Daily · Daily Fundamental Monday, October 05, 2009 Market at a Glance Monsoon Watch Top Gainers...

Daily Fundamental

Monday, October 05, 2009

Market at a Glance

Monsoon Watch

Top Gainers

Exchange Commodity Price Chg %

MCX NATURAL GAS FUT Oct09 225.8 5.07

NCDEX CHILLI GUNTUR FUT Dec09 5750 4.02

NCDEX GUARSEED JODPR FT Nov09 2336 2.59

NCDEX GUAR GUM JDHPR FT Nov09 4942 2.30

NCDEX CARDAMOM FUTURE Oct09 747.25 1.87

Top Losers

Exchange Commodity Price Chg %

NCDEX TURMERIC FUTURE Oct09 7587 -2.28

MCX ALUMINIUM FUTURE Oct09 86.7 -1.81

NCDEX SOYBEAN A FUTURE Nov09 1996 -1.58

MCX COPPER FUT (MCX) Nov09 285.85 -1.24

NCDEX SILVER DELHI FUT Oct09 25900 -1.19

The well-marked low-pressure area that triggered some of the worst

flooding in peninsular India’s recorded history let off some steam weak-

ening as a conventional ‘low’ on Sunday.

The system ‘spin’ was tempered for the time being by the overwhelming

influence of a deep westerly trough trooping in from the northwest bor-

der.

On Sunday, India Met Department located the westerly trough as dip-

ping down to around south Rajasthan and adjoining north Gujarat and

west Madhya Pradesh.

The westerly trough and the ‘low’ have started interacting and this is

expected take the core of the rain belt rains now along a north-east direc-

tion across central India into east and northeast India.

Expected to be brought under rain cover over the next week (until Octo-

ber 11) are Gujarat, Rajasthan, Uttar Pradesh, Bihar and the North-

Eastern States.

Please refer to the Disclaimer on the last pagePlease refer to the Disclaimer on the last pagePlease refer to the Disclaimer on the last pagePlease refer to the Disclaimer on the last page

attempt at an all-time high this time was likely to take a while.

Non-commercial net long positions in gold futures on the COMEX divi-sion of the New York Mercantile Exchange eased to 231,386 lots for the week ended Sept. 29 from an all-time high of 236,749 lots the week before, figures from the Commodity Futures Trading Commission showed. The world's largest gold-backed exchange-traded fund, the SPDR Gold Trust, said its holdings stood at 1,096.548 tonnes as of Oct. 4, up 0.1 percent or 1.221 tonnes from the previous business day. The US economy lost 263,000 jobs in September, which was more than had been expected, according to official non-farm payrolls figures. The job-less rate rose to a fresh 26-year high of 9.8% from August's figure of 9.7%. The number in employment has now fallen for 21 consecutive months. The dollar remained under pressure on Monday after falling against most major currencies on Friday. Finance ministers from the Group of Seven industrialized na-

tions said at a meeting in Is-tanbul at the weekend that too much volatility in the foreign exchange market could hurt the global economy and finan-cial system. While G7 offi-cials had a chance to address concern that a further dollar slide could hurt many coun-tries' exports, they merely recycled verbatim the language on exchange rates that appeared in its statement six months ago. The failure to break new ground on currency rates leaves the door open to more dollar weakness in com-ing months as the U.S. econ-omy struggles with its trade and budget deficits.

Overall we expect $997 to be a critical support level while $1012 will act as a resistance level for Gold.

U.S Unemployment Rate Increases The US economy lost 263,000 jobs in September, which was more than had been expected, according to official non-farm payrolls figures. The jobless rate rose to a fresh 26-year high of 9.8% from August's figure of 9.7%. The number in employment has now fallen for 21 con-secutive months.

Precious Metals

Events

Economic Calendar

Da i ly Fundamenta l

U.S

Unemployment

Rate Increase is

weak for the

economy.

Gold stayed above $1,000 an ounce on Monday as the dollar remained pressured after last week's jobs data pushed the currency down broadly on concerns the U.S. eco-nomic recovery may not be as ro-bust as previously thought. Trad-ers remained wary of a sudden liqui-dation of speculative long positions in U.S. gold futures even after such positions eased slightly from record highs in the week ended Sept. 29, putting a cap on prices.

U.S. gold futures for December delivery were barely changed at $1,004.8 per ounce, compared with $1,004.3 an ounce on the COMEX. The December contract had hit the day's low of $987 an ounce on Friday.

At the same time, physical demand emerged at the market's lows last week to underpin prices. The market appeared more resilient than in March 2008 when it failed to sustain gains after scaling record highs, taking nearly a year to retest the $1,000 level, traders said. But an


Base Metals

Energy

Copper fell to the lowest price

in two months after a report

showed U.S. job losses acceler-

ated in September, signaling

slowing growth and contracting

demand for the metal used in

pipes and wires.

Employers cut 263,000 posi-

tions last month. Losses were

forecast at 175,000. The jobless

rate climbed to 9.8%, the high-

est level since 1983. Copper

slid to a fifth weekly loss, the

longest slump in more than a

year, on signs that the global

recovery is stalling.

The economic data is showing

a situation that is clearly not

supportive for copper. In the

fourth quarter, copper generally

continues to fall and the start

of the quarter supports the

previous trend as prices con-

tinue to fall.

Prices also fell as inventory

levels spurred concern that

demand may be diminishing.

The U.S. Dollar Index, a six-

currency gauge of the green-

back’s performance, pared an

earlier drop of as much as

0.7% to close in on a second

weekly advance. A rise would

make the metal more expen-

sive for holders of other cur-

rencies.

Copper stockpiles in ware-

houses monitored by the

LME posted a 12th weekly

increase, swelling 34% since

July 14. Consumption levels

are at low ebb, as everything is

pretty much slower, but this

was masked by the weakness

of the dollar throughout the

summer. We are not seeing

the appropriate pickup in ei-

ther restocking or actual de-

mand. Stocks are all going up,

and it gives you the story that

the markets are still oversup-

plied.

In China, markets were closed

for a holiday and won’t reopen

until Oct. 8. With the absence

of China, it is not surprising

that people don’t want to play,

and a lot of the bigger players

are sidelined. The metals are

under pressure and are testing

recent lows again.

With the absence of

China, it is not surprising

that people don’t want to

play, and a lot of the

bigger players are

sidelined.


Oil was little changed at just below $70 on Monday, pausing from the previous session's losses, as concerns about a halting U.S. economic recovery and sluggish energy demand continued to cast a pall on crude prices.

Oil prices fell more than 1% on Friday as doubts over an eco-nomic recovery resurfaced after data showed the U.S. unem-ployment rate had soared to a 26-year high.

U.S. employers cut a deeper-than-expected 263,000 jobs in September, lifting the unem-ployment rate to 9.8%, the highest since June 1983. The Labor Department said pay-rolls had now dropped for 21 consecutive months.

The U.S. service sector is thought to have been on the verge of growth in September after 11 months of contrac-tion, according to a Reuters' poll of economists.

The U.S. dollar index fell 0.28% against a basket of cur-rencies to 76.79 points on Monday, amid expectations that U.S. interest rates will stay near zero for some time.

With a thin economic calendar in the United States, the oil price is likely to take its cue from equities markets, leading caution that it could hit more speed bumps this week if the start of the third-quarter earn-ings season provides little evidence the economic recov-ery is gaining strength. Oil

gained nearly 6% last week, largely bolstered by a U.S. gov-ernment report mid-week show-ing a surprise drop in gasoline inventories as well as tensions between key oil exporter Iran and the West over Tehran's nu-clear programme.

However, crude prices are likely to lose some support from geo-political tensions, after Iran and the U.S. described recent talks as productive, with Iran allowing inspectors from United Nations into a uranium enrichment plant. The amount of crude oil held at sea on tankers is likely to fall as consumption grows in the fourth quarter, the chief execu-tive of the world's biggest inde-pendent oil tanker group Front-line said on Friday. Expect a range bound trade for the day.



Palm Oil & Mustard / RM Seed Following soybean trend palmoil

prices traded on a weaker note

during Saturday’s trading ses-

sion.

Palm oil fell for the first time in

four days amid concern global

supplies of vegetable oils will

increase, helped by a record crop

of rival soybean.

Palm oil for December delivery

in Malaysia, the second- biggest

producer, fell 3.7 percent to

2,037 ringgit ($585) a metric ton

Soy Bean

3.245 billion bushels for soy-

beans and 12.954 billion bushels

for corn. The highest corn pro-

duction recorded in the U.S. was

13.038 billion bushels in 2007.

Soybean prices tumbled in Sep-

tember in the Brazilian and inter-

national markets over the last

days, reaching the lowest level of

the year.

From September 24 to October

1º, the CEPEA/ESALQ Index

for the product delivered at

Paranaguá port dropped 1.24

percent, closing at 43.72 reais or

24.45 dollars per bag

Taking cues from the same even

the prices on domestic comexes

traded weak during Saturday’s

session.

Soybean futures traded on a

weaker note during Saturday’s

trading session. This was on the

back of profit booking and

weak cues from international

markets..

Soybeans fell to the lowest

since March on speculation the

U.S., the world’s largest grower

and exporter of both crops, will

produce record harvests this

year after warm weather

boosted yields.

Soybeans for November deliv-

ery fell as much as 0.6 percent

to $8.795 a bushel, the lowest

for the most-active contract

since March 16. The contract

was at $8.8325 a bushel in after-

hours electronic trading on the

Chicago Board of Trade.

The USDA last month forecast

record soybean production of

on the Malaysia Derivatives

Exchange. It lost 6.8 percent

this week, the worst weekly

performance in four weeks.

Malaysia’s palm oil output in

August reached 1.49 million

tons, the highest since a record

set in November last year, the

Malaysian Palm Oil Board said.

That helped lift stockpiles to a

six-month high of 1.42 million

tons as exports fell. The sea-

sonal peaking of palm oil pro-

duction comes at a time when

U.S. soybean production is

forecast to reach a record.

For that reason weaker trend

was witnessed in CPO prices.

Taking cues from soy & palm

even mustard seed traded on a

mix note and concern over

good carry over stocks for the

coming rabi season.


Pepper

Chilli & Turmeric

Jeera (Cumin)

Pepper futures market traded on a lackluster note during Saturday’s trading session.

There was no selling pressure on spot. Exporters were seen trying to cover from the ex-change and validity-expired stocks.

Spot prices on buying support and in tandem with the futures market trend increased by Rs 200 a quintal to close at Rs 14,100 (un-garbled) and Rs 14,600 (MG 1).Meanwhile, experts predicted that for get-ting orders from overseas, the

Indian prices need to soften.

But, according to the trade, In-dian parity in the international market is very competitive at $3,150 a tonne (c&f). Indonesia had quoted $3,150 a tonne, while Vietnam was offering at $3,100-3,150 a tonne(c&f).

Brazil has quoted $2,900-2,950 a tonne (fob) and a difference of $150 a tonne over Brazil is ac-ceptable in the world market. The only problem faced now by the exporters is the uncertainty in the prices because of the high volatil-ity in the futures market, where

only the material is available.

Local prices for Malaysia stood at 9000MR from 8800MR previ-ously.

Chilli prices traded on a posi-tive note during Saturday’s trading session. Market opened on a steady note with some downside but after which prices recovered and closed in positive trajectory.

This was nothing to do with physical buying activity but was primarily influenced by rains which has played havoc in Guntur region.

Going further markets will be supported as flooding has been reported in Guntur region which is the major chilli pro-ducing belt.

Turmeric futures slumped dur-ing Saturday’s trading session on the back of lackluster activ-ity in the physical market and profit booking in futures mar-kets.

The country's peak festival sea-son runs from August to Octo-ber, when demand for spices usually goes up. But at present activity in the physical market is reported to be lackluster on the back of higher prices.

Even though as of now stocks are inadequate as output fell sharply last year due to lower acreage.

“Spices counter trades

on a mix note on the

back of weak demand

and short covering”


Furthermore, futures market witness profit booking after good gains during previous session.

Jeera futures traded on a mix note during Saturday’s trading session. Market opened on a steady note but later recovered to close in positive trajectory.

Spot market reported arrival of about 3000bags whereas de-mand was reported to be at 4000-5000bags. And for that reason prices traded upbeat in spot front.

Overall on the back of coming festivity domestic demand would support the prices along with the same export parity of India is trading lower compared to other origins, and even this would support the prices.


Monsoon - Update

11th Floor, Times Tower,

Kamala Mill Compound, Pandurang Budhkar Marg,

Lower Parel, Mumbai - 400016

We’re on the Web

Www.rathi.com

Commodities of this issuer(s) or

in related investments, and may

be on the opposite side of public

orders. AnandRathi Commodi-

ties, its affiliates, directors, offi-

cers, and employees may have a

long or short position in any

Commodities of this issuer(s) or

in related investment banking or

other business from, any entity

mentioned in this report. This

research report is prepared for

private circulation. It does not

have regard to the specific in-

vestment objectives, financial

situation and the particular needs

of any specific person who may

receive this report. Investors

should seek financial situation

and the particular needs of any

DISCLAIMER: This report has

been issued by AnandRathi

Commodities Ltd., (A Part of

Anand Rathi Group) which is

regulated with FMC, India. The

information herein was obtained

from various sources; we do not

guarantee its accuracy or com-

pleteness. Neither the informa-

tion nor any opinion expressed

constitutes an offer, or an invita-

tion to make an offer, to buy or

sell any Commodities or any

options, future or other deriva-

tives related to such Commodi-

ties (“related investment”). An-

andRathi Commodities and its

affiliated may trade for their own

accounts as market maker/ job-

ber and /or arbitrageur in any

specific investing in any Com-

modities or investment strategies

discussed or recommended in

this report and should under-

stand that statements regarding

future prospects may not be

realized. Investors should note

that income from such Com-

modities, if any, may fluctuate

and that each commodity’s price

or value may rise or fall. Past

performance is not necessarily a

guide to future performance.

Foreign currency rates of ex-

change may adversely affect the

value, price or income of any

Commodity or related invest-

ment mentioned in this report.

Disclaimer

Phone: 91-22-6626 6460

Fax: 91-22-6626 6464

E-mail: [email protected]

Daily · Daily Fundamental Monday, October 05, 2009 Market at a Glance Monsoon Watch Top Gainers...

Documents

Transcript of Daily · Daily Fundamental Monday, October 05, 2009 Market at a Glance Monsoon Watch Top Gainers...