Commodities & Currencies Weekly...

Commodities & Currencies

Weekly Tracker

Commodities Weekly Tracker

Contents Returns • Non Agri Commodities • Currencies • Agri Commodities

Non-Agri Commodities • Gold • Silver • Copper • Crude Oil

Currencies – DX, Euro, INR

Agri Commodities • Sugar • Turmeric • Jeera • Soybean • Cotton

Commodities Weekly Tracker Monday, September 12, 2016

0.9 0.6

0.2

(0.8) (0.9) (1.1)(1.5)

(2.2)(2.7)

(3.3)(4.0)

(3.0)

(2.0)

(1.0)

0.0

1.0

Global Equities Performance (%)

Source: Reuters


1.4

0.9 0.7

0.2

(0.0)(0.2)

(0.5)

(1.2)

(2.0)

(1.5)

(1.0)

(0.5)

0.0

0.5

1.0

1.5

2.0

Currencies Weekly Performance (%)

Source: Reuters


Monday, September 12, 2016

3.2 3.1

0.3 0.2 0.2

(1.1)(2.0)

(2.4)(3.1)(4.0)

(3.0)

(2.0)

(1.0)

0.0

1.0

2.0

3.0

4.0

Non-Agri Commodities Weekly Performance (%)

Source: Reuters



6.2

3.1 2.5

2.1 1.5 1.4 1.2 1.1

(0.2)

(1.7) (1.9) (2.1)

(2.9) (3.0) (3.1)(4.0)

(2.0)

0.0

2.0

4.0

6.0

8.0

Agri-Commodities Weekly Performance (%)


Gold Weekly Price Performance

• Last week, spot gold prices declined by 1.6 percent to close at $1327.7 per ounce after the European Central Bank held interest rates at record lows but refrained from adding new stimulus as some investors had expected. Global equities also tumbled on disappointment that ECB chief Mario Draghi said the bank had not even discussed an extension of quantitative easing.

• Gold has given up much of its strong gains from earlier in the week, when weak U.S. jobs data led investors to bet that a September rate rise was no longer on the cards, weakening the dollar. U.S. services sector activity slowed to a 6-1/2-year low in August amid sharp drops in production and orders, pointing to slower economic growth that further diminished prospects for a near-term interest rate increase. Meanwhile, U.S. non-manufacturing new orders index for August fell to their lowest since December 2013.

• The U.S. central bank's policy-setting Federal Open Market Committee meeting is scheduled for Sept. 20-21.

• On the MCX, gold prices declined by 0.5 percent to close at Rs.31217 per 10 gms.

SPDR Gold Holdings

• Last week, holdings in the SPDR Gold Trust rose by 2.05 tonnes to 939.94 tonnes

• On a year-to-date basis, holdings have increased by 297.57 tonnes, or around 46.32 percent.


1,000

1,100

1,200

1,300

1,400

1,500

1,600

1,700

1,800

1,900

24,000

26,000

28,000

30,000

32,000

34,000

MCX and Comex Gold Price Performance

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

70.0

80.0

90.0

100.0

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

Spot Gold Vs Dollar Index

Spot Gold -$/oz US Dollar Index


Gold

CFTC holdings:

• The Commodity Futures Trading Commission (CFTC) Commitments of Traders report in the week to 6th September showed that

investors have raised their net longs in gold by 40842 contracts to 278994 contracts.

Investment demand for gold is increasing across the globe

• As of August 31, the total amount of gold held by the universe of funds that we track – 73 active funds – stood at 2,297.3t (73.9 moz),

up 27.0t from the previous month. In value terms, assets under management totaled US$96.7bn, 1% lower from the end of July.

• In Europe, the United Kingdom continued to be a source of growth. ETFS Physical Gold (UK), the region’s largest fund, added 3.7t to

149.4t by the end of August. Source Physical Gold P-ETC and iShares Physical Gold ETF added 7.0t and 9.0t, respectively, to 94.9t and

55.0t.

Outlook

• Money managers have raised their bets in gold last week as uncertainty about rate hikes continues to bother investors across the

globe.

• Inflows in the SPDR gold trust last week indicates strength in investment demand, although there have been liquidation in the past few

weeks.

• Strengthening of dollar index on account of comments from the fed members and good economic data sets will also act as a negative

factor for gold prices.

• However, recent comments from Erin Rosengreen regarding the rate hike being low for fairly long period of time indicates that the

possibility of the rate hike will increase in the upcoming US Federal Reserve meeting.

• However, technically we expect gold prices to trade higher in the international as well as domestic markets. Prices will trade higher

towards $1344 while domestic prices will go higher towards Rs.31500 per 10 gms.

Weekly Technical Levels – Trend Sideways to up

• Spot Gold : Support $1315/$1300 Resistance $1344/$1357 (CMP:$1319)

• MCX Gold: Buy MCX Gold Oct between 30900 – 30800, SL – 30600, Target – 31500 / 31700 (CMP: 30947)



Silver Weekly Price Performance

• Spot silver prices declined by 5 percent last week to close at $19 per ounce in line with decline in gold prices and stronger dollar index.

• On the MCX, silver prices declined by 0.64 percent to close at Rs.46714 per kg.

CFTC Holdings

• The Commodity Futures Trading Commission (CFTC) Commitments of Traders report in the week to 6th September raised their net longs in silver by 8052 contracts to 82210 contracts.

Outlook

• Silver prices will trade higher this week in line with strength in gold prices.

• Hiowever, strengthening dollar index, profit booking at higher levels will exert downside pressure on silver.

• We expect silver prices to trend higher this week towards $19.5 while MCX silver prices can go higher towards Rs.47000 mark

Weekly Technical Levels – Trend Neutral

• Spot Silver : Support $18.75/$17.90 Resistance $19.40/$19.80. (CMP: $18.52)

• MCX Silver: Support Rs.45500/44800 Resistance Rs.46900/47600 (CMP: 43702).


12

17

22

27

32

28,500

33,500

38,500

43,500

48,500

53,500

58,500

MCX and Comex Silver Price Performance

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

70.0

80.0

90.0

100.0

110.0

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0 Spot Silver Vs US Dollar Index

Spot Silver -$/oz US Dollar Index


Copper Weekly Price Performance

• LME Copper prices traded higher by 0.3 percent last week to close at $4633/tonne as US NFP climbed by just 151,000 last month following a 275,000 gain in July, signaling that the job market is cooling and adding to bets that the rate hike may be pushed back.

• Also, union president Patricio Elgueta said operations were suspended and walkout by one of the two main unions at the Salvador mine run by Codelco entered its third day.

• However, sharp upside was capped as stocks at the LME’s Asian warehouses have persistently risen since mid August, indicating that China is exporting the surplus.

• Besides, the European Central Bank left its €1.7 trillion ($1.9 trillion) stimulus unchanged at a policy meeting although Draghi was concerned about persistently low euro zone inflation, which has fallen short of the ECB’s near-2% target for more than three years.

• MCX copper prices traded higher by 0.8 percent last week to close at Rs.313.7 per kg on Friday.

CFTC Holdings

• The CFTC Commitments of Traders report in the week to 6th September have raised their net shorts in copper by 14840 contracts to 41695 contracts.

Outlook

• Copper is likely to trade lower this week as increasing hawkish comments from Fed members has raised the possibility of a September rate hike. Fed member Rosengren in his latest statement on Friday warned that inaction on the part of rate hike could cost the US economy dearly.

• Also, latest CFTC data showed Hedge funds and money managers increased their net shorts further.

• We expect MCX Copper prices to trade lower this week.

However, technically – Trend Up

• LME Copper: Support $4565/$4490 Resistance: $4710/$4785 (CMP: $4607.5)

• MCX Copper: Buy MCX Copper Nov between 309– 307, SL- 304, Target – 319/324. (CMP: 313.7)


275

305

335

365

395

425

455

485

515

3,400

4,400

5,400

6,400

7,400

8,400

LME and MCX Copper Price Performance

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

3,400

4,400

5,400

6,400

7,400

8,400

1,00,000

2,00,000

3,00,000

4,00,000

5,00,000

6,00,000

7,00,000

LME Copper v/s LME Inventory

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


Crude Oil Weekly Price Performance

• WTI oil prices rose by 2.3 percent last week to close at $45.9 per ounce after a surprisingly huge drawdown in U.S. crude stocks as Gulf Coast imports slumped to a record low.

• U.S. crude stocks dropped 14.5 million barrels last week to 511.4 million barrels, the biggest weekly drop in stockpiles since January 1999, according to government data. Imports into the U.S. Gulf Coast fell to 2.5 million barrels per day, the lowest since data collection began in 1990.

• Oil prices drew support earlier when Chinese trade data showed crude imports in August surged nearly 25 percent from a year ago to the second-highest ever, as independent refiners took advantage of low oil prices before import quotas expire in December.

• On the MCX, oil prices rose by 3.9 percent to close at Rs.3080 per barrel.

Crude oil inventories

• At 511.4 million barrels, U.S. crude oil inventories are at historically high levels for this time of year.

• Total motor gasoline inventories decreased by 4.2 million barrels last week, but are well above the upper limit of the average range.

• Both finished gasoline inventories and blending components inventories decreased last week. Distillate fuel inventories increased by 3.4 million barrels last week.


360.3

371.7382.7

391.3

393.8

364.6358.26

374.54

388

357.6375.9

381.6

393.2390.3

370364.5

357.4

375.4378

404.6

415.8

456.3

464.5

350

370

390

410

430

450

470

Crude Oil Inventories (mn barrels)

20.0

40.0

60.0

80.0

100.0

120.0

1,700

2,700

3,700

4,700

5,700

6,700

7,700

Nymex and MCX Crude Oil Price Performance

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


CFTC Holdings

• The Commodity Futures Trading Commission (CFTC) Commitments of Traders report in the week to 6th September have cut their net longs in crude by 42849 contracts at 177537 contracts.

Battle for market share lefts the world with high inventories

• A battle for market share between oil producers has left the world awash with stocks of unwanted crude and driven a collapse in prices over the past two years.

• But a study of one often overlooked oil market parameter -- spare capacity or the ability of producers to quickly ramp up output to cushion against unexpected supply cuts elsewhere -- shows that a major bullish trend for prices could be building.

Outlook

• Withdrawal of oil inventories by around 14.5 million barrels in the US is an indication that the incremental demand is chipping in. However, global supply glut and high OECD oil inventories continue to bother investor’s sentiment.

• Although the recent Chinese imports data has been higher, consistent demand will lead to a prices rise in the counter.

• The meeting of oil producers in Algeria scheduled on 26-28 of September will keep the oil investors on toes as an unexpected outcome with regards to curtailing the output will favor oil prices.

• Although the recent week inventories have declined by huge margin, consistent demand and outflow of inventories will be crucial to support oil prics

• We expect oil prices to trade higher in the international as well as domestic markets. Prices will go higher towards $49 while MCX oil prices will trade positive towards Rs.3170 mark

Weekly Technical Levels – Trend Buy

• Nymex Crude: Support $44.40/$43.90 Resistance $47.10/$48.70 (CMP: $46.96 )

• MCX Crude: Buy MCX Crude Sep between 2990 – 2970, SL – 2890, Target – 3170 / 3190. (CMP: 3165)



Rupee

Weekly Price Performance

• The Indian Rupee depreciated by 0.7 percent yesterday owing to persistent buying of the greenback by importers and banks.

• Domestic markets i.e. Sensex and Nifty ended on a weak note as recent surge in equities has prompted the traders to book profits. Weakness in the Asian market equities also governed the trend of the Indian markets and its currency.

• However, sharp losses were capped on account of heavy influx of capital into the domestic markets.

• Moreover, weak release of economic datasets from the US has dimmed the possibility of a US rate hike in Sep’16 monetary policy review thereby keeping the DX pressurized.

Foreign Inflows

• For the month of September 2016, FII inflows in equities totalled at Rs. 786.77 crores ($117.51 million) as on 8th September’16.

• Year to date basis, net capital outflows stood at Rs. 41636.50 crores ($6254.66 million) as on 8th September’16.

Outlook

• From a weekly perspective, Rupee is likely to trade negative in the coming trading session as negative trading in the Asian market equities will govern the trend of the Indian markets and its currency. Inventors refrain from making any risky bets amid concerns that central banks will become less accommodative.

• Moreover, markets remain cautious ahead of the important release of economic datasets from the nation that will keep the currency a bit volatile.

Weekly Technical Levels

• USDINR: Support 66.30 / 66.00; Resistance 67.10 / 67.50 (CMP: 66.67)

Economic data release during the week Current Account Q2 - 12th Sep’16 Time : 5:00pm Previous : $-0.3B; Forecast : $ -0.5B

Industrial Production YoY– 12th Sep’16 Time : 5:30pm Previous :2.1 percent; Forecast : 4 percent

Manufacturing Production - 12th Sep’16 Time : 5:30pm Previous : 0.9 percent; Forecast : 2.7 percent

Inflation Rate YoY – 12th Sep’16 Time : 5:30pm Previous : 6.07 percent; Forecast : 5.8 percent


Daily INR= 10-08-2016 - 14-09-2016 (GMT)

Cndl, INR=, 12-09-2016, 66.8400, 66.9300, 66.8030, 66.8875,

+0.0175, (+0.03%)

Price

/USD

66.2

66.4

66.6

66.8

67

67.2

66.8875

15 22 29 05 12August 2016 September 2016


Dollar Index Weekly Price Performance

• US Dollar Index traded lower by 0.5 percent in the last week as markets discount the statement made by Boston Fed President Eric Rosengren who warned that keeping interest rates for longer time will overheat America’s economy.

• Slowdown in the overseas economy has prompted the US Federal Reserve to keep the borrowing rates at lower levels. Mr. Rosengren, who has always been on the dovish side, now thinks that waiting for too long will create problems of its own to the American economy.

• Furthermore, disappointing release of economic indicators like non-manufacturing, NFP, ADP, average earnings and unemployment rate data from the nation added to the woes. All the above factors acted as a negative factor for the DX which made a weekly low of 94.44 and ended at 95.33 levels on Friday.

Economic data from the US

• ISM Non-Manufacturing PMI for the month of August’16 decreased to 51.4 from previous months 55.5.

• Unemployment Claims for the week ending 2nd Sep’16 decreased to 259K from previous week’s 263K.

• Revised UoM Consumer Sentiment plunged to 89.8 percent in Aug’16 from previous months 90.4.

Outlook

• The Dollar Index is likely to trade higher as recent statement by the Boston Fed President Eric Rosengren who said that keeping borrowing rates low for a longer period will be unhealthy for the US economy. Hence investors feel that the US Feds might think about hiking rates in the coming session instead of Dec’16.

• Moreover, markets remain cautious ahead of the important economic datasets form the nation that will keep the currency a bit volatile.


• Dollar Index (DX) : Support 94.60 / 93.80; Resistance 95.90 / 96.50 (CMP: 95.35)


Economic data release during the week

PPI m/m – 15th Sep’16

Time: 6:00pm

Previous : -0.4 percent Forecast : 0.1 percent

Retail Sales m/m – 15th Sep’16

Time: 6:00pm

Previous : 0.0 percent; Forecast : -0.1 percent

CPI m/m – 16th Sep’16

Time: 6:00pm

Previous :0.0 percent; Forecast : 0.1 percent

Prelim UoM Consumer Sentiment–16th Sep’16

Time: 7:30pm

Previous : 89.8; Forecast : 91.0

Daily /.DXY 27-07-2016 - 16-09-2016 (NYC)

Cndl, /.DXY, 12-09-2016, 95.309, 95.327, 95.207, 95.251,

-0.085, (-0.09%)

Price

USD

94

94.5

95

95.5

96

96.5

97

95.251

01 08 15 22 29 05 12August 2016 September 2016


Euro Weekly Price Performance

• Euro currency traded higher by 0.8 percent in the last week as weak release of economic datasets from the US has dimmed the possibility of a rate hike in Sep’16 monetary policy review thereby keeping the DX pressurized.

• Moreover, markets discounted the release of ECB monetary policy review where the policymakers kept the interest rates unchanged and said that they will remain at present or lower levels for an extended period of time.

• Furthermore, ECB executive board member Benoit Coeure said that Euro area’s economy was quite resilient to global uncertainty.

• All the above factors acted as a positive factor for the shared currency that made a weekly high of 1.1326 that closed at 1.1229 levels on Friday.

Economic data from the Euro Zone

• German Prelim CPI plunged by 0.0 percent in August’16 from previous month’s rise of 0.3 percent.

• Spanish Manufacturing PMI remained unchanged at 51.0 for the month of August’16.

• CPI Flash Estimate for the month of August’16 remained unchanged at 0.2 percent.

Outlook

• Euro is expected to trade lower this week as recent gains in the currency will prompt the traders to book profits.

• Markets remain cautious ahead of the important economic data releases from the nation that will keep the currency a bit pressurized. Moreover, strength in the USD will further keep the shared currency pressurized.


• EUR/USD SPOT: Support 1.1160 / 1.1080; Resistance 1.1280 / 1.1350 (CMP: 1.1231)

Economic Data to be released during the week:

ECB President Draghi Speaks – 13th Sep’16

Time: 2:30pm

German ZEW Economic Sentiment– 13th Sep’16

Time: 2:30pm

Previous : 0.5 percent; Forecast : 2.8 percent

ZEW Economic Sentiment – 13th Sep’16

Time: 2:30am

Previous : 4.6; Forecast : 6.7

Final CPI y/y – 15th Sep’16

Time : 2:30pm

Previous : 0.2 percent; Forecast : 0.2 percent


Daily EURINR= 11-07-2016 - 16-09-2016 (GMT)

Cndl, EURINR=, 09-09-2016, 75.0200, 75.2300, 74.7800, 74.9600,

+0.1800, (+0.24%)

Price

INR

73.5

74

74.5

75

75.5

76

74.9600

11 18 25 01 08 15 22 29 05 12July 2016 August 2016 Sep 16

Sugar



• Sugar Futures edged higher during last week taking clues from the

physical market coupled with expectation of sugar deficit in the coming

sugar season. The most-active October sugar contract closed higher by

3.08% during last week to settle at 3,543 per quintal.

• Central government is taking steps to stabilize prices by imposed stock

limits on sugar mills during the festival season until October-end.

Fundamentals

• According to the Agriculture Ministry, cane acreage as on Aug 26 stood at

45.55 lakh hectares (lh), fell by 8.2% lower than last year.

• . The government has come out with the notification under which the

sugar mills cannot keep more than 37 % of their sugar availability in the

current season as on September 30 and 24 % at the end of October.

NCDEX Sugar

• Earlier, exchange has imposed additional margins on both buy and sell side and now total margin increased to 45 % for buy side and 15% to

sell side for all sugar contracts.

Global Update

• ICE raw sugar futures continue to trade down as cane crushing in the key Center-South region of Brazil going on strongly. Dry weather

expected to continue for the next fortnight, which will aid crushing in Brazil. Prices have now been stuck between support at 19.50 cents

and resistance around 21 cents for more than four weeks.

• ISO in its first full assessment of the forthcoming 2016-17 season, forecast a global sugar deficit of 7.05 million tonnes.

Outlook

• We expect sugar to trade higher on expectation of tight supplies in next sugar year due to lower yield coupled with festival demand in

coming months. However, government policies regarding supplies and trade may check sugar prices in the physical market.

Weekly Strategy

BUY NCDEX SUGAR OCT AT 3510 – 3530, SL – 3450, TARGET – 3630 / 3680

Weekly NSMc1 12-12-2015 - 24-09-2016 (BOM)

Cndl, NSMc1,

16-09-2016, 3,568.00, 3,588.00, 3,554.00, 3,564.00,

+21.00, (+0.59%)

Price

INR

100B

2,700

3,000

3,300

3,6003,564.00

Jan Feb Mar Apr May Jun Jul Aug SepQ1 2016 Q2 2016 Q3 2016


Turmeric



• Turmeric futures traded lower last week on slow down in physical and

export demand. Forecast of favorable weather conditions in turmeric

growing areas also weigh on the prices. Turmeric Oct’16 delivery

contract on NCDEX closed 2.85% lower to settle at Rs 6,754 per quintal.

• Fundamentals

• Currently, stock positions in NCDEX warehouses at south India at 7,464

tonnes as on 11-Sep, which was 7,511 tonnes a week earlier.

• Turmeric acreage in Telangana as on 07 Sep was up 12% at 46,000

hectares as compared to 41,000 hectares last year. Sowing of turmeric is

over in 93% of normal area and up by 107 % of normal sowing area.

NCDEX Turmeric

• In August, arrivals have increased year on year to 8,700 tonnes compared to 5,300 tonnes last year. Similarly, rrival of the turmeric in July

dropped substantially to 8,684 tonnes from 20,826 tonnes in June.

• At the Erode Turmeric Merchants Association, the finger turmeric was sold at ₹7,293-9,011 a quintal; the root variety at ₹6,993-7,588. Of the

arrival of 1,067 bags, 890 were sold.

• In the export front, as per department of commerce data, country exported about 32,834 tonnes of turmeric during April-June period up by

32% compared to same period last year.

Outlook

• We expect turmeric to trade sideways to down on reports of higher arrivals from last year stock in the physical market. However, there is

expectation of pick up in up country demand as festival season coming up. Good health of new season crop in south Indian states weigh on

prices in recent weeks.

Weekly Strategy

SELL NCDEX TURMERIC OCT AT 6950 – 7000, SL – 7250, TARGET – 6600 / 6500

Weekly NTMc2 28-11-2015 - 24-09-2016 (BOM)

Cndl, NTMc2,

16-09-2016, 6,830.00, 6,922.00, 6,830.00, 6,890.00,

+48.00, (+0.70%)

Price

INR

100B

7,000

8,000

9,000

6,890.00

Dec Jan Feb Mar Apr May Jun Jul Aug SepQ4 15 Q1 2016 Q2 2016 Q3 2016


Jeera



• Jeera futures slipped last week due to profit booking by the market

participants as demand in physical market is not picking up as

expected. NCDEX Oct’16 Jeera closed 2.99% down to close at Rs

17,495 per quintal.

Fundamentals

• NCDEX stock of jeera decrease last week to 4,877 tonnes as on 11

Sep, which was 5,575 tonnes a week earlier. In the Gujarat markets,

arrivals of jeera slowed down during July compared to previous two

months.

NCDEX Jeera

• The arrival of jeera in the physical market is declining during the last three months – June, July and August as per the seasonal trend. As

per the Agmarknet data, the quantity of jeera arrivals in the country reported lower by 30 per cent in first five month of new financial

year (April-August) at 69,675 tonnes compared to more than 1,00,000 tonnes same period last year.

• According Department of commerce data, the exports of Jeera in the first three months (Apr-Jun) of 2016-17 is at 44,023 tonnes, higher

by 71.7% compared to last year same time. In the first three months of new financial year, jeera exports has achieved about 46% of last

year’s export volume due to good demand from Vietnam and Bangladesh.

• In the next few months, the prices will depend on export demand. The export demand expected to pick up as prices have corrected

enough in last 2 weeks.

Outlook

• We expect Jeera futures to trade sideways to lower due to lower than expected exports demand and corrections from higher levels may

exert pressure. However, dwindling supplies with the stockists and steady domestic demand may keep the prices supported during the

off-season.

Weekly Strategy

SELL NCDEX JEERA OCT AT 17800 – 17900, SL - 18300 TARGET – 17300 / 17200

Weekly NJEc1 19-12-2015 - 24-09-2016 (BOM)

Cndl, NJEc1,

16-09-2016, 17,495.00, 17,495.00, 17,150.00, 17,395.00,

-100.00, (-0.57%)

Price

INR

100B

14,000

16,000

18,00017,395.00

Jan Feb Mar Apr May Jun Jul Aug SepQ1 2016 Q2 2016 Q3 2016


Soybean



• Soybean futures closed lower during last week on expectation of higher

production in the coming kharif season. The most-active Oct’16 delivery

contract closed 3.07% down last week to settle at Rs. 3,220 per quintal.

Moreover, increase in tariff value of soyoil support soybean prices.

Fundamentals

• As on Sep 09, soybean is 114.7 lh , down around 1.3% lower from a year

ago level. The according to a latest survey report released SOPA, the

overall condition of soybean crop in the country is "satisfactory" with

over 30% of crop in good-to-very-good condition, and nearly 60% in

normal condition.

NCDEX Soybean

• According to SOPA, the export of soybean meal and its other value-added products during August 2016 is 10,615 tonnes compared to

31,157 tonnes in August last year, registering a fall of 66%.

Global Update

• U.S. soybean futures closed higher by 2.91% during the last week due to concerns over excessive wet weather delaying the U.S. harvest.

The U.S. Department of Agriculture rated the soybean crop as 73 percent good-to-excellent, unchanged from last week. Analysts had

expected a slight decline in ratings.

• Brazil's 2016-17 soybean crop showed the world's largest exporter of the commodity is expected to harvest a record 103.1 million tonnes

early next year, an average of 12 forecasts showed, surpassing this season's output by 8 percent.

Outlook

• We expect Soybean prices to trade sideways to higher on expectation lower level buying by the market participants. However, higher

supplies in the coming harvesting months and consideration of lowering import tax may pressurise prices.

Weekly Strategy

BUY NCDEX SOYBEAN OCT AT 3170 – 3190, SL – 3100, TARGET – 3320 / 3350

Weekly NSBc1 24-10-2015 - 24-09-2016 (BOM)

Cndl, NSBc1, 16-09-2016, 3,200.00, 3,210.00, 3,179.00, 3,196.00,

-24.00, (-0.75%)

Price

INR

100B

3,300

3,600

3,900

3,196.00

Nov Dec Jan Feb Mar Apr May Jun Jul Aug SepQ4 2015 Q1 2016 Q2 2016 Q3 2016


Cotton



• Cotton complex during the last week traded higher due to dwindling supplies and expectation of lower cotton production in the country. Last week, NCDEX Kapas for Apr’17 closed 1.52% higher while MCX Oct’16 cotton closed higher by 1.11%.

Fundamentals

• As per latest estimate by government, cotton is planted in 102 lh in the country, down by 11% against 114.8 lh last year as on 09 Sep.

• In its first estimate, the Cotton Association of India (CAI), the apex trade body of the fibre crop, has pegged the output for the year starting October 2016 at 336 lakh bales of 170 kg each in line with the production in the previous year.

MCX Cotton

• Domestic stocks are dwindling, which leads to competition between exporters and the textile industry, which has been forced to import at the end of the season.

Global Cotton Updates

• Cotton futures on ICE closed higher by 1.9% as market still gathering evidence of damage to the US crop from Hurricane Hermine last weekend. Forecast of rainy days in the cotton growing areas may keep the prices firm.

• The US Department of Agriculture's weekly crop progress report which showed that 48% of cotton crops in the United States were in good-to-excellent condition, unchanged from a week ago.

• Weekly export sales data from the US Department of Agriculture (USDA) showed net upland sales totalled 344,500 running bales of cotton for the week ended September 1, compared with 309,200 running bales in the prior week.

Outlook

• We expect cotton prices may trade sideways to lower down as industrial demand is muted due to want of good quality cotton and

expectation of better production. Good weather across cotton sowing states like Gujarat and Maharashtra is also weighing on prices.

Weekly Strategy

• BUY MCX COTTON OCT AT 19800 – 19900, SL – 19500, TARGET – 20500 / 20700

Weekly MCOTc1 25-10-2015 - 25-09-2016 (GMT)

Cndl, MCOTc1,

11-09-2016, 19,750.00, 20,400.00, 19,400.00, 20,360.00

+250.00, (+1.24%)

Price

INR

16,000

18,000

20,000

22,000

20,360.00

Nov Dec Jan Feb Mar Apr May Jun Jul Aug SepQ4 2015 Q1 2016 Q2 2016 Q3 2016


Thank You!

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