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Commodity Research Report 02 November 2016 Ways2Capital .pdf



Original filename: Commodity Research Report 02 November 2016 Ways2Capital.pdf
Title: Commodity research report

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✍ MCX DAILY LEVELS
DAILY

R4

R3

R2

R1

PP

S1

S2

S3

S4

ALUMINIU 31-OCT-2016 121
M

119

117

116

115

114

113

111

109

30-NOV-2016 340

336

332

328

326

324

320

318

316

CRUDE OIL 19-OCT-2016 3336

3265

3194

3149

3123

3078

3052

2981

2910

GOLD

05-DEC-2016 31067 30767 30467 30333 30167 30033 29867 29567

29267

LEAD

31-OCT-2016 143

141

139

138

137

136

135

134

133

NATURAL 26-OCT-2015 230
GAS

219

208

202

197

191

186

175

164

717

708

703

699

694

690

681

672

COPPER

EXPIRY

NICKEL

31-OCT-2016 726

SILVER

05-DEC-2016 43218 43009 42800 42687 42591 42478 42382 42173

ZINC

31-OCT-2016 173

170

167

165

164

162

161

158

41946
155

✍ MCX WEEKLY LEVELS
WEEKLY

R4

R3

R2

ALUMINIUM 31-OCT-2016

126

122

119

117

115

114

112

108

105

COPPER

30-NOV-2016

342

337

332

331

327

325

322

317

312

CRUDE OIL

19-OCT-2016

3879

3645

3411

3258

3177

3024

2943

2709

2475

GOLD

05-DEC-2016 31366 30968 30570 30427 30172 30029 29774 29376

28978

LEAD

31-OCT-2016

143

141

139

139

137

135

133

131

129

NATURALGA 26-OCT-2015
S
31-OCT-2016
NICKEL

257

238

219

207

200

188

181

162

143

740

726

712

704

698

690

684

670

656

SILVER
ZINC

EXPIRY

R1

PP

S1

S2

S3

05-DEC-2016 47448 46038 44628 44101 43218 42691 41808 40398
31-OCT-2016

181

175

169

166

163

160

157

151

Monday, 02 November 2016

S4

38988
145

WEEKLY MCX CALL
BUY ZINC NOV ABOVE 163 TGT 166 SL 160
BUY NATURAL GAS NOV ABOVE 195 TGT 202 SL 189.90
PREVIOUS WEEK CALL
SELL CRUDEOIL NOV BELOW 3349 TGT 3286 SL 3401- TGT ACHIEVED
BUY GOLD DEC ABOVE 30013 TGT 30346 SL 29724 - TGT ACHIEVED
✍ FOREX DAILY LEVELS
DAILY

EXPIRY DATE R4

R3

R2

R1

PP
67

S1

S2

S3

S4

USDINR

26-OCT2016 67.4067.30 67.20 67.10

66.90 66.80 66.70

66.60

EURINR

26-OCT2016 74.6574.55 74.45 74.35 74.25 74.15 74.05 73.95

73.85

GBPINR

26-OCT2016 82.6082.50 82.40 82.30 82.20 82.10

81.90

81.80

JPYINR

26-OCT2016

65 64.90 64.80 64.70 64.60 64.50 64.40 64.30

64.20

82

✍ FOREX WEEKLY LEVELS
DAILY

EXPIRY DATE R4

R3

R2

R1

PP

S1

S2

S3

S4

USDINR

26-OCT2016 67.75 67.55 67.35 67.15 66.95 66.75 66.55 66.35

66.10

EURINR

26-OCT2016

73.80 73.60

73.40

GBPINR

26-OCT2016 82.90 82.70 82.50 82.30 82.10 81.90 81.70 81.50

81.30

JPYINR

26-OCT2016 65.30 65.10 64.90 64.70 64.50 64.30 64.10 63.90

63.70

75 74.80 74.60 74.40 74.20

74

WEEKLY FOREX CALL
BUY GBPINR NOV ABOVE 82.60 TGT 83.45 SL 81.95
SELL JPYINR NOV BELOW 64.20 TGT 63.50 SL 64.85
PREVIOUS WEEK CALL
BUY GBPINR NOV ABOVE 82.80 TGT 83.50 SL 82.20 - NOT EXECUTED
BUY JPYINR NOV ABOVE 64.70 TGT 65.20 SL 64.30 - NOT EXECUTED

✍ NCDEX DAILY LEVELS
DAILY

EXPIRY DATE

R4

R3

R2

R1

PP

S1

S2

S3

S4

SYOREFIDR

18-NOV-2016

678

674 670 668

666

664

662

660

658

SYBEANIDR

18-NOV-2016

3224 3182 3140 3114 3098

3072

3056

3014

2972

RMSEED

18-NOV-2016

4707 4652 4597 4565 4542

4510

4487

4432

4377

JEERAUNJHA

18-NOV-2016 18937 183821782717473 17272 16918

16717 16162

15607

GUARSEED10

18-NOV-2016

3548 3469 3390 3341 3311

3262

3232

3153

3074

TMC

18-NOV-2016

7721 7603 7485 7431 7367

7313

7249

7131

7013

✍ NCDEX WEEKLY LEVELS
WEEKLY

EXPIRY DATE

R4

R3

R2

R1

PP

S1

S2

S3

S4

SYOREFIDR

18-NOV-2016

712

698

684

675

670

661

656

642

628

SYBEANIDR

18-NOV-2016

3402

3312 3222 3177

3132

3087

3042

295

2862

RMSEED

18-NOV-2016

4892

4770 4648 4598

4526

4476

4404

4282

4160

JEERAUNJHA 18-NOV-2016 19912 19012 18112 17698 17212 16798

16312

15414

14512

GUARSEED10

18-NOV-2016

3827

3692 3557 3500

3422

3365

3287

3152

3017

TMC

18-NOV-2016

8555

8131 7707 7445

7283

7021

6859

6435

6011

WEEKLY NCDEX CALL
BUY JEERA DEC ABOVE 17500 TGT 17900 SL 17100
ELL DHANIYA DEC BELOW 7380 TGT 7240 SL 7516
PREVIOUS WEEK CALL
BUY REFSOYA NOV ABOVE 670 TGT 680 SL 661 - MADE HIGH OF 679.70
SELL TMC NOV BELOW 7090 TGT 6886 SL 7352 - NOT EXECUTED

MCX - WEEKLY NEWS LETTERS
✍ BULLION
Gold rose on Tuesday due to rising physical demand from India but growing expectations of a U.S.
interest rate hike kept a lid on prices. The metal is highly sensitive to rising U.S. rates, which lift the
opportunity cost of holding non-yielding assets while boosting the dollar. Spot gold XAU= was up
0.4 percent at $ 1,268.68 an ounce at 1220 GMT. It has traded in a narrow $ 6.60 per ounce range for
the past five sessions. Analysts say demand from India is expected to remain elevated as festivals,
including Dhanteras and Diwali, will be celebrated at the end of the month - two of the most
important Hindu festivals and a time when gold is traditionally given as a gift. "Gold has been clearly
supported by physical buying in the Indian market especially and gold prices are at a slight premium
there," said Societe Generale's head of metals research, Robin Bhar. He said higher premiums were
an indication of physical buying. U.S. gold futures GCcv1 were up 0.4 percent at $1,267 an ounce. At
the same time, markets seemed cautious, trading gold in narrow ranges, as hawkish statements from a
U.S. Federal Reserve official and upbeat economic data were seen raising the likelihood of a rate hike
later this year. Chicago Fed President, Charles Evans, said on Monday the U.S. central bank will raise
its policy rate three more times by the end of next year, if inflation expectations and the labour market
continue to improve. Markit survey of U.S. manufacturing climbed to a one-year top of 53.2, while
business activity in Europe expanded in October at the fastest pace this year so far. need to monitor
economic data ahead of the Fed's decision because it's an ongoing battle between the hawks and the
doves right now and also how to interpret the data," Danske Bank senior analyst Jens Pedersen said.
In technicals, support for gold appears to be between $ 1,250 and $ 1,260, which restricts downside
moves, "With the market pricing in a 70 percent chance of a U.S. rate rise this December it is difficult
to see the yellow metal pulling too far away from these levels over the short term," Silver XAG= was
up 0.6 percent at $ 17.67 an ounce. It touched a more than two-week high of $ 17.88 in the previous
session. Platinum XPT= was up about 2 percent at $ 959.40 an ounce after hitting a two-week high of
$963.60, while palladium XPD= was up 0.9 percent at $ 636.47.
Gold nudged lower on Monday amid uncertainty about the timing of an interest hike by the US
Federal Reserve, while a stronger dollar added to pressure on bullion. Spot gold was down nearly 0.2
per cent at $ 1,263.45 an ounce at 0430 GMT, while US gold futures fell about 0.3 per cent to $
1,264.40. "Given the risk is just going to be increased, most people are going to liquidate a part of
their holdings, just to place themselves in a safer position," Ahead of the US elections results, it will
move around the level $ 1,250 to $ 1,270 without much momentum to go up," Third-quarter growth
figures from the United States and Fed policymakers speeches due this week will be closely watched
by the market for clues on a possible interest rate hike. Hedge funds and money managers cut their
net long positions in COMEX gold for a third straight week in the week to October 18, US
Commodity Futures Trading Commission data showed on Friday. San Francisco Fed President John
Williams on Friday redoubled his call for raising rates soon, telling reporters after a speech here that

"this year would be good" for a rate rise that he had wanted to take effect last month. Gold is highly
sensitive to rising US interest rates, which increase the opportunity cost of holding non-yielding
assets such as bullion, while boosting the dollar, in which it is priced. The dollar index was up nearly
0.1 per cent at 98.77, making gold more expensive to buyers using other currencies. "People are
watching the US elections and the data is on the positive side, favourable for a rate hike. As long as
prices stay below the $1,300 mark, the downward trend might continue," Prices need to break
convincingly above the $1,300 level for a strong upside movement," Spot gold is biased to retest a
support at $ 1,261 per ounce, a break below which could cause a loss to $ 1,251, Silver remained
broadly flat at $ 17.48 an ounce. Platinum was up about 0.6 per cent at $ 934.95 an ounce, after
touching a low of $ 921.20 on Friday, its worst since February 29. Palladium, which touched an over
three-month low of $613.10 in the previous session, rose 0.6 per cent at $627.90.
✍ ENERGY
Oil prices dipped early on Friday, weighed down by lingering doubts over whether OPEC can
coordinate a crude production cut big enough to rein in oversupply that has dogged markets for two
years.International Brent crude oil futures LCOc1 were trading at $ 50.39 per barrel at 0033 GMT,
down 8 cents from their last close. U.S. West Texas Intermediate crude was down 5 cents at $ 49.67 a
barrel.Traders said there were significant doubts that the Organization of the Petroleum Exporting
Countries would be able to rally its members and non-OPEC producers, especially Russia, around a
significant cut in output. both Iraq and Iran saying they won't be part of the cuts for various reasons,
and Russia talking freezes not production cuts, the onus will fall on Saudi Arabia to pull any deal
together, "OPEC's Nov. 30 meeting suddenly seems like a long way away with seemingly half of the
group wanting exemptions now," he added.

Oil settled higher on Thursday, as commitments from Gulf OPEC members to cut production
assuaged some lingering doubts in the market about cooperation from other producers. The
international benchmark Brent crude LCOc1 was up 49 cents, or 1 percent, at $ 50.47 a barrel. U.S.
West Texas Intermediate crude CLc1 gained 54 cents, or 1.1 percent, to $ 49.72. "Another day,
another market being pushed and prodded around by OPEC rhetoric," Energy ministers from Saudi
Arabia and Gulf allies told their Russian counterpart this week they are willing to reduce peak oil
output by 4 percent, sources familiar with the matter said. Organization of the Petroleum Exporting
Countries said last month it would restrain output to boost prices, which have been slumping at less
than half their mid-2014 levels due to a persistent supply glut. Iraq, however, has called for an
exemption, adding to the list of members seeking special treatment. The expectation was that Libya,
Nigeria and Iran should be exempt as their output had been hit by wars and sanctions, OPEC sources
said. noted that overall OPEC exports have been rising, which would normally be bearish for the
commodity. While doubts linger about OPEC's ability to implement its production cut, the market has

been leery of reading too much into it ahead of a meeting scheduled for the end of November, "The
market is reluctant to get significantly short in front of that because, obviously, a political decision
could catch them on the wrong side," OPEC members are expected to have a technical meeting on
Friday and a meeting with officials from non-member countries on Saturday. The cartel's oil ministers
meet on Nov. 30, and are expected to work out how much individual countries should cut. Prices
were also boosted by a fall in U.S. crude stockpiles at the Cushing, Oklahoma, delivery base, which
showed a weekly decrease of 6,50,000 barrels, traders said, citing data from energy monitoring
service Genscape.
On Wednesday, the U.S. Energy Department said domestic crude stocks fell 553,000 barrels last
week, the seventh such decline in the last eight weeks, adding to hopes that a long-awaited market
rebalancing is taking place.
✍ BASE METAL
LME Copper prices traded higher by 1.4 percent on Tuesday to close at $4920/tonne as copper stocks
at the LME warehouses continued their decline for the seventh day in a row, falling by around 13
percent this month to 326,400 tonnes. This is a major respite to the metal given a whopping 40
percent jump in inventories in August. Adding to the optimism, factory activity, which is the core
demand driver for metals, gained momentum in the world’s biggest consumers. US manufacturing
gauge climbed to 53.2, the highest since 2015 whereas Euro Zone’s Markit's composite PMI rose to a
10-month high of 53.7 in October. MCX copper prices traded higher by 4.4 percent to close at Rs.325
per kg on Friday.
The global nickel market is seen in a 66,000 tonne deficit next year, in line with this year, on growing
demand from the stainless steel sector, the International Nickel Study Group said. Global demand for
nickel is expected to increase to 2.11 million tonnes in 2017, up from 2.00 million tonnes in 2016, the
Lisbon-based group said. Global output of nickel is expected to rise to 2.05 million tonnes in 2017,
up from 1.93 million in 2016. The INSG forecast a 67,000 tonne deficit for this year. Stainless steel is
by far the biggest consumer of nickel. Demand is also growing from the aerospace industry and
battery sectors, the INSG said, with nickel benefiting from increased use of renewable energy. Nickel
pig iron production in China continued to fall in 2016 after Indonesia banned nickel ore exports in
January 2014, while supplies of nickel ore from the Philippines also fell, it said. Nickel pig iron is a
lower nickel content substitute for refined nickel. In Indonesia, NPI production is expected to
increase in 2016 and in 2017 due to the ramp-up of new projects, it said.

NCDEX - WEEKLY MARKET REVIEW
✍ SOYABEAN
Soybean futures corrected for the second consecutive session on Tuesday due to higher arrivals and

steady physical demand. The prices have dropped below the MSP in States of MP and Gujarat. The
mostactive Nov’16 delivery contract closed 0.83% down to settle at Rs. 3,088 per quintal. The
harvesting of soybean in full swing and supplies are strong in the physical market. As per SEA recent
survey soybean production in 2016-17 forecasted at 10.9 mt, up 58% from the last year.
Refined soy oil futures closed lower due to technical correction and lower physical demand as
festival season nearing end. Moreover, prices is also tracking weak international edible oil price. The
most active Ref Soy oil Nov’16 expiry contract closed 0.37% down to settle at Rs. 665.4 per quintal.
The base import prices of crude soyoil were raised by $8 per tn each to $853. This is the third
increase in two month by the government. Since January 2016, the base import prices for crude soy
oil increase by more than 20% from $720 per tonnes. Government fixes the tariff value every
fortnight. As per SEA data, India September crude soyoil import 469,564 tonnes, an increase of 46 %
compared to 321,062 tonnes year ago while, India Nov-Sep crude soyoil import 3.96 mt vs 2.58 mt –
an increase of 53% y/y for the current oil year. Earlier, India has cut import taxes on both crude palm
oil and refined edible oils by 5% points to 7.5 and 15 % respectively.
✍ JEERA
Jeera futures fell on Tuesday due to profit booking at higher levels as spot market is flat owing to
steady demand. NCDEX Nov’16 Jeera closed 1.67% down to close at Rs 17,120 per quintal. Last
week jeera prices have recovered due to reports of dwindling physical supplies and slow start to the
new season sowing in Gujarat and Rajasthan. Earlier, pickup in physical demand and expecting
dwindling supplies in the physical market pushed the prices . Good sowing prospects for jeera in
Gujarat and Rajasthan are pressurizing the prices as the sowing season is about to commenced.
According to the trade sources, jeera exports may have raise by 29% to 58,000 tonnes in Apr-Aug
compared to last year figure of 45,000 tonnes. According Department of commerce data, the exports
of Jeera in the first four months of 2016-17 is at 51,904 tonnes, higher by 61.5% compared to last
year same time. The exports of jeera during July 2016 decrease 20% m/m to 7,881 tonnes but
increase y/y by 27.3%.

✍ TURMERIC
Turmeric futures closed higher on tuesday to lower supplies and good demand from the upcountry
buyers. The prices are trending sideways to higher on anticipation of lower supplies from the last year
stocks. Turmeric Nov’16 delivery contract on NCDEX closed 0.63% higher to settle at Rs 7,378 per
quintal. It is expected that the demand from the industrial buyers will support the prices just before
new season harvesting. On the export front, country exported about 42,923 tonnes of turmeric during
April-July period up by 34.5% compared last year, as per department of commerce data. Expectations
of increasing production in coming harvesting season and lowering export demand in recent months
are putting pressure on turmeric prices at higher levels. Turmeric acreage in Telangana and Andhra
Pradesh was higher this year as compared last year.

✍ COTTON
Cotton complex prices closed higher last week on anticipation of good demand for new season crop.
Last week, NCDEX Kapas for Apr’17 closed 0.28% higher while MCX Oct’16 cotton closed higher
by 0.82%. It is estimated that the arrival will be peaking up after the Diwali. Industry expects the
cotton output to surpass 35-36 million bales this season. The arrivals have begun in Gujarat, Madhya
Pradesh and are expected to pick in Haryana where the ginners have called off their strike. Despite
less area under cotton, a good monsoon is expected to rescue the 2016-17 production. People in the
industry are estimating 355 lakh bales for the season 2016-17 , as against the government’s first
estimate of 321.2 lakh bales. As per CAB, India's cotton output is seen at 351 lakh bales , up 4% from
338 lakh bales a year ago due to good monsoon and minimum pest infestation. Cotton area is down
by 11.6% at 105.6 lh against 116 lh last year.
✍ RM SEED
Mustard acreage 1.9 millioln h as of Thu, up 175% on year All-India acreage of mustard in the
ongoing rabi season was nearly 1.9 millioln ha as of Thursday, up 175.2% from a year ago, data
released by theagriculture ministry showed. The acreage is sharply higher this year because of better
monsoon rains, traders said. In Rajasthan--the largest mustard producing state--the crop has been
sown across 1.4 mln ha, almost a threefold increase from 473,800 ha sown a year ago, the data
showed. The area under mustard was also three times higher in Uttar Pradesh at 350,000 ha. In
Madhya Pradesh, the oilseed has been sown over 58,000 ha, up 76% from 33,000 ha sown a year ago.
Mustard accounts for a bulk of overall output of oilseeds grown during the rabi season, which starts
in October. The sowing of the crop picks up in Nov-Dec. Mustard seed futures closed higher due to
lower level buying and anticipation of good physical demand and good progress of mustard sowing in
Rajasthan. The Nov’16 contract ended 0.13% higher to settle at Rs. 4,532/quintal. The rabi sowing in
the largest mustard producing state, Rajasthan hasstarted. According to government data, Rajasthan
has sown 13.7 lakh hectares as on 24th Oct 2016, up by 191.5% higher compared to last year acreage.
As per agriculture ministry data, all-India acreage of mustard in the ongoing rabi season was nearly
1.9 mln ha as of Thursday, up 175.2% from a year ago. The country's production of rapeseed is
expected to increase by 12.5% to 6.3 mt from a year earlier.


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