Posts Tagged ‘commodities trading’

Commodity Weekly Commentary 2nd – 6th August

Bullion counter hammered down last week as prices fell like nine pins after investors wind up their long positions in gold and silver. Gold slid nearly $100.0 from the historic record highs, recorded June 21 at $1265.30 an ounce, affected by traders reducing their stakes and investments in the SPDR Gold Trust, the world’s largest exchange-trade fund.

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The absence of fundamentals from Europe, led traders to turn to the US for signs of global recovery, but the disappointment came from US durable goods report which slumped in the month of June by 1.0 percent, compared with a revised -0.8%. Base metal pack extended their previous week gains as global inventory draw down and gains in the euro boosted the metals despite a surprise decline in U.S. orders for long-lasting
goods.

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Western world unwrought aluminium stocks fell to 1.192 million tonnes in June from a revised 1.306 million tonnes in May, industry data showed. Moreover, gains in equity market also supported the prices as investors anticipate robust demand in near future. In energy counter crude oil prices wiped out its previous week gains and just fell from the level of $80 after the U.S Energy department reported a surge in inventories in the US. However, crude oil prices managed tom conquer some part of the lost territory mainly on the back of the softer US dollar index.

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However, natural gas futures ended higher last week, backed by firmer cash prices and a government report
showing another light weekly inventory build despite ongoing concerns about too much supply.

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As regards agro commodity, the week gone by majorly known for profit booking at higher levels in many commodities. Traders preferred profit booking in most of the spices as they became overbought in the market. Cardamom futures caught the attention of traders as they traded in lower circuits throughout the week, supported by weak spot market.

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After trading in positive territory for many weeks, finally jeera, turmeric and pepper saw pause in the rally as stockiest released some stocks at higher levels. Good monsoon and improved sowing in producing area dragged down guar counter in both spot and future market.

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What surprised the market was the upside move oil seeds. R M seed, refined soya oil and crude palm oil witnessed nonstop four week rally on confident move in CBOT amid fall in dollar index.

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Maize futures ignored the positive sentiments of CBOT and moved down on profit booking. Additionally, soyabean saw good short covering. Good export demand supported mentha futures to recover from its week low. Weak sentiments in spot market continuously hammered the potato futures.

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Area Sowing of Rabi Crops Crosses Last year Level

Hello Friends here we come up with the Latest Agri Commodities updates from various parts of the country.

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Area sown under Rabi wheat picks up

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Area sown under Rabi wheat picks up

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Sowing of Rabi wheat, rice, coarse cereals and pulses has crossed last year’s level but there is a decline of about 6.2 per cent in the acreage of oilseeds.

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The shortfall in oilseed is mainly due to the decline in acreage of mustard in Rajasthan on account of poor weather conditions.

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A crop and weather watch group coordinated by the Ministry of Agriculture reviewed the situation on Friday.

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It was informed that as against a coverage of 88.85 lakh hectares in oilseeds last year, so far 83.33 lakh hectares had been sown this year.

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The shortfall was in mustard, groundnut, safflower, and Seamus sowing.


The area under pulses, however, increased to 125.60 lakh hectares this rabi, against 120.84 lakh hectares in the corresponding period last year.

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The highest area coverage was in Madhya Pradesh, followed by Uttar Pradesh and Karnataka.

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In the case of wheat, the area sown so far is 260.71 lakh hectares compared to 255.62 lakh hectares last year.

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Sowing in Uttar Pradesh was delayed owing to a late harvest of the kharif sugarcane crop.

The area under coarse cereals stood at 326.20 lakh hectares as against 324.04 lakh hectares in the corresponding period last year.

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Rabi rice was sown in 4.55 lakh hectares against 3.61 lakh hectares last year.

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In Other major Commodities Updates there is news of government allowing import of refined sugar at zero duty up to December 31 this year.

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Govt allows duty free sugar imports till Dec end

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The government allowed import of refined sugar at zero duty up to December 31 this year in the wake of sweetener prices nearing Rs 50 a kg in the retail market.

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The Cabinet Committee on Prices (CCP) also decided to permit UP mills to process imported raw sugar outside the state due to restrictions there.

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Import of white sugar was allowed till March 31 this year earlier.

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Cardamom exports may touch 1.5k tonne mark

Hello Friends here we come up with the Latest Agri Commodities updates from various parts of the country.

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Cardamom exports may touch 1.5k tonne mark

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Cardamom exports may touch 1.5k tonne mark

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With exports racing towards  a new high and the domestic demand  remaining strong, the average cardamom prices have surpassed the Rs. 1,000 per kg mark for the first time.

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The cardamom exports  for November 2009 stood at 275 tonne, taking the total exports in the april November period to 895 tonne compared with 370 tonnes  in the same period of the previous year.

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In 2008-09, the cardamom export was 750 tonne.

With another four months to go  the growers and traders feel the export could register a new record this year.  That is something in the range of 1,500 tonne.

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The harvest period is over and the growers are releasing  their stock to take advantage of the high price.

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The upcountry buyers  are continuing their  purchase fearing a scarcity of the spice  in February as the existing stock with the growers could be exhausted.

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The growers are expecting the prices to move further to 1200 per kg in the coming weeks with arrivals thining.

A lower production in the current year has also aided the rise in prices.

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In Other major Commodities Updates, we have info on the ATMA recommendations to the Govt to suspend the tradings of rubber futures.

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Suspend rubber futures – ATMA :

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Unusual volatility in natural rubber prices, despite peak production season and record imports, smacked of speculative  manipulation in the commodity.

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This view has been put forth by the association of automotive tyres manufacturers  association (ATMA).

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ATMA has therefore, called for a suspension of futures trading in rubber in the wake of the  unusual volatility in natural rubber prices.

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“As immediate and direct fallout of heavy speculative activity in natural rubber futures trading, the physical market for rubber is being unduly affected”.

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R Singhania, chairman of the ATMA has said so in a note sent to commerce and industry minister Anand Sharma and agriculture minister Sharad pawar.

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Political will needed to contain pulse price rise

Hello Friends here we come up with the Latest Agri Commodities updates from various parts of the country.

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political will needed to contain pulse price rise

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Political will needed to contain pulse price rise –

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As part of measures to curb price rise, the planning commission has mooted the idea of encouraging formation of pulses grower’s federation which will trade on commodity future exchanges.

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The commission seems to believe such a trading plan will rein in price rise.

Stagnant acreage, low yields  and unsteady output have characterized pulse production for over two decades.

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On the other hand, demand for pulses has been rising steadily because of rising incomes and demographic pressure.

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In Other major Commodities Updates, we can read that palm oil climbed to the highest in more than seven months.

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Palm oil extends 2009 rally on crude oil rise –

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Palm oil climbed to the highest in more than seven months, extending the best annual gain in 12 years, as gains in crude oil prices increased its appeal as a substitute used in biofuels.

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Palm oil rallied 56 percent last year on rising demand from India and China, the top consumers, and amid tight supplies of soyabean oil because of drought in south America.

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Oil surged 78 percent in 2009, the biggest annual advance in a decade, and soyabean oil rose 21 percent.

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March delivery palm oil  gained as much as 1.2 percent to 2,696 ($788) a metric ton on the Malaysia derivatives exchange, highest since may 15 in intra day trading.

It traded at 2,690 ringgit at 5:13 local time.

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Industry expects 44% rise in sugar output next season

Hello Friends here we come up with the Latest Agri Commodities updates from various parts of the globe.

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Industry expects 44% rise in sugar output next season

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Industry expects 44% rise in sugar output next season:

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India’s sugar output is expected to rise by 44% to 23 million tonne in the crop year that starts from October 2010, an industry official said, as higher prices are likely to support cane cultivation.

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The output in 2010-11 would be substantially higher than an expected 16 million tonne during 2009-10, Vinay Kumar, managing director of the National Cooperative Federation of Sugar Factories Ltd, told.

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Bumper planting is going on in Uttar Pradesh because of higher prices.

Producers are raising price of cane every week, Kumar said.

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In Other major Commodities Updates we can read that Corn, Soybeans are expected to rise with the rise in crudeoil prices and decline in dollar value.

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Corn, Soybeans May Advance as Crude Oil Rises, Dollar Declines

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Corn, soybeans and wheat were little changed and may climb on speculation that the dollar’s decline and rising crude oil may increase demand for the crops used for food, animal feed and alternative fuel.

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Corn for March delivery fell 0.1 percent to $4.0425 a bushel in electronic trading on the Chicago Board of Trade at 10:51 a.m. in Tokyo after gaining 1.5 percent yesterday, the biggest gain since Dec. 11.

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Before today, the contract fell 3.1 percent this month, the first drop in four months. March-delivery soybeans climbed 0.3 percent to $10.12 a bushel.

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The contract rose 1.1 percent yesterday after the Department of Agriculture said U.S. exporters sold a total of 367,000 metric tons in transactions with Italy, China and buyers that weren’t identified.

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Cumulative U.S. sales from Sept. 1 to Dec. 10 are up 53 percent to 29.554 million tons.

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Seasonal Index – “Time is Money” Final Part

Hello Friends here we come up with an extension of our previous blog, “Seasonal Index……“Time is Money” Part 2

In previous Blog, we had touched upon the aspect like analysis part of seasonal patterns in predicting the future prices of the commodity.

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Seasonal Index - “Time is Money” Final Part

In this Blog, we would read about that how an annual average method can be used to generate a seasonal pattern in predicting the future prices of the commodity and seasonal pattern in the year 2009.

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Annual Average Method

The annual average method can be used to generate a seasonal pattern as well as predicting the future prices of the commodity.

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This seasonal price index is derived by calculating the annual average price, and then by expressing the price for each month during the year as a percent of the annual average.

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Here, the data which is used to derive the seasonal price patterns are the monthly prices taken between the year April’2004 & November’2009.

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The monthly indexes over the years are averaged to derive a price index that represents those years.

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An example of the technique is presented in Table 1.

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The seasonal price index table suggests that the index increases from the month of June, the time the buyers enter the market with full potential & reaches the highest till the end of the year.

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In The Year 2009

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The prices movement of this year almost followed the seasonal pattern, except few months.

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The supply constraints of lower output, as farmers opted for cotton, worked as a high base effect for the futures with a flat production figure of 8.5 lakh tonnes in 2008-09.

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The recovery in prices was noticed owing to the unforeseen failure of monsoons & comfortable stocks of 25-30 lakh bags from last year for which guar prices traded higher all through-out the year.

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This commodity created a history as it made a life time high, since the date of launch at national bourse, on reports that the output is estimated at 30-35 lakh quintals, down 62% due to factors like scanty rains in the major growing areas.

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Stronger Rupee along-with volatile Crude oil prices brought some corrections in export earnings from Guargum markets in Europe/US.

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However, upcoming demand for by-products such as churi & korma from international markets kept the millers interested in processing guar.

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In a nutshell, if investors want to spin their money safely & stabilize their net returns, using seasonal Index can prove to be a fair advantage.

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Futures Trading in Rice, Sugar and Pulses Should be Banned

Hello Friends here we come up with the Latest Agri Commodities updates from various parts of the country.

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'Futures trading in rice, sugar and pulses should be banned'

‘Futures trading in rice, sugar and pulses should be banned’:

A parliamentary panel today suggested that futures trading should be banned in case of wheat, rice, sugar and some pulses till the country becomes self sufficient in these food items.


The Estimates Committee asked the government to bring a new legislation to control the retail prices of essential commodities like rice,wheat, pulses, edible oils, sugar, milk and vegetables.


On futures trading, the report said: “Since food security of the country is at the stake, the Committee recommends that futures trading in wheat, rice, tur dal, urad dal and sugar should be banned till the country achieves self-sufficiency in the production of these items on a continuous basis”.


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In Other major Commodities Updates we can see exports of Spice declining and on the other hand price of pulses rising up 80% in a year time.

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Spice exports decline 1.3% in April-October:

Exports of spices fell 1.3 per cent in volume and 1.6 per cent in value during the April-October period of the current financial year.


According to the latest estimates of Spices Board, total exports in the period were 280,885 tonnes valued at Rs 3,031.59 crore against 284,560 tonnes valued at 3,080.25 crore in the same period last year.


Pepper exports suffered a serious setback as the figures dropped to 11,500 tonnes valued at Rs 179.16 crore as against 14,750 tonnes valued at Rs 246. 70 crore in the same period last year.


Export of chilli also declined to 100,500 tonnes valued at Rs 706.50 crore as against 121,500 tonnes valued at Rs 660.17 crore.


Coriander exports had a better performance at 25,250 tonnes valued at Rs 128.12 crore against 17,100 tonnes valued at Rs 116.80 crore.

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Pulse prices rise up to 80 per cent in one year:

The government today said prices of pulses have surged by up to 80 per cent in the national capital over the last one year.


While prices of tur have gone up by 80 per cent in the last one year to Rs 90 a kg, that of moong dal surged 74 per cent to Rs 82, according to the data presented by Food and Agriculture Minister Sharad Pawar in a written reply to the Lok Sabha.


Even import of about 16 lakh tonnes of pulses between April and October has not eased pressure on the prices, the data showed.

Not just pulses, prices of sugar have almost doubled to Rs 38 a kg.

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