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Published on 2/06/2020 10:51:10 AM | Source: Kedia Advisory

Copper trading range for the day is 413.9-427.1 - Kedia Advisory

Posted in Commodities Reports| #Commodity Tips #Kedia Advisory

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Gold

Gold yesterday settled up by 0.07% at 47138 as riots in major U.S. cities rattled investors already reeling from strained Sino-U.S. relations and boosted demand for the safe-haven metal, with a weaker dollar lending further support. China's state media and the government of Hong Kong lashed out at U.S. President Donald Trump's pledge to end Hong Kong's special status if Beijing imposes new national security laws on the city. Much of the dollar's recent decline has come against the euro which has been broadly boosted by plans for an EU stimulus package. Markets are awaiting a meeting of the European Central Bank on Thursday where it is widely expected to raise its asset buying by around 500 billion euros to 1.25 trillion. The number of Americans seeking jobless benefits fell for an eighth straight week last week, likely as some people returned to work, but claims remained at astonishingly high levels, suggesting it could take the economy a while to rebound as businesses reopen. Indicative of sentiment, holdings of SPDR Gold Trust , the world's largest gold-backed exchange-traded fund, rose 0.3% to 1,123.14 tonnes on Friday, a fresh seven-year high. Speculators cut their bullish positions in COMEX gold and increased them in silver contracts in the week to May 26, the U.S. Commodity Futures Trading Commission said. Technically market is under fresh buying as market has witnessed gain in open interest by 0.43% to settled at 15345 while prices up 34 rupees, now Gold is getting support at 46870 and below same could see a test of 46601 levels, and resistance is now likely to be seen at 47353, a move above could see prices testing 47567.


Trading Ideas:
* Gold trading range for the day is 46601-47567.
* Gold prices rose as riots in major U.S. cities rattled investors already reeling from strained Sino-U.S. relations and boosted demand.
* Markets are awaiting a meeting of ECB where it is widely expected to raise its asset buying by around 500 billion euros to 1.25 trillion.
* SPDR Gold Trust holdings hit 7-year peak

 

Silver

Silver yesterday settled up by 0.98% at 50611 after violent clashes erupted in major U.S. cities and outside the White House between law enforcement and protesters taking to the streets. The riots in major U.S. cities rattled investors already reeling from the deepening Sino-U.S. rift over Hong Kong. There are also concerns about a resurgence of the coronavirus as a result of the protests. Meanwhile, Beijing has warned Washington of retaliation after U.S. President Donald Trump announced that the United States would ban some Chinese graduate students and start reversing Hong Kong's special status in customs and other areas. On the data front, there is some cheer as a private survey showed that China's manufacturing sector moved into expansion territory in May. The downturn in the euro area manufacturing sector eased noticeably in May as companies restarted work, final data from IHS Markit showed. In economic news, revised data released by the University of Michigan showed consumer sentiment in the U.S. improved by slightly less initially estimated in the month of May. The report showed the consumer sentiment index for May was downwardly revised to 72.3 from the preliminary reading of 73.7. A report released by MNI Indicators showed its Chicago business barometer dropped to 32.3 in May from 35.4 in April, with a reading below 50 indicating a contraction in regional business activity. Technically market is under fresh buying as market has witnessed gain in open interest by 9.75% to settled at 12993 while prices up 493 rupees, now Silver is getting support at 49895 and below same could see a test of 49179 levels, and resistance is now likely to be seen at 51196, a move above could see prices testing 51781.

 

Trading Ideas:

* Silver trading range for the day is 49179-51781.
* Silver gained after violent clashes erupted in major U.S. cities and outside the White House between law enforcement and protesters taking to the streets.
* The Sino-U.S. rift deepened after China's parliament approved the controversial security law on Hong Kong
* There is some cheer as a private survey showed that China's manufacturing sector moved into expansion territory in May.

 

Crude oil

Crude oil yesterday settled up by 4.1% at 2669 on reports Russia had no objection to the next meeting of OPEC and its allies being brought forward to June 4 from the following week. OPEC oil output hit the lowest in two decades in May as Saudi Arabia and other members started to deliver a record supply cut, a survey found, although Nigeria and Iraq are laggards in making their share of the reduction. On average, the 13-member Organization of the Petroleum Exporting Countries pumped 24.77 million barrels per day (bpd) this month, the survey found, down 5.91 million bpd from April's revised figure. OPEC and its allies last month agreed to an output cut to offset a slump in demand and prices caused by the coronavirus crisis. An easing of government lockdowns and lower supply have helped oil prices more than double compared with a 21-year low below $16 a barrel in April. OPEC and its allies, known as OPEC+, agreed to cut supply by a record 9.7 million bpd from May 1. OPEC's share, to be made by 10 members from their October 2018 output in most cases, is 6.084 million bpd. Algeria, which currently holds the presidency of the Organization of the Petroleum Exporting Countries (OPEC), has proposed the meeting planned for June 9-10 be brought forward to facilitate oil sales for countries such as Saudi Arabia, Iraq and Kuwait. Technically market is under short covering as market has witnessed drop in open interest by -11.69% to settled at 2341 while prices up 105 rupees, now Crude oil is getting support at 2610 and below same could see a test of 2550 levels, and resistance is now likely to be seen at 2715, a move above could see prices testing 2760.

Trading Ideas:

* Crude oil trading range for the day is 2550-2760.
* Crude oil prices gained on reports Russia had no objection to the next meeting of OPEC and its allies being brought forward to June 4 from the following week.
* OPEC oil output hit the lowest in two decades in May as Saudi Arabia and other members started to deliver a record supply cut.
* OPEC and its allies last month agreed to an output cut to offset a slump in demand and prices caused by the coronavirus crisis.

 

Natural gas

Nat.Gas yesterday settled up by 1.32% at 137.7 amid forecasts for warmer weather and higher air conditioning demand over the next two weeks than previously expected. However upside seen limited as liquefied natural gas (LNG) exports continue to drop on record low gas prices in Europe and Asia. Data provider Refinitiv said gas output in the U.S. Lower 48 states was on track to fall to 87.6 billion cubic feet per day (bcfd) on the first day of June, down from a one-year low of 89.3 bcfd in May and an all-time monthly high of 95.4 bcfd in November. U.S. natural gas storage is expected to end the April-October injection season at a record 4.040 trillion cubic feet (tcf) around Oct. 31 as the coronavirus cuts demand before producers have a chance to reduce output. That compares with 3.762 tcf at the end of the injection season in 2019, the highest since 2017, and a five-year (2015-2019) average of 3.754 tcf. In 2017, there was 3.816 tcf of gas in storage on Oct. 31. The current all-time high on Oct. 31 is 4.013 tcf in 2016. U.S. natural gas prices at the Henry Hub benchmark in Louisiana in 2020 were expected to drop to their lowest since 1998 as near record production and ample storage reduce market worries about future price spikes and supply shortages. Technically market is under fresh buying as market has witnessed gain in open interest by 15.06% to settled at 8795 while prices up 1.8 rupees, now Natural gas is getting support at 134.1 and below same could see a test of 130.4 levels, and resistance is now likely to be seen at 139.9, a move above could see prices testing 142.

Trading Ideas:

* Natural gas trading range for the day is 130.4-142.
* Natural gas prices gained amid forecasts for warmer weather and higher air conditioning demand over the next two weeks than previously expected.
* However upside seen limited as liquefied natural gas (LNG)  exports continue to drop on record low gas prices in Europe and Asia.
* U.S. natural gas storage is expected to end the April-October injection season at a record 4.040 tcf around Oct. 31

 

Copper

Copper yesterday settled up by 1.49% at 422.4 on solid manufacturing data from China and a milder-than-expected response by the U.S. President Donald Trump on China's security legislation for Hong Kong. Trump ordered the process of eliminating special U.S. treatment for Hong Kong but did not undermine the U.S.-China Phase 1 trade deal. Markets had feared any tariff row would further deteriorate the global economy and metals demand. Meanwhile, a private business survey showed China's factory activity unexpectedly returned to growth in May, while a similar survey for bigger Chinese firms showed more activity in the services and construction sectors. However, both surveys showed export orders shrank, dampening outlook for metals consumption in manufacturing. Chile produced 474,880 tonnes copper in April, up 2.8% year on year, despite restrictions to tame the coronavirus outbreak. China's factory activity grew at a slower pace in May but momentum in the services and construction sectors quickened. China is importing at least two cargoes of copper concentrate from the United States after Beijing allowed Chinese companies to seek trade-war tariff waivers on the material. The United States was China's eighth-biggest copper concentrate supplier in 2017, sending almost 433,000 tonnes, but trade virtually dried up after Beijing imposed a 10% tariff on U.S. shipments from September 2018 and later raised it to 25%. Technically market is under fresh buying as market has witnessed gain in open interest by 16.28% to settled at 3071 while prices up 6.2 rupees, now Copper is getting support at 418.2 and below same could see a test of 413.9 levels, and resistance is now likely to be seen at 424.8, a move above could see prices testing 427.1.

 

Trading Ideas:

* Copper trading range for the day is 413.9-427.1.
* Copper prices rose on solid manufacturing data from China and a milder-than-expected response by the President Trump on China's security legislation
* Chile produced 474,880 tonnes copper in April, up 2.8% year on year, despite restrictions to tame the coronavirus outbreak.
* China's factory activity grew at a slower pace in May but momentum in the services and construction sectors quickened.

 

Zinc

Zinc yesterday settled up by 1.38% at 161.2 as official data showed China’s factory activity expanded in May. China’s National Bureau of Statistics reported that its Purchasing Manager's Index (PMI) for the country’s manufacturing sector eased to 50.6 in May from 50.8 in April, but held above the 50-point mark that separates expansion from contraction on a monthly basis. No signals of changes to the trade deal with China from US President Donald Trump during a much-awaited news conference Friday also supported investor sentiment. Trump said he would take action to eliminate special treatment towards Hong Kong. However, he did not indicate the US would pull out of the phase one trade agreement reached with China earlier this year. China had approved a national security bill that would increase the mainland’s power over the city. Tensions between Washington and Beijing have risen lately, with trade, the coronavirus pandemic and now Hong Kong a focus in the dispute. The US dollar extended its slide due to month-end flows and investors continued to cheer the European Union’s recently announced plan to prop up the bloc’s coronavirus-hit economies with a 750 billion-euro ($828 billion) recovery fund and global economies gradually moving to reopen after coronavirus-linked shutdowns. Inventories of zinc ingot across Shanghai-bonded areas fell for a sixth straight week this week, decreasing 8,800 mt from a week earlier to 46,000 mt as of Friday May 29, showed data. Technically market is under fresh buying as market has witnessed gain in open interest by 5.79% to settled at 1917 while prices up 2.2 rupees, now Zinc is getting support at 158.4 and below same could see a test of 155.5 levels, and resistance is now likely to be seen at 163, a move above could see prices testing 164.7.

 

Trading Ideas:

* Zinc trading range for the day is 155.5-164.7.
* Zinc prices gained as official data showed China’s factory activity expanded in May.
* China’s National Bureau of Statistics reported that its PMI for the country’s manufacturing sector eased to 50.6 in May from 50.8 in April
* Inventories of zinc ingot across Shanghai-bonded areas fell for a sixth straight week this week, decreasing 8,800 mt from a week earlier.

 

Nickel

Nickel yesterday settled up by 1.24% at 952.1 as no signals of changes to the trade deal with China from US President Donald Trump during a much-awaited news conference supported investor sentiment. Trump said he would take action to eliminate special treatment towards Hong Kong. However, he did not indicate the US would pull out of the phase one trade agreement reached with China earlier this year. Nickel ore inventories across all Chinese ports continued to fall this week, decreasing 300,000 wmt from a week earlier to 7.85 million wmt as of Friday May 29, showed SMM data. This came after a decline of 100,000 wmt in the prior week. Data showed that China’s factory activity grew at a slower pace in May but momentum in the services and construction sectors quickened. The official manufacturing Purchasing Manager's Index (PMI) eased to 50.6 in May from 50.8 in April, China’s National Bureau of Statistics data showed, but held above the 50-point mark that separates expansion from contraction on a monthly basis. The official non-manufacturing PMI rose to 53.6 in May, from 53.2 in April, suggesting the sector's business and consumer confidence may slowly be improving. Tensions between Washington and Beijing have risen lately, with trade, the coronavirus pandemic and now Hong Kong a focus in the dispute. Technically market is under fresh buying as market has witnessed gain in open interest by 21.01% to settled at 1169 while prices up 11.7 rupees, now Nickel is getting support at 942 and below same could see a test of 931.8 levels, and resistance is now likely to be seen at 959.6, a move above could see prices testing 967.

 

Trading Ideas:

* Nickel trading range for the day is 931.8-967.
* Nickel gained as no signals of changes to the trade deal with China from US President Donald Trump supported investor sentiment.
* Trump did not indicate the US would pull out of the phase one trade agreement reached with China earlier this year.
* Nickel ore inventories across all Chinese ports continued to fall this week, decreasing 300,000 wmt from a week earlier

 

Aluminium

Aluminium yesterday settled up by 0.3% at 132.1 underpinned by a solid recovery in demand from top consumer China. SHFE aluminium inventories were at their lowest since Feb. 7 as of the end of last week, the latest exchange data showed. However, stocks in LME-registered warehouse have climbed more than 50% to more than 1.49 million tonnes over the same period. The premium for the cash contract over three-month tin is at an elevated $188 a tonne, indicating concern over nearby supplies on the LME market. Low LME stocks and large holdings of warrants and cash contracts are behind those worries. China's imports of aluminium are about to hit their highest in a decade as an arbitrage opportunity created by demand recovery after its coronavirus outbreak makes it cheaper to buy metal from outside the country. China, the world's top producer of the metal used in everything from cars to cans, normally has little need to import primary aluminium, made from alumina rather than scrap. Imports for all of 2019 totalled just over 75,000 tonnes versus output of 35 million tonnes. This year, though, as demand in the rest of the world collapses and metals consumption in China recovers from coronavirus-induced shock, its aluminium imports are set to top 100,000 tonnes in May alone. Technically market is under fresh buying as market has witnessed gain in open interest by 12.31% to settled at 894 while prices up 0.4 rupees, now Aluminium is getting support at 131.6 and below same could see a test of 130.9 levels, and resistance is now likely to be seen at 132.6, a move above could see prices testing 132.9.

 

Trading Ideas:

* Aluminium trading range for the day is 130.9-132.9.
* Aluminium prices gained underpinned by a solid recovery in demand from top consumer China.
* SHFE aluminium inventories were at their lowest since Feb. 7 as of the end of last week, the latest exchange data showed.
* China's imports of aluminium are about to hit their highest in a decade as an arbitrage opportunity created by demand recovery.

 

Mentha oil

Mentha oil yesterday settled down by -0.18% at 1067.2 as production this year is up nearly by 40% compare with last year, seen at a record high of 52,000-56,000 tn this year. There were expectations of higher area under cultivation for crop year 2020-21. After a week's delay due to heavy rainfall, oil from new mentha crop has started arriving at the key wholesale market of Barabanki in Uttar Pradesh, traders said. So far, arrivals of the spice oil are at 5-10 drums. New mint crop is being harvested in Bareilly, Sitapur and Konch districts. Demand is there for new mentha crop but it will take some time for bulk arrivals to hit markets. New arrivals are likely to pick up during the first week of June. In the first week of June, arrivals are likely to touch 100 drums per day. During the peak arrival season after mid-June, 400-500 drums will collectively arrive daily in the markets of Chandausi, Sambhal and Barabanki in Uttar Pradesh. Prices of the spice oil are also likely to remain on the downside as production is seen at a record high of 55,000-60,000 tn this year, up nearly 50%. The yield of mentha is expected to be high this time too, due to this, traders are not taking fresh positions in mentha. Technically market is under fresh selling as market has witnessed gain in open interest by 16.22% to settled at 43 while prices down -1.9 rupees, now Mentha oil is getting support at 1057.9 and below same could see a test of 1048.7 levels, and resistance is now likely to be seen at 1075.4, a move above could see prices testing 1083.7.

 

Trading Ideas:

* Mentha oil trading range for the day is 1048.7-1083.7.
* Mentha oil spot at Sambhal closed below 1200 level as demand concerns
* Mentha oil dropped as production this year is up nearly by 40% compare with last year, seen at a record high of 52,000-56,000 tn this year.
* There were expectations of higher area under cultivation for crop year 2020-21.
* The yield of mentha is expected to be high this time too, due to this, traders are not taking fresh positions in mentha.

 

Soyabean

Soyabean yesterday settled up by 0.68% at 3846 as support seen on news of countries beginning to ease lockdown measures has enabled prices to show some signs of recovery. Support also seen on news of US export sales to China, and US soyabean planting figures lagging behind industry estimates. India’s annual monsoon arrived on the Kerala, an official at the state-run weather office said, marking the start of the four-month rainy season that is crucial for the country’s farm-dependent economy. The U.S. Department of Agriculture said weekly soybean export sales were 1.669 million tonnes, topping forecasts that ranged from 800,000 tonnes to 1.6 million tonnes. Brazilian soybean exports between May 17 and May 31 will total an estimated 7.2 million tonnes, with the total for the month pegged at 14.7 million tonnes based on the shipping lineup. Normal monsoon outlook for this kharif season has brightened the prospects for soyabean cultivation starting next month. Meanwhile, the trade body has estimated exports for the year 2019-20 (October 2019 to September 2020) to fall by one lakh tonnes to 6 lakh tonnes. The USDA confirmed private sales of 396,000 tonnes of U.S. soybeans to China, a day after reporting sales of an additional 136,000 tonnes to the world's top soy importer. Technically market is under short covering as market has witnessed drop in open interest by -4.9% to settled at 60385 while prices up 26 rupees, now Soyabean is getting support at 3826 and below same could see a test of 3807 levels, and resistance is now likely to be seen at 3862, a move above could see prices testing 3879.

 

Trading Ideas:

* Soyabean trading range for the day is 3807-3879.
* Soyabean prices gained as support seen on news of countries beginning to ease lockdown measures has enabled prices to show some signs of recovery.
* Support also seen on news of US export sales to China, and US soyabean planting figures lagging behind industry estimates.
* In the May’20 WASDE report by USDA, the US 2020/21 soybean area is projected at 83.5 million acres compared to 76.1 million acres in 2019/20.
* At the Indore spot market in top producer MP, soybean gained  5 Rupees to 3932 Rupees per 100 kgs.

 

Ref.Soyaoil

Ref.Soyaoil yesterday settled up by 1.25% at 795.2 as customs duty hike on edible oil imports perking up prices. Further prices seen supported due to insufficient stocks in physical markets following tepid imports and rising demand. India's oilmeal exports dropped 60% in April from a year earlier, as higher government-set oilseed prices made New Delhi's overseas shipments uncompetitive. India sold 102,001 tonnes of oilmeal on the world market in April 2020, the start of the 2020-21 fiscal year, the Solvent Extractors' Association of India said in a statement. Demand for veg oil may fall further in the 2nd half of 2020 due to disruptions in economic activities caused by novel coronavirus. The disruption caused by novel coronavirus has already hit demand for veg oil. U.S. soyoil stocks at the end of April were projected to jump to 2.532 billion lbs, from 2.328 billion lbs at the end of March. If realized, it would be the largest end-of-month soyoil supply in two years. Soyoil stocks estimates ranged from 2.350 billion to 2.750 billion lbs, with a median of 2.550 billion lbs. The National Oilseed Processors Association (NOPA), whose members account for 95% of all soybeans processed in the United States, reported an April crush of 171.754 million bushels and end-of-month oil stocks of 2.111 billion lbs, a nearly seven-year high. Technically market is under fresh buying as market has witnessed gain in open interest by 2.91% to settled at 28960 while prices up 9.8 rupees, now Ref.Soya oil is getting support at 790 and below same could see a test of 785 levels, and resistance is now likely to be seen at 799, a move above could see prices testing 803.

 

Trading Ideas:

* Ref.Soya oil trading range for the day is 785-803.
* Ref soyoil prices gained as customs duty hike on edible oil imports perking up prices.
* Indian vegoil industry lobby group has urged the country's government to increase import duties on edible oils to encourage farmers
* U.S. soyoil stocks at the end of April were projected to jump to 2.532 billion lbs, from 2.328 billion lbs at the end of March.
* At the Indore spot market in Madhya Pradesh, soyoil was steady at 806.75 Rupees per 10 kgs.

 

Crude palm Oil

Crude palm Oil yesterday settled up by 1.3% at 646.5 tracking firmness in Malaysian prices supported by a rise in May exports and optimism over a recovery in demand. Prices were boosted by hopes of lower output in May and resumption of purchases by India, the world's largest edible oil consumer. Malaysia's exports rose between 7% and 8.4% in May from the month before, cargo surveyors said. The world's biggest palm oil producers Indonesia and Malaysia have set export tax for crude palm oil at zero for June. Indonesia, the world's largest palm oil supplier, also set new tariffs for other refined palm oil products, ranging from $25 to $45 per tonne. Previously, export levies were only charged when the government reference price for CPO exports reached $570 per tonne, increasing to a maximum of $50 per tonne when the price exceeded $619. The world's largest crude palm oil producer FGV Holdings said production, which has dropped due to reduced fertiliser application last year, is expected to normalise in the second half of the year. Demand is also expected to improve with the return of top buyer India. Crude palm oil prices may rise to 2,300-2,400 ringgit ($528.37-$551.34) per tonnne in the coming months as Malaysia's relationship with top importer India improves, industry regulator the Malaysian Palm Oil Board (MPOB) said. Technically market is under short covering as market has witnessed drop in open interest by -9.1% to settled at 2277 while prices up 8.3 rupees, now CPO is getting support at 638.8 and below same could see a test of 631.2 levels, and resistance is now likely to be seen at 654.4, a move above could see prices testing 662.4.

 

Trading Ideas:

* CPO trading range for the day is 631.2-662.4.
* Crude palm oil gains tracking firmness in Malaysian prices supported by a rise in May exports and optimism over a recovery in demand.
* Malaysia's exports rose between 7% and 8.4% in May from the month before, cargo surveyors said.
* The world's biggest palm oil producers Indonesia and Malaysia have set export tax for crude palm oil at zero for June.
* Malaysia, slashed the June palm oil export duty to zero, lowering its price against rival Indonesian palm.

 

Mustard Seed

Mustard Seed yesterday settled up by 1.4% at 4558 as procurement continues and arrivals are limited. In recent session prices gained because of lower-than-expected supply of fresh crop in spot markets following restrictions due to coronavirus scare in the country. Arrivals of the oilseed in April were at just over 980,000 tn, compared with 1.55 mln tn a year ago, according to data from the Mustard Oil Producers Association of India. The association has estimated India's mustard output in 2019-20 (Jul-Jun) at 7.6 mln tn, down from 8.1 mln tn in the previous crop year. This is lower than the farm ministry's third advance estimate of 8.7 mln tn. During Nov-Apr, mustard oil imports fell sharply to 17,000 tn, from 44,167 tn a year ago, according to The Solvent Extractors' Association of India. Total imports in 2018-19 were around 59,000 tn. Imports are down due to the coronavirus pandemic and ample stocks of edible oils in domestic markets. The government had procured 411,152 tn of mustard harvested in 2019-20 (Jul-Jun) under the price support scheme from farmers in Gujarat, Rajasthan, the top grower, Haryana, Uttar Pradesh, and Madhya Pradesh, a government official said. Technically market is under short covering as market has witnessed drop in open interest by -1.95% to settled at 11050 while prices up 63 rupees, now Rmseed is getting support at 4528 and below same could see a test of 4498 levels, and resistance is now likely to be seen at 4578, a move above could see prices testing 4598.

 

Trading Ideas:

* Rmseed trading range for the day is 4498-4598.
* Mustard seed prices gained as procurement continues and arrivals are limited.
* Prices also gained amid a smaller crop and limited supply.
* India's mustard output in 2019-20 (Jul-Jun) at 7.6 mln tn, down from 8.1 mln tn in the previous crop year.
* In Alwar spot market in Rajasthan the prices gained 51.5 Rupees to end at 4849 Rupees per 100 kg.

 

Turmeric

Turmeric yesterday settled down by -0.3% at 5256 amid reports of higher carry forwards stocks from last year due to higher production. State of Tamil Nadu and Andhra Pradesh has also ample amount of stocks which eased worries in the domestic market. Moreover, positive pre-monsoon reports by IMD has improved the sentiments for higher sowing in the June-August months of the current year in Telangana, Tamil Nadu and Maharashtra. This is expected to bring lower supplies in the coming months as farmers are expected to be engaged in the same. As per Department of Commerce, turmeric exports for the period April to January 2020 has been reported at 110,399.27 tonnes, lower by 25.83% compared to 138,920.39 tonnes of the last year. In Andhra Pradesh government has started procuring through Markfed and has purchased 5000 qt till now after lockdown at State advised price of INR 6850/qt, but even this procurement has not distorted the market due to lower demand. The demand is lower for both export as well as from bulk buyers as Covid-19 lockdown has led to demand destruction indirectly coming out from hotel and restaurant industry and at the same time the requirement has been deferred from spice manufacturers due to reduced finished product demand, lockdown and labour issues. Technically market is under long liquidation as market has witnessed drop in open interest by -5.88% to settled at 4480 while prices down -16 rupees, now Turmeric is getting support at 5214 and below same could see a test of 5172 levels, and resistance is now likely to be seen at 5306, a move above could see prices testing 5356.

 

Trading Ideas:

* Turmeric trading range for the day is 5172-5356.
* Turmeric prices dropped amid reports of higher carry forwards stocks from last year due to higher production.
* State of Tamil Nadu and Andhra Pradesh has also ample amount of stocks which eased worries in the domestic market.
* Positive pre-monsoon reports by IMD has improved the sentiments for higher sowing in the June-August months of the current year
* In Nizamabad, a major spot market in AP, the price ended at 5117.2 Rupees dropped -82.8 Rupees.

 

Jeera

Jeera yesterday settled up by 1.59% at 13765 on short covering after prices dropped as traders are still bracing for a continued slackness in offtakes. The harvest was delayed this year and just when the arrivals started picking up, government imposed the national lockdown. Chief Minister Ashok Gehlot directed that jeera produce should be charged 50 paise for every Rs 100 instead of the earlier stipulated fee of Rs 2. Despite a peak demand period, the operations of spices industry in many upcountry markets have been hit in the wake of a labour shortage. Though the industry has to work in full swing prior to the onset of monsoon, their presence in the red zone area coupled with the departure of labour has affected the functioning of many spices industries especially in Maharashtra, Madhya Pradesh, Rajasthan, Delhi. In Rajasthan, all jeera mandis are closed in protest against announcement of two percent farmer welfare tax on the purchase and sale of agricultural products. Farmers are expecting nearly 30 per cent jump in jeera crop from 4,16,600 tonnes reported in 2019 to 5,35,500 tonnes this year, as projected by the Federation of Indian Spice Stakeholders (FISS) this year. According to the Unjha APMC officials, the yard has suspended auctions indefinitely due to the coronavirus scare. Technically market is under short covering as market has witnessed drop in open interest by -5.81% to settled at 1119 while prices up 215 rupees, now Jeera is getting support at 13610 and below same could see a test of 13455 levels, and resistance is now likely to be seen at 13860, a move above could see prices testing 13955.

 

Trading Ideas:

* Jeera trading range for the day is 13455-13955.
* Jeera prices gained on short covering after prices dropped as traders are still bracing for a continued slackness in offtakes.
* Chief Minister Ashok Gehlot directed that jeera produce should be charged 50 paise for every Rs 100 instead of the earlier stipulated fee of Rs 2.
* Farmers are expecting nearly 30 per cent jump in jeera crop from 4,16,600 tonnes reported in 2019 to 5,35,500 tonnes this year
* In Unjha, a key spot market in Gujarat, jeera edged up by 111.15 Rupees to end at 13765 Rupees per 100 kg.

 

Cotton

Cotton yesterday settled up by 1.08% at 15980 as support seen after cotton body lowers crop estimates to 330 lakh bales from 354 lakh bales due to locust attack, less care during lockdown. It is observed that the recent Locust attack and Covid-19 on cotton plantings may not affect the cotton plants to impact the acreage or expected yields. Approximately 2 months demand supply mismatch is presently observed in entire supply chain for the crop season 2019-20 & 20-21. It is expected that the carry over stock will be in huge considerable quantities, thereby breaking previous records of at least 5 years. At present the Indian Cotton is the cheapest in the world due to which there is a good demand from importing countries thereby hitting the expected figures to 50 Lakh Bales and correspondingly reducing the estimated imports by 5-10 lakh bales. Since the rains are expected to be normal this year and also the considerable quantity of seed cotton is with Farmers, it is expected that the stock of seed cotton will also be carried to the new crop season. Even though the consumption has reduced in last two months but looking at the present demands in domestic as well as international markets, the price of cotton bales is expected to rise in coming weeks. Technically market is under short covering as market has witnessed drop in open interest by -0.93% to settled at 3850 while prices up 170 rupees, now Cotton is getting support at 15870 and below same could see a test of 15760 levels, and resistance is now likely to be seen at 16080, a move above could see prices testing 16180.

 

Trading Ideas:
* Cotton trading range for the day is 15760-16180.
* Cotton prices gained as support seen after cotton body lowers crop estimates to 330 lakh bales from 354 lakh bales due to locust attack.
* The recent Locust attack and Covid-19 on cotton plantings may not affect the cotton plants to impact the acreage or expected yields.
* At present the Indian Cotton is the cheapest in the world due to which there is a good demand from importing countries.
* Corona virus is affecting the global trade and world economies

 

Chana

Chana yesterday settled up by 2.05% at 4188 after update that due to heavy moisture. In recent session prices seen supported due to supply shortages as many cotton seed crushing units are closed. Andhra Pradesh aims to reduce the area under cotton in the coming 2020-21 (Jul-Jun) kharif season to 544,000 ha from 654,000 ha last year. Local textile mills and ginners were in distress. Many mills were closed up till now due to the building up of inventory while some mills were working partially but they were near closing. The government has decided to exempt cottonseed oil cake from 5 percent General Sales Tax. Punjab has registered a record production of cotton at 43.25 lakh quintals in 2019-20 season even as the procurement of the crop is still in its last stage. According to the data procured from the Punjab State Agricultural Marketing Board, the state has witnessed a jump of over 26% over the production of 34.68 lakh quintals recorded during the 2018-19 season. The Cotton Corporation of India (CCI) has announced bulk discount for cotton bales with it from 2018-2019 and 2019-2020 cotton seasons. The CCI’s operations under which the corporation procures cotton from farmers at the government declared Minimum Support Price (MSP) of Rs 5,550 per quintal continues till September. Technically market is under short covering as market has witnessed drop in open interest by -12.1% to settled at 23400 while prices up 84 rupees, now Chana is getting support at 4126 and below same could see a test of 4063 levels, and resistance is now likely to be seen at 4230, a move above could see prices testing 4271.

 

Trading Ideas:

* Chana trading range for the day is 4063-4271.
* Chana prices gained as support continues due to procurement activity by the government and news of amendment in essential commodities act.
* The acreage of the crop in the recently ended week is reported at 107.21 lakh hectares.
* According to NAFED, the government has procured nearly about 2.5 Lakh metric tonnes of Chana.
* In Delhi spot market, chana remains unchanged at by 0 Rupees to end at 4105 Rupees per 100 kgs.

 

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