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Gold

Gold yesterday settled up by 0.05% at 50760 as U.S. Treasury yields rose ahead of the critical testimony from Fed Chair Jerome Powell scheduled this week. The yield on the benchmark 10-year Treasury note was almost 3 basis points higher at 3.269 percent, while the yield on the 30-year Treasury bond traded 4.5 basis points higher at 3.339 percent. Investors looked forward to the testimony from Fed Chairman Jerome Powell later this week for more signals on the central bank's commitment to bring inflation back to the 2 percent target. Canada new housing price index for May and retail sales for April and U.S. existing home sales for May will be featured in the New York session as traders return to their desks after a holiday on Monday. Meanwhile, U.S. Treasury Secretary Janet Yellen said on Monday that the Biden administration is discussing about price caps or a price exception to enhance energy restrictions on Russia, which would push down its oil prices and depress Putin's revenues. The Confederation of British Industry's order book balance fell to 15 in June of 2022 from 26 in the previous month and below market expectations of 22. Technically market is under short covering as market has witnessed drop in open interest by -0.48% to settled at 12524 while prices up 25 rupees, now Gold is getting support at 50624 and below same could see a test of 50487 levels, and resistance is now likely to be seen at 50924, a move above could see prices testing 51087.

Trading Ideas:
* Gold trading range for the day is 50487-51087.
* Gold prices were subdued as U.S. Treasury yields rose ahead of the critical testimony from Fed Chair Jerome Powell scheduled this week.
* The yield on the benchmark 10-year Treasury note was almost 3 basis points higher at 3.269 percent
* Investors looked forward to the testimony from Fed Powell for more signals on the central bank's commitment to bring inflation back to the 2 percent target.

Silver

Silver yesterday settled up by 0.87% at 61271 as the dollar eased, even as investors kept a keen eye on posturing from major central banks on interest rate hikes for a clearer outlook for bullion. The U.S. central bank could raise interest rates swiftly this year and forge a "stellar" economy ahead if it can pull off a repeat of the success of the central bank's 1994 tightening cycle, St. Louis Fed President James Bullard said. In the latest Fed commentary, Governor Christopher Waller said he would support another increase of a similar scale at the central bank’s July meeting. Meanwhile, Cleveland Fed Bank President Loretta Mester said that the risk of a US recession is increasing, and that it will take several years to return to the central bank’s 2% inflation goal. The Federal Reserve hiked the Fed funds rate by 75bps and Chair Powell signaled a similar move is on the table at the next meeting, while the Bank of England raised rates for the 5th time and the Swiss National Bank raised borrowing costs for the first time since 2007. Investors now look ahead to Fed Chair Jerome Powell’s appearance before Congress on Wednesday and Thursday for clues on the likely path forward for US monetary policy. Technically market is under short covering as market has witnessed drop in open interest by -17.93% to settled at 9496 while prices up 527 rupees, now Silver is getting support at 60666 and below same could see a test of 60061 levels, and resistance is now likely to be seen at 61783, a move above could see prices testing 62295.

Trading Ideas:
* Silver trading range for the day is 60061-62295.
* Silver prices edged up as the dollar eased, even as investors kept a keen eye on posturing from major central banks on interest rate hikes for a clearer outlook.
* Fed’s Waller said he would support another increase of a similar scale at the central bank’s July meeting.
* Fed’s Mester said that the risk of a US recession is increasing, and that it will take several years to return to the central bank’s 2% inflation goal.

Crude oil

Crude oil yesterday settled up by 0.61% at 8556 on high summer fuel demand while supplies remain tight because of sanctions on Russian oil after its invasion of Ukraine. Prices have been supported by supply anxiety after sanctions on oil shipments from Russia, the world's second-largest oil exporter, and questions over how Russian output might fall due to sanctions on equipment needed for production. Prospects are receding for successful negotiation of a nuclear deal with Iran and a lifting of U.S. sanctions on the Iranian energy sector. Russia's production is likely to drop following the European Union's agreement to ban most of its oil imports, but demand will remain high due to the post-pandemic recovery. On the demand side, China is trying to revive its economy through a raft of stimulus measures and eased regulations on the tech sector. Oil production has been rising in the United States, but refineries are struggling to keep up with higher summer demand. Money managers cut their net long U.S. crude futures and options positions in the week to June 14, the U.S. Commodity Futures Trading Commission (CFTC) said. The speculator group cut its combined futures and options position in New York and London by 24,813 contracts to 259,357 during the period. Technically market is under fresh buying as market has witnessed gain in open interest by 4.54% to settled at 4402 while prices up 52 rupees, now Crude oil is getting support at 8486 and below same could see a test of 8416 levels, and resistance is now likely to be seen at 8662, a move above could see prices testing 8768.

Trading Ideas:
* Crude oil trading range for the day is 8416-8768.
* Crude oil rose on high summer fuel demand while supplies remain tight because of sanctions on Russian oil after its invasion of Ukraine.
* Prices have been supported by supply anxiety after sanctions on oil shipments from Russia
* Russia's production is likely to drop following the European Union's agreement to ban most of its oil imports, but demand will remain high.

Natural Gas
Nat.Gas yesterday settled up by 3.2% at 538.8 amid record power demand in Texas and a slow slide in daily gas output. However, upside seen limited on forecasts for less demand over the next two weeks than previously projected and expectations Texas Freeport liquefied natural gas (LNG) export plant shutdown will allow utilities to quickly rebuild low U.S. stockpiles. The Freeport shutdown on June 8 reduced the amount of U.S. gas available to the rest of the world, especially in Europe where most U.S. LNG has gone as countries there wean themselves off Russian energy after Moscow invaded Ukraine. Data provider Refinitiv said average gas output in the U.S. Lower 48 states slid to 94.9 bcfd so far in June from 95.2 bcfd in May. That compares with a monthly record of 96.1 bcfd in December 2021. With hotter weather coming, Refinitiv projected average U.S. gas demand, including exports, would rise from 93.1 bcfd this week to 96.7 bcfd next week. Those forecasts were lower than Refinitiv's outlook on Friday before the U.S. Juneteenth holiday on Monday. The amount of gas flowing to U.S. LNG export plants fell from an average of 12.5 bcfd in May to 11.4 bcfd so far in June due to the Freeport outage, according to Refinitiv. Technically market is under short covering as market has witnessed drop in open interest by -25.23% to settled at 3532 while prices up 16.7 rupees, now Natural gas is getting support at 519.2 and below same could see a test of 499.7 levels, and resistance is now likely to be seen at 551.8, a move above could see prices testing 564.9.

Trading Ideas:
* Natural gas trading range for the day is 499.7-564.9.
* Natural gas gains amid record power demand in Texas and a slow slide in daily gas output.
* However, upside seen limited on forecasts for less demand over the next two weeks than previously projected.
* Texas Freeport liquefied natural gas (LNG) export plant shutdown will allow utilities to quickly rebuild low U.S. stockpiles.

Copper

Copper yesterday settled up by 0.71% at 742.35 supported by low inventories and news that workers at the world's largest copper producer Codelco in Chile will start a nationwide strike on June 22nd to protest the government and the company's decision to close a troubled smelter. China's strict "zero-COVID" policy of constantly monitoring, testing and isolating its citizens to prevent the spread of the coronavirus has battered the country's economy and manufacturing sector. Meanwhile, copper stocks held by LME were at 117,025 tonnes, down 35% since mid-May. The price of the red metal, a leading indicator of the health of the global economy, touched a 15-month low below $4 on June 19th and is down almost 20% since its March peak on mounting fears that a global economic slowdown triggered by an aggressive tightening from major central banks and persistent coronavirus outbreaks in China would dampen demand. Workers at Chile's state-owned Codelco announced they will start a nationwide strike early Wednesday in protest of the government and company's decision to close a troubled smelter, the president of the union federation told. "We are going to start in the first shift," said Amador Pantoja, president of the Federation of Copper Workers (FTC). Aggressive rate hikes by major central banks to combat soaring inflation has raised worries over an economic slowdown. The U.S. Federal Reserve raised rates by 75 basis points last week for the largest increase since 1994. Technically market is under short covering as market has witnessed drop in open interest by -10.57% to settled at 3224 while prices up 5.25 rupees, now Copper is getting support at 735 and below same could see a test of 727.7 levels, and resistance is now likely to be seen at 748.7, a move above could see prices testing 755.1.

Trading Ideas:
* Copper trading range for the day is 727.7-755.1.
* Copper prices rebounded supported by low inventories and news that workers at Codelco in Chile will start a nationwide strike on Wednesday
* Copper stocks held by LME were at 117,025 tonnes, down 35% since mid-May.
* Aggressive rate hikes by major central banks to combat soaring inflation has raised worries over a economic slowdown.

Zinc

Zinc yesterday settled up by 1.23% at 316.15 on concern over potential shortages resulting from falling inventories and possible reductions in smelter output because of high energy prices. LME zinc has shed 20% over the past two months along with other industrial metals, hit by concern over a slowdown in top metals consumer China and potential global recession. LME data showed owners of more than 18,000 tonnes of zinc in warehouses in Malaysia gave notice that they want to withdraw the material, reducing available stocks by 30%. Premiums for physical metal in Europe have soared owing to zinc smelter cutbacks in the face of power prices that hit three-month highs. The premium for cash LME zinc over the three-month contract spiked to $76.25 a tonne, its strongest since December and up from $14.30 a week ago, indicating short-term shortages of LME inventories. Zinc stocks in London Metal Exchange (LME) approved warehouses are at their lowest in more than two years due to shortages in Europe where record-high power prices have led to production cuts of the metal used to galvanise steel. European power prices have been rising since late 2020, but upward momentum picked up this year due to worries about gas supplies from Russia after it invaded Ukraine. Technically market is under short covering as market has witnessed drop in open interest by -13.61% to settled at 679 while prices up 3.85 rupees, now Zinc is getting support at 311.5 and below same could see a test of 306.8 levels, and resistance is now likely to be seen at 320.1, a move above could see prices testing 324.

Trading Ideas:
* Zinc trading range for the day is 306.8-324.
* Zinc prices jumped on concern over potential shortages resulting from falling inventories and possible reductions in smelter output.
* Premiums for physical metal in Europe have soared owing to zinc smelter cutbacks in the face of power prices that hit three-month highs.
* The premium for cash LME zinc over the three-month contract spiked to $76.25 a tonne, its strongest since December, indicating short-term shortages of inventories.

Aluminium

Aluminium yesterday settled up by 0.44% at 216.6 supported by hopes of a recovery in top metals consumer China. China's economy showed signs of recovery in May after slumping in the prior month, as industrial production rose unexpectedly. China's monthly production of aluminium reached a record high in May after power consumption curbs were eased and as COVID-19-induced lockdowns had little impact on output. China's state planner said it would expand the scope of use of funds raised by local government special bonds and ensure reasonable economic growth in the second quarter. Global primary aluminium output in May rose 0.43% year on year to 5.805 million tonnes, data from the International Aluminium Institute (IAI) showed. Estimated Chinese production increased to 3.42 million tonnes in May, up from 3.355 million tonnes in May last year, IAI data shows. China's aluminium imports in May fell 16.4% from the same month a year earlier, government data showed, amid high overseas prices and weaker domestic consumption. The country brought in 188,469 tonnes of unwrought aluminium and products – including primary metal and unwrought, alloyed aluminium – last month, according to data from the General Administration of Customs. The May imports were up slightly from 175,289 tonnes in April however. Technically market is under short covering as market has witnessed drop in open interest by -13.98% to settled at 1956 while prices up 0.95 rupees, now Aluminium is getting support at 215 and below same could see a test of 213.4 levels, and resistance is now likely to be seen at 218.3, a move above could see prices testing 220.

Trading Ideas:
* Aluminium trading range for the day is 213.4-220.
* Aluminium prices advanced supported by hopes of a recovery in China.
* China's May aluminium imports drop 16% y/y
* Global May aluminium output rises 0.4% y/y to 5.8 mln tonnes – IAI

Mentha oil
Mentha oil yesterday settled up by 0.79% at 1035.6 amid low production this season and improving demand post-pandemic. 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 3.4 Rupees to end at 1147.7 Rupees per 360 kgs.Technically market is under short covering as market has witnessed drop in open interest by -7.95% to settled at 579 while prices up 8.1 rupees, now Mentha oil is getting support at 1025.5 and below same could see a test of 1015.5 levels, and resistance is now likely to be seen at 1045, a move above could see prices testing 1054.5.

Trading Ideas:
* Mentha oil trading range for the day is 1015.5-1054.5.
* In Sambhal spot market, Mentha oil gained  by 3.4 Rupees to end at 1147.7 Rupees per 360 kgs.
* Mentha oil gains 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.

Turmeric

Turmeric yesterday settled up by 0.36% at 7736 amid improving buying by bulk traders amid good domestic demand is supported prices. However, reports of sufficient stocks and good sowing progress in south India is pressurizing the prices. As per latest export figures, turmeric exports in Mar 2022 jumped higher 27.4% y/y at 15,750 tonnes vs 12,360 tonnes while for the period of Jan-Mar 2022, exports are only down by 1.15% y/y at 36,750 tonnes. In FY 2021/22, exports were down 16.7% y/y at 1.53 lakh tons but higher by 10% compared with 5-year average. As per market feedback, all-India Turmeric production is likely to fall by 15% on year to 4.50 lakh tonnes in the marketing year 2022-23 (February-January) over the previous year due to unseasonal rains reported during growth stage of Turmeric in key producing states. Turmeric all India production for 2022 is estimated at 4.67 lakh tonnes, revised after crop damage due to excessive rainfall in Maharashtra, Andhra Pradesh and Telangana during October and November. In 2022-23 marketing year (Feb-Jan), total arrivals reported are up by 35.87% to around 314,902 tonne from 231,771 tonne reported same period last year. In Nizamabad, a major spot market in AP, the price ended at 8103.2 Rupees dropped -173.35 Rupees.Technically market is under short covering as market has witnessed drop in open interest by -1.55% to settled at 16225 while prices up 28 rupees, now Turmeric is getting support at 7654 and below same could see a test of 7574 levels, and resistance is now likely to be seen at 7816, a move above could see prices testing 7898.

Trading Ideas:
* Turmeric trading range for the day is 7574-7898.
* Turmeric gains amid improving buying by bulk traders amid good domestic demand is supported prices.
* However, reports of sufficient stocks and good sowing progress in south India limited the upside.
* Turmeric exports in Mar 2022 jumped higher 27.4% y/y at 15,750 tonnes vs 12,360 tonnes
* In Nizamabad, a major spot market in AP, the price ended at 8103.2 Rupees dropped -173.35 Rupees.
 

Jeera

Jeera yesterday settled up by 0.58% at 20785 because of lower production of the spice in the country, partly because many farmers shifted to more lucrative commodities. Cumin exports dropped by 60.58% in March 2022 to around 13406.43 tonnes as against 33203.08 tonnes in March 2021. On daily basis Jeera arrivals in Unjha market were around 5,000 bags, Saurashtra and Gondal market around 800 t0 1,000 bags are arriving. Similarly, in Rajasthan also daily arrivals have remained weak, in Jodhpur market around 1,500 bags, at Nagaur 500 bags and other centres 500 bags arrivals noted. In Rajasthan, the new crop of cumin in the current year has come only 60% i.e. around 30 lakh bags as compared to last year. The arrival of cumin in Rajasthan has been only 50% in the peak season in the current year as compared to the previous years as the crop was less. There was a drought in Turkey and Syria and due to state tensions, the sowing of cumin seeds has been reported to be very low. Export demand for cumin seeds is expected to increase for the rest of the season due to reports of very low harvests in Turkey, Syria and Afghanistan. In Unjha, a key spot market in Gujarat, jeera edged up by 29.8 Rupees to end at 21272 Rupees per 100 kg.Technically market is under short covering as market has witnessed drop in open interest by -1.97% to settled at 13701 while prices up 120 rupees, now Jeera is getting support at 20580 and below same could see a test of 20375 levels, and resistance is now likely to be seen at 20960, a move above could see prices testing 21135.

Trading Ideas:
* Jeera trading range for the day is 20375-21135.
* Jeera gained because of lower production of the spice in the country, partly because many farmers shifted to more lucrative commodities.
* In Rajasthan, the new crop of cumin in the current year has come only 60% i.e. around 30 lakh bags as compared to last year.
* Export demand for cumin seeds is expected to increase for the rest of the season due to reports of very low harvests in Turkey, Syria and Afghanistan.
* In Unjha, a key spot market in Gujarat, jeera edged up by 29.8 Rupees to end at 21272 Rupees per 100 kg.

Cotton

Cotton yesterday settled down by -0.4% at 46740 as sowing could accelerate as the monsoon's progress will help farmers. India's annual monsoon rainfall has covered more than half of the country and conditions are favourable for it to advance into central, northern and western regions this week, the weather department said. In Karnataka, cotton acreages stood at 1.21 lakh hectares as of June 10 compared to 0.59 lakh ha in the same period last year. In several parts of Karnataka, including Chamrajanagar, Haveri and Gadag districts, the long-staple variety of cotton is planted early in the season, where farmers have brought in more area under the fibre crop. Cotton Association of India (CAI) on Saturday reduced its estimate for the cotton crop output for the current season beginning October 2021 to 315.32 lakh bales of 170 kg each, 8.31 lakh bales lower from its previous projection. In the year-ago season (2020-21), the country's total cotton production stood at 353 lakh bales, CAI (Cotton Association of India) said in its latest estimate for the month of May this year. Giving state-wise estimates, CAI said the production in Gujarat is projected at 79.75 lakh bales for the 2021-22 season. Telangana is estimated to produce 35.40 lakh bales, while the outputs in Maharashtra and Karnataka are estimated at 77.50 lakh bales and 20.25 lakh bales, respectively. In spot market, Cotton dropped by -110 Rupees to end at 47490 Rupees.Technically market is under long liquidation as market has witnessed drop in open interest by -19.97% to settled at 1703 while prices down -190 rupees, now Cotton is getting support at 46560 and below same could see a test of 46380 levels, and resistance is now likely to be seen at 46960, a move above could see prices testing 47180.

Trading Ideas:
* Cotton trading range for the day is 46380-47180.
* Cotton prices dropped as sowing could accelerate as the monsoon's progress will help farmers.
* In Karnataka, cotton acreages stood at 1.21 lakh hectares as of June 10 compared to 0.59 lakh ha in the same period last year.
* CAI lowers cotton crop estimate for current season
* In spot market, Cotton dropped  by -110 Rupees to end at 47490 Rupees.

-www.kediaadvisory.com

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