Nickel trading range for the day is 1301-1336 - Kedia Advisory
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Gold
Gold yesterday settled up by 1.12% at 49534 after U.S. President-elect Joe Biden's nominee to head the Treasury Department, Janet Yellen, bolstered bets for another pandemic-related stimulus package. Yellen said pandemic relief would take priority over tax increases, adding that the benefits of a relief package outweighed the expenses of a higher debt burden. Euro zone finance ministers pledged continued fiscal support for their economies, while focus in the United States remains on Biden's $1.9 trillion stimulus package proposal. Fed Chair Jerome Powell also said there was no reason to alter the central bank's highly accommodative stance with the U.S. economy still far from its inflation and employment goals. Although U.S. inflation expectations have risen in anticipation of more U.S. fiscal stimulus, gold has not been the sole beneficiary – bond yields have risen and weighed on gold. Hedge funds and money managers reduced their bullish positions in COMEX gold contracts in the week to Jan. 12, the U.S. Commodity Futures Trading Commission (CFTC) said. Physical gold in China was sold at a small premium for the first time since early 2020, as demand picked up ahead of the Chinese new year. Dealers in China offered premiums of $0.50-$4 an ounce over benchmark spot gold prices. In India, dealers charged premiums of up to $0.50 an ounce, down from last week’s premium of $1.50. Technically market is under short covering as market has witnessed drop in open interest by -14.91% to settled at 5559 while prices up 551 rupees, now Gold is getting support at 49010 and below same could see a test of 48486 levels, and resistance is now likely to be seen at 49849, a move above could see prices testing 50164.
Trading Ideas:
* Gold trading range for the day is 48486-50164.
* Gold rose after Janet Yellen, bolstered bets for another pandemic-related stimulus package.
* Yellen said pandemic relief would take priority over tax increases, adding that the benefits of a relief package outweighed the expenses of a higher debt burden.
* Euro zone finance ministers pledge continued fiscal support
Silver
Silver yesterday settled up by 1.44% at 66990 as the dollar weakened on U.S. Treasury secretary nominee Janet Yellen's call to "act big" on measures to help the U.S. economy recover from the impact of the pandemic. The dollar weakened on optimism about China's economy and hopes for further global stimulus. Data that China's economy gathered momentum towards the end of 2020. After suffering a 6.8 percent contraction in the first three months of the year, China's economy notched three quarters of progressively stronger gains. China reported more than 100 new Covid-19 cases for the sixth consecutive day, while the number of hospitalized Covid-19 patients with serious symptoms in Japan topped 970, marking a record high since the onset of the pandemic in the country. Portugal imposed a new nationwide lockdown while the U.K. government announced that it will close all travel corridors from today in order to restrict the spread of new coronavirus variant cases. Biden urged immediate action on the $1.9 trillion economic stimulus plan, but some rescue projects in the proposal were opposed by many Republicans. The market has high expectations for the upcoming new round of stimulus bill, and economists expect that the new round of large-scale fiscal stimulus will boost the economic growth of the US this year. Biden will be sworn in as the 46th President of the US on January 20. Technically market is under fresh buying as market has witnessed gain in open interest by 1.65% to settled at 11837 while prices up 954 rupees, now Silver is getting support at 65970 and below same could see a test of 64951 levels, and resistance is now likely to be seen at 67614, a move above could see prices testing 68239.
Trading Ideas:
* Silver trading range for the day is 64951-68239.
* Silver gained as the dollar weakened on U.S. Treasury secretary nominee Janet Yellen's call to "act big" on measures to help the U.S. economy recover.
* The dollar weakened on optimism about China's economy and hopes for further global stimulus.
* The US retail sales unexpectedly fell in December, the producer price index rose lower than expected
Crude oil
Crude oil yesterday settled up by 0.57% at 3910 on expectations the incoming U.S. administration will go ahead with massive stimulus spending that would boost fuel demand and draw down crude stocks. Oil demand recovery will take a hit from a spike in new coronavirus cases before vaccine roll-outs and stimulus measures help in the second half of the year, International Energy Agency (IEA) said. "Border closures, social distancing measures and shutdowns...will continue to constrain fuel demand until vaccines are more widely distributed, most likely only by the second half of the year," it said in its monthly report. U.S. oil output from seven major shale formations is expected to decline for the fourth straight month to about 7.52 million barrels per day (bpd) in February, the lowest since June, the U.S. Energy Information Administration said in a monthly forecast. Output at nearly every formation is expected to fall, driving an overall decline of about 90,000 bpd in February. Oil producers in the United States have begun to slowly add drilling rigs as prices recover but tepid demand recovery and investor pressure to reduce debt has kept companies from rushing to complete new wells. United Arab Emirates Energy Minister Suhail al-Mazrouei said he saw the oil market recovering in 2021 and possibly rebalancing by early 2022. Technically market is under fresh buying as market has witnessed gain in open interest by 11.97% to settled at 1375 while prices up 22 rupees, now Crude oil is getting support at 3886 and below same could see a test of 3861 levels, and resistance is now likely to be seen at 3939, a move above could see prices testing 3967.
Trading Ideas:
* Crude oil trading range for the day is 3861-3967.
* Crude oil gains on expectations the incoming U.S. administration will go ahead with massive stimulus spending that would boost fuel demand
* U.S. shale oil output to drop 90,000 bpd to 7.52 mln bpd in Feb – EIA
* Resurgence in COVID-19 cases slows oil demand rebound-IEA
Nat.Gas
Nat.Gas yesterday settled down by -3.47% at 181 on forecasts for milder weather and lower heating demand through the end of January than previously expected. That decline came despite near record liquefied natural gas (LNG) exports as global gas prices remain near their highest in years. U.S. natural gas production and demand will drop in 2021 as the economic fallout from coronavirus lockdowns continues, the U.S. Energy Information Administration (EIA) said in its Short Term Energy Outlook (STEO). EIA projected dry gas production will drop to 88.17 billion cubic feet per day (bcfd) in 2021 from 90.76 bcfd in 2020 before rising to 89.66 bcfd in 2022. That compares with an all-time high of 93.06 bcfd in 2019. It also projected gas consumption would fall to 80.73 bcfd in 2021 and 79.03 bcfd in 2022 from 83.06 bcfd in 2020. That compares with a record high of 85.15 bcfd in 2019. If the outlook is correct, 2021 would be the first time output falls for two years in a row since 2005, and 2022 would be the first time consumption falls for three consecutive years since 1983. EIA's projections for 2021 in January were higher than its December forecasts of 87.91 bcfd for supply and 79.37 bcfd for demand. Technically market is under fresh selling as market has witnessed gain in open interest by 20.59% to settled at 7660 while prices down -6.5 rupees, now Natural gas is getting support at 177.3 and below same could see a test of 173.7 levels, and resistance is now likely to be seen at 186, a move above could see prices testing 191.1.
Trading Ideas:
* Natural gas trading range for the day is 173.7-191.1.
* Natural gas fell on forecasts for mostly mild weather and lower-than-normal heating demand through early February.
* That decline came even though much higher gas prices around the world continued to prompt buyers to purchase near record amounts of U.S. LNG
* EIA projected dry gas production will drop to 88.17 billion cubic feet per day (bcfd) in 2021 from 90.76 bcfd in 2020 before rising to 89.66 bcfd in 2022.
Copper
Copper yesterday settled up by 0.18% at 611.35 as the U.S. dollar slipped after Treasury Secretary nominee Janet Yellen urged lawmakers to "act big" on the next coronavirus relief package, boosting the appeal of greenback-priced metals. However, investors remained guarded as top metals consumer China stepped up COVID-19 restrictions, with capital Beijing shutting down a subway station after reporting the biggest daily jump in new cases in more than three weeks. Yellen, U.S. President-elect Joe Biden's nominee for the Treasury post, said the benefits of increased spending outweigh the costs of a higher debt burden. The dollar nursed losses as investors' mood brightened in the wake of a better-than-expected sentiment survey in Germany and Yellen's big spending talk. China's imports of copper concentrate from Australia dried up completely in December, customs data showed, as smelters shunned Australian supply amid tense bilateral ties. Imports of copper concentrate from Australia were zero tonnes last month, according to General Administration of Customs data. That compares to 26,717 tonnes imported in November and 110,930 tonnes last December. For 2020, Australia was China's sixth-largest copper concentrate supplier at 783,476 tonnes, down 25% from in 2019 and the lowest yearly total since 2016, the data showed. Australia was the fifth-largest supplier in 2019. Technically market is under short covering as market has witnessed drop in open interest by -5.17% to settled at 2515 while prices up 1.1 rupees, now Copper is getting support at 608 and below same could see a test of 604.5 levels, and resistance is now likely to be seen at 614.8, a move above could see prices testing 618.1.
Trading Ideas:
* Copper trading range for the day is 604.5-618.1.
* Copper prices rose as the U.S. dollar slipped after Treasury Secretary nominee Janet Yellen urged lawmakers to "act big" on the next coronavirus relief package
* Yellen, U.S. President-elect Joe Biden's nominee for the Treasury post, said the benefits of increased spending outweigh the costs of a higher debt burden.
* China's imports of Australian copper ore crashed to zero in December
Zinc
Zinc yesterday settled up by 0.62% at 218.5 as the large-scale fiscal stimulus plan of the US is expected to boost the overall risk appetite. TC at home and abroad continued to fall, and smelters' profits narrowed, which reduced production. Smelters are expected to reduce production by 10,300 mt in January. With the spread of the pandemic in the downstream north, the downstream demand for zinc fell, and with weak supply and demand, zinc prices are likely to continue to fluctuate in the near term. Vedanta Zinc International said that mining has started again at its Gamsberg mine in South Africa following a closure in November when the pit wall collapsed, trapping miners underground. Zinc inventories in China fell over the weekend, primarily propelled by a decrease in Shanghai and Tianjin. Data showed that social inventories of refined zinc ingots across Shanghai, Tianjin, Guangdong, Jiangsu, Zhejiang, Shandong and Hebei decreased 1,100 mt from last Friday January 15 to 144,700 mt as of Monday January 18. The stocks were down 9,300 mt from last Monday January 11. Stocks in Shanghai decreased slightly as downstream restocked when zinc prices fell despite the increased arrivals at smelters and the inflow of imported zinc. In south China's Guangdong, low inventories lifted up the shipments at smelters, prompting stocks to rebound. Stocks in Tianjin fell as arrivals decreased with sluggish transaction prices and downstream rigid demand shrank. Technically market is under short covering as market has witnessed drop in open interest by -18.96% to settled at 1077 while prices up 1.35 rupees, now Zinc is getting support at 216.7 and below same could see a test of 214.9 levels, and resistance is now likely to be seen at 219.5, a move above could see prices testing 220.5.
Trading Ideas:
* Zinc trading range for the day is 214.9-220.5.
* Zinc prices gained as the large-scale fiscal stimulus plan of the US is expected to boost the overall risk appetite.
* TC at home and abroad continued to fall, and smelters' profits narrowed, which reduced production.
* Smelters are expected to reduce production by 10,300 mt in January.
Nickel
Nickel yesterday settled down by -0.11% at 1322.1 on forecasts for mostly mild weather and lower-than-normal heating demand through early February. That decline came even though much higher gas prices around the world continued to prompt buyers to purchase near record amounts of U.S. liquefied natural gas (LNG). Data provider Refinitiv said output in the Lower 48 U.S. states averaged 91.3 billion cubic feet per day (bcfd) so far in January. That compares with an eight-month high of 91.5 bcfd in December and an all-time monthly high of 95.4 bcfd in November 2019. Even though the weather will remain milder than normal through early February, next week is expected to be much colder than this week. Refinitiv projected that cold would boost average gas demand, including exports, to 127.4 bcfd next week from 119.2 bcfd this week. The amount of gas flowing to U.S. LNG export plants averaged 10.6 bcfd so far in January, just shy of December's 10.7-bcfd monthly record. Those exports came as global futures held near last week's highs when gas in Asia rose to an all-time high and Europe hit its highest since October 2018 due to extreme cold in both regions and numerous LNG supply issues. Technically market is under long liquidation as market has witnessed drop in open interest by -11.41% to settled at 1437 while prices down -1.4 rupees, now Nickel is getting support at 1311.5 and below same could see a test of 1301 levels, and resistance is now likely to be seen at 1329, a move above could see prices testing 1336.
Trading Ideas:
* Nickel trading range for the day is 1301-1336.
* Nickel dropped paring gains on profit booking after prices seen supported as China's economic recovery accelerated in the fourth quarter.
* China's refined nickel production in 2020 rose 1.4% to 164,600 tonnes.
* Refined nickel output in December was up 3.1% from November at 14,090 tonnes but down 11.9% year on year
Aluminium
Aluminium yesterday settled up by 0.93% at 163.25 as dollar seen pressure as investors' mood brightened in the wake of a better-than-expected sentiment survey in Germany and Yellen's big spending talk. The value of the U.S. dollar should be determined by markets, Janet Yellen told Senate lawmakers at her confirmation hearing on Tuesday. Yellen also reaffirmed her commitment to relief measures and underlined the depth of the economic crisis. China's aluminium imports in December rose 40.5% from the previous month, customs data showed, snapping three months of declines and extending 2020's position as a record year. The world's biggest aluminium producer, usually has little need for overseas supply but a rapid demand recovery after the coronavirus outbreak saw Shanghai prices surge above London, opening up an arbitrage for cheaper imports. The arb closed in the final quarter, but December arrivals of unwrought aluminium and aluminium products were still the highest since September at 265,569 tonnes, the General Administration of Customs data showed. That was up from 188,973 tonnes in November and up 147.3 year-on-year. Full-year shipments in 2020 were 2.7 million tonnes, up 318.7% on 2019. Imports – which include both primary aluminium and unwrought alloy – surpassed the previous annual record, set in 2009, in just 11 months of 2020, with China turning net importer in July and August for the first time in over a decade. Technically market is under short covering as market has witnessed drop in open interest by -16.3% to settled at 765 while prices up 1.5 rupees, now Aluminium is getting support at 161.2 and below same could see a test of 159.2 levels, and resistance is now likely to be seen at 164.3, a move above could see prices testing 165.4.
Trading Ideas:
* Aluminium trading range for the day is 159.2-165.4.
* Aluminium gains as dollar seen pressure as investors' mood brightened in the wake of a better-than-expected sentiment survey in Germany and Yellen's big spending talk.
* China aluminium imports extend 2020 record high with December rise
* Full-year shipments in 2020 were 2.7 million tonnes, up 318.7% on 2019.
Mentha oil
Mentha oil yesterday settled down by -1.04% at 962 as demand from cosmetics and toiletries sector will remain weak in India. The COVID-19 outbreak has had a huge impact on the worldwide economy, and has posed a similar influence on the aroma chemicals market. The market has been faced with the lack of migrant labor, supply chain disruptions, shutdown of manufacturing activities, to name a few. Support also seen on the expectation that India’s fragrance industry which had been slow, now slowly gaining the positive momentum post the COVID unlock down. Headed towards a new decade, the fragrance industry has received a much needed boost with the acceptance of trendy dhoop sticks and dhoop cones which has seen an increased 20% demand day by day. The global aroma chemicals market is likely to record a steady CAGR of about 4% during the assessment period of 2020-2030. Growing demand for aroma chemicals in the food & beverage and fragrance industry will underpin the growth of the market. Strict regulations in relation to artificial flavours are complimenting to the expansion of natural aroma chemicals in the food sector. Out of India's total mentha oil exports, nearly 55% goes to China while 16% goes to the US and around 5% goes to Singapore. In Sambhal spot market, Mentha oil dropped by -1.9 Rupees to end at 1126.6 Rupees per 360 kgs. Technically market is under long liquidation as market has witnessed drop in open interest by -2.02% to settled at 97 while prices down -10.1 rupees, now Mentha oil is getting support at 958.2 and below same could see a test of 954.3 levels, and resistance is now likely to be seen at 967.9, a move above could see prices testing 973.7.
Trading Ideas:
* Mentha oil trading range for the day is 954.3-973.7.
* In Sambhal spot market, Mentha oil dropped by -1.9 Rupees to end at 1126.6 Rupees per 360 kgs.
* Mentha oil dropped as demand from cosmetics and toiletries sector will remain weak in India
* The COVID-19 outbreak has had a huge impact on the worldwide economy, and has posed a similar influence on the aroma chemicals market.
* The global aroma chemicals market is likely to record a steady CAGR of about 4% during the assessment period of 2020-2030.
Soyabean
Soyabean yesterday settled down by -1.39% at 4547 amid worry over slim demand from poultry after the bird flu outbreak. The poultry industry is the main consumer of soya and many private poultry players have a direct contract with farmers for supply of feed. BV Mehta, executive director of the Solvent Extractors’ Association of India (SEA), said that poultry consumes about 5 million tonnes of soya every year and despite the bird flu, soya prices would not come down drastically. “Soya constitutes about 30 per cent of poultry feed every month. If the domestic demand dips, we are looking for additional export. We don’t want to increase export by reducing supply to the domestic market, but if local demand fails to pick up we will enhance export,” said Mehta. China's soybean imports hit a record high in 2020, customs data showed, after crushers ramped up purchases amid improved margins and healthy demand from the country's rapidly recovering pig sector. China, the world's top soybean buyer, bought 100.33 million tonnes of the oilseed in 2020, up 13% from 88.51 million tonnes in 2019, according to the General Administration of Customs, the highest annual imports on record. December's imports came in at 7.524 million tonnes, down 27% from 9.54 million tonnes a year ago. At the Indore spot market in top producer MP, soybean gained 32 Rupees to 4594 Rupees per 100 kgs. Technically market is under long liquidation as market has witnessed drop in open interest by -2.62% to settled at 193405 while prices down -64 rupees, now Soyabean is getting support at 4509 and below same could see a test of 4472 levels, and resistance is now likely to be seen at 4581, a move above could see prices testing 4616.
Trading Ideas:
* Soyabean trading range for the day is 4472-4616.
* Soyabean prices dropped amid worry over slim demand from poultry after the bird flu outbreak.
* SEA said that poultry consumes about 5 million tonnes of soya every year.
* China's soybean imports hit a record high in 2020, customs data showed, after crushers ramped up purchases amid improved margins and healthy demand
* At the Indore spot market in top producer MP, soybean gained 32 Rupees to 4594 Rupees per 100 kgs.
Ref.Soyaoil
Ref.Soyaoil yesterday settled up by 0.41% at 1086.2 tracking rise in CPO prices after prices dropped as the sowing of oilseed crops has increased to 81.80 lakh hectares in the current Rabi whereas till this time last year, it was sown only in 77.79 lakh hectares. Pressure also seen tracking weakness in soyabean prices as the outbreak of bird flu may reduce the demand for soybean from the poultry industry. The outbreak of avian influenza in Parbhani district has been among poultry, while AI has been confirmed from crows in Mumbai, Thane, Dapoli, Maharashtra. Soybean production is estimated at 4.135 billion bushels, down 35 million led by reductions for Minnesota, Iowa, and Kansas. Largest exporter Argentina and Uruguay have also reported lower production of soybean this year, soybean production is lowered 2 million tons to 48 million for Argentina and 200,000 to 2.2 million for Uruguay, reflecting dry weather conditions in December and early January.. NOPA members, which handle about 95% of all soybeans processed in the United States, were estimated to have crushed a near-record 185.175 million bushels of soybeans last month. Soyoil supplies among NOPA members at the end of December were seen rising for a third straight month to 1.712 billion pounds, compared with 1.558 billion pounds at the end of November and 1.757 billion pounds at the end of December 2019. At the Indore spot market in Madhya Pradesh, soyoil was steady at 1079.55 Rupees per 10 kgs. Technically market is under fresh buying as market has witnessed gain in open interest by 5.49% to settled at 38325 while prices up 4.4 rupees, now Ref.Soya oil is getting support at 1066 and below same could see a test of 1045 levels, and resistance is now likely to be seen at 1098, a move above could see prices testing 1109.
Trading Ideas:
* Ref.Soya oil trading range for the day is 1045-1109.
* Ref soyoil gains as recovery seen tracking rise in CPO prices after prices dropped as the sowing of oilseed crops has increased to 81.80 lakh hectares.
* Pressure also seen tracking weakness in soyabean prices as the outbreak of bird flu may reduce the demand for soybean from the poultry industry
* Soybean production is estimated at 4.135 billion bushels, down 35 million led by reductions for Minnesota, Iowa, and Kansas.
* At the Indore spot market in Madhya Pradesh, soyoil was steady at 1079.55 Rupees per 10 kgs.
Crude palm Oil
Crude palm Oil yesterday settled up by 1% at 933.2 amid supply disruptions due to floods in Malaysia however prices dropped earlier as dismal Jan. 1-20 exports data dragged the market. Exports of Malaysian palm oil products for Jan. 1-20 fell 41% to 632,827 tonnes from the same period in December, AmSpec Agri Malaysia said. Exports during Jan. 1-15 had also declined 42%. Contracting demand outweighed fears of supply disruption as flooding in several parts of Malaysia hurt output. The high rainfall is delaying harvesting in flooded areas, jeopardizing the road conditions and affecting evacuation. The market will now wait for more export and production outlook to reinforce sentiment for January end-palm oil inventories in Malaysia. Indonesia's CPO exports to Malaysia rose by 56.63% to 142,654 tons in 2020 from the previous year to compensate for the deficit in CPO from the second largest producer. European Union palm oil imports in the 2020/21 season that started last July had reached 3.24 million tonnes by Jan. 17, up from 3.10 million by the same time last year, data published by the European Commission showed. Exports of Malaysian palm oil products for January 1 – 15 fell 41.8 percent to 426,276 tonnes from 732,780 tonnes shipped during December 1 – 15. Malaysia kept its export duty for crude palm oil at 8% for February, a circular on the Malaysian Palm Oil Board website showed. In spot market, Crude palm oil dropped by -17.9 Rupees to end at 921.4 Rupees. Technically market is under short covering as market has witnessed drop in open interest by -16.35% to settled at 2650 while prices up 9.2 rupees, now CPO is getting support at 913.2 and below same could see a test of 893.3 levels, and resistance is now likely to be seen at 944.3, a move above could see prices testing 955.5.
Trading Ideas:
* CPO trading range for the day is 893.3-955.5.
* Crude palm oil gains amid supply disruptions due to floods in Malaysia however prices dropped earlier amid dismal Jan. 1-20 exports data.
* Contracting demand outweighed fears of supply disruption as flooding in several parts of Malaysia hurt output.
* Indonesia's CPO exports to Malaysia rose by 56.63% to 142,654 tons in 2020 from the previous year
* In spot market, Crude palm oil dropped by -17.9 Rupees to end at 921.4 Rupees.
Mustard Seed
Mustard Seed yesterday settled down by -0.6% at 5622 after update India’s 2020-21 mustard crop may touch 100 lakh ton-level due to higher sowing and conducive weather. Sowing of mustard, has increased to 72.98 lakh hectare in the current Rabi whereas till last year, it was sown only in 68.15 lakh hectare. The sowing of oilseed crops has increased to 81.80 lakh hectares in the current Rabi whereas till this time last year, it was sown only in 77.79 lakh hectares. At the national level, the total production area of rabi crops increased to 620.71 lakh hectare on January 1, 2021, compared to 603.15 lakh hectare to 17.56 lakh hectare or 2.91 percent and the general average area from 620.27 lakh hectare to 44 thousand hectare in the same period last year. The latest data from the Union Ministry of Agriculture shows that this time the production of oilseeds crops was 75.93 lakh hectare as compared to the last season. In oilseed crops, mustard-rapeseed production area jumped from 66.62 lakh hectare last year to 72.39 lakh hectare. The Union Agriculture Ministry has set a target of sowing mustard in 75 lakh hectare area during the current Rabi season. In Alwar spot market in Rajasthan the prices gained 52.15 Rupees to end at 6200 Rupees per 100 kg. Technically market is under fresh selling as market has witnessed gain in open interest by 1.24% to settled at 15490 while prices down -34 rupees, now Rmseed is getting support at 5577 and below same could see a test of 5532 levels, and resistance is now likely to be seen at 5656, a move above could see prices testing 5690.
Trading Ideas:
* Rmseed trading range for the day is 5532-5690.
* Mustard seed dropped after update India’s 2020-21 mustard crop may touch 100 lakh ton-level due to higher sowing and conducive weather.
* Sowing of mustard, has increased to 72.98 lakh hectare in the current Rabi whereas till last year, it was sown only in 68.15 lakh hectare.
* The sowing of oilseed crops has increased to 81.80 lakh hectares in the current Rabi whereas till this time last year, it was sown only in 77.79 lakh hectares.
* In Alwar spot market in Rajasthan the prices gained 52.15 Rupees to end at 6200 Rupees per 100 kg.
Turmeric
Turmeric yesterday settled up by 2% at 6330 amid expectation of decrease in Turmeric sown area in the kharif sowing season 2020 across Nizamabad and Marathwada regions. However upside seen limited due to excess stocks which will be 50-60% of the excess in the current year as carry forward in the next year. Covid-19 raised expectations regarding the consumption of turmeric as a body immune enhancer, but it did not last long. Poor quality of arrivals is another reason for the drop in demand. Therefore, many traders in Erode started buying turmeric from the markets of Andhra Pradesh and Maharashtra as the prices were low there. Despite 2% freight, they are saving 5% on costs. Apprehensions are there that water logging and higher moisture due to recent rains in October in major Turmeric growing regions of Telangana, Maharashtra, Karnataka is likely to have adverse impact on overall productivity of Turmeric. Stockiest are getting active and started purchasing actively due to factors like decreasing sowing area and increasing demand. On the export front, India exported around 0.86 lakh tonnes of Turmeric in April-August, 2020 which is 51% higher than April-August, 2019 at 0.57 lakh tonnes. In Nizamabad, a major spot market in AP, the price ended at 5845.25 Rupees gained 3.55 Rupees. Technically market is under fresh buying as market has witnessed gain in open interest by 4.92% to settled at 8215 while prices up 124 rupees, now Turmeric is getting support at 6242 and below same could see a test of 6156 levels, and resistance is now likely to be seen at 6372, a move above could see prices testing 6416.
Trading Ideas:
* Turmeric trading range for the day is 6156-6416.
* Turmeric gained amid expectation of decrease in Turmeric sown area across Nizamabad and Marathwada regions.
* However upside seen limited due to excess stocks which will be 50-60% of the excess in the current year as carry forward in the next year.
* Stockiest are getting active and started purchasing actively due to factors like decreasing sowing area and increasing demand.
* In Nizamabad, a major spot market in AP, the price ended at 5845.25 Rupees gained 3.55 Rupees.
Jeera
Jeera yesterday settled down by -0.72% at 13060 as the season progresses in Gujarat, the increase in Rabi sowing continues. The total sowing of cumin in Gujarat has been over 4,64,469 hectares, compared to 4,35,657 hectares in the same period last year and the three-year average of 4,06,141 hectares in the state. Prices are likely to decline due to a reduction in export demand amidst substantial carryover stocks. There has also been a decrease in demand from domestic stockists as the arrival of new crops is awaiting in the market. Meanwhile, prices are under pressure due to better sowing prospects this year. As the ongoing rabi sowing progress and overall demand in wholesale markets in steady with bulk buyers are looking at the prospect of a heay crop in current harvest, keeping the undertone in futures mostly weak over last one month or so. The latest data showed that acreage under Jeera in leading producing state of Gujarat was at 4.64 lakh hectates (lh), marking a jump of around 11% compared to the same time last year. Meanwhile some support can be seen as statement from the Spices Board said export of spices, which had fetched ₹12,273.81 crore in the first half of the current fiscal between April and September, had grown by 19 per cent compared to the corresponding period last year. In Unjha, a key spot market in Gujarat, jeera edged down by -40.6 Rupees to end at 12991.3 Rupees per 100 kg. Technically market is under fresh selling as market has witnessed gain in open interest by 1.49% to settled at 1434 while prices down -95 rupees, now Jeera is getting support at 13000 and below same could see a test of 12940 levels, and resistance is now likely to be seen at 13135, a move above could see prices testing 13210.
Trading Ideas:
* Jeera trading range for the day is 12940-13210.
* Jeera dropped as the season progresses in Gujarat, the increase in Rabi sowing continues.
* Prices declined due to a reduction in export demand amidst substantial carryover stocks.
* The total sowing of cumin in Gujarat has been over 4,64,469 hectares, compared to 4,35,657 hectares in the same period last year
* In Unjha, a key spot market in Gujarat, jeera edged down by -40.6 Rupees to end at 12991.3 Rupees per 100 kg.
Cotton
Cotton yesterday settled up by 0.19% at 21160 on short covering after prices as pressure seen after Cotton Association of India increasing India cotton stock estimates. Cotton Association of India increased Indian cotton output estimates for 2020-21 season to 358.50 lakh bales (170 kg) against 356 lakh bales pegged previously. Cotton farmers of Anantapur, who suffered due to vagaries of nature earlier, are now suffering due to lack of procurement centres in the district. The district has two cotton procurement centres in Gooty and Tadipatri, while Rythu Bharosa Kendras (RBKs) are limited to registering the names of the cotton growers. The Cotton Corporation of India (CCI), which opened two procurement centres, is paying Rs 5,825 per quintal for high quality cotton and Rs 5,725 per quintal for medium quality and Rs 5,615 for the low grade cotton to the farmers. But the farmers cannot go directly to the CCI procurement centres and sell their produce. They have to get their names registered with the RBKs and only after getting an alert on their mobile phones, they can go to the procurement centres. The farmers have to wait for their serial number and the produce will be procured depending on availability of space in the warehouse of the CCI procurement centres. In spot market, Cotton dropped by -20 Rupees to end at 20890 Rupees. Technically market is under short covering as market has witnessed drop in open interest by -8.61% to settled at 2737 while prices up 40 rupees, now Cotton is getting support at 21060 and below same could see a test of 20950 levels, and resistance is now likely to be seen at 21240, a move above could see prices testing 21310.
Trading Ideas:
* Cotton trading range for the day is 20950-21310.
* Cotton gained on short covering after prices as pressure seen after Cotton Association of India increasing India cotton stock estimates.
* CAI increased Indian cotton output estimates for 2020-21 season to 358.50 lakh bales.
* Cotton farmers of Anantapur, are suffering due to lack of procurement centres in the district.
* In spot market, Cotton dropped by -20 Rupees to end at 20890 Rupees.
Chana
Chana yesterday settled down by -1.01% at 4415 as pressure seen after Pulses sowing area jumped by nearly 109% to 8.55 lh. Chana acreage has soared by 115% to 8.03 lh. Nafed’s unstable chana releasing strategy continues to affect market directly at a time when area is up by 5 % and the new crop is hardly one and a half month away. Nafed continued to fix reserve price and changed it frequently from Rs 5600 to Rs. 5100, again Rs. 5100 to Rs. 4875. Apart from it has offered 5 to 10 % discount over previous MSP on particular centers. As offtake from central pool is lower, Nafed may decrease price further to vacate storage space for new procurement. It would not allow chana cash market to go up beyond a certain level. Delhi chana is being traded at Rs4550-4650. Demand is weak. Weather condition in Jan –Feb remains crucial. The latest data shows that the total area of pulses has increased by 7% to 141 lakh hectares. More sowing is done in Maharashtra, Odisha and Jharkhand as compared to last year. Gram cultivation has increased by about 10%. NAFED to sell Gram PSS Rabi-2020 stock from all the States at or above base prices of Rs. 5100 per quintal in the month of December 2020, it offers an initial quantity of 1.5 LMT of Gram, for the month of December 2020. In Delhi spot market, chana dropped by -35.4 Rupees to end at 4435 Rupees per 100 kgs. Technically market is under long liquidation as market has witnessed drop in open interest by -0.38% to settled at 33790 while prices down -45 rupees, now Chana is getting support at 4389 and below same could see a test of 4363 levels, and resistance is now likely to be seen at 4457, a move above could see prices testing 4499.
Trading Ideas:
* Chana trading range for the day is 4363-4499.
* Chana prices dropped as pressure seen after Pulses sowing area jumped by nearly 109% to 8.55 lh.
* Chana acreage has soared by 115% to 8.03 lh.
* Nafed’s unstable chana releasing strategy continues to affect market directly at a time when area is up by 5 %
* In Delhi spot market, chana dropped by -35.4 Rupees to end at 4435 Rupees per 100 kgs.
