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ALUMINIUM

Global Aluminium futures traded bullish during the month of July, owing to demand recoveries in China due to higher industrial buying. Covid-19 worries continue to loom in the European and South American countries that had added uncertainties regarding the health of the global economy but then Aluminium prices seem to overlook the same and is expected to improve the usage of war materials. MCX Alumini futures has closed at Rs.204.35/kg by 29th July, higher by 2.25% compared to Rs.199.85/kg as on 30th June.

Looking forward for the coming month, we expect International Aluminium Futures to trade bullish as the covid vaccination process has picked up face. Currently, the Chinese and United States economic data has shown further incline over the months and expected to be higher for the month of July, which is forecasted to support higher Aluminium production due to rising demand.

Moreover, the US Dollar Index and Bond Yield remain lower after FED reported a dovish stance that they are not looking to increase the interest rate any time soon considering the economic recovery. As per International Aluminium Institute, global Aluminium production for the month of June’21 has been reported to be around 5.545 Million tonnes, lower compared to previous month's production of 5.750 million tonnes. China has witnessed higher global production for the last month.

China’s Aluminium production for the above month has been estimated around 3.245 million tonnes, lower compared to 3.350 million tonnes reported during the previous month. Elsewhere, production in Asia (excluding China), North America, Western and Eastern Europe have also reported lower production for the June’21 compared to the proceeding month. Overall, with supply reduction and rising demand over the months, we expect a bullish trend in MCX Aluminium Futures for the month ahead.

On a four hourly chart, MCX Aluminium (Aug) future has given a breakout of Symmetrical Triangle Pattern with spurt volumes, which indicates bullish movement in the near future. In addition, the price is trading above Ichimoku cloud, which point-out positive trend for long term. Moreover, the price is trading above 50 Exponential Moving Averages, which suggests bullish strength. However, an oscillator Stochastic RSI suggested negative crossover, which indicates some correction in the counter till the level of upper bands of the pattern. Hence, based on the above technical structure we are recommending buy on dip strategy in MCX Aluminium (Aug) around 203 or a fall in the price till 201.50 levels, that can be used as buying opportunity for the upside target of 213 . However, the bullish view will be negated if MCX Aluminium (Aug) future close below the Support Level Of 198.

Turmeric

NCDEX Turmeric Future price has mainly traded sideways to bullish during the July month closing at Rs.7392/quintal on 29th July, higher by 1.09% compared to Rs.7312/quintal as on 30th June. Steady buying in the domestic market amid high medicinal value including the proven anti-inflammatory qualities kept the prices supported in the last couple of weeks.

Fundamentally for the month ahead, we are estimating NCDEX Turmeric futures to trade bearish, with the reports of good monsoon in the southern peninsula. Although the monsoon has slowed down in the central and north western parts of India, but then, monsoon continues to remain favourable in Tamil Nadu, Karnataka, Andhra Pradesh and Telangana.

The domestic APMC markets have reopened and supplies/arrivals are slowly rising with vaccination process picking up pace. The demand on the other hand has remained choppy although exports of turmeric continue to rise ona monthly basis. The state of Telangana and Andhra Pradesh is expected to continue sowing until the end of the August month and with favourable weather along with higher prices is expected to increase acreage in the said states by 10-12% compared to the previous year.

Sowing in Karnataka and Orissa is likely to be similar compared to the previous year with Assam likely to increase sowing by 5-10% due to higher demand for premium quality turmeric spice in the domestic and international market. In the case of Maharashtra, sowing is expected to decline by 10-15% due to higher demand for traditional soybean crop along with demand for cotton amid relatively higher prices in the spot and futures markets. Although monsoon has shown some recoveries in Maharashtra the latter commodities continue to be the preference for the farmers.

On the daily chart, NCDEX Turmeric (Sep) future has been trading in a Bearish channel from last couple of days. It has faced immediate resistance of the upper band of Trendline. In addition, the priceis trading below the Ichimoku Cloud, which indicates a bearish trend in the near future. Moreover, a momentum indicator RSI (14) reading is below 50 levels, which suggests also a bearish move for the near term. Furthermore, on a weekly chart the price has also formed the Shooting star candlestick, which indicates bearish momentum in the near future. Hence, based on the above technical structure we are expecting bearish movement for the month ahead. On the downside, it may find the support around 6900 while upside resistance is intact at 7770.

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