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Gold

Gold yesterday settled down by -0.48% at 50847 weighed down by a rebound in the dollar and firmer US Treasury yields. U.S. consumer confidence eased slightly in May as concerns about high inflation persisted and perceptions of the labor market softened a bit, a survey showed. The Conference Board said its consumer confidence index slipped to a reading of 106.4 this month. Data for April was revised higher to show the index at 108.6 instead of the previous reported reading of 107.3. The Federal Reserve needs to move interest rates much higher and soon if high inflation does not begin to subside, Fed Governor Christopher Waller said. "If inflation doesn't go away, that... rate is going a lot higher, and soon," Waller said following a speech given to the Institute for Monetary and Financial Stability in Frankfurt, Germany. "We are not going to sit there and wait six months...I am advocating 50 on the table every meeting until we see substantial reductions in inflation. Until we get that, I don't see the point of stopping." Minutes of the last FOMC meeting showed that most participants believed that 50 basis point rate hikes would be appropriate at each of the next two meetings. Technically market is under fresh selling as market has witnessed gain in open interest by 3.55% to settled at 14046 while prices down -247 rupees, now Gold is getting support at 50667 and below same could see a test of 50487 levels, and resistance is now likely to be seen at 51088, a move above could see prices testing 51329.

Trading Ideas:
# Gold trading range for the day is 50487-51329.
# Gold fell weighed down by a rebound in the dollar and firmer US Treasury yields.
# U.S. consumer confidence eased slightly in May as concerns about high inflation persisted and perceptions of the labor market softened a bit
# Fed's Waller: If inflation doesn't go away, we need to raise rates a lot higher

Silver

Silver yesterday settled down by -1.22% at 61125 as the dollar rose and U.S. Treasury yields edged up amid worries about Fed and ECB policy tightening. Federal Reserve governor Christopher Waller said that he favored 50 basis point hike at every meeting until there is a substantial reduction in inflation. Eurozone inflation accelerated further in May on surging energy and food prices, flash data from Eurostat showed. Inflation rose to a fresh record 8.1 percent in May from 7.4 percent in April. The rate was forecast to climb to 7.7 percent. Investors repositioned for the possibility of a slower pace of US interest rate hikes and as fears of a global recession have somewhat receded. The Fed-preferred core PCE index slowed to 4.9% year-on-year in April from 5.2% in March, a still-elevated level that nonetheless indicated that price pressure could be easing a bit. US consumer spending also rose more than expected in April which shows that the economy remains robust despite price pressures. Investors have scaled back forward expectations about Fed rate hikes amid hints the central bank might slow or even pause its tightening cycle later this year after raising interest rates aggressively over the next two months. German inflation rose to its highest level in nearly half a century in May on the back of soaring energy and food prices. Technically market is under fresh selling as market has witnessed gain in open interest by 7.9% to settled at 14551 while prices down -757 rupees, now Silver is getting support at 60632 and below same could see a test of 60139 levels, and resistance is now likely to be seen at 61746, a move above could see prices testing 62367.

Trading Ideas:
# Silver trading range for the day is 60139-62367.
# Silver prices edged lower as the dollar rose and U.S. Treasury yields edged up amid worries about Fed and ECB policy tightening.
# Federal Reserve governor Christopher Waller said that he favored 50 basis point hike at every meeting until there is a substantial reduction in inflation.
# Eurozone inflation accelerated further in May on surging energy and food prices, flash data from Eurostat showed.

Crude oil

Crude oil yesterday settled down by -0.59% at 9026 as investors reacted to headlines suggesting that OPEC is considering suspending Russia's participation in the cartel, which could pave the way for other producers to pump more crude into markets. The European Union agreed to ban most Russian oil imports by the end of the year as part of new measures designed to punish Russia over its invasion of Ukraine. Improved PMI data from China and signs of fewer Covid-19 infections in Beijing over the weekend also raised hopes that oil demand will pick up again in China. EU countries failed to agree on a Russian oil import ban despite last-minute haggling before the summit got under way in Brussels. But leaders of the 27 EU countries will agree in principle to an oil embargo, a draft of their summit conclusions showed, while leaving the practical details and hard decisions until later. Any further ban on Russian oil would tighten a crude market already strained for supply amid rising demand for gasoline, diesel and jet fuel ahead of the peak summer demand season in the United States and Europe. Underscoring market tightness, the Organization of the Petroleum Exporting Countries and allies including Russia, a group dubbed OPEC+, are set to rebuff Western calls to speed up increases in output when they meet on Thursday. Technically market is under long liquidation as market has witnessed drop in open interest by -7.58% to settled at 10217 while prices down -54 rupees, now Crude oil is getting support at 8839 and below same could see a test of 8651 levels, and resistance is now likely to be seen at 9265, a move above could see prices testing 9503.

Trading Ideas:
# Crude oil trading range for the day is 8651-9503.
# Crude oil dropped as investors reacted to headlines suggesting that OPEC is considering suspending Russia's participation in the cartel
# Improved PMI data from China and signs of fewer Covid-19 infections in Beijing over the weekend also raised hopes that oil demand will pick up again in China.
# In the US, the summer driving season kicked off at the weekend with retail gasoline prices at a record high.

Nat.Gas

Nat.Gas yesterday settled down by -4.39% at 649 on forecasts for less demand over the next two weeks than previously expected. U.S. gas futures were up about 127% so far this year as much higher prices in Europe and Asia keep demand for U.S. liquefied natural gas (LNG) exports strong, especially since Russia's Feb. 24 invasion of Ukraine stoked fears Moscow might cut gas supplies to Europe. Data provider Refinitiv said average gas output in the U.S. Lower 48 states climbed to 95.0 billion cubic feet per day (bcfd) so far in May from 94.5 bcfd in April. That compares with a monthly record of 96.1 bcfd in November 2021. Refinitiv projected average U.S. gas demand, including exports, would rise from 86.0 bcfd this week to 86.9 bcfd next week. Those forecasts were lower than Refinitiv's outlook on Friday before the long U.S. Memorial Day holiday weekend. The average amount of gas flowing to U.S. LNG export plants rose to 12.5 bcfd so far in May from 12.2 bcfd in April. That compares with a monthly record of 12.9 bcfd in March. The United States can turn about 13.6 bcfd of gas into LNG. Technically market is under long liquidation as market has witnessed drop in open interest by -10.28% to settled at 5270 while prices down -29.8 rupees, now Natural gas is getting support at 634.7 and below same could see a test of 620.4 levels, and resistance is now likely to be seen at 673, a move above could see prices testing 697.

Trading Ideas:
# Natural gas trading range for the day is 620.4-697.
# Natural gas slid on forecasts for less demand over the next two weeks than previously expected.
# That decline came even though U.S. power generators were forced to burn more gas for a second week in a row due to lower wind power.
# EIA data showed US natural gas stocks rose by 80 billion cubic feet (bcf) last week

Copper

Copper yesterday settled down by -0.83% at 774.6 due to a stronger dollar, although better factory activity data and easing of COVID-19 lockdowns in top metals consumer China kept prices downside limited. China's factory activity contracted at a slower pace in May, as restrictions on some plants were rolled back after the economy was hit hard by the widespread COVID-19 curbs, an official survey showed. China will accelerate its issuance of special bonds by local governments in order to stabilise the country's slowing economy, the finance ministry said. Copper rose buoyed by low inventories and prospects of higher demand following the ease of some Covid-19 curbs in top consumer China. The latest data showed China’s factory activity fell at a softer pace in May and China’s key commercial hub of Shanghai allowed all manufacturers to resume operations from June. Additionally, copper inventories in LME-registered warehouses fell by 6,250 tonnes to 156,175 tonnes at the end of last week, and those in warehouses monitored by the Shanghai Futures Exchange fell 23.7% from a week earlier. Copper output in Chile, the world's largest producer of the metal, fell 9.8% year on year to 421,742 tonnes in April, the country's statistics agency INE said. Manufacturing output rose 1.7% year-over-year in April. Technically market is under fresh selling as market has witnessed gain in open interest by 5.32% to settled at 3903 while prices down -6.45 rupees, now Copper is getting support at 770.4 and below same could see a test of 766.2 levels, and resistance is now likely to be seen at 782.4, a move above could see prices testing 790.2.

Trading Ideas:
# Copper trading range for the day is 766.2-790.2.
# Copper edged lower due to a stronger dollar, although better factory activity data and easing of COVID-19 lockdowns in China kept prices downside limited.
# China’s factory activity fell at a softer pace in May and China’s key commercial hub of Shanghai allowed all manufacturers to resume operations from June.
# Copper inventories in LME-registered warehouses fell by 6,250 tonnes to 156,175 tonnes at the end of last week.

Zinc

Zinc yesterday settled up by 0.24% at 333.65 as SHFE/LME price ratio dropped to 6.6, and the import window closed a little theoretically, highlighting the logic of tight more supply in China. It is expected that Shanghai will resume work and production soon, market transactions picked up amid rising speculative demand. As such, both the premiums and average prices rose. According to data released by the London Metal Exchange (LME), LME zinc inventory continued to fall last week, with the latest stock at 84,700 mt, a new low of more than two years. According to SHFE data, SHFE zinc inventory moved rangebound within three months. The inventory rebounded in the week of May 27, with weekly stocks increasing by 2.59% to 170,850 mt. In May, China's manufacturing purchasing managers' index (PMI) was 49.6, below the 50-point mark but up 2.2 points from the previous month, with the overall climate index in the manufacturing sector improving. In terms of enterprise size, the PMI for large enterprises was 51.0, up 2.9 points from the previous month, back to the expansion zone; the PMIs for medium and small enterprises were 49.4 and 46.7 respectively, up 1.9 and 1.1 points from the previous month respectively. Technically market is under fresh buying as market has witnessed gain in open interest by 7.14% to settled at 1411 while prices up 0.8 rupees, now Zinc is getting support at 331 and below same could see a test of 328.4 levels, and resistance is now likely to be seen at 337.4, a move above could see prices testing 341.2.

Trading Ideas:
# Zinc trading range for the day is 328.4-341.2.
# Zinc gains as SHFE/LME price ratio dropped to 6.6, highlighting the logic of tight more supply in China.
# LME zinc inventory continued to fall last week, with the latest stock at 84,700 mt, a new low of more than two years.
# China's manufacturing PMI was 49.6, below the 50-point mark but up 2.2 points from the previous month

Aluminium

Aluminium yesterday settled down by -3.15% at 235.3 as pressure seen as domestic aluminium operating capacity in May increased by 130,000 mt month-on-month to around 40.6 million mt. On the supply side, the growth rate of the domestic aluminium supply slowed down in May. The domestic social inventory of aluminium ingots dropped by 14,000 mt from last Thursday to 923,000 mt on Monday. With the resumption of work and production in Shanghai and other places, the domestic aluminium downstream consumption picked up, and market sentiment also improved. On the whole, the short-term aluminium prices are expected to remain range bound, and the market will continue to pay attention to destocking and consumption recovery. On May 31, LME aluminium inventory data was updated with a total decrease of 6,825 mt, including a total decrease of 5,075 mt at the Klang warehouse. Then it was followed by Singapore with a decrease of 950 mt, Kaohsiung with a decrease of 375 mt, Kuangyang with a decrease of 350 mt and Rotterdam with a small decrease. In May, China's manufacturing purchasing managers' index (PMI) was 49.6, below the 50-point mark but up 2.2 points from the previous month, with the overall climate index in the manufacturing sector improving. Technically market is under fresh selling as market has witnessed gain in open interest by 17.84% to settled at 3051 while prices down -7.65 rupees, now Aluminium is getting support at 231.7 and below same could see a test of 228 levels, and resistance is now likely to be seen at 242.2, a move above could see prices testing 249.

Trading Ideas:
# Aluminium trading range for the day is 228-249.
# Aluminium dropped as pressure seen as domestic aluminium operating capacity in May increased by 130,000 mt month-on-month
# LME aluminium inventory reduced 6,825 mt on May 31
# On the supply side, the growth rate of the domestic aluminium supply slowed down in May.

Mentha oil

Mentha oil yesterday settled down by -1.02% at 1051.1 as long liquidation seen in the market as sentiments turned weak amid upcoming monsoon updates where southwest Monsoon has set in over Kerala yesterday two days early against the normal date of onset, June 1, prevailing current weather is not suitable for mentha oil distilation process. Last month we have seen sharp rise in prices after the market's forecast that production to fall to around 45000-46000 MT due to sharp fall in area and loss in yields following severe summer heat resulting almost 10-15% drop in yield. Farmers opted for more remunerative crops and yields have been decreased following poor recovery. Also the production cost of Mint has gone up manifold so some farmers have switched to more lucrative crops, like corn as corn has a minimum price support guarantee from government. Unfortunately, mint farmers are solely dependent of market forces and have no price support. This has resulted in only traditional farmers are cultivating mint in Western UP. But in Barabanki it is different, Mentha farmers have free of cost water availability in that area so they still cultivate it. Prices are expected to see support soon after the news that authorities in Shanghai have announced that some Covid-19 lockdown measures imposed on businesses will be lifted from Wednesday. Plans have also been introduced to support the city's economy, which has been hit hard by the restrictions. In Sambhal spot market, Mentha oil dropped by -17.6 Rupees to end at 1182.2 Rupees per 360 kgs.Technically market is under long liquidation as market has witnessed drop in open interest by -1.87% to settled at 998 while prices down -10.8 rupees, now Mentha oil is getting support at 1044.3 and below same could see a test of 1037.5 levels, and resistance is now likely to be seen at 1060.3, a move above could see prices testing 1069.5.

Trading Ideas:
# Mentha oil trading range for the day is 1037.5-1069.5.
# In Sambhal spot market, Mentha oil dropped  by -17.6 Rupees to end at 1182.2 Rupees per 360 kgs.
# Menthaoil dropped as long liquidation seen in the market as sentiments turned weak amid.
# The market's forecast that production to fall to around 45000-46000 MT due to sharp fall in area and loss in yields following severe summer heat
# Prices are expected to see support soon as authorities in Shanghai have announced that lockdown measures imposed on businesses will be lifted

Turmeric

Turmeric yesterday settled down by -1.17% at 7918 due to good arrivals from new crop and less demand. Traders and exporters are expecting the prices to remain stable as Maharashtra and Andhra Pradesh turmeric arrivals have also increased. Kocha arrivals are good at markets in Sangli, Hingoli and Nanded regions in Maharashtra. Due to aggressive coverages by oleoresin companies, prices were steady during the month. Panangali arrivals have started in Salem, Erode and Gundalpet markets. Turmeric harvesting in Indonesia is likely to start during June – July 2022. Crop is reported to be normal. Currently, export demand is normal but is expected to pick up. As per latest export figures, turmeric exports in Feb 2022 were lower by 17% y/y at 10400 tonnes vs 12,575 tonnes while in FY 2021/22 (Apr-Feb), exports down 20% at 1.37 lakh tons compared to last year but higher by 8.3% compared with 5-year average. Domestic demand reduced particularly with the new season crop supplies from Marathwada region of Maharashtra during April. Export demand too reported sluggish despite report of some queries from Bangladesh. 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 Nizamabad, a major spot market in AP, the price ended at 8274.15 Rupees dropped -108.15 Rupees.Technically market is under long liquidation as market has witnessed drop in open interest by -3.32% to settled at while prices down -94 rupees, now Turmeric is getting support at 7848 and below same could see a test of 7778 levels, and resistance is now likely to be seen at 8018, a move above could see prices testing 8118.

Trading Ideas:
# Turmeric trading range for the day is 7778-8118.
# Turmeric settled down due to good arrivals from new crop and less demand.
# Traders and exporters are expecting the prices to remain stable as Maharashtra and Andhra Pradesh turmeric arrivals have also increased.
# Turmeric harvesting in Indonesia is likely to start during June – July 2022 and crop is reported to be normal.
# In Nizamabad, a major spot market in AP, the price ended at 8274.15 Rupees dropped -108.15 Rupees.

Jeera

Jeera yesterday settled down by -1% at 21195 as the selling of cumin by the farmers increases after the onset of monsoon. Due to this, there is a perception that the arrival of cumin seeds will increase after the onset of monsoon. The demand for cumin seed for exports have improve after easing of supply chain disruption due to covid restrictions in China. Traders expect jeera production in 2021/22 sharply lower at 5.0-6.0 mln bags (1 bag = 55 kg) from 8.0-8.5 mln bags the previous year. As per govt data, jeera exports in Feb 2022 down by 23.6% Y/Y at 14000 tonnes compared to 18300 tonnes while exports for FY 2021/22 (Apr-Feb) period is also down by 23% Y/Y at 2.02 lt compared to 2.62 lt last year. The production of cumin in Rajasthan is estimated to be 30 to 32 lakh bags. Considering the present arrivals, the production of cumin will be the same as the earlier estimate. So far 15 to 15.50 lakh bags have arrived in Rajasthan. 50% of the total cumin crop has arrived and 50% of cumin seeds are yet to arrive. Production of 15 lakh bags of cumin is estimated in Gujarat and 12 to 13 lakh tonnes of old carry forward stock is estimated. In Unjha, a key spot market in Gujarat, jeera edged down by -209.9 Rupees to end at 21418.4 Rupees per 100 kg.Technically market is under long liquidation as market has witnessed drop in open interest by -4.25% to settled at while prices down -215 rupees, now Jeera is getting support at 20905 and below same could see a test of 20615 levels, and resistance is now likely to be seen at 21515, a move above could see prices testing 21835.

Trading Ideas:
# Jeera trading range for the day is 20615-21835.
# Jeera dropped as jeera exports in Feb 2022 down by 23.6% Y/Y at 14000 tonnes
# The selling of cumin by the farmers increases after the onset of monsoon.
# The production of cumin in Rajasthan is estimated to be 30 to 32 lakh bags.
# In Unjha, a key spot market in Gujarat, jeera edged down by -209.9 Rupees to end at 21418.4 Rupees per 100 kg.

Cotton

Cotton yesterday settled up by 0.92% at 46120 as the USDA lowered its forecasts for global cotton supplies in 2022/23, as smaller beginning stocks more than offset a 2.6-million-bale increase in production. The Spinners' Association of South India has announced the closure of the mills, due to which most of the smaller mills have closed down and the demand for cotton will be seen to decrease due to decrease in production in the big mills. In North India's states of Punjab, Haryana and Rajasthan, the water from canals will be released late, which will lead to late sowing of cotton, but there is no report of the possibility of very low sowing. Cotton sowing in North India is expected to increase by 15% from last year. Texas, had concerns about production due to lack of rainfall, but with good rainfall in Texas for the past one week, there is no problem with U.S. cotton production. Cotton sowing in China has increased, but with only one to two percent increased, the crop is unlikely to grow much. Similarly, in Pakistan, production is also expected to increase due to increase in sowing from last year. In spot market, Cotton dropped by -1100 Rupees to end at 47750 Rupees.Technically market is under short covering as market has witnessed drop in open interest by -1.61% to settled at 2876 while prices up 420 rupees, now Cotton is getting support at 45770 and below same could see a test of 45430 levels, and resistance is now likely to be seen at 46390, a move above could see prices testing 46670.

Trading Ideas:
# Cotton trading range for the day is 45430-46670.
# Cotton gained as the USDA lowered its forecasts for global cotton supplies in 2022/23 and smaller beginning stocks
# Cotton sowing in North India is expected to increase by 15% from last year.
# The Spinners' Association of South India has announced the closure of the mills, due to which most of the smaller mills have closed down
# In spot market, Cotton dropped  by -1100 Rupees to end at 47750 Rupees.

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