Commodity Online
Local markets (mandis) in India are all set to get a facelift with the installation of tickers by commodity markets regulator, Forward Markets Commission. It will display spot and futures prices so that farmers can know the prices before they sell their produce.

Meanwhile, heavy rains in food grains producing regions have spread cheer in the markets. Seasonal rain deficit has been trimmed to 20 per cent as on Wednesday (September 9) as a hyperactive well-marked low-pressure maintained a stubborn presence over northwest India. An India Meteorological Department (IMD) update said that the week ending Wednesday saw excess rains (21 per cent) being dumped over Lakshadweep, Kerala, Karnataka, Konkan, Marathwada, Madhya Pradesh Jharkhand, Gangetic West Bengal, Bihar, Uttar Pradesh, Uttarakhand, Himachal Pradesh and Jammu and Kashmir.
India has adequate food stocks to make up a shortfall in output this year and will step up efforts to mitigate distress of farmers hit by deficient monsoon rains, Prime Minister Manmohan Singh said.

"We had record production and procurement of foodgrains in both 2007/08 and 2008/09. We thus have adequate food stocks and there is no cause for concern or fear of shortages of foodgrains in the country as a whole," he added.

Coffee prices in the global market have tumbled ahead of the harvesting of new crop from October in a number of countries including India,. “Although average monthly prices in August were higher than in July, the prices of all four groups (of coffee) seem to be on a downward trend as the new crop year approaches in a number of countries,” the International Coffee Organisation (ICO) said in its latest report.

Public Sector Oil India’s $570 million IPO was subscribed nearly 31 times on Thursday, quelling fears investor appetite for new offerings had waned in the wake of a tepid market debut for two recent big listings. Robust demand for Oil India's IPO also boosted hopes the government will look to sell more stakes in state firms as it looks to raise funds and cut a widening budget deficit.

The wholesale price index (WPI) fell for the 13th successive week though the drop was lower at 0.12% for the week ended August 29 against 0.21% decline in the week before.

Bullion (Precious Metals)
Following the dollar witnessing longest slide in six months, gold surged to the highest price since March 2008 last week as it is a hedge against inflation. Gold, which tends to gain when the dollar weakens, has climbed 14 percent in 2009 while silver reached a 13-month high. Gold futures for December delivery rose $9.60, or 1 percent, to $1,006.40 an ounce on the New York Mercantile Exchange’s Comex division, the highest closing price on record and the first above $1,000 since February.

Explore Commodity Online Mobile Services

Last week prices did fall below $1,000/oz levels. On Wednesday and Thursday gold prices surged on dollar weakness and pent-up technical momentum. Spot Gold rose to $1007 on Tuesday. Holdings in the SPDR Gold Trust, the biggest exchange traded fund backed by bullion, were unchanged for a third day at 1,077.63 metric tons on Friday. Though prices have fallen, it is likely that demand for the yellow metal from the safe-haven perspective will remain but prices may find it difficult to sustain above $1,000/oz levels. In our earlier reports it was pointed out that gold prices will take forward the $1,000/oz mark only if the metal sustains above $1,006/oz levels. Gold rally above $1000 may not be sustainable according to Karen Jones, a technical analyst at Commerzbank AG, citing the metal’s relative strength index. (quoted by Bloomberg). Gold’s relative strength index was above 70, a level that some investors and analysts use as an indication that prices are poised to fall, Bloomberg report said. Expect gold prices to trade below $1,005/oz levels ahead of the weekend.

Base Metals
Negative news that the production capacity cut in Lead is far less than expected, erased gains that the metal had made in the last few days. The metal had surpassed $2,000 on the LME and had sustained well above that. But this news is negative and may lead to further selling pressure in the metal as it erases concern over supply. The metal could end this week on a negative note.

Latest economic data from China indicated that industrial production gained faster than expected in August. New lending in the country also saw a rise. Industrial output at factories in China gained 12.3% from a year earlier. New loans in China stood at 410.4 billion yuan ($60 billion), up from 355.9 billion yuan in July. The Chinese government pledged to continue to its stimulus measures in order to secure the recovery as the country feels that the rebound is not stable, unbalanced and may not have become sustainable. Retail sales in China climbed 15.4% in August from a year earlier. This data for August indicates that China is poised to help stroke growth throughout Asia. This positive data from China could help provide a cushion to the downside in base metals.

Energy
US Crude oil futures have slumped on Friday by 3% after rallying for over four days last week . Dollar slump was citied as reason for gains in crude oil prices and it stayed lower against a basket of currencies. On Thursday crude rallied to $71.50 after bullish inventory data and OPEC decision to maintain production whetted investor appetite. OPEC left output unchanged, with Saudi Oil Minister Ali al-Naimi saying prices were being driven by economic recovery, and that high levels of inventory had become irrelevant to the market.

On Wednesday oil prices hovered around $71 and on Tuesday prices had spked by 4.5%. Oil prices could end the week on a positive note due to the following factors: 1) weak dollar, 2) positive industrial production data from China, and 3) forecast of higher crude oil demand in 2010. In the coming week, oil inventories could gain as stockpiles are expected to rise and refineries prepare to idle units for seasonal maintenance. This factor could put pressure on oil prices in the coming week.

Soybean
Soybean (NCDEX October contract) futures opened the week at Rs 2005 a quintal and moved in a range of 1948-2079 levels amidst weak sentiments during the last week on account revival of monsoon rains in major growing areas and lower export demand of soy meal. Globally soybean production is estimated higher as compared to last year also in favour of bears in the market. As per Agriculture Ministry of India till September 03, 2009, Domestic kharif oilseeds area has been covered 162.81 lakh ha against 175.19 lakh ha during corresponding period a year ago.

The area under soybean is reported down at 94.96 lh against 95.38 lakh hectare a year ago, groundnut at 41.61 lakh hectare vs 50.89 lakh hectare in the corresponding period last year, sunflower sowing is reported at 4.57 lakh hectare against 5.10 lakh hectare, sesamum at 13.77 lakh hectare versus 13.88 lakh hectare last year, niger 1.60 lakh hectare against 3.14 lakh hectare and the sowing of castor seed is reported at 6.30 lakh hectare compared to 6.80 lakh hectare in the corresponding period last year. As per USDA Oilseed Report, global oilseed production for 2009-10 is projected at 422.56 million tonnes, up 7.15 % from 394.35 million tonnes in 2008-09.

Global oilseed ending stocks for 2009-10 is projected to 62.73 million tonnes, up 16.75% from 53.73 million tonnes in 2008-09, mainly due to higher sowing acreage globally. Global protein meals production for 2009-10 is projected at 237.07 million tonnes, up 3.47 % from 229.13 million tonnes in 2008-09. Global vegetable oil production for 2009-10 is projected at 137.06 million tonnes, up 3.60 % from 132.30 million tonnes in 2008-09. In the coming week, prices are expected to move southwards on above mentioned fundamentals. Prices have strong support at 1940/1890 and resistance is seen at 2080/2140 levels.
  Continued...