Commodities & Currencies Weekly Tracker

Commodities & Currencies

Weekly Tracker

www.angelcommodities.com

Commodities Weekly Tracker

Contents

Returns • Non Agri Commodities• Currencies• Agri CommoditiesNon-Agri Commodities• Gold• Silver• Copper• Crude• DX & INRAgri Commodities• Guar• Chana• Black Pepper• Jeera• Soybean • Refine Soy Oil & CPO• Sugar• Kapas

Monday | November 21, 2011


Commodities Weekly TrackerMonday | November 21, 2011


(3.7)

(7.1)

(1.3)(2.0) (2.5)

0.5

2.3

(1.6)

(7.0)(7.5)(6.5)(5.5)(4.5)(3.5)(2.5)(1.5)(0.5)0.5 1.5 2.5

Non-Agri Commodities Weekly Returns



1.5

2.4

(1.8)

0.7

(1.7)

0.7

(0.3)

2.6

(2.0)

(1.0)

0.0

1.0

2.0

3.0

Currencies Weekly Returns



*Weekly Returns for December contract

7.7

5.5 5.1

3.3

4.4

3.3 2.4 2.5 2.1 2.0

1.3 1.3 0.5

(0.1) (0.4) (0.6) (0.5)

(4.9)(6.0)(5.0)(4.0)(3.0)(2.0)(1.0)0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0

Agri Commodities- Weekly Returns

GoldWeekly Price Performance• Spot gold prices declined sharply by 3.7% w-o-w and MCX Gold December contract

dropped around 1%.

Factors which influenced prices• Despite rising concerns with respect to the European economies, gold prices came

under pressure due to strength in the US dollar.

• Uncertainty in the global markets led to selling pressure.

• The Indian Rupee depreciated sharply which resisted further decline on the domesticbourses.

ETF Performance• Holdings in the SPDR Gold Trust, world's largest gold-backed exchange-traded-fund

(ETF), rose 1.9 percent to 1293.09 tonnes on 18th November 2011 from the previous1,268.67 tonnes on 11th November 2011.

News• According to the World Gold Council (WGC), India’s gold demand declined sharply by

23 percent (y-o-y) to 203.3 tonnes in the third quarter of 2011 from 263.9 tonnes inthe previous quarter. Higher prices due to depreciation in the Indian Rupee and highinflation affected demand in India. While China's demand for gold rose 16 percent to191.2 tonnes in the Q3 of the current year. The global demand increased around 6percent as per WGC.

Outlook• For the week, we expect gold to trade with a negative bias, taking cues from dollar

strength. A stronger dollar makes dollar-denominated commodities look expensive forholders of other currencies.

Weekly Technical Levels• Sell MCX Gold December Between 28950-29000, SL-29560, Target -28100/27300.

(CMP: 28,714)

• Spot Gold : Support 1692/1657 Resistance 1744/1778 (CMP: 1720)



SilverWeekly Price Performance• On a weekly basis, Spot silver declined sharply by almost 7% and on

the MCX, the white metal prices slipped by 4.2%.

• Further decline on the Indian platform was cushioned on account ofRupee depreciation.

Factors that led downside in silver prices• Fall in gold prices coupled with a stronger dollar.

• Being an industrial metal it also took cues from downside in basemetals to witness further drop in prices.

ETF performance• Holdings in the iShares Silver Trust, the world's largest silver-backed

exchange-traded fund, decreased around 0.7 percent to 9,715.63tonnes by 18th November from the previous 9,783.71 tonnes on 11th

November 2011.

Outlook• Silver is expected to come under pressure during the week, mainly on

account of fall in gold prices, dollar strength and downside in basemetals.

Weekly Technical Levels• Sell MCX Silver December Between 56950-57100, SL-58360, Target -

53950/52600. (CMP: 55,338)

• Spot Silver Support 31.32/30.54 Resistance 33.12/34.56 (CMP:32.07)



CopperWeekly Price Performance• LME copper prices dropped around 1.3% w-o-w while on the MCX, Copper

November contract witnessed gains of more than 1% on account of sharpdepreciation in the Indian currency last week.

Inventories• Copper LME inventories declined by 2.3% in the last week to reach the

level of 398,250 tonnes on 18th November 2011. On a year-to-date basis,inventories rose around 5.5% from the level of 377,550 tonnes on 31st

December 2010.

• Weekly copper inventories in warehouses monitored by the ShanghaiFutures Exchange dropped around 11% to 74,199 tonnes last week.

Factors that exerted pressure on copper prices• Weak sentiments in the global markets due to rising worries over Euro

Zone debt crisis.

• This has created demand concerns for the commodity which affected thered metal prices.

• Dollar strength.

Outlook• We expect copper to trade lower during the week as rise in risk aversion in

the global markets and a stronger dollar will add pressure on prices in theinternational markets.

Weekly Technical Levels• MCX Copper November: Support 379/373 Resistance 397/405 (CMP:

385.15)

• LME Copper: Support 7311/7070 Resistance 7860/8170 (CMP: 7464.50)



Crude OilWeekly Price Performance• Nymex Crude Oil declined by 1.6% on w-o-w basis and on the MCX prices gained

by 1.8%.

US Energy Department Inventory• According to the US Energy Department (EIA) report released last week, crude

oil inventories declined by 1.06 million barrels to 337.03 million barrels for theweek ending on 11th November, 2011. Gasoline stocks rose by 992,000 barrelsto 205.16 million barrels whereas distillate stockpiles drop by 2.14 millionbarrels to reach the level of 133.73 million barrels in the last week.

Fundamentals affecting oil prices• Despite expectations of reversal of the Seaway pipeline and a decline in

inventories, crude oil prices came under pressure on the back of rising globaleconomic concerns.

• A stronger dollar and weak global market sentiments also added pressure oncrude oil.

News• Oil and Petroleum Exporting Countries (OPEC) forecast oil price in range of $85-

$95 for this decade which is $10 more then 2010 OPEC report.

Outlook• Crude oil prices are expected to trade lower this week on account of weak global

market sentiments coupled with dollar strength. Rising concerns over slowdownin the global economy will also create demand fears for the commodity whichwill exert further downside pressure on oil prices.

Weekly Technical Levels• Sell MCX Crude December Between 5050-5070, SL-5185, Target -4865. (CMP:

5019)

• Nymex Crude Oil: Support 94.40/91.10 Resistance 99.25/101.80 (CMP: 97.28)



DX/ INRWeekly Price Performance• In the last week, the US Dollar Index (DX) appreciated sharply by around 1.5%.

• The Spot Rupee depreciated sharply by 2.5 percent last week and closed above the51-mark.

Factors that affected DX• Poor sentiments in the global markets due to rising concerns over global economy

boosted demand for dollar. (Dow Jones -3% and S&P -3.8%)

• Fall in Euro due to escalating worries over Euro Zone debt tensions also providedfurther support for dollar.

Factors that influenced movement in INR• Rise in risk aversion the global markets led weak sentiments in the domestic

markets. • A stronger dollar also acted as a negative factor for the currency.

FII outflows• FII inflows totaled at Rs 1356.40 crores till 18th November 2011. While on a year to

date basis, capital inflows stood at Rs 2742.20 crores till last week.

Outlook• We expect the DX to strengthen during the week as market sentiments remain

weak. Negative global market sentiments could lead to downside pressure indomestic equities too, thus leading to depreciation in the Rupee. In additional tothis, month-end dollar demand from the oil importers will also act as a negativefactor for INR.

Weekly Technical Levels• USD/INR MCX Nov: Support 50.97/50.45 Resistance 52.45/ 53.20 (CMP: 51.78)• US Dollar Index: Support 77.05 /76.00 Resistance 78.75/ 79.40 (CMP: 78.06)



Guar


Weekly Price Performance• Guar seed & Guar gum December contract settled 8% and 5.6 % higher w-o-w on

account emergence of fresh demand from millers and decline in arrivals.

Farmers holding back their fresh stocks- Arrivals declined 25%• Average daily arrival stood at 60-70 thousand bags in the week ended 19th

November , 2011 compared to 80-85 thousand bags in the previous week.

• Prices had declined by round 10% in the week ended 14th November, thusfarmers held back their fresh crop in anticipation of higher prices in the long tern.

Demand from domestic millers remain robust• Millers are actively buying Guar seed on fear of lower output this season. Also,

carry over stocks are very low.

Lower output and carry over stocks to support price in the long term• Rajasthan government had estimated 11.36 lakh tons of Guar output in 2011-12

against 15.46 lakh tons in 2010-11 mainly on crop losses.

• Lower stocks of around 15-20 thousand bags against normal 30-35 thousand bagsis seen hampering supplies.

Export demand to emerge at every dip, restricting sharp fall in prices• Exports of Guar gum from April to June of the current fiscal year 2011-12 stood at

1.45 lakh tn compared to 0.71 lakh tn during the same period last year.

• Exports demand remains firm % weaker rupee against dollar may aid exports.

Outlook• Guar futures ere expected to remain firm in the current week on good demand

from Guar gum millers amidst fears of lower crop estimates. Further, lower arrivaldue to holding back of stocks by the farmers may also favor the upside in theprices.

• If prices gain sharply in the initial days of the week, arrival pressure mightincrease restricting the upside in the prices.

Weekly Strategy• Buy NCDEX December Guar Seed between 4425-4435, SL-4315, target 4550/4600 www.angelcommodities.com

Chana


Weekly Price Performance• Chana December contract settled 2.58% higher w-o-w, on lower stocks and

renewed demand.

• However, higher acreage restricted the sharp upside in the prices.

Pulses acreage up 7.3% - Higher area witnessed under Chana• Total rabi pulses sown area in country is up by 7.3% to 49.75 lakh ha in contrast

with previous year 46.33 lakh ha. Higher Pulses acreage is mainly on higher areaunder Chana in Maharashtra, MP and Rajasthan.

• Area under Chana up by 64.6% in Maharashtra, and by 38% in Rajasthan.

Another bumper crop on cards – prices still higher on lower stocks• If weather remains favorable, India may harvest another bumper crop of Chana

for the fourth consecutive year.

• However, the fresh arrivals are expected only after December, and thus impactof lower stocks may continue to support prices.

C&F quote eased by $ 7 per ton- Imports from Australia viable• Cost and Freight (C & F) quote declined marginally by $7 per MT to $658/MT.

• Thus, fresh import contract may execute in the coming weeks due to importparity . Landed cost currently stands at Rs 33392 / tn against domestic price ofRs 34000 / tn in Mumbai.

Outlook• Chana prices may remain range bound in the current week, as impact lower

domestics stocks may be offset by cheaper imports in the coming weeks.

• However, overall trend till December remain positive on tight supplies in thedomestic as well global markets.

Weekly Strategy• Sell NCDEX December Chana between 3575-3585, SL-3640, target 3480/3450


Black Pepper Weekly Price Performance

• Lower arrivals amidst better offtakes by the local stockists for the winter season

requirement led prices to trade firm in the last week .

• Spot prices and Dec Futures settled 0.60% & 4.3% higher respectively w-o-w.

Indian exports surge in the month of September 2011 to 2500 tonnes

• Exports of Pepper from India during April to September 2011 surged by 22% to

2500 tonnes owing to lower price quotes of India as compared to other origins.

• Exports were highest in September 2011 since the beginning of the year.

39th International Pepper Meet – 22nd – 25th November, 2011 Indonesia

• 39th International Pepper Community meeting to be scheduled on 22nd -25th

November, 2011 Lombok island , Indonesia.

• “Global Strategy and Innovation for sustainable pepper production, price and

quality “ is the theme for the above session .

Outlook

• Lower stocks with major producers amidst expected decline in the output in the

domestic is likely to keep Pepper prices firm in the coming week. Prices are also

likely to take cues from any comments delivered on production in major

producing nations in the IPC meeting

• Prices in the short term(till mid of December ), will also take cues from Pepper

prices prevailing in the international market of major origins.

Weekly Strategy

• Buy NCDEX December Pepper between 34700-34750, SL-34200, target

35870/36200


Jeera Weekly Price Performance• Jeera Futures after falling for 10 straight weeks bounced back from the support

levels and settled 0.60% higher w-w owing to reduced arrivals in the domesticamidst steady offtakes.

Weekly average arrivals declined in the Unjha mandi to 3,000 bags• Currently, average daily arrivals in Unjha mandi are around 3,000 bags from the

previous week level of 4,000 bags (each bag weighs 55 kgs).

16 % decline in the exports of Jeera till second quarter of 2011• Exports during April to September 2011 declined by 16 percent to 16000 tonnes

as compared to 18800 tonnes during the same period last year.

• However, exports in the month of Sep 2011 witnessed robust growth and stood at6,500 tn month on month and highest exports in the last three years (2009-2011).

Sufficient carryover stocks of jeera• Carry over stocks of jeera is expected to surge to 8-9 lakh bags as compared to 4-

5 lakh bags in the previous year.

Sowing of jeera commenced in Gujarat and Rajasthan• Sowing of jeera in Gujarat and Rajasthan have commenced and area is expected

to go up in 2011-12 season

Outlook• Improved buying at support levels is likely to keep jeera prices firm in this week.

• Prices will also take cues from the area covered under jeera and crop growth.

Weekly Strategy• Buy NCDEX December Jeera between 13700-13720, SL-13450, target

14300/14500



*Figures in lakh tonnes

Soybean


Weekly price performance• Soybean futures at NCDEX settled 1.3% higher w-o-w due to demand from the

local stockists at lower levels. CBOT Soybean futures also settled 0.19% higherw-o-w on reports of improved purchases by China the major consumer of theprotein.

Firm US exports of Soybean in the week ended 17th Nov, 2011• According to the latest USDA report weekly sales of Soy bean from U.S stood at

7.51 lakh tonnes from the earlier estimates of 5-7 lakh tonnes.

• Renewed purchases from China to the tune of 5.17 lakh tonnes resulted intosuch robust growth in the exports from U.S.

Decline in Soybean arrivals by around 18.8 % to 6.5 lakh bags currently• Arrivals of Soy bean currently have declined to 6.5 lakh bags per day as

compared to 8-9 lakh bags in the beginning of the month.

Expectation of record acreage towards Soy bean in Argentina• Area under Soybean in Argentina, the second largest producer, is expected to

touch record high level of 19 million hectares in 2011-12 owing to sufficient soilmoisture.

• Around 44 percent of the set target by the government has already beenachieved.

Outlook• Improved demand from the overseas buyers particularly China will keep Soy

bean prices firm in this week .

• Further, prices are likely to track sowing progress in Argentina and Brazil andweather prevailing in the above nations.

Strategy• Buy NCDEX December Soybean between 2240-2245, SL-2194, target 2295/2320


Figures in lakh tonnes

State-wise Soybean Estimates for 2011-12

States 2011-12 2010-11 Change(+/-)

Madhya Pradesh 60 56 7.14

Maharastra 37.5 38.89

Rajasthan 11 6.5 69.23

Andhra Pradesh 1.6 1.5 6.67

Karnataka 2.4 1.8 33.33

Chhatisgarh 1.5 1.6 -6.25

Others 1 0.6 66.67

India 115 95 21.05

Source: COOIT

Refine Soy Oil and Crude Palm Oil


Weekly price performance• NCDEX Soy Oil futures ended 3.4% higher tracking firmness in palm oil while CBOT

Soy Oil settled 0.20% down owing to long liquidation by the market participants andtracking better acreage expectations of Soybean in Argentina.

• MCX CPO and BMD palm oil futures also ended 5.6% and 4.83% higher w-w.

• Lower stocks of Edible oil due to depreciation in Rupee against dollar has causeddomestic imports to decline thereby reducing the availability.

Global Scenario• Malaysian Palm Oil exports during November 1st -20th 2011 rose 0.6% to 10.37 lakh

tonnes as compared to 10.31 lakh tonnes in the same period previous month.

• Chinese palm Oil imports were posted at 1.88 lakh tonnes 4.81% higher ascompared to previous month.

• Weather concerns on account of La Nina might lower Crude Palm Oil production inIndonesia .

Domestic Scenario• The total vegetable oil output from domestic sources is estimated around 75 lakh tn

as compared to a sustained production of 65-68 lakh tn over the past last few years.

• Edible Oil imports for the month of October were marginally higher by 0.03% at1,91,590 tonnes compared to 191520 tonnes in September, 2011.

Strategy

Refine Soy Oil• Buy NCDEX December Refined Soy Oil between 640-642, SL-632, Target 655/660.

Crude palm Oil (CPO)• Buy MCX December CPO between 518-521, SL-508, Target 540/550


Sugar


Weekly Price Performance• NCDEX Sugar gained 4.4% on slow cane crushing in UP and expectations on

positive export decision .

• Liffe Sugar however, settled lower by 4.5% on higher global output.

Uncertainty over final cane pricing in Uttar Pradesh• Delayed crushing of cane by sugar mills and uncertainty over final prices,

farmers in Uttar Pradesh, India’s second-largest sugar producer, have startedsupplying the raw material to Jaggery units.

Crushing in Full swing in Maharashtra• Mills from Maharashtra have crushed 43 lakh tn sugarcane and produce 3.5

lakh tn sugar till date, according to sugar commissioner ate of Maharashtra.

• It is noticeable that mills have crushed 47 lakh tonnes of sugarcane and haveproduce 3.9 lakh tonnes of sugar last year same period.

Sugar Exports decision deferred• One of the most awaited decision that was likely to be announced was the

decision on Sugar exports. However, the government deferred the exportdecision and may consider the same in December or January.

• The Brazil white Sugar prices have declined to $ 657 /tn last week compared to$680-685 per tonne (FOB), in the previous week. Current offer prices stands atRs 32900 per ton in rupee terms compared to current domestic price of Rs31000 / tn FOB . Thus, if intl prices decline further, exports may turn unviable .

Outlook• Sugar prices are expected to remain range bound as long as Indian

government does not allow exports for 2011-12 season. Supplies are sufficientto cater the domestic demand. If UP government settle higher cane prices ,then it may provide some upside support to the prices.

Strategy• Buy NCDEX December Sugar between 2935-2945, SL-2870, Target 3050/3100


KapasWeekly Price Performance• Kapas futures declined for the third consecutive week amidst arrival pressure,

however the fall due to firm export demand.• ICE Cotton futures settled lower by 4% wow on forecast of higher global outputArrival pressure to cap the major upside despite firm demand• Indian Cotton harvesting which was delayed by more than 20 days due to delay in

sowing has gained momentum since the beginning of the month .• Total cotton arrivals across the country during Oct 1-Nov 13 stood at 26.8 lakh

bales compared to 31.77 lakh bales same period last year. (1 bale = 170 kg).India 2011-12 Exports Likely Up 27% on record High Output• India's cotton exports during this marketing year ending July 31 will likely rise 27%

following a bigger crop and removal of export restrictions (ICAC)• India is expected to produce bumper crop for the second consecutive year at 355

lakh bales compared to 312 lakh bales in 2010-11.• However, on the of lower opening stocks and higher exports , stocks to use ratio

in India is expected to decline drastically in one digit figure.USDA November demand supply report forecast higher global output• Global production is expected to higher at 123.4 million bales due to higher

output from China, India and Pakistan.• USDA lower the crop estimates to 16.3 billion bales, down 2% from last month's

forecast and 10% below year-ago levels. However, exports were also lowered to12 million bales from 13 million bales on reduced demand for the fiber.

Outlook• Kapas prices may decline initially in the current week as arrivals have gained

momentum. However, export demand may emerge at lower levels which maypush prices higher towards the end.

• Forecast of higher imports by China may push Indian exports higher therebysupporting prices in the long term, despite of bumper output.

Strategy• Buy NCDEX April Kapas between 710-715, SL-678, Target 780/800

Commodities Weekly TrackerMonday | November 21,2011

Thank You!

Angel Commodities Broking Pvt. Ltd.Registered Office: G-1, Ackruti Trade Centre, Rd. No. 7, MIDC, Andheri (E), Mumbai - 400 093.Corporate Office: 6th Floor, Ackruti Star, MIDC, Andheri (E), Mumbai - 400 093. Tel: (022) 2921 2000MCX Member ID: 12685 / FMC Regn No: MCX / TCM / CORP / 0037 NCDEX : Member ID 00220 / FMC Regn No: NCDEX / TCM / CORP / 0302

Disclaimer: The information and opinions contained in the document have been compiled from sources believed to be reliable. The company does not warrant its accuracy, completeness and correctness. The document is not, and should not be construed as an offer to sell or solicitation to buy any commodities. This document may not be reproduced, distributed or published, in whole or in part, by any recipient hereof for any purpose without prior permission from “Angel Commodities Broking (P) Ltd”. Your feedback is appreciated on [email protected]

Commodities Weekly Tracker


Monday | November 21, 2011

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Commodities & Currencies Weekly Tracker