recovery concerns but there after weakened to $1239 on better than expected US payrolls data although a disappointing service industry index did provide support towards weekend. Next week trading may be lower on account of a light economic calendar and two holidays. New York market will be shut on Monday.

SPDR- the world largest gold-backed exchange traded fund reversed inflow and as its holdings fell 9 tonnes to 1249.908 tonnes on Thursday. Gold prices rose 6% in August. In Indian market gold prices were muted as traders were cautious about placing fresh orders.

Silver prices turned bullish and rose to $19.47 and is expected to resume a bull trend that began in October 2008. Some analysts expect Silver to rally to $21.35. Comex December silver rose to $19.949 while spot silver traded at $19.82 levels. Rally in industrial metals following positive US labor market report also aided the positive sentiments towards silver. MCX December Silver made huge gain of Rs 885 at Rs 31, 321.

Base Metals
Copper prices rose on positive US payroll data, the red metal has advanced 14% since June 1,as LME inventories dropped. Last week Copper gained 3.6%, the biggest increase since late July. Copper December at Comex rose to $3.50;/lb and looks set for a rally to $3.65/lb and the rally looks sustainable on China demand. Other metals, Aluminium, Lead and Nickel also climed in US and UK markets. At MCX, November copper contract rose to Rs 359 levels, a gain of Rs 6.

Crude oil
Crude oil prices fell as fundamentals are not supportive of the energy complex. US petroleum stock piles which are a mixture of oil and fuel supplies have increased by 4.04 mn barrels or 0.4% to 1.14 bn barrels, the highest level since 1990. Last week, oil prices climbed on better than expected US jobless data but fell towards weekend on service industries data which showed US service sector grew at the weakest pace in seven months, raising concerns about economic recovery. Index of non-manufacturing business fell to 51.5 in August from 54.3 the prior month.

Nymex Crude Oil futures slipped 0.8% this week and ended at $74.60 while brent crude at London Inter continental Exchange (ICE) last traded at $76.67. Futures weakened on explosion of oil and Natural Gas platform at Mariner Energy Inc in the Gulf of Mexico. Fundamentals of oil continue to be bearish in the short to medium term. The commodity touched a low of $64.24 on May 20.

MCX September Crude oil fell marginally to 3471 tracking global trends

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