01-01-1970 12:00 AM | Source: Kedia Advisory
Mentha oil trading range for the day is 953.1-969.5 - Kedia Advisory
News By Tags | #473 #5839

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Gold

Gold yesterday settled down by -0.24% at 52544 as the U.S. dollar regained some ground, but expectations of less aggressive interest rate hikes from the Federal Reserve limited the downside. Minutes from the Fed's November meeting have potentially given gold an extra kick higher, enabling it to really push on from here if the data does allow for it. The U.S. central bank delivered a fourth consecutive 75 basis-point (bps) rate hike earlier this month, and market participants now widely expect a 50 bps rate increase at the December meeting. Policymakers also noted that with inflation showing little sign of abating, and with supply and demand imbalances in the economy persisting, the ultimate level of the federal funds rate that would be necessary to achieve the Committee's goals was somewhat higher than they had previously expected. The Federal Reserve raised the target range for the federal funds rate by 75bps to 3.75%-4% during its November 2022 meeting, marking a sixth consecutive rate hike and the fourth straight three-quarter point increase, pushing borrowing costs to a new high since 2008. Physical gold demand in Asia stayed soft, with premiums in top hub China easing further as fresh COVID-19 restrictions dimmed activity while higher domestic prices put off most buyers in India. Technically market is under long liquidation as the market has witnessed a drop in open interest by -12.25% to settle at 3430 while prices are down -127 rupees, now Gold is getting support at 52382 and below same could see a test of 52221 levels, and resistance is now likely to be seen at 52727, a move above could see prices testing 52911.

Trading Ideas:
* Gold trading range for the day is 52221-52911.
* Gold prices retreated as the U.S. dollar regained some ground
* However, expectations of less aggressive interest rate hikes from the Federal Reserve limited the downside.
* Minutes from the Fed's November meeting have potentially given gold an extra kick higher, enabling it to really push on from here if the data does allow for it.


Silver

Silver yesterday settled down by -0.51% at 61676 as dollar index regained some ground above the 106, recovering from an over three-month low of around 105.6 in the prior session, as investors assessed the outlook for growth and monetary policy. The latest Fed meeting minutes showed that a substantial majority of policymakers agreed it would soon be appropriate to slow the pace of interest rate hikes while pointing to increased recessionary risks. Earlier this month, the Fed delivered its fourth straight 75 basis point rate increase to tame stubbornly high inflation, pushing borrowing costs to the highest since 2008. Signs of low supply also lifted prices, as inventories at New York’s COMEX fell 70% in the last 18 months to just over 1 million tonnes. Also, during the period, stocks at the London Bullion Market Association fell for the 10th straight month to a record-low 27.1 thousand tonnes. Federal Reserve Bank of San Francisco President Mary Daly said it is premature and nothing is off the table regarding the size of the rate hike at the next policy meeting in December. The OECD forecast global growth to ease to 2.2% next year from 3.1% in 2022. In 2024, growth is projected to be 2.7%, helped by initial steps to ease policy interest rates. Technically market is under long liquidation as the market has witnessed a drop in open interest by -16.55% to settle at 8473 while prices are down -317 rupees, now Silver is getting support at 61256 and below same could see a test of 60835 levels, and resistance is now likely to be seen at 62112, a move above could see prices testing 62547.

Trading Ideas:
* Silver trading range for the day is 60835-62547.
* Silver dropped as dollar index regained above the 106, as investors assessed the outlook for growth and monetary policy
* Signs of low supply also lifted prices, as inventories at New York’s COMEX fell 70% in the last 18 months to just over 1 million tonnes.
* Stocks at the London Bullion Market Association fell for the 10th straight month to a record-low 27.1 thousand tonnes.


Crude oil

Crude oil yesterday settled down by -1.7% at 6311 marked by worries about Chinese demand and haggling over a Western price cap on Russian oil. The EU plans to ban purchases of the country's oil products from Feb. 5. U.S. crude oil stocks in the Strategic Petroleum Reserve fell by 1.6 million barrels in the latest week to 390.5 million barrels, the lowest level since March 1984, the Energy Information Administration said. U.S. East Coast gasoline stocks fell in the period to 47.1 million barrels, the lowest level since November 2012, while refinery utilization in the region rose to 102.9%, the highest on record. U.S. crude stockpiles fell, but gasoline and distillate inventories both rose substantially, alleviating a bit of concern about market tightness, the Energy Information Administration said. Crude inventories fell by 3.7 million barrels in the week to Nov. 18 to 431.7 million barrels, compared with expectations in a poll for a 1.1 million-barrel drop. U.S. gasoline stocks rose by 3.1 million barrels in the week to 211 million barrels, the EIA said, compared with expectations in a poll for a 383,000-barrel rise. Technically market is under fresh selling as the market has witnessed a gain in open interest by 5.92% to settle at 17796 while prices are down -109 rupees, now Crude oil is getting support at 6220 and below same could see a test of 6129 levels, and resistance is now likely to be seen at 6478, a move above could see prices testing 6645.

Trading Ideas:
* Crude oil trading range for the day is 6129-6645.
* Crude Oil prices fall as Chinese demand worries linger

* U.S. crude oil stocks in SPR fall to lowest level since March 1984 – EIA
* Crude stockpiles fell, but gasoline and distillate inventories both rose substantially, alleviating a bit of concern about market tightness


Nat.Gas

Nat.Gas yesterday settled down by -2.57% at 605.4 on a smaller-than-expected draw in inventories last week and doubts whether or not Freeport LNG will be able to restart operations next month. The latest EIA data showed US utilities pulled 80 billion cubic feet (bcf) of gas from storage during the week ending November 18th, below market expectations of an 87 billion draw. Freeport LNG delayed the plant's restart from November to December but has not yet submitted a request to restart the export plant, raising questions about another delay, which would mean more gas available for domestic use. Meanwhile, workers at the largest US rail union voted against a tentative contract deal reached in September, raising the possibility of a year-end strike that could disrupt coal deliveries and force power generators to burn more gas. U.S. natural gas futures implied volatility hit a record high following weeks of rapid price moves due to changing winter weather forecasts and questions about the restart of the Freeport liquefied natural gas (LNG) export plant in Texas. With less cold weather coming, Refinitiv projected average U.S. gas demand, including exports, would drop from 126.3 bcfd this week to 113.7 bcfd next week. The forecasts for next week was lower than Refinitiv's outlook on Monday. Technically market is under long liquidation as the market has witnessed a drop in open interest by -14.91% to settle at 5159 while prices are down -16 rupees, now Natural gas is getting support at 592.1 and below same could see a test of 578.9 levels, and resistance is now likely to be seen at 626, a move above could see prices testing 646.7.

Trading Ideas:
* Natural gas trading range for the day is 578.9-646.7.
* Natural gas dropped on a smaller-than-expected draw in inventories last week
* Further doubts were looming whether or not Freeport LNG will be able to restart operations next month.
* Data showed US utilities pulled 80 billion cubic feet (bcf) of gas from storage


Copper

Copper yesterday settled down by -0.25% at 675.6 as a surge in COVID-19 cases in China to record levels and expanding lockdowns in the country are hurting metals demand in the short term. China stepped up measures to support its economy and the metals-intensive property sector. China's central bank said it is cutting bank reserve requirements to free up liquidity and sources said it will offer cheap loans to financial firms for buying bonds issued by property developers. The global copper market was in deficit in the first nine months of this year and copper producer Codelco said the trade would be undersupplied by millions of tonnes in the coming decade. Some 2,000 workers at Chile's Escondida mine, the world's largest copper deposit, have turned down BHP's offer to settle a labor dispute and could stop work on Nov. 28 and 30 if their demands are not met, their union said. BHP announced earlier this week that it had reached a deal with the union to avert a work stoppage over safety issues, but the agreement had to be ratified by the workers represented by the Sindicato No. 1 union at the Australian company's mine in northern Chile. Copper inventories in warehouses monitored by the Shanghai Futures Exchange fell 18.1 % from last Friday. Technically market is under fresh selling as the market has witnessed a gain in open interest by 2.95% to settle at 5020 while prices are down -1.7 rupees, now Copper is getting support at 672.4 and below same could see a test of 669.2 levels, and resistance is now likely to be seen at 681.1, a move above could see prices testing 686.6.

Trading Ideas:
* Copper trading range for the day is 669.2-686.6.
* Copper prices dropped as a surge in COVID-19 cases in China to record levels and expanding lockdowns in the country are hurting metals demand.
* Workers at BHP's Escondida mine in Chile reject offer, threaten strike
* Shanghai warehouse copper stocks down 18.1%


Zinc

Zinc yesterday settled up by 0.25% at 263.45 gains as China stepped up efforts to support the economy, fuelling speculation of a pick up in demand and offering some respite to prices. On the supply side, LME has decided against banning Russian metal from being traded and stored in its warehouses because a substantial share of the market is still planning to buy the country's metal in 2023. China imported 1,007 mt of refined zinc in October, down 77.55% on the month and 97.54% on the year. Numerous European zinc producers had to either shut down their smelters entirely or cut production down this year due to high energy costs and low inventories. Meanwhile, the Budel smelter of Nyrstar was planning to resume production partially this month, and giant Glencore said it expects to resume production in the first quarter of 2023. Data shows that zinc ingot social inventories across seven major markets in China totalled 52,900 mt as of November 25, down 7,300 mt from this Monday (November 21) and down 5,900 mt from a week earlier (November 18). The cargoes sent from Yunnan to Shanghai shrank as local transportation was restricted by pandemic, resulting in low inflows into the Shanghai warehouses. Technically market is under short covering as the market has witnessed a drop in open interest by -2.35% to settle at 2825 while prices are up 0.65 rupees, now Zinc is getting support at 262.4 and below same could see a test of 261.3 levels, and resistance is now likely to be seen at 264.8, a move above could see prices testing 266.1.

Trading Ideas:
* Zinc trading range for the day is 261.3-266.1.
* Zinc gains as China stepped up efforts to support the economy
* China imported 1,007 mt of refined zinc in October, down 77.55% on the month and 97.54% on the year.
* European zinc producers had to either shut down their smelters entirely or cut production down this year due to high energy costs and low inventories.


Aluminium

Aluminium yesterday settled down by -0.19% at 206.7 weighed down by a stronger dollar and as a spike in Covid-19 cases in top consumer China clouded the demand outlook. China said it would cut the amount of cash that banks must hold as reserves for the second time this year, releasing about 500 billion yuan ($69.8 billion) in long-term liquidity to prop up the faltering economy. The People's Bank of China (PBOC) said it would cut the reserve requirement ratio for banks by 25 basis points (bps), effective from Dec. 5. That would lower the weighted average ratio for financial institutions to 7.8%, the central bank said. The cut, which follows a 25-bp reduction in April, had been widely expected after state media on Wednesday quoted the cabinet as saying China would use timely reserve ratio cuts, alongside other monetary policy tools, to keep liquidity reasonably ample. The aluminium ingot social inventories across China’s eight major markets hit a new low of 518,000 mt as of November 24, a drop of 29,000 mt from a week ago. The inventory in Wuxi fell 23,000 mt on a weekly basis to a new low of 119,000 mt as fewer cargoes arrived, and this trend will be maintained next week. Technically market is under long liquidation as the market has witnessed a drop in open interest by -2.14% to settle at 4708 while prices are down -0.4 rupees, now Aluminium is getting support at 205.4 and below same could see a test of 204 levels, and resistance is now likely to be seen at 208.2, a move above could see prices testing 209.6.

Trading Ideas:
* Aluminium trading range for the day is 204-209.6.
* Aluminum dropped weighed down by a stronger dollar and as a spike in Covid-19 cases in top consumer China clouded the demand outlook.
* China frees up $70 bln for banks to underpin slowing economy
* The aluminium ingot social inventories across China’s eight major markets hit a new low of 518,000 mt


Mentha oil

Mentha oil yesterday settled up by 0.55% at 962.6 on low level buying after prices dropped as mentha exports during Apr-Sept 2022 has dropped by 13.84 percent at 1,107.20 tonnes as compared to 1,285.12 tonnes exported during Apr- Sept 2021. In the month of September 2022 around 220.67 tonnes Mentha was exported as against 238.04 tonnes in August 2022 showing a drop of 7.30%. In the month of September 2022 around 220.67 tonnes of Mentha was exported as against 250.97 tonnes in September 2021 showing a drop of 12.07%. Synthetic Mentha supply remains uninterrupted. Support also seen amid low production this season and improving demand post-pandemic. Many states have seen gutkha and pan masala ban which have seen a lower demand from the pan masala industry. The production of Mentha oil was historically high in 2020-21, the area remained almost similar last year but the yields were lower which affected the production. In the current year, production to fall to around 46,238 MT due to sharp fall in area and loss in yields following severe summer heat. which will come closed 14% down in the year 20-21. In Spot market, support seen after IMD issues Yellow Alert in key sowing area ; light-moderate rain to continue till Sept 4 impacting arrival in the mandi. In Sambhal spot market, Mentha oil gained by 21.1 Rupees to end at 1101.5 Rupees per 360 kgs.Technically market is under fresh buying as the market has witnessed a gain in open interest by 2.47% to settle at 911 while prices are up 5.3 rupees, now Mentha oil is getting support at 957.9 and below same could see a test of 953.1 levels, and resistance is now likely to be seen at 966.1, a move above could see prices testing 969.5.

Trading Ideas:
* Mentha oil trading range for the day is 953.1-969.5.
* In Sambhal spot market, Mentha oil gained  by 21.1 Rupees to end at 1101.5 Rupees per 360 kgs.
* Mentha oil gained on low level buying after prices dropped as exports during Apr-Sept 2022 has dropped by 13.84 percent
* In the month of September 2022 around 220.67 tonnes Mentha was exported showing a drop of 7.30%.
* However, Synthetic Mentha supply remains uninterrupted.


Turmeric

Turmeric yesterday settled down by -2.75% at 7156 amid lower demand from domestic spice-makers and stockists amid availability of Turmeric supply form Marathwada region. Marathwada region has been serving as a round-the-year supply centre for Turmeric since past couple of years. Agriculture Minister Narendra Singh Tomar said unseasonal rains in some parts of the country have affected the crops. As per Andhra Pradesh agricultural department, Turmeric sowing activity completed around 16,921 hectares as compared to last year same period 19,376 hectares, down by 12.67%. Turmeric exports during Apr- Sept 2022 has rose by 14.65 percent at 88,384.27 tonnes as compared to 77,091.52 tonnes exported during Apr- Sept 2021. In the month of September 2022 around 13,990.65 tonnes turmeric was exported as against 12,147.89 tonnes in August 2022 showing a rise of 15.16%. In the month of September 2022 around 13,990.65 tonnes of turmeric was exported as against 12,598.15 tonnes in September 2021 showing a rise of 11.05%. Production of spices in India is likely to have declined 1.5% on year to 10.9 mln tn in 2021-22 (Jul-Jun), according to data from Spices Board India. The country had produced 11.0 mln tn of spices in the previous year. The Spices Board has pegged turmeric production at 1.33 mln tn, up 18.4% on year. In Nizamabad, a major spot market in AP, the price ended at 7441.05 Rupees dropped -32.05 Rupees.Technically market is under fresh selling as the market has witnessed a gain in open interest by 0.65% to settle at 9335 while prices are down -202 rupees, now Turmeric is getting support at 6990 and below same could see a test of 6826 levels, and resistance is now likely to be seen at 7392, a move above could see prices testing 7630.

Trading Ideas:
* Turmeric trading range for the day is 6826-7630.
* Turmeric dropped amid lower demand from domestic spice-makers and stockists amid availability of supply.
* As per Andhra Pradesh agricultural department, turmeric sowing activity completed around 16,921 hectares, down by 12.67% till date from last year.
* Marathwada region has been serving as a round-the-year supply centre for Turmeric since past couple of years.
* In Nizamabad, a major spot market in AP, the price ended at 7441.05 Rupees dropped -32.05 Rupees.


Jeera

Jeera yesterday settled down by -2.1% at 23570 as current year sowing area likely to increase in Rajasthan and Gujarat growing regions. As per Gujarat Government, around 77,037 hectares of sowing has been completed as on 21st November 2022 in Jeera key growing regions in Gujarat and according to this data, normal area (three years average) in Gujarat likely to be around 421,457 hectares. Jeera exports during Apr- Sept 2022 has dropped by 21.28 percent at 1,09,587.28 tonnes as compared to 1,39,218.38 tonnes exported during Apr- Sept 2021. In the month of September 2022 around 18,081.78 tonnes jeera was exported as against 24,448.33 tonnes in August 2022 showing a drop of 26.04%. In the month of September 2022 around 18,081.78 tonnes of jeera was exported as against 14,828.07 tonnes in September 2021 showing a rise of 21.94%. Production of spices in India is likely to have declined 1.5% on year to 10.9 mln tn in 2021-22 (Jul-Jun), according to data from Spices Board India. The country had produced 11.0 mln tn of spices in the previous year. Jeera production was seen at 725,651 tn, down 8.8% on year due to lower acreage in Rajasthan and Gujarat, the key producer, according to data from Spices Board India. According to fourth advanced estimates by Gujarat government, jeera production is seen fall by 44.5 per cent to 221500 tonnes in 2021-22 on yoy basis. In Unjha, a key spot market in Gujarat, jeera edged down by -339 Rupees to end at 23888.35 Rupees per 100 kg.Technically market is under long liquidation as the market has witnessed a drop in open interest by -3.52% to settle at 5841 while prices are down -505 rupees, now Jeera is getting support at 23300 and below same could see a test of 23030 levels, and resistance is now likely to be seen at 23960, a move above could see prices testing 24350.

Trading Ideas:
* Jeera trading range for the day is 23030-24350.
* Jeera prices dropped as current year sowing area likely to increase in Rajasthan and Gujarat growing regions.
* Current year sowing area likely to increase in Rajasthan and Gujarat growing regions.
* All-India Jeera production is expected to fall in the Marketing year 2022-23 by around 33% to 3 lakh tonnes on y-o-y basis due to lower sowings.
* In Unjha, a key spot market in Gujarat, jeera edged down by -339 Rupees to end at 23888.35 Rupees per 100 kg.


Cotton

Cotton yesterday settled down by -0.79% at 31410 as India’s domestic cotton demand for the 2022-23 season up to September is estimated to be lower by about 18 lakh bales (170 kg each) at 300 lakh bales or nearly 6 per cent less than last year’s 318 lakh bales, the Cotton Association of India (CAI) has estimated. The association’s Cotton Crop Committee meeting attributed the decline in domestic consumption to a reduction in operations of mills due to slack demand for yarn and cloth. India is likely to produce 34.4 million bales of cotton in the 2022/23 season that started on Oct. 1, up 12% from a year ago after farmers expanded the crop area. India’s cotton output for the season ended September 30, 2022, fell to 307.5 lakh bales (against 360.13 lakh bales estimated at the beginning of the season in October last year. This is the lowest since 2007-08, when the production was 307 lakh bales. WASDE report said world trade is projected to be nearly 1 million bales lower from September, with declines in imports by China, Pakistan, Mexico, Turkey and Vietnam. The agency lowered its U.S. exports forecast by 100,000 bales to 12.5 million bales, while also cutting export estimates for Australia, Brazil, India, Benin, Cote d’Ivoire, Greece and Mexico. "In the 2022/23 world balance sheet this month, consumption is 3.0 million bales lower and ending stocks are 3.1 million bales higher," the USDA said. In spot market, Cotton gained by 490 Rupees to end at 32960 Rupees.Technically market is under fresh selling as the market has witnessed a gain in open interest by 3.33% to settle at 2826 while prices are down -250 rupees, now Cotton is getting support at 30850 and below same could see a test of 30280 levels, and resistance is now likely to be seen at 31940, a move above could see prices testing 32460.

Trading Ideas:
* Cotton trading range for the day is 30280-32460.
* Cotton dropped as current year sowing area likely to increase in Rajasthan and Gujarat growing regions.
* Cotton supply is expected to remain around 38.7 million bales which was 39.2 million bales during 2021-22.
* Data from CFTC showed that speculators cut their net short position on cotton futures
* In spot market, Cotton gained  by 490 Rupees to end at 32960 Rupees.

 

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