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Published on 17/08/2022 11:44:44 AM | Source: Kedia Advisory

Mentha oil yesterday settled up by 0.25% at 989.3 - Kedia Advisory

Posted in Commodities Reports| #Commodity Tips #Kedia Advisory

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Gold 

Gold yesterday settled down by -1.42% at 51837 weighed down by an uptick in the U.S. dollar and worries over further U.S. interest rate hikes. U.S. single-family homebuilders' confidence and New York state factory activity fell in August to their lowest levels since near the start of the COVID-19 pandemic, a further sign the economy is softening as the Federal Reserve raises interest rates. Fed officials have maintained a hawkish tone and hinted at more rate hikes down the year to tame high inflation. Traders were pricing in around a 36.5% chance of a 75-basis-point rate hike by the Fed in September and a 63.5% chance of a 50 bps increase. Meanwhile, investors remained cautious as US policymakers indicated their commitment to keep raising interest rates until they see compelling evidence that inflation sustainably declines. High domestic prices restrained physical gold demand in India, while uncertainty surrounding Taiwan-related developments prompted bullion importers in China to hold off on big purchases. Retail demand has been weak for the past few weeks as buyers were waiting for a correction. Dealers offered discounts of up to $14 an ounce over official domestic prices unchanged from last week. Chinese premiums narrowed to $5-$9 an ounce over international spot prices, from $4-$11 last week. Technically market is under long liquidation as market has witnessed drop in open interest by -7.44% to settled at 15196 while prices down -748 rupees, now Gold is getting support at 51649 and below same could see a test of 51462 levels, and resistance is now likely to be seen at 52144, a move above could see prices testing 52452.
 

Trading Ideas:

*  Gold trading range for the day is 51462-52452.
* Gold prices inched lower weighed down by an uptick in the U.S. dollar and worries over further U.S. interest rate   hikes.
* Fed officials have maintained a hawkish tone and hinted at more rate hikes down the year to tame high inflation.
* U.S. single-family homebuilders' confidence and New York state factory activity fell in August to their lowest levels     since near the start of the COVID-19 pandemic

 

Silver 

Silver yesterday settled down by -2.72% at 57665 as a stronger dollar spooked investors away from the non-yielding metal. The safe-haven U.S. dollar rose after a new batch of disappointing data from China bolstered global recession worries, while the yuan weakened following a People’s Bank of China surprise rate cut. Chinese industrial output, retail sales and fixed-asset investment all fell short of analyst estimates on Monday, as a nascent recovery from draconian Covid-19 lockdowns faltered. The dollar was also supported by Federal Reserve policymakers’ hawkish comments in response to early signs that U.S. inflation may have peaked. Markets continued to bet that the Federal Reserve would go ahead with its aggressive tightening plan despite signs of cooling inflation. Several Fed policymakers last week pointed out that a dovish pivot is unlikely. Several policymakers have pointed out that a dovish pivot is unlikely despite signs that inflation could be peaking. More speeches this week and the FOMC minutes release due on Wednesday are now highly expected for clues about the central bank's rate path. On top of that, a slew of economic data from China, including disappointing industrial production and retail sales figures, raised further concerns over a global economic slowdown. Technically market is under fresh selling as market has witnessed gain in open interest by 15.59% to settled at 15103 while prices down -1611 rupees, now Silver is getting support at 57119 and below same could see a test of 56574 levels, and resistance is now likely to be seen at 58355, a move above could see prices testing 59046.
 

Trading Ideas:

* Silver trading range for the day is 56574-59046.
* Silver fell as a stronger dollar spooked investors away from the non-yielding metal.
* Markets continued to bet that the Federal Reserve would go ahead with its aggressive tightening plan despite signs of cooling inflation.
* Fed officials have maintained a hawkish tone and hinted at more rate hikes down the year to tame high inflation.

 

Crude oil

Crude oil yesterday settled down by -6.64% at 6870 as bleak economic data from top crude buyer China renewed concerns of a global recession and the market monitored talks on a reviving deal that could allow more Iranian oil exports. Saudi Aramco head Amin Nasser said that the state-owned firm stands ready to raise crude output to its maximum capacity of 12 million barrels a day if the Saudi Arabian government orders it to do so. China's central bank cut lending rates to try to revive demand as the nation's economy slowed unexpectedly in July after Beijing's zero-COVID policy and a property crisis slowed factory and retail activity. Barclays lowered its Brent price forecasts by $8 per barrel for this year and next, as it expects a large surplus of crude oil over the near-term due to "resilient" Russian supplies. In the United States, output in the major U.S. shale oil basins will rise to 9.049 million barrels per day (bpd) in September, the highest since March 2020, the U.S. Energy Information Administration (EIA) said in a report on Monday. In the Permian, the biggest U.S. shale oil basin, output will hit a record 5.408 million bpd, it said. Technically market is under fresh selling as market has witnessed gain in open interest by 69.98% to settled at 7600 while prices down -489 rupees, now Crude oil is getting support at 6740 and below same could see a test of 6609 levels, and resistance is now likely to be seen at 7116, a move above could see prices testing 7361.
 

Trading Ideas:
*  Crude oil trading range for the day is 6609-7361.
* Crude oil prices fell on demand fears as disappointing Chinese economic data renewed global recession concerns.
* EIA: In September, US oil output from key shale locations is expected to reach its highest level since March 2020.
* EIA: US total shale regions oil production for September seen up about 673,000 bpd at 93.835 m

Nat.Gas

Nat.Gas yesterday settled up by 5.03% at 733.1 on record global gas prices, a drop in daily U.S. output, a heat wave in California and forecasts for more hot weather and higher air conditioning demand in late August than previously expected. That U.S. price increase came despite the ongoing outage at the Freeport liquefied natural gas (LNG) export plant in Texas, which has left more gas in the United States for utilities to inject into stockpiles for next winter. Data provider Refinitiv said average gas output in the U.S. Lower 48 states rose to 97.4 bcfd so far in August from a record 96.7 bcfd in July. On a daily basis, however, output was on track to drop from a record 98.3 bcfd on Aug. 8 to a preliminary 15-week low of 94.3 bcfd on Tuesday. Preliminary data is often revised later in the day. With warmer weather expected, Refinitiv projected average U.S. gas demand, including exports, would rise from 95.3 bcfd this week to 97.5 bcfd next week. The forecast for this week was lower than Refinitiv's outlook on Monday, but its forecast for next week was higher. The average amount of gas flowing to U.S. LNG export plants has held at 10.9 bcfd so far in August, the same as July. Technically market is under fresh buying as market has witnessed gain in open interest by 11.33% to settled at 6897 while prices up 35.1 rupees, now Natural gas is getting support at 707.6 and below same could see a test of 682.2 levels, and resistance is now likely to be seen at 748.8, a move above could see prices testing 764.6.

Trading Ideas:

*  Natural gas trading range for the day is 682.2-764.6.
* Natural gas jumped on record global gas prices, a drop in daily U.S. output, a heat wave in California and forecasts for more hot weather.
* Average gas output in the U.S. Lower 48 states rose to 97.4 bcfd so far in August from a record 96.7 bcfd in July.
* U.S. natgas output to hit record highs in 2022 – EIA

 

Copper 

Copper yesterday settled down by -1.38% at 666.7 after China reported lower-than-expected industrial production, fixed asset investments and retail sales numbers for July, prompting its central bank to unexpectedly cut key lending rates to shore up demand. China’s central bank cut key lending rates in a surprise move to revive demand as data showed the economy unexpectedly slowing in July, with factory and retail activity squeezed by Beijing’s zero-Covid policy and a property crisis. The grim set of figures indicate the world’s second largest economy is struggling to shake off the June quarter’s hit to growth from strict Covid restrictions, prompting some economists to downgrade their projections. China’s economy narrowly escaped a contraction in the June quarter, hobbled by the lockdown of the commercial hub of Shanghai, a deepening downturn in the property market and persistently soft consumer spending. Meanwhile, tight inventories and supply risks kept a floor on copper prices, with London and Shanghai exchanges recently reporting falling stockpiles, while major producers flagged various supply disruptions that reduced output. Copper has been moving in lockstep with equity markets since mid-July, tracking global risk sentiment as investors continue to grapple with high inflation, rising interest rates and slowing global growth. Technically market is under fresh selling as market has witnessed gain in open interest by 8.62% to settled at 5633 while prices down -9.35 rupees, now Copper is getting support at 662.1 and below same could see a test of 657.5 levels, and resistance is now likely to be seen at 670.6, a move above could see prices testing 674.5.

 

Trading Ideas:

* Copper trading range for the day is 657.5-674.5.
* Copper dropped after China reported lower-than-expected industrial production, fixed asset investments and retail sales numbers
* China’s central bank cut key lending rates in a surprise move to revive demand as data showed the economy unexpectedly slowing in July
* Meanwhile, tight inventories and supply risks kept a floor on copper prices, with London and Shanghai exchanges recently reporting falling stockpiles

 

Zinc 

Zinc yesterday settled up by 0.53% at 324.2 amid supply tightness after Nyrstar, announced to close the smelter BUDEL starting from September 1. China’s central bank unexpectedly slashed key lending rates to counter downbeat data that highlighted the country’s struggling economy. The People’s Bank of China reduced the rate on its one-year policy loans by 10 bps to 2.75% and that for seven-day reverse repos by the same margin to 2%, defying expectations for no change. Meanwhile, China’s industrial output grew 3.8% in July from a year ago, missing the 4.6% forecast and slowing from a 3.9% gain in June. The country’s retail sales also rose 2.7% in July, well below the 5% increase expected by analysts and following a 3.1% growth in June. China’s economy has been on a rocky path towards recovery as it continues to grapple with recurring Covid-19 outbreaks, property sector risks and simmering tensions with the US over Taiwan. China’s economy narrowly escaped a contraction in the June quarter, hobbled by the lockdown of the commercial hub of Shanghai, a deepening downturn in the property market and persistently soft consumer spending. Risks still abound as many Chinese cities, including manufacturing hubs and popular tourist spots, imposed lockdown measures in July after fresh outbreaks of the more transmissible Omicron variant of the coronavirus were found. Technically market is under short covering as market has witnessed drop in open interest by -2.74% to settled at 1457 while prices up 1.7 rupees, now Zinc is getting support at 315.8 and below same could see a test of 307.4 levels, and resistance is now likely to be seen at 336.3, a move above could see prices testing 348.4.

 

Trading Ideas:???????

* Zinc trading range for the day is 307.4-348.4.
* Zinc rose amid supply tightness after Nyrstar, announced to close the smelter BUDEL starting from September 1.
* PBOC reduced the rate on its one-year policy loans by 10 bps to 2.75% and that for seven-day reverse repos by the same margin to 2%.
* China’s industrial output grew 3.8% in July from a year ago, missing the 4.6% forecast and slowing from a 3.9% gain in June.

 

Aluminium 
Aluminium yesterday settled down by -1.51% at 209.2 as fears of a demand-sapping global recession and higher production levels in China continued to hang over the market. Concerns about an economic and manufacturing slowdown have taken a front seat as increasingly hawkish central banks to rein in sky-high inflation have dented demand for industrial metals. This has come against a backdrop of increasing production from China as smelters recovered from last year’s aggressive energy efficiency targets and recent coronavirus-induced halts. China’s primary aluminum production rose 5.6% to a record monthly high of 3.43 million tonnes in July from a year earlier. Still, a deepening energy crisis, particularly in Europe, has squeezed supplies of the energy-intensive metal. China’s central bank cut key lending rates in a surprise move to revive demand as data showed the economy unexpectedly slowing in July, with factory and retail activity squeezed by Beijing’s zero-Covid policy and a property crisis. The grim set of figures indicate the world’s second largest economy is struggling to shake off the June quarter’s hit to growth from strict Covid restrictions, prompting some economists to downgrade their projections. Industrial output grew 3.8% in July from a year earlier, according to the National Bureau of Statistics (NBS), below the 3.9% expansion in June and a 4.6% increase expected. Technically market is under fresh selling as market has witnessed gain in open interest by 11.21% to settled at 4582 while prices down -3.2 rupees, now Aluminium is getting support at 207.2 and below same could see a test of 205.1 levels, and resistance is now likely to be seen at 212.3, a move above could see prices testing 215.3.
 

Trading Ideas:

*  Aluminium trading range for the day is 205.1-215.3.
* Aluminium dropped as fears of a demand-sapping global recession and higher production levels in China continued to hang over the market.
* Concerns about an economic and manufacturing slowdown have taken a front seat
* China’s primary aluminum production rose 5.6% to a record monthly high of 3.43 million tonnes in July from a year earlier

 

 Mentha oil

Mentha oil yesterday settled up by 0.25% at 989.3 amid low production this season and improving demand post-pandemic. However, upside seen limited as Synthetic Mentha supply remains uninterrupted. Many states have seen gutkha and pan masala ban which have seen a lower demand from the pan masala industry. The harvest is expected to be almost the same as last year's in Barabanki area but harvesting this year is expected to be delayed. Crop growth is poor this year compared with last year despite use of fertiliser. The plant is about 25% less than the total crop, water is being felt after every three days. 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 we forecast 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. Germany's BASF said it would have to stop production if natural gas supplies fell to less than half its needs, as the world's largest chemicals group warned of the damage to its operations from Europe's power crunch. In Sambhal spot market, Mentha oil gained by 20.2 Rupees to end at 1137.7 Rupees per 360 kgs.Technically market is under short covering as market has witnessed drop in open interest by -2.94% to settled at 1519 while prices up 2.5 rupees, now Mentha oil is getting support at 985 and below same could see a test of 980.7 levels, and resistance is now likely to be seen at 995.3, a move above could see prices testing 1001.3.
 

Trading Ideas:???????

* Mentha oil trading range for the day is 980.7-1001.3.
*  In Sambhal spot market, Mentha oil gained  by 20.2 Rupees to end at 1137.7 Rupees per 360 kgs.
* Mentha oil gained amid low production this season and improving demand post-pandemic.
* In the month of May 2022 around 209.90 tonnes Mentha was exported as against 170.22 in April 2022 showing a rise of 23.31%.
* In the month of May 2022 around 209.90 tonnes of Mentha was exported as against 179.76 in May 2021 showing a rise of 16.77%.

 

Turmeric 

Turmeric yesterday settled up by 0.6% at 7368 amid expectations of decline in sown area in the ongoing kharif sowing season. Mandi arrivals of Turmeric, at all-India level, 0.22 lakh tonnes, marking a decline of 38% on m-o-m basis and 48% on y-o-y basis. The major Turmeric producing states such as Telangana, Maharashtra witnessed fall in mandi arrivals during the month of July. Turmeric sowing for marketing year 2023 has started across major production states. In the beginning of June, with the delay in monsoon progress over key Turmeric growing states like Andhra Pradesh, Maharashtra and Tamil Nadu, Turmeric sowings remained sluggish. Stockists have remained inactive due to availability of stock in Marathwada region. As per market feedback, in the ongoing season, no major quality concerns were observed in the crop arrived in the Marathwada region. Turmeric exports during Apr-May 2022 has rose by 14.94 percent at 30,899.73 as compared to 26,881.41 exported during Apr-May 2021. In the month of May 2022 around 17,137.15 tonnes turmeric was exported as against 13762.59 in April 2022 showing a rise of 24.51%. In the month of May 2022 around 17,137.15 tonnes of turmeric was exported as against 13,598.88 in May 2021 showing an increase of 26.02%. In Nizamabad, a major spot market in AP, the price ended at 7524.7 Rupees gained 28.75 Rupees.Technically market is under fresh buying as market has witnessed gain in open interest by 1.42% to settled at 14980 while prices up 44 rupees, now Turmeric is getting support at 7298 and below same could see a test of 7226 levels, and resistance is now likely to be seen at 7416, a move above could see prices testing 7462.
 

Trading Ideas:???????

* Turmeric trading range for the day is 7226-7462.
* Turmeric prices seen supported amid expectations of decline in sown area in the ongoing kharif sowing season.
* In the ongoing season, no major quality concerns were observed in the crop arrived in the Marathwada region.
* Turmeric exports during Apr-May 2022 has rose by 14.94 percent at 30,899.73 as compared to 26,881.41 exported during Apr-May 2021.
* In Nizamabad, a major spot market in AP, the price ended at 7524.7 Rupees gained 28.75 Rupees.
 

Jeera 

Jeera yesterday settled up by 0.78% at 25105 as supply was observed to be less as farmers and stockists were holding stocks in expectations of higher prices in coming months. Arrivals also observed to be less during the month. Mandi arrivals of Jeera, at all-India level decreased by 10% as compared with previous month supported by decrease in arrivals in Rajasthan as well as in Gujarat. However, mandi arrivals were also lower by 39% compared to the corresponding period of the previous year. As per market feedback, export demand has decreased as compared to corresponding period of the previous year. The reason behind decline in export demand was lower exports to China, as the country had imposed lockdown amid resurgence of Covid. In last 3 years Jeera export was observed to be 7.30 Lakh Tonnes out of which 2.01 Lakh Tonnes was exported to China i.e 28% of total jeera exported. As per preliminary estimates, all-India Jeera production is expected to fall in the Marketing year 2022-23 (April-March) by around 33% to 3 lakh tonnes on y-o-y basis due to lower sowings. As per Fourth advance estimates released by Govt of Gujarat Jeera production is likely to fall by 45% to 2.22 lakh tonnes over the previous year. Area covered under cumin seed in Gujarat and Rajasthan state (considered together) has decreased by 28% over last year. In Unjha, a key spot market in Gujarat, jeera edged up by 246.6 Rupees to end at 24279.45 Rupees per 100 kg.Technically market is under short covering as market has witnessed drop in open interest by -4.39% to settled at 10314 while prices up 195 rupees, now Jeera is getting support at 24745 and below same could see a test of 24385 levels, and resistance is now likely to be seen at 25370, a move above could see prices testing 25635.
 

Trading Ideas???????

* Jeera trading range for the day is 24385-25635.
* Jeera prices seen supported as supply was observed to be less as farmers and stockists were holding stocks
* Mandi arrivals of Jeera, at all-India level decreased by 10% as compared with previous month
* 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 up by 246.6 Rupees to end at 24279.45 Rupees per 100 kg.

 

Cotton 
Cotton yesterday settled up by 2% at 49560 after a federal report cut forecasts for global and U.S. production. In its monthly supply-demand report, the United States Department of Agriculture (USDA) cut its global production forecast by 3.1 million bales, and the U.S. output outlook by 3 million bales for the 2022-23 crop year. Hot and dry weather conditions in key growing areas in the United States have threatened the condition of the natural fiber crop and raised supply concerns. The USDA's lower global output estimates also reflected a reduction of about 100,000 bales "as extreme heat in Uzbekistan reduced yield prospects there." However, the agency said it expects the lower U.S. production projections to result in a 2 million bale reduction in exports compared with July, and a 200,000 bale dip in mill use. India’s Cotton sowing gained by nearly 5.34% to 117.65 lakh hectares in 2022 against an area sown of 111.69 lakh hectares in 2021. In Gujarat Cotton sowing grows by nearly 13% with 2,528,354.00 hectares against sown area of 2021 which was 2,240,765.00 hectares as of now. In Rajasthan, Cotton sowing witnessed a gain of 7.99% with 647.1 thousand hectares as against 599.22 thousand hectares on the same day last year. However, crop has been damaged as excessive rains continue to hit parts of the Maharashtra State. In spot market, Cotton gained by 800 Rupees to end at 47170 Rupees.Technically market is under short covering as market has witnessed drop in open interest by -1.65% to settled at 1073 while prices up 970 rupees, now Cotton is getting support at 49560 and below same could see a test of 49560 levels, and resistance is now likely to be seen at 49560, a move above could see prices testing 49560.
 

Trading Ideas:

* Cotton trading range for the day is 49560-49560.
* Cotton rallied after a federal report cut forecasts for global and U.S. production.
* U.S. output forecast cut results in lower exports, mill use view
* Extreme heat in Uzbekistan reduced yield prospects- USDA
* In spot market, Cotton gained  by 800 Rupees to end at 47170 Rupees.

 

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