Commodities Weekly Tracker, 24th June 2013

7/28/2019 Commodities Weekly Tracker, 24th June 2013

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Commodities & Currencies

Weekly Tracker


2/24

Commodities Weekly TrackerContents

Returns

Non Agri Commodities

Currencies Agri Commodities

Policy Review

RBI

FOMC

Non-Agri Commodities

Gold Silver

Copper

Crude Oil

Currencies DX, Euro, INR

Agri Commodities

Chana

Black Pepper

Turmeric

Jeera

Soybean

Refine Soy Oil & CPO

Sugar

Kapas

Monday | June 24, 2013


3/24

Commodities Weekly TrackerMonday | June 24, 2013

4.1

3.1

2.3

1.41.2

(0.9)

(1.7) (1.8)(2.0)

(1.0)

0.0

1.0

2.0

3.0

4.0

Currencies Weekly Performance


4/24


2.0

(0.6)

(1.5)

(3.5) (3.6)(4.1) (4.3)

(6.7)

(8.9)(9.0)

(7.0)

(5.0)

(3.0)

(1.0)

1.0

Non-Agri Commodities Weekly Performance


5/24

*Weekly Performance for July contract, Mentha Oil Cotton & CPO- June Contract,


tt


6/24


RBI Monetary Policy ReviewSilent on Interest Rates

Citing growth-inflation dynamics and recent developments in the

external sector, the Reserve Bank of India (RBI) kept interest rates

unchanged as expected.

Indications for further changes in interest rates in the July13 policy

are currently mute but may change over time, given that the

monsoon this year is expected to be normal, thus reducing the

supply-side pressure and thereby easing inflation.

Fall in the WPI to 4.7 percent has not been a strong enough factor for

the central bank to reduce interest rates as food inflation remains

high.

While factors like distribution and supply of food are affecting food

inflation, measures to tackle the same need to be introduced. A good

monsoon progress on a pan-India scale ahead of time will help to

bring down food inflation in the coming months.

Developments on the external sector front, being one of the major

factors that drove the RBIs decision, need to be looked at closely. Sharp depreciation in the Rupee along with a widening of the trade

deficit due to a surge in gold imports has restricted interest rate cuts

by the RBI.

In its review, the central bank has indicated that the key to boosting

economic growth could be done through increasing investment by

creating a favorable and conducive environment for private

investment, improving project clearance and raising the role of public

investment.

This move by the RBI has largely dampened sentiments at a time

when the world economy is suddenly witnessing a slowdown in growth

momentum.

Recent measures in order to reduce the Current Account Deficit

(CAD) by way of curbing gold imports through restricting its supply and

increasing customs duty, it looks like the RBI is using indirect measures to

reduce economic hurdles and is also applying the same strategy to boost

economic growth.

Repo Rate 7.25%

Reverse Repo Rate 6.25%

Cash Reserve Ratio 4%

Bank Rate 8.25%

epo ate . Reverse Repo Rate 6.25 %

Cash Reserve Ratio 4%Bank Rate 8.25%

epo ate . Reverse Repo Rate 6.25 %

Cash Reserve Ratio 4%Bank Rate 8.25%

8.5

7

6

9

6.5

4.75

6.75

8.5

7.25

4.2

5.2

6.2

7.2

8.2

9.2

10.2

27-

04-

2001

28-

05-

2001

23-

10-

2001

28-

03-

2002

30-

10-

2002

3-

03-

2003

19-

03-

2003

25-

08-

2003

27-

10-

2004

26-

10-

2005

8-

06-

2006

31-

10-

2006

31-

03-

2007

25-

06-

2008

20-

10-

2008

8-

12-

2008

5-

03-

2009

19-

03-

2010

2-

07-

2010

16-

09-

2010

25-

01-

2011

3-

05-

2011

26-

07-

2011

25-

10-

2011

17-

04-

2012

19-

03-

2013

17-

06-

2013

Repo Rate (%)

6.5

5.5

4.5

6 6

3.25

5.25

7.5

6.25

3

3.5

4

4.5

5

5.5

6

6.5

77.5

8

27-04-2001

28-05-2001

23-10-2001

28-03-2002

30-10-2002

3-03-2003

19-03-2003

25-08-2003

27-10-2004

26-10-2005

8-06-2006

31-10-2006

31-03-2007

25-06-2008

20-10-2008

8-12-2008

5-03-2009

19-03-2010

2-07-2010

16-09-2010

25-01-2011

3-05-2011

26-07-2011

25-10-2011

17-04-2012

19-03-2013

17-06-2013

Reverse Repo Rate (%)


7/24


FOMC UpdateWithdrawal symptoms seen as Fed prepares to taper

Federal Reserve Chairman Ben Bernanke confirmed that the US

economy was growing at a strong enough pace and that the central

bank could now begin with tapering the stimulus

World stocks, commodities and bonds slumped on this statement

However, US Treasury yields on the 10-year note rose to a 15-month

high of 2.36 percent on the day of the announcement

The Fed is more confident about US economic growth than before,

thus making the expected move more certain in the near future

However, Ben Bernanke left two cues in terms of the future as he saidthat the Fed could stop reducing its bond purchases or raise it again

if the job market does not stabilise

It was reiterated in the Feds policy meet that interest rates would

not be increased until the unemployment rate hits 6.5 percent or

lower, given that the inflation outlook remains below 2.5 percent

Also, the withdrawal process would begin once the unemployment

rate comes around the comfort level of 7 percent

The Dollar Index strengthened on Wednesday and Thursday but the

currency could weaken in the short-term as liquidity is expected to

continue until the pullback actually begins in the later part of the year

The panic seen after Federal Reserve Chairman Ben Bernankes

announcement yesterday clearly shows that the world financial

markets witnessed withdrawal symptoms much ahead of the stimulus

pullback process.

Fear of removal of excess liquidity from markets and its impact on

the world economy led to sharp selling across risky asset classes

immediately after the Feds announcement.

Emerging markets are witnessing withdrawal symptoms already,

with capital flows receding and currencies depreciating.

Foreign Institutional Investors (FIIs) are not finding India a very

attractive investment destination and the improving US economic

scenario is leading to a shift in investment patterns from emerging

and developing economies to the worlds largest economy the

US. The Indian economy too will face a repercussion of the withdrawal

and the domestic equities have seen a major negative reaction. A

rise in US Treasury yields is seen, while the Indian 10-year

benchmark yield is seen declining.

Arbitrage opportunity for FIIs is vanishing in the Indian markets due

to increase in hedging cost as Rupee has depreciated sharply.

Hence, Treasury yields in the US look more attractive at this point

in time, making the Indian bond market situation less attractive.

Emerging markets would face the burden of this withdrawal plan

as investors would move towards fixed income assets, while riskier

investment classes will face downside pressure.

World equity markets and the economy at large will undergo a

weak economic phase once the withdrawal begins. Capital flows to

emerging markets could be hit in a big way, thus affecting

economic fundamentals.


8/24


GoldWeekly Price Performance

Following Feds announcement, gold prices slumped sharply below $1300/oz levels

last week as the pullback in stimulus measures would lead to strength in the Dollar

Index and investors would move away from gold as a stronger dollar will make it moreexpensive for holders of other currencies

Spot Gold prices touched a weekly low of $1268/oz on Friday, falling around 7

percent over the week

On the MCX, prices touched a weekly low of Rs26,727/10gm on Friday, slipping 3.1

percent over the week

Fall in Indian markets was lower than that in the international markets due to the

Rupee depreciation factor

SPDR Gold Holdings fall below 1000 tonnes Reacting to the Feds announcement, ETF Holdings in the SPDR Gold Trust, fell to

999.56 tonnes on Wednesday, erasing more than $23 billion in the funds value

Over the year, holdings have slipped 26 percent and further decline in holdings could

be seen as the safe-haven status of gold has faded drastically

Increased Gold Imports Widen Trade Deficit in India

Gold and Silver imports jumped 90 percent in May13 to $8.3 billion from $4.4 billion

in May12.

Indias trade deficit has widened to a 7-month high in May13 to $20.1 billion from$16.9 billion in May12 . Trade deficit has widened due to a sharp increase in gold

imports coupled with a fall in exports. A high trade deficit affects the current account

deficit and the value of the Rupee

Merchandise exports slipped 1.1 percent to $24.5 billion and the weaker Rupee did

not help as world demand slowed while the government banned gold trading in

Special Economic Zones (SEZ)

Imports climbed around 7 percent, backed by rise in gold and silver imports

1,280

1,380

1,480

1,580

1,680

1,780

25,500

26,500

27,500

28,500

29,500

30,500

31,500

MCX and Comex Gold Price Performance

MCX-Near Month Gold Futures -Rs/10 gms Comex Gold Futures -$/oz

79.0

80.0

81.0

82.0

83.0

84.0

85.0

1,275

1,325

1,375

1,425

1,475

1,525

1,575

1,625

1,675

Spot Gold Vs Dollar Index

Spot Gold -$/oz US Dol lar Index


9/24


GoldCME raises margins on gold futures

Sharp selling in gold futures led the CME to increase margins on the

gold contracts on Thursday after prices fell to the lowest levels seen inSeptember 2010

Minimum cash deposit for gold traders will increase 25 percent to

$8800 per 100 ounce contract

Gold exports from SEZ allowed after value addition

Sharp decline in gold exports concerned the government, which then

allowed units in SEZs to export gold items after a minimum value

addition of 3 percent in gold jewelry and 5 percent in gold and precious

stone studded jewelry.

This measure would help to increase gold exports from India as gold

exports had taken a hit of $0.8 billion in May13.

Base Rate Cut

Indian government cut the gold base import price to $450/10 gms from

$459/10 gms

Reliance Cap to restrict gold backed loans

In the Indian markets, sentiments towards gold purchases is turning

mixed as Reliance Capital announces its decision to suspend gold sales This step by the company is taken In order to support the RBIs decision

to curb gold imports, reduce the current account deficit and help to

control the rising demand for the yellow metal

Reliance Capital has suspended sales of gold coins and sale of gold in

the physical form along with refinancing against gold, which is a very

big market in India

New subscriptions will also be suspended in the Reliance Gold Savings

Fund, which has a corpus of Rs2600cr

Stocks of Gold mining companies correct

The steep fall in gold prices led to selling pressure in stocks of gold mining

companies as margins would come under pressure due to low gold prices

With the yellow metal trading around the marginal cost of production,

gold miners are expected to witness a slow growth phase

US Commodity Futures Trading Commission Data (CFTC)

The latest CFTC report showed that hedge funds and money managers

have reduced their bullish bets on gold futures and options for the second

consecutive week

OutlookOver the week, gold prices in dollar terms are expected to trade lower as

sentiments towards the yellow metal have turned weak. With clear

indication that the Federal Reserve will begin its stimulus withdrawal in

the coming months, the Dollar Index is expected to strengthen, thereby

adding pressure on gold prices.

In the Indian markets, a sharp correction in prices will be cushioned due to

the depreciation in the Rupee. But the overall trend in the Indian markets

is also bearish.

Weekly Technical Levels

Spot Gold : Support 1,247/1,196 Resistance 1,321/1,370. (CMP:

$1282.5)

Sell MCX Gold August between 27,280-27,330, SL-27,551, Target -

26,500. (CMP: Rs 26,695)


10/24


SilverWeekly Price Performance

Spot silver prices slipped below the $20/oz crucial mark, falling around 9

percent over the last week. In dollar terms, prices touched a low of $19.35/oz

on Friday

In the Indian markets, prices corrected 5.2 percent over the week and on the

MCX, the near-month contract touched a low of Rs40,716/kg on Friday

ETF Performance

Holdings in the iShares Silver Trust increased around 0.8 percent last week to

10,073 tonnes

Demand slows despite sharp price correction

Silver prices have slipped around Rs41,000/kg levels currently from

Rs55,000/kg in June12

Despite a sharp fall in prices, huge stocks remain with domestic bullion

dealers. Demand is expected to revive in the festive season but the current

scenario remains weak from the demand perspective

Due to slowdown in the electronic industry, industrial demand for silver has

also taken a beating . Exports of silver items from India to the US and

Australia have also declined

Base-Rate Price cut

Indian government cut the base import price of silver from $737/kg to

$709/kg

Outlook A bearish trend is expected in silver prices over the week, with sharp losses in

the Indian market to be cushioned due to Rupee depreciation.


Spot Silver: Support 19.10/17.80 Resistance 20.55/21.65. (CMP:$19.58)

Sell MCX Silver July between 42,500-42,550, SL-43,201, Target -40,200. (CMP:

Rs.40,661)

20

22

24

26

28

30

32

41,000

43,000

45,000

47,000

49,000

51,000

53,000

55,000

57,000

59,000

MCX and Comex Silver Price Performance

MCX-Near Month Silver Futures -Rs/ kg Comex Silver Futures -$/oz

79.0

80.0

81.0

82.0

83.0

84.0

85.0

19.5

21.5

23.5

25.5

27.5

29.5

31.5

Spot Silver Vs US Dollar Index

Spot Si lver -$ /oz US Dol lar Index


11/24


CopperWeekly Price Performance

LME Copper prices slipped 3.5 percent last week, while prices on the MCX near-month

contract closed on a flat note, owing to Rupee depreciation in the last week

Prices hit a low of $6692/tonne on the LME and on the MCX prices slipped to a low ofRs401.9/kg last week

In dollar terms, prices have declined sharply and this indicates a bearish trend in the

commodity especially amid demand-side worries from China

Copper Inventories

On the LME and the SHFE, inventories jumped 7.5 percent and 3.2 percent to 664,850

tonnes and 189,209 tonnes respectively. Increase in inventories also acted as a bearish

factor on copper prices last week

Supply-side Action Freeport output starts, while strike at Codelco to begin Indonesia may allow mining operations at Freeport McMoran to begin after a

prolonged shutdown following the accidents. The miner has started some operations,

thereby erasing the supply-side threat

However, there is an expected strike on Wednesday at Codelco in Chile. Hence,

fundamentally, the supply-side support will remain but it will have little impact on

prices due to worries over Chinese economic slowdown

Asian participation on LME bourse increases

Asian participation on the LME has grown phenomenally, with demand from China

being a major contributor, as the country consumes around 40 percent of base metalsoutput on an annual basis

Transactions during Asian trading hours accounted for 16 percent of electronic trading

in the three-month futures contracts in 2012

Industrial metals turnover at the LME stood around $14.5 trillion as compared with $4

trillion on the Shanghai Futures Exchange

365

375

385

395

405

415

425

435

445

455

6,700

6,900

7,100

7,300

7,500

7,700

7,900

8,100

8,300

LME and MCX Copper Price Performance

LME Copper Future ($/tonne) MCX Near Month Copper Contract (Rs/kg)

6,700

6,900

7,1007,300

7,500

7,700

7,900

8,100

8,300

318,000

368,000

418,000

468,000

518,000

568,000

618,000

668,000

LME Copper v/s LME Inventory

Copper LME Inventory (tonnes) LME Copper Future ($/tonne)


12/24


CopperNet short position in Copper rises

CFTC data showed that net short positions in copper increased sharply, marking the

most in more than two months

Negative Chinese economic data along with an overall slump in commodity prices has

led to a bearish view for the metal

Outlook

Copper prices are expected to trade with a negative bias during the week despite

supply-side concerns as a slowing Chinese economy coupled with Dollar Index strength

after the Feds announcement over the stimulus pullback will lead to pressure on prices

on the LME.

On the MCX however, sharp decline in prices are expected to be curtailed due to

weakness in the Rupee.Weekly Technical Levels

LME Copper: Support 6760/6630 Resistance 7010/7120. (CMP: $6671.0)

MCX Copper: Support 402.50/396.50 Resistance 413/418. (CMP: Rs 397.95)


13/24


Crude OilWeekly Price Performance

Nymex WTI crude oil prices declined 4.3 percent last week and tested a low of

$93.12/bbl

On the MCX prices fell marginally by 0.5 percent over the week due to Rupee

depreciation and oil touched a weekly low of Rs.5587/bbl

Inventories

Over the week, the inventory report was mixed as the API report showed a fall of

4.3 million barrels, while the EIA report showed an increase by 0.3 million barrels

Crude Oil Supply in the US

Domestic crude oil production outpaced imports in late May13 for the first time

since 1997 on account of increase in shale-led production

Commercial oil stocks of 394 million barrels around their highest levels since1980s

The International Energy Agency (IEA) has forecasted that US oil output would

touch 10 million barrels a day, rising 23 percent in two years

American oil demand is expected to average lower at 18.6 million barrels a day in

2013, falling for the third straight year

Fall in demand is due to decline in driving activity and rise in purchases of fuel-

efficient cars . In 2005, US demand stood at around 21 million barrels per day

For the first time since 1970s, US could start exporting oil

After the Arab oil embargo in 1973-74, the US had imposed a ban on oil exports,

triggering supply shortage and a sharp increase in prices

Due to advancement in oil production techniques such as hydraulic fracturing,

there is an increase in output that could outstrip refinery capacity in the near

future

Net petroleum imports in the US now account for 40 percent of demand as

against 60 percent in 2005

Domestic oil production in the US last year stood at a record of 766,000 barrels a

day

86.0

88.0

90.0

92.0

94.0

96.0

98.0

4,700

4,900

5,100

5,300

5,500

5,700

Nymex and MCX Crude Oil Price Performance

MCX crude oil (Rs/bbl) NYMEX Crude Oil ($/bbl)

361.3

360.3

363.1369.1

371.7

372.2

376.4

377.53

381.4

384

382.7

385.9

388.6 388.9

387.6

388.6

395.3 395.5

394.9 394.6

397.6

391.3

393.8

394.1

360

365

370

375

380

385

390

395

400

Crude Oil Inventories (mn barrels)


14/24


Crude OilOil demand is the US falls in May13

Oil demand slipped more than 1 percent in May13 as compared with a

year earlier, marked by a sharp decline in usage of gasoline by 3.3percent

Consumption stood at a monthly average of 18.503 million tonnes inMay13, touching a two-year low

Gasoline demand fell to a 13-year low of 8.697 million barrels a day inMay13, per day use in gasoline fell 300,000 barrels from May12

Ultra-low- sulfur diesel use increased to 3.619 million barrels per day 5.1percent y-o-y in May13

Oil output in US

Output jumped almost 15 percent y-o-y to a 22-year high in May13 to7.287 million barrels per day, topping 7 million barrels a day for theseventh straight month

New drilling technologies such as hydraulic fracturing and horizontaldrilling has unlocked oil deposits trapped in shale rocks

Demand for imported crude oil will reduce with increase in indigenousproduction and high oil inventories

Oil imports in the US fell by around 1 million barrels per day ascompared to a year earlier to an 18-year May low of 7.916 millionbarrels per day

Crude oil stocks during May-end stood at 388.6 million barrels, touchingthe highest since 1981

Refinery processing of crude oil rose by 0.2 percent y-o-y to 15.208million barrels a day, thus increasing the output of major petroleumproducts

Outlook

A comfortable supply-side scenario along with increase ininventories is expected to be bearish for crude oil. Over the week,

prices are expected to trade on a negative note, with a stronger

Dollar Index adding additional pressure on prices.

Rupee depreciation will help cushion sharp decline in prices on the

MCX.


Nymex Crude Oil: Support: 91.65/89.35 Resistance 95.45/97.80.

(CMP:$93.17)

Sell MCX Crude July between 5680-5700, SL-5801, Target -5520.

(CMP:Rs 5581)


15/24


Rupee and Dollar IndexWeekly Price Performance

Following Feds announcement, the Rupee touched an all-time low of 59.975 on

Thursday as a result of sell-off across risky asset classes and sharp strength in the Dollar

Index Over the week, the currency depreciated 3 percent against the dollar. Capital outflows

along with expectations of further removal of FII flows from the markets led to

weakness in the currency

Capital Flows

For the month of June 2013, FII outflows totaled at Rs.5,028.70 crores ($848.17 million)

as on 21st June 2013. Year to date basis, net capital inflows stood at Rs.78,176.40

crores ($14,504.80 million) till 21st June 2013.

Dollar Index

Federal Reserves announcement of tapering in stimulus measures pushed the DollarIndex to a weekly high of 82.32

Over the week the Dollar Index has strengthened more than 2 percent

US Treasury Yields Rise Sharply

Post the Feds announcement, US Treasury yields touched a 22-year high to around

2.36 percent last week, while a sell off was seen in the Indian bond market

Factors that affected currency movement

A high current account deficit, weak economic scenario and a slowing Indian economy

acted as a negative factor for the Rupee

An improving US economic scenario along with a pullback of stimulus measures by the

Federal Reserve has boosted the appeal of the Dollar Index

Outlook

Strength in the Dollar Index, capital outflows and weak domestic and global equity

markets are expected to leads to depreciation in the Rupee this week


USD/INR MCX June Support 57.90/56.50 Resistance 60.40/61.60. (CMP: 59.26)

US Dollar Index: Support 81.10/79.80 Resistance 83.10/83.90. (CMP: 82.58)

53.0

54.0

55.0

56.0

57.0

58.0

59.0

60.0

$/INR - Spot

79.0

80.0

81.0

82.0

83.0

84.0

US Dollar Index


16/24


EuroWeekly Price Performance

The currency touched a low of 1.3098, falling around 1.7 percent over the

week, taking cues from a stronger Dollar Index

Although economic data from the Euro Zone was supportive last week,

the currency slipped as global markets were weak and as the Dollar Index

strengthened

Economic data failed to impress

A positive consumer confidence report failed to push the Euro higher, thus

showing the impact that market sentiments had on the currency

A slight improvement in Euro Zone manufacturing activity was also seen in the

past month

Italy boosts infrastructure spending

Italy, the fifth-largest European economy, announced its decision to boost

infrastructure spending.

Italian Prime Minister accepted measures to invest more than 3 billion

Euros of funds to develop roads and railway lines

This move will help to increase employment levels in the country as the

infrastructure spending is expected to create 30,000 jobs

Outlook Over the week, a stronger Dollar Index will continue to add pressure on

the Euro

Movement in the currency will be driven by the sentiments is the world

financial markets, which are still connected to the Feds announcement

made last week


EURO/USD SPOT: Support 1.3056/1.2990 Resistance 1.3210/1.3310. (CMP:

1.3104)

1.275

1.285

1.295

1.305

1.315

1.325

1.335

1.345

1.355

1.365

Euro/$ - Spot

69.0

70.0

71.0

72.0

73.0

74.0

75.0

76.0

77.0

78.0

79.0

EURO/INR -Spot


17/24

Chana


Weekly Price Performance

Chana futures declined sharply in the early part of the last week due to good

pace of kharif pulses sowing and smooth advancement of monsoon. However,

receding supplies and strong demand led prices to recover towards later part. On a weekly basis, spot prices settled 0.28% higher while Chana July futures

settled 0.7% lower.

Cumulative rainfall 54 percent up for the period 1-19 June

For the country as a whole, cumulative rainfall during this years monsoon has so

far upto 19 June been 54% above the LPA.

Pulses sowing higher amidst early monsoon

Kharif Pulses are mainly grown in the western and southern belts of India. 3.74

lakh ha of area is covered under kharif pulses as on 21st

June 2013 as againstnormal 1.2 lakh ha.

Chana output estimated at record high - Third Advance Estimates

According to the third advance estimates released last week, Chana output is

pegged marginally lower to 8.49 mn tn compared with its second advance

estimates of 8.57 million tonnes.

Seasonal pattern to restrict further downside in the prices

Chana prices tend to follow a seasonality pattern, wherein prices decline during

the harvesting period (Apr-May) and bottom out when arrivals reach their peak

in the month of May. Thus, taking cues from seasonality pattern , chana prices

are set to recover from the current month (June as arrival will decline gradually.

Outlook

Chana prices may trade range bound with upward bias as demand is strong at

current price levels while arrivals have started declining. Good sowing prospects

of kharif pulses may cap sharp gains in the prices.

Weekly Strategy

Buy NCDEX CHANA July between 3200-3190, SL -3140, Target - 3280 / 3290


18/24

Turmeric

Source: Agriwatch & Reuters

Commodities Weekly Tracker


Turmeric Futures traded higher last week extending previous weeks gains on

account of declining arrivals. Heavy rains in the turmeric growing regions may

cause delay in the sowing. Also, fresh export enquiries supported prices at lowerlevels.

The spot as well as the futures settled 1.06% and 4.49% higher w-o-w.

Better than expected exports

Turmeric exports in 2012-13 stood at 80,050 tn as against 79,500 tn in 2011-12.

Commencement of sowing of Turmeric for the 2013-14 season

The area covered under Turmeric in A.P. as on 19/06/2013 stood at 0.01 lakh

hectares. Sowing last year commenced late due to drought conditions. Normal

sowing for the season is 0.68 lakh hectares. Production of turmeric declined in2012-2013 season due to weak monsoon as well as lower turmeric prices.

Lower production in the 2012-2013 season

Turmeric production in 2012-13 is expected around 50% lower compared to last

year and is expected around 45-50 lakh bags. Production in 2011-12 is reported

at historical high of 90 lakh bags/ 10.62 lakh tns.

Outlook

Turmeric is expected to continue to gain this week as lower arrivals coupled with

improvement in the overseas demand ahead of Ramadan may support prices.However, the carryover stocks are huge, which may cap sharp gains and

pressurize prices. Arrivals of monsoon may also lead to improvement in sowing.

The progress of monsoon needs to be tracked carefully as this may affect the

acreage as well as the yield of the crop.

Weekly Strategy Buy NCDEX Turmeric July between 5850 5830, SL 5550, Target 6300.


Source: Reuters & Angel Research.


19/24

Jeera

Source: Ministry of Agriculture, Gujarat.

Commodities Weekly Tracker


Jeera traded on a positive note last week on account of good overseas as well as

local demand. However, good arrivals coupled with higher production estimates

capped sharp gains. About 25-30% of the new crop from Gujarat has already beenexported to Singapore, Europe & Dubai.

The spot as well as the July Futures settled 1.95% and 3.93% higher w-o-w.

Second consecutive year of higher output

Indias 2013 Jeera output is estimated at 40-45 lakh bags (of 55kgs each), higher

than 40 lakh bags in 2012. However, increase in the exports due to supply

concerns in the global markets offset the impact of higher supplies on the prices

and thus, medium term fundamentals remain supportive for the upside.

Global supply concerns boost Jeera exports Jeera exports in 2012-13 stood at 79,900 tn, as against 45,500 tn last year.

The ongoing tensions in Syria and Turkey, coupled with output concerns has led to

supply concerns, and thus, exports have been diverted to India.

International Scenario

According to reports, production in Turkey is reported around 8,000-10,000

tonnes while production in Syria is expected to be lower, raising supply concerns

in the international markets.

Currently, Indian Jeera in the international market is being offered at $2,510/tn(FOB Mumbai).

Outlook

Jeera is expected to trade higher this week on expectations of good overseas

demand. Also, declining arrivals may support prices. However, higher production

figures this season may cap sharp gains and pressurize pries at higher levels.

Good progress of the monsoon may also limit the upside in the prices.

Weekly Levels Buy NCDEX Jeera July between 13500 13550, SL 13150, Tgt 14000/14100.


Source: Reuters & Angel Research.


20/24

Soybean


Weekly price performance

Soybean prices remained positive in the early part of the session as delayed US soy

planting raised concerns over supplies. However, with good progress of monsoon

and higher sowing in the domestic markets, soybean prices declined sharply towardsthe later part of the week. On a weekly basis July futures as well as spot settled

around 1% and 0.3% lower w-o-w.

CBOT Soybean Futures declined 1.53% as less threatening weather forecasts for late

plantings and good development of crops across major growing belts dampened

positive market sentiments.

Commencement of Kharif Sowing

As per the Ministry of Agriculture, oilseeds sowing is completed under 8.13 lakh ha

against normal 3.37 lakh ha.

Groundnut was sown in 5.56 lakh ha against 2.21 lakh ha sown during the sameperiod last year. Soybean was planted on 1.32 lakh ha, against 0.16 lakh ha last year.

India's soy meal Exports Fall by 57 Percent during FY13-14 SEA

Indias soy meal exports for the month of May 2013 were 96,492 tonnes, lower by

32.33 percent from 142,588 tonnes a year ago.

USDA to release planting report on 28th June

US department of agriculture is schedule to release its planting report on Friday this

week.

In its preliminary report released on 28th March 2013, USDA estimated Soybeanacreage around 77.1-million acres in 2013, the fourth highest acreage on record,

but down marginally by 0.13 percent from last year.

Outlook Soybean is expected decline this week on higher output expectations in the coming

season amidst increased sowing and good monsoon. Prices may also take cues from

the USDA planting report which is schedule to release on Friday.

Strategy

Sell NCDEX Soybean July between 3830 - 3850, SL - 3975, Target - 3680 / 3650


21/24

Refine Soy Oil and Crude Palm Oil


Weekly price performance

Domestic edible oil prices continued with its upward trend in the initial part of

the week on account of weakness in the Indian rupee along with firminternational markets. However, prices declined sharply in the second half of

the week amidst broad sell off in commodities caused on concerns the U.S.

Federal Reserve may phase out stimulus. CPO managed to settle higher by

1.79% last week as rupee continued to weaken. However, Ref Soy oil settled

0.5% lower taking cues from the international markets.

Global Scenario

Malaysian palm oil products Exports from June 1-20 rose 16 percent to

928,810 tons from shipped during May 1-20. Malaysia, the world's No.2 palm

oil producer, will set its crude palm oil export tax for July at 4.5 percent.Domestic Scenario

As per the data released by the Solvent Extractors' Association of India

Imports of vegetable oils, including non-edible oils, rose 40.2% to 917,964 tn

in May, after dropping for 3 months, mainly due to surge in palm oil imports.

India's refined palm oil imports hit a record high in May by jumping 47.5

percent from April. The world's top buyer of vegetable oils imported 373,837

tonnes of refined palm oil in May.

Monthly soy oil imports rose 2.7% as local supplies are almost exhausted

before the new planting season for soybean.

Stockpiles of edible oil at ports on May 1 stood at 670,000 tn, the trade body

said, off a record of 930,000 tn on March 1. Stocks were still on the higher

side despite the decline in monthly imports.

Strategy

Buy NCDEX Ref Soy Oil July Support 1 - 688, Support 2 680 and Resistance 1-

706,Resistance 2 - 712

MCX CPO July between 500 498, SL 487, Target 520/525 (CMP 505.40)


22/24

Sugar



Sugar prices declined last week after the government said that it will not increase

the import duty until September 2013. Also, good progress of monsoon in the

drought ridden state of Maharashtra has eased concerns over output.

Liffe Sugar recovered from lower levels after touching 3 year low in the preceding

week on account of short coverings. Prices have declined sharply on account of

3rd year of global sugar surplus.

Sugarcane acreage down 10 percent as on 14th June

According to the Ministry of Agriculture, Sugarcane has been planted in 44.55

lakh ha as compared to 49.3 lakh ha last year as drought affected Maharashtra

and Karnataka have reported lower area.

After producing surplus sugar in the current season, sugar output is expected todecline in 2013-14 season on account of lower plantings.

India sugar reserves at five-year high set to avert imports

Sugar inventories in India, are poised to surge by 37% to 9.2 million tonnes at the

start of October, a five-year high as exports halt because of slumping global

prices. Exports have plunged to about 35,000 tonnes since 1 October from 3.4

million tonnes in 2011-2012.

Brazil's CS sugar output up 40 percent yoy

Sugar and ethanol mills in Brazil's main center-south cane belt made strong

progress harvesting record crop through mid-May, producing more than twice the

amounts of sugar and ethanol than they did from last season's smaller cane crop.

Mills in the region benefited from dry weather in late April and early May and

produced mn tn of sugar, up 40 percent from a year ago.

Outlook

Sugar prices may correct tracking god monsoons as well as governments refusal

to impose import duty. However, lower production estimates may support prices.

Strategy

NCDEX SUGAR July between 3030-3040, SL -3075, Target - 2970 / 2950.


23/24

C di i kl k


24/24

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Commodities Weekly Tracker, 24th June 2013