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Published on 12/08/2020 12:08:13 PM | Source: Kedia Advisory

Rmseed trading range for the day is 4902-5182 By Kedia Advisory

Posted in Commodities Reports| #Commodity Tips #Kedia Advisory

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Gold

Gold yesterday settled down by -5.49% at 51929 as the dollar clung to recent gains and risk appetite was boosted by an expected U.S. stimulus deal, prompting investors to take profits from bullion’s explosive run to a record high. Adding to gold’s headwinds, global equities hit multi-month highs on expectations that U.S. Congress will agree a massive stimulus deal while looming trade talks raised hopes of an easing in tensions between the United States and China. China had imposed sanctions on 11 U.S. citizens, including lawmakers from President Donald Trump's Republican Party, after Washington's sanctions on Hong Kong and Chinese officials last week. Physical gold remained out of favour in most Asian hubs this week as a worsening pandemic kept retail buyers away with global benchmark spot prices at historic highs, while logistical challenges plagued the Indian market. In India, premiums eased to about $4 an ounce over official domestic prices, from last week's $8. Amid mounting tensions between Washington and Beijing, U.S. Health Secretary Alex Azar offered President Donald Trump's strong support for democratic Taiwan. China said it will impose sanctions on 11 U.S. citizens in response to similar measures from Washington on Chinese and Hong Kong officials. Technically market is under long liquidation as market has witnessed drop in open interest by -0.75% to settled at 15963 while prices down -3017 rupees, now Gold is getting support at 50844 and below same could see a test of 49759 levels, and resistance is now likely to be seen at 53882, a move above could see prices testing 55835.
Trading Ideas:
* Gold trading range for the day is 49759-55835.
* Gold slid as the dollar clung to recent gains and risk appetite was boosted by an expected U.S. stimulus deal, prompting investors to take profits.
* Adding to gold’s headwinds, global equities hit multi-month highs on expectations that U.S. Congress will agree a massive stimulus deal
* Physical gold remained out of favour in most Asian hubs this week as a worsening pandemic kept retail buyers away

 

Silver

Silver yesterday settled down by -11.22% at 66934 as equities rose and the dollar maintained its gains after investor sentiment in Germany improved more than expected in August and data showed auto sales in China rose for the fourth straight month. Investors keep a close eye on Sino-U.S. relations amid concerns that their trade deal could be at jeopardy. In economic news, signs of improvement in China's industrial activity added to signs of economic recovery in the world's second-largest economy. Sales in China rose by an annual 16.4 percent in July in a sign of sustained recovery for the industry's biggest global market as Beijing eases restrictions and offers favorable policies and subsidies in a bid to revive the economy. German economic confidence improved notably in August, survey data from the ZEW - Leibniz Centre for European Economic Research showed. The ZEW Indicator of Economic Sentiment increased unexpectedly to 71.5 in August from 59.3 in July. Meanwhile, investors remain hopeful that U.S. Republicans and Democrats will eventually agree a comprehensive stimulus package to limit the economic damage caused by the coronavirus pandemic and boost growth. China said it will impose sanctions on 11 U.S. citizens in response to similar measures from Washington on Chinese and Hong Kong officials. Technically market is under long liquidation as market has witnessed drop in open interest by -20.65% to settled at 10261 while prices down -8460 rupees, now Silver is getting support at 63850 and below same could see a test of 60767 levels, and resistance is now likely to be seen at 72513, a move above could see prices testing 78093.
Trading Ideas:
* Silver trading range for the day is 60767-78093.
* Silver prices fell as equities rose and the dollar maintained its gains after investor sentiment in Germany improved more than expected in August
* Meanwhile, investors remain hopeful that U.S. Republicans and Democrats will eventually agree a comprehensive stimulus package to limit the economic damage
* Investors keep a close eye on Sino-U.S. relations amid concerns that their trade deal could be at jeopardy.

 

Crude oil

Crude oil yesterday settled down by -0.95% at 3131 paring its gains seen underpinned by expectations of U.S. stimulus and a rebound in Asian demand as economies reopen. Saudi Aramco is moving ahead with plans to boost crude output capacity by 1 million barrels per day (bpd) to 13 million bpd despite cuts in capital expenditure this year and next year, the state oil group's CEO said on Monday. Aramco's capital spending plan for 2021 will be "significantly lower than previous guidance," CEO Amin Nasser also said. Iraq said it would cut its oil output by a further 400,000 barrels per day in August and September to compensate for its overproduction in the past three months. The move would help it comply with its share of cuts by the Organization of the Petroleum Exporting Countries and allies, known as OPEC+.Energy companies have begun taking back millions of barrels of oil from the U.S. government's emergency stockpile after renting storage in the facility to help manage a glut of crude this spring after energy demand collapsed during COVID-19 lockdowns, a Department of Energy website showed. Money managers raised their net long U.S. crude futures and options positions in the week to August 4, the U.S. Commodity Futures Trading Commission (CFTC) said. Technically market is under long liquidation as market has witnessed drop in open interest by -12.07% to settled at 1078 while prices down -30 rupees, now Crude oil is getting support at 3096 and below same could see a test of 3062 levels, and resistance is now likely to be seen at 3184, a move above could see prices testing 3238.
Trading Ideas:
* Crude oil trading range for the day is 3062-3238.
* Crude oil dropped paring its gains seen underpinned by expectations of U.S. stimulus and a rebound in Asian demand as economies reopen.
* Saudi Aramco is moving ahead with plans to boost crude output capacity by 1 million barrels per day (bpd) to 13 million bpd
* Iraq said it would cut its oil output by a further 400,000 barrels per day in August and September

 

Nat.Gas

Nat.Gas yesterday settled up by 1.12% at 162.5 on a daily reduction in output, forecasts for hot weather through late August and a continued increase in liquefied natural gas (LNG) exports. Looking ahead, futures for the balance of 2020 and calendar 2021 were trading over the front-month by 18% and 27%, respectively, on hopes energy demand will rise as the economy rebounds from coronavirus lockdowns. U.S. output for Tuesday was on track to fall 2.5 billion cubic feet per day (bcfd), the most in a day since early May, to 87.2 bcfd, according to preliminary data. Although U.S. and European gas contracts mostly trade on their own fundamentals, a 47% jump in prices at the European Title Transfer Facility (TTF) benchmark in the Netherlands so far in August has helped drag U.S. gas up about 22% this month. That made it profitable for more U.S. LNG cargoes to go to Europe again for the first time in months. U.S. LNG exports in August were on track to rise for the first time in six months. Pipeline gas flowing to the plants climbed to 4.2 bcfd in August from a 21-month low of 3.3 bcfd in July, when buyers canceled dozens of cargoes – the most in a month. Refinitiv projected U.S. demand, including exports, will hold near 88.9 bcfd over the next two weeks. Technically market is under short covering as market has witnessed drop in open interest by -8.27% to settled at 5832 while prices up 1.8 rupees, now Natural gas is getting support at 159.8 and below same could see a test of 157.1 levels, and resistance is now likely to be seen at 166.1, a move above could see prices testing 169.7.
Trading Ideas:
* Natural gas trading range for the day is 157.1-169.7.
* Natural gas rose on a daily reduction in output, forecasts for hot weather through late August and a continued increase in LNG exports.
* Looking ahead, futures for the balance of 2020 and calendar 2021 were trading over the front-month by 18% and 27%, respectively.
* U.S. output for Tuesday was on track to fall 2.5 billion cubic feet per day (bcfd), the most in a day since early May, to 87.2 bcfd

 

Copper

Copper yesterday settled down by -0.01% at 511.2 due to souring U.S.-China tensions and a stronger U.S. dollar that made greenback-prices metals in London more expensive to users of other currencies. However downside seen limited as investors eyed a potential U.S. stimulus bill after lawmakers and officials said they were willing to restart negotiations on a COVID-19 rescue package. U.S. congressional leaders and Trump administration officials said they were ready to resume negotiations on a coronavirus aid deal after talks collapsed on Friday without an agreement. China's auto sales in July climbed 16.4% from a year earlier, the fourth consecutive month of gains as the world's biggest vehicle market comes off lows hit during the country's coronavirus lockdown. China's major copper smelters reduced output in July by 7.2% year-on-year due to summer maintenance. The main factors behind the drop were maintenance at Jinchuan Group's 400,000 tonnes per year smelter in Guangxi and the relocation of a smelter in Inner Mongolia. Maintenance will be lower in August but treatment charges at "a relatively low historical level" of around $50 a tonne will limit production to around 710,000 tonnes this month. Technically market is under long liquidation as market has witnessed drop in open interest by -3.78% to settled at 3383 while prices down -0.05 rupees, now Copper is getting support at 507 and below same could see a test of 502.7 levels, and resistance is now likely to be seen at 514.5, a move above could see prices testing 517.7.
Trading Ideas:
* Copper trading range for the day is 502.7-517.7.
* Copper prices dropped due to souring U.S.-China tensions and a stronger U.S. dollar
* However downside seen limited as investors eyed a potential U.S. stimulus bill after lawmakers and officials said they were willing to restart negotiations
* China's major copper smelters reduced output in July by 7.2% year-on-year due to summer maintenance.

 

Zinc

Zinc yesterday settled up by 0.58% at 190.6 as upbeat domestic economic data and continued declines in zinc social inventories bolstered zinc prices. However upside seen limited as investors worried about U.S.-Sino tensions and the economic impact of the COVID-19 pandemic. Zinc output came in at 430,000 tonnes in July, up 0.2% year-on-year and up 6.7% from June as smelters in Inner Mongolia, Yunnan, Anhui came back from maintenance. Zinc ingot inventories at most smelters and factories are already at zero or low levels as demand recovers, as August zinc output may rise by around 6,000 tonnes, followed by a further increase in September. The zinc market was in surplus by 126 kt during January to May 2020 which compares with a deficit of 63 kt recorded in the whole of the previous year. Reported stocks increased by 132 kt during January to May which included a net increase in Shanghai of 79 kt over the period. LME stocks rose over the January to May period to close 48 kt above the December 2019 level. Technically market is under fresh buying as market has witnessed gain in open interest by 7.83% to settled at 2395 while prices up 1.1 rupees, now Zinc is getting support at 188.6 and below same could see a test of 186.6 levels, and resistance is now likely to be seen at 191.8, a move above could see prices testing 193.
Trading Ideas:
* Zinc trading range for the day is 186.6-193.
* Zinc gained as upbeat domestic economic data and continued declines in zinc social inventories bolstered zinc prices.
* Zinc output came in at 430,000 tonnes in July, up 0.2% year-on-year and up 6.7% from June.
* Zinc ingot inventories at most smelters and factories are already at zero or low levels as demand recovers.

 

Nickel

Nickel yesterday settled down by -0.05% at 1086 amid nervousness about a fresh flare in U.S.-China tensions and considerable uncertainty on whether U.S. policymakers could approve a mooted stimulus package. The market turned its attention back to robust economic growth and demand in China and expectations of an upturn at manufacturing companies in Europe and the United States. The uncertainty of a new round of US economic stimulus package kept investors cautious about the economic situation, buoying US dollar index. U.S. congressional leaders and Trump administration officials said they were ready to resume negotiations on a coronavirus aid deal after talks collapsed on Friday without an agreement. The nickel market was in surplus during January to May 2020 with production exceeding apparent demand by 33.3 kt. In the whole of 2019, the calculated deficit was 29.1 kt. Reported stocks held in the LME at the end of May 2020 were 80.2 kt higher than at the end of the previous year. Refined production in January to May 2020 totalled 890.6 kt and demand was 857.3 kt. Mine production during January to May was 868.9 kt, 115 kt below the comparable 2019 total. Chinese smelter/refinery output fell by 69 kt compared with 2019 and apparent demand was 408.4 kt, 50 kt lower than in the previous year. Technically market is under fresh selling as market has witnessed gain in open interest by 9.77% to settled at 1359 while prices down -0.5 rupees, now Nickel is getting support at 1075.3 and below same could see a test of 1064.7 levels, and resistance is now likely to be seen at 1094.2, a move above could see prices testing 1102.5.
Trading Ideas:
* Nickel trading range for the day is 1064.7-1102.5.
* Nickel dropped amid nervousness about a fresh flare in U.S.-China tensions and considerable uncertainty on whether U.S. policymakers could approve a stimulus package.
* The nickel market was in surplus during January to May 2020 with production exceeding apparent demand by 33.3 kt.
* Chinese smelter/refinery output fell by 69 kt compared with 2019 and apparent demand was 408.4 kt, 50 kt lower than in the previous year.

 

Aluminium

Aluminium yesterday settled down by -0.31% at 146.4 due to stronger dollar and risks from rising tensions between Washington and Beijing, while hopes for a potential U.S. stimulus bill capped losses. Social inventories of aluminium ingots rose slightly as shipments from social warehouses weakened. China's Henan Shenhuo Group said it had switched on the third 150,000 tonnes per year production line of its aluminium smelting project in the country's southwestern Yunnan province. It will take around a month to ramp up to full production, the company said on its official WeChat account, after which all 450,000 tonnes of annual aluminium capacity the company transferred from Henan to Yunnan will be operational. The calculated market balance for primary aluminium for January to May 2020 was a surplus of 908 kt which follows a surplus of 780 kt recorded for the whole of 2019. Demand for primary aluminium for January to May 2020 was 26.33 million tonnes, 285 kt more than in the comparable period in 2019. Demand is measured on an apparent basis and it is likely that the full effects of national lockdowns have not been fully reflected in the trade statistics. Overall, global production rose in January to May 2020 by 4.0 per cent compared with the first five months of 2019. Chinese output was estimated at 14789.8 kt based on higher availability of imported bauxite and alumina. Technically market is under long liquidation as market has witnessed remain unchanged in open interest by 0% to settled at 657 while prices down -0.45 rupees, now Aluminium is getting support at 146 and below same could see a test of 145.5 levels, and resistance is now likely to be seen at 147, a move above could see prices testing 147.5.
Trading Ideas:
* Aluminium trading range for the day is 145.5-147.5.
* Aluminium dropped due to stronger dollar and risks from rising tensions between Washington and Beijing
* China aluminium smelter Shenhuo starts up another 150,000 T of capacity in Yunnan
* The calculated market balance for primary aluminium for January to May 2020 was a surplus of 908 kt

 

Mentha oil

Mentha oil yesterday settled up by 0.67% at 989.3 as prices are on attractive levels at this movement as prices are fallen since the start of the year. Unlock down will support demand for industry as Mentha oil is most used in pharma industry, cosmetics industry, FMCG sector as well as confectionery products. Due to prevailing low prices for natural mentha companies using synthetic menthol will rely on natural mentha this year. New demand for Mentha products can be seen as produce are also used in pain relieving medication, cough syrup, soap and sanitizer. These days, due to the increase of pests on Mentha plants, the possibility of oil shortage has increased. In recent session prices remained under pressure as production this year is up by 40% compare with last year. Sharp drop seen suddenly as arrival has increased, farmers are constantly bringing their crops to the mandis as this year farmers had a bumper yield. Mentha crop has been cultivated on a large scale due to reduced production of kharif crop. There were expectations of higher area under cultivation for crop year 2020-21. According to market sources, the yields could be between 52,000-56,000 tonnes this year, up by 40 per cent Technically market is under fresh buying as market has witnessed gain in open interest by 2.16% to settled at 142 while prices up 6.6 rupees, now Mentha oil is getting support at 978.6 and below same could see a test of 967.8 levels, and resistance is now likely to be seen at 1002.1, a move above could see prices testing 1014.8.
Trading Ideas:
* Mentha oil trading range for the day is 967.8-1014.8.
* In Sambhal spot market, Mentha oil remains unchanged at by 0 Rupees to end at 1119.2 Rupees per 360 kgs.
* Menthaoil gains as prices are on attractive levels at this movement as prices are fallen since the start of the year.
* These days, due to the increase of pests on Mentha plants, the possibility of oil shortage has increased.
* Unlock down will support demand for industry as Mentha oil is most used in pharma, cosmetics, FMCG sector as well as confectionery products

 

Soyabean

Soyabean yesterday settled down by -2.06% at 3710 as prices seen pressure as India's soybean production is set to jump by at least 15% in 2020 from a year earlier as farmers are increasing the oilseed's acreage due to timely arrival of monsoon rains and as New Delhi raised the minimum buying price. Farmers have planted soybean on 10.15 million hectares, compared with 5.17 million hectares a year earlier as the monsoon covered the entire country nearly two weeks earlier than usual, according to the farm ministry. The central state of Madhya Pradesh and Maharashtra in the west account for more than 80% of India's total soybean output. Both states received 15% above average rainfall since the start of monsoon season on June 1, weather department data showed. India raised the minimum buying price for soybean by 4.6% from a year earlier to 3,880 rupees per 100 kg, even as prices came under pressure in the last few months due to weak demand for soymeal from poultry industry. Farmers in parts of Maharashtra are expected to switch from cotton to soyabean this year. Madhya Pradesh, the largest soyabean producing State, has received good rains so far in the monsoon season. Western MP has received 30 per cent surplus, while the rainfall has been 131 per cent more than normal in Eastern MP during June 1-22 period. Technically market is under long liquidation as market has witnessed drop in open interest by -2.13% to settled at 32460 while prices down -78 rupees, now Soyabean is getting support at 3662 and below same could see a test of 3615 levels, and resistance is now likely to be seen at 3780, a move above could see prices testing 3851.
Trading Ideas:
* Soyabean trading range for the day is 3615-3851.
* Soyabean dropped as prices seen pressure as India's soybean production is set to jump by at least 15% in 2020
* China's monthly imports of soybeans leapt to a record high in June, jumping 71% from a year earlier, customs data showed
* SOPA sees good prospects for the oilseed on anticipated good rains this year.
* At the Indore spot market in top producer MP, soybean dropped  -10 Rupees to 3824 Rupees per 100 kgs.


Ref.Soyaoil
Ref.Soyaoil yesterday settled down by -1.6% at 856.3 on profit booking after prices gained as support seen India sees sharp rise in edible oil exports at 80,765 tonnes for 2019-20, due to the refilling of depleted stocks. India's imports of edible oil in June were up 8% year on year, due to the refilling of depleted stocks. In a major boost for India’s oilseed sector, the country has recorded a sharp jump — nearly 54 per cent — in edible oil exports to 80,765 tonnes for 2019-20, according to government data. India had exported 52,490 tonnes of edible oils in 2018-19. The country earned Rs. 955.51 crore during 2019-20 from the exports, which is more than Rs. 320 crore higher from Rs. 627 crore recorded in the previous year. The rise in bulk exports is seen as a big boost to oilseed growers as it brightens the prospects for better remuneration for their oilseed crops. Edible oils are freely exportable in bulk, while mustard oil is allowed in consumer packs not exceeding 5 kg. A SOPA official opined that “The government should impose restrictions on edible oil imports so as to balance the need-based supply. We need to incentivize export of the oil meals so that the industry retains viability and contributes to forex earnings. Technically market is under long liquidation as market has witnessed drop in open interest by -6.43% to settled at 28360 while prices down -13.9 rupees, now Ref.Soya oil is getting support at 850 and below same could see a test of 844 levels, and resistance is now likely to be seen at 867, a move above could see prices testing 878.
Trading Ideas:
* Ref.Soya oil trading range for the day is 844-878.
* Ref soyoil dropped on profit booking after prices gained as support seen India sees sharp rise in edible oil exports
* India's imports of edible oil in June were up 8% year on year, due to the refilling of depleted stocks.
* A SOPA official opined that “The government should impose restrictions on edible oil imports so as to balance the need-based supply.”
* At the Indore spot market in Madhya Pradesh, soyoil was steady at 860 Rupees per 10 kgs.

 

Crude palm Oil

Crude palm Oil yesterday settled down by -1.87% at 727.9 on demand concerns as cargo surveyor data showed a decline in early August exports. Data from cargo surveyors showed Malaysia's palm oil exports for Aug. 1-10 dropped between 4.8% and 6.2% from a month earlier. Top buyer India's oils and fats end-stock for July has already recovered, while China is expected to ramp up soybean purchases, which could result in lower palm oil imports. July crude palm oil production fell 4.14% from the previous month to 1.81 million tonnes. Palm oil exports rose 4.19% on-month to 1.78 million tonnes, MPOB said. Although Malaysia is entering its season for peak production, industry observers cited worker shortages and heavy rains in estimating that production would drop 5% from the previous month to 1.79 million tonnes, the second time this year after a marginal decrease in May. Palm oil imports by India probably surged 46% last month as a drop in stockpiles in the world’s biggest buyer prompted refiners and traders to boost purchases. Inbound shipments rose to 823,000 tons from a month earlier in July as demand from the food services industry grew following the easing of lockdown rules. A jump in purchases by India will likely trim stockpiles in top producers Indonesia and Malaysia, potentially further boosting palm oil prices that have advanced more than 20% so far this quarter. Technically market is under long liquidation as market has witnessed drop in open interest by -7.98% to settled at 3907 while prices down -13.9 rupees, now CPO is getting support at 721.2 and below same could see a test of 714.6 levels, and resistance is now likely to be seen at 739.4, a move above could see prices testing 751.
Trading Ideas:
* CPO trading range for the day is 714.6-751.
* Crude palm oil dropped on demand concerns as cargo surveyor data showed a decline in early August exports.
* Data from cargo surveyors showed Malaysia's palm oil exports for Aug. 1-10 dropped between 4.8% and 6.2% from a month earlier.
* Top buyer India's oils and fats end-stock for July has already recovered.
* In spot market, Crude palm oil remains unchanged at by 0 Rupees to end at 737.3 Rupees.

 

Mustard Seed

Mustard Seed yesterday settled down by -2.03% at 5011 on profit booking after prices gained as crop estimate is seen lower year on year because of heavy rainfall across regions of Haryana and Rajasthan during March and April months. According to farmers possible damage is expected around 20-25% roughly. Demand for Mustard oil remains healthy due to increase in household consumption, being influenced from the Rainy season. Procurement from the government had also favored price rise. According to Haryana Agriculture Ministry, mustard was procured at minimum support price of Rs 4,425 per quintal. As per trade sources total procurement in the leading producing states of Rajasthan and Haryana have reached roughly 12 Lakh tonnes this year. All in all, procurement of Mustard ended with a satisfactory pace in the country despite Covid -19 outbreak. Mustard procurement had commenced at 165 centres across Haryana in the month of April and to overcome the corona virus outbreak during the procurement season, the state government not only increased the number of purchase centers from last year’s 64, but also put limit against the number of farmers visiting these centers per day at 100 only. The Gujarat State Cooperative Marketing Federation Ltd (GUJCOMASOL) was also active in procuring mustard seeds this year. Technically market is under fresh selling as market has witnessed gain in open interest by 6.3% to settled at 29350 while prices down -104 rupees, now Rmseed is getting support at 4957 and below same could see a test of 4902 levels, and resistance is now likely to be seen at 5097, a move above could see prices testing 5182.
Trading Ideas:
* Rmseed trading range for the day is 4902-5182.
* Mustard seed dropped on profit booking after prices rallied in recent session after updates that crop estimate is seen lower year on year
* There are estimates of rise in sowing area this year due to better price remuneration by the farmers in 2019-2020.
* Total procurement in the leading producing states of Rajasthan and Haryana have reached roughly 12 Lakh tonnes this year.
* In Alwar spot market in Rajasthan the prices dropped -25.35 Rupees to end at 5224.65 Rupees per 100 kg.


Turmeric

Turmeric yesterday settled down by -1.13% at 5782 as supply improved in the spot markets as a result of increased mandi arrivals. Pressure also seen amid reports of higher carry forwards stocks from last year due to higher production. Production for the marketing year 2020-21 is expected to be around 5.20 lakh tonnes on the preliminary basis as against last year’s production of 5.35 lakh tonnes. Turmeric prices trading lower owing to decline in demand from exporters and bulk buyers such as spice manufacturers amid the ongoing lockdown. However, there is good demand from domestic market anticipating high demand in the coming months due to Turmeric’s increasing awareness as immunity booster. On export front, Turmeric exports are likely to remain lower compared to previous year as demand from export destinations such as the US and West Asia is likely to fall due to outbreak of Corona virus. On export front, India exported 1.10 lakh tonnes in 2019-20 (April- January) a decrease of around 4% from the same period of last year. India exported around 0.09 lakh tonnes of Turmeric in January 2020 which is 15% higher than 0.08 lakh tonnes shipped in January 2019. However, in January 2020, Turmeric exports reported at 0.09 lakh tonnes, 39% lower than 0.15 lakh tonnes recorded in the previous month Technically market is under fresh selling as market has witnessed gain in open interest by 2.28% to settled at 7620 while prices down -66 rupees, now Turmeric is getting support at 5710 and below same could see a test of 5640 levels, and resistance is now likely to be seen at 5874, a move above could see prices testing 5968.
Trading Ideas:
* Turmeric trading range for the day is 5640-5968.
* Turmeric prices dropped as supply improved in the spot markets as a result of increased mandi arrivals.
* Pressure also seen amid reports of higher carry forwards stocks from last year due to higher production.
* Production for the marketing year 2020-21 is expected to be around 5.20 lakh tonnes on the preliminary basis.
* In Nizamabad, a major spot market in AP, the price ended at 5608.8 Rupees remains unchanged at0 Rupees.

 

Jeera

Jeera yesterday settled up by 1.25% at 14150 on likely fall in arrivals in the coming weeks as most farmers are engaged in sowing Kharif crops. Higher production in the current year and slow pace of demand is capping the upside in prices. Bulk buyers who usually build-up their inventories during the peak harvest season are now buying on demand and need basis due to financial problems and uncertainty due to coronavirus. Demand from the domestic and overseas markets has declined. It generally remains subdued during monsoon because of higher moisture content in the spice. On the export front, India exported 2.14 lakh tonnes in 2019-20 (April- March) rise of 17% from the same period of last year. India exported around 0.19 lakh tonnes of Jeera in March 2020 which is 17% lower than March 2019 at 0.23 lakh tonnes. However, in March 2020, Jeera exports reported at 0.19 lakh tonnes, have been 58% higher than 0.12 lakh tonnes recorded in the previous month. International jeera prices have fallen, hovering in the range of $1,780-1,800 (FOB rates) per tonne, about 35-40 per cent lower than what was quoted in the same period last year. Technically market is under fresh buying as market has witnessed gain in open interest by 14.52% to settled at 1656 while prices up 175 rupees, now Jeera is getting support at 13960 and below same could see a test of 13770 levels, and resistance is now likely to be seen at 14280, a move above could see prices testing 14410.
Trading Ideas:
* Jeera trading range for the day is 13770-14410.
* Jeera prices gained on likely fall in arrivals as most farmers are engaged in sowing Kharif crops.
* Higher production in the current year and slow pace of demand is capping the upside in prices.
* Bulk buyers who usually build-up their inventories during the peak harvest season are now buying on demand and need basis.
* In Unjha, a key spot market in Gujarat, jeera edged up by 58.1 Rupees to end at 13953.55 Rupees per 100 kg.

 

Cotton

Cotton yesterday settled down by -0.25% at 16280 as plans by Indian farmers to plant a record amount of cotton this season will pile fresh pressure, already hard hit by the coronavirus pandemic. The Cotton Corporation of India (CCI), the government agency which is presently holding close to one third of the country's cotton stocks, has slashed the price of its cotton to promote sales. This has made domestic cotton cheaper than the imported cotton, however, large availability of cotton in the current year and forecast of a big crop ahead has kept the buying subdued. CCI and its agencies have procured 1.25 crore bales of cotton in the current year, which is close to one third of the cotton arrivals in the country. Cotton industry and trade had been demanding that the CCI slash its rates, while CCI had refused to oblige, saying it had quoted the right price for its premium quality cotton. The government raised MSP of medium staple cotton by Rs 442 to Rs 9,376 a bale. Also, the minimum threshold of long staple cotton was raised by Rs 468 to Rs 9,903 a bale. In a major relief to cotton growers, the Cotton Corporation of India has filed an affidavit before the Aurangabad bench of the Bombay High Court stating that cotton would be purchased from farmers till September 30. Technically market is under long liquidation as market has witnessed drop in open interest by -0.59% to settled at 2207 while prices down -40 rupees, now Cotton is getting support at 16230 and below same could see a test of 16180 levels, and resistance is now likely to be seen at 16360, a move above could see prices testing 16440.
Trading Ideas:
* Cotton trading range for the day is 16180-16440.
* Cotton prices dropped as plans by Indian farmers to plant a record amount of cotton this season will pile fresh pressure.
* Cotton textile exports slumped by 64% in two months during lockdown
* Export of cotton textiles during March to May 2020 would be very low and insignificant on account of the outbreak of COVID-19.
* In spot market, Cotton remains unchanged at by 0 Rupees to end at 16130 Rupees.

 

Chana

Chana yesterday settled down by -0.14% at 4250 on profit booking after prices gained as improved demand in the market and procurement of Chana by NAFED supported the market prices sentiments. However, reports of NAFED started releasing its stocks have arrested uptrend in Chana. Further, higher production estimates this year also weighed on the sentiments. The government has procured over 93% of the targeted 22 lakh tonne of Chana for 2020-21 (Apr-Mar) marketing year from nine states under price support scheme. As of Jun 30, 2020 NAFED has procured 20.55 lakh tonne Chana. Chana import for 2019-20 (Apr-Mar) stood at 3.71 lakh tonnes as against 1.86 lakh tonnes imported during the corresponding period of the previous year. Apart from Chana, it has been reported that around 6.67 lakh tonnes of Pea has been imported during 2019-20 (Apr-Mar) and total pulses import stood at 29.75 lakh tonnes. Canada Government in its June month report informed the Chickpea area seeded is expected to decrease sharply from 2019-20 due to difficulties during previous harvest and lower yields. After three years of drought, Australia will see its crop production spike in 2020-21, according to the Australian Bureau of Agriculture and Resource Economics and Sciences (ABARES). Technically market is under fresh selling as market has witnessed gain in open interest by 1.61% to settled at 78850 while prices down -6 rupees, now Chana is getting support at 4227 and below same could see a test of 4204 levels, and resistance is now likely to be seen at 4266, a move above could see prices testing 4282.
Trading Ideas:
* Chana trading range for the day is 4204-4282.
* Chana dropped on profit booking after prices gained as improved demand and procurement of Chana by NAFED supported the prices
* The government has procured over 93% of the targeted 22 lakh tonne of Chana for 2020-21 (Apr-Mar) marketing year from nine states
* NAFED has extended procurement period for Chana in Madhya Pradesh up to 29th July 2020.
* In Delhi spot market, chana remains unchanged at by 0 Rupees to end at 4212.15 Rupees per 100 kgs.

 

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