IGI Logo

Gold

Gold yesterday settled down by -1.05% at 47508 as the dollar recovered after initial weakness amid a rise in U.S. treasury yields. Federal Reserve Chair Jerome Powell acknowledged that the "improvement in labor market conditions stalled" in the past few months because of a resurgence in coronavirus infections, which weighed heavily on restaurants and other consumer-facing businesses. The number of Americans filing new applications for unemployment benefits inched down last week, consistent with a recent stalling in the labor market recovery. Initial claims for state unemployment benefits totaled a seasonally adjusted 793,000 for the week ended Feb. 6, compared to 812,000 in the prior week, the Labor Department said. Claims remain above their 665,000 peak during the 2007-2009 Great Recession. They are, however, well below the record 6.867 million reported last March when the pandemic hit the United States. But there is cause for cautious optimism. President Joe Biden's proposed $1.9 trillion recovery package on top of nearly $900 billion in additional pandemic relief provided by the government in late December could also support the labor market. A government source confirmed that gold imports in India for the month of January surged 72% from a year earlier. India are the world’s second-biggest consumer of the gold and imported around 62 tonnes of it in January, up from 36.5 tonnes a year ago. Technically market is under fresh selling as market has witnessed gain in open interest by 3.89% to settled at 12535 while prices down -505 rupees, now Gold is getting support at 47276 and below same could see a test of 47044 levels, and resistance is now likely to be seen at 47920, a move above could see prices testing 48332.  

Trading Ideas:            

* Gold trading range for the day is 47044-48332.

*  Gold settled lower as the dollar recovered after initial weakness amid a rise in U.S. treasury yields. 

*  Federal Reserve Chair Jerome Powell acknowledged that the "improvement in labor market conditions stalled" in the past few months

*  The number of Americans filing new applications for unemployment benefits inched down last week, consistent with a recent stalling in the labor market recovery

Silver    

Silver yesterday settled down by -0.63% at 68492 as the dollar attempted a rebound from a two-week low hit in the previous session after a benign reading on U.S. inflation and a dovish Federal Reserve outlook. The U.S. dollar is benefiting from a bounce in U.S. yields and low liquidity due to Chinese New Year holiday. In a speech, Fed Chair Jerome Powell emphasized that he wanted to see inflation at 2 percent or more before even thinking of tapering the bank's super-easy policies. The number of Americans filing new applications for unemployment benefits fell slightly last week as the labor market continued to tread water, but a drop in new COVID-19 cases has raised cautious optimism that momentum could pick up by the spring. The weekly unemployment claims report from the Labor Department, the most timely data on the economy's health, also highlighted labor market scarring, with at least 20.4 million people on unemployment benefits in late January. The euro zone economy will rebound less than earlier expected from the coronavirus slump this year as a second wave of the pandemic put economies in new lockdowns, the European Commission said, adding 2022 growth will be stronger than earlier thought. The Commission forecast economic growth in 19 countries sharing the euro would be 3.8% this year and the same in 2022, rallying from a 6.8% drop in 2020. Technically market is under long liquidation as market has witnessed drop in open interest by -1.86% to settled at 12479 while prices down -434 rupees, now Silver is getting support at 68030 and below same could see a test of 67569 levels, and resistance is now likely to be seen at 69111, a move above could see prices testing 69731.          

Trading Ideas:            

* Silver trading range for the day is 67569-69731.

* Silver prices edged lower as the dollar attempted a rebound after a benign reading on U.S. inflation and a dovish Federal Reserve outlook.

* Fed Chair Powell emphasized that he wanted to see inflation at 2 percent or more before even thinking of tapering the bank's super-easy policies.

* Euro zone growth in 2021 to rebound less than expected

Crude oil      

Crude oil yesterday settled down by -1.03% at 4241 , giving up some of the recent strong gains on expectations of slower economic recovery and speculation that the market’s strength could tempt producers like Saudi Arabia to reduce output by less. U.S. crude oil stocks plunged unexpectedly last week, tumbling by more than 6 million barrels, as refiners ramped up production rates to pre-pandemic levels in March amid rising fuel demand, the Energy Information Administration said. Crude inventories fell by 6.6 million barrels in the week to Feb. 5 to 469 million barrels, compared with expectations for a 985,000-barrel rise. U.S. gasoline stocks rose by 4.3 million barrels in the week to 256.4 million barrels, compared with expectations for a 1.8 million-barrel rise.Distillate stockpiles , which include diesel and heating oil, fell by 1.7 million barrels in the week, versus expectations for a 790,000-barrel drop. Top exporter Saudi Arabia is unilaterally reducing supply in February and March, supplementing cuts agreed by other members of the Organization of the Petroleum Exporting Countries (OPEC) and allies, known as OPEC+. In its Short-term Energy Outlook report, the U.S. Energy Information Administration lifted its 2021 and 2022 forecasts for West Texas Intermediate and Brent crude oil prices, citing tightened first-quarter supply outlooks. Technically market is under fresh selling as market has witnessed gain in open interest by 3.4% to settled at 3105 while prices down -44 rupees, now Crude oil is getting support at 4226 and below same could see a test of 4210 levels, and resistance is now likely to be seen at 4265, a move above could see prices testing 4288.       

Trading Ideas:            

*  Crude oil trading range for the day is 4210-4288.

* Crude oil prices fell on expectations of slower economic recovery and speculation that the market’s strength could tempt producers like Saudi Arabia to reduce output by less.

*  EIA lifted its 2021 and 2022 forecasts for West Texas Intermediate and Brent crude oil prices, citing tightened first-quarter supply outlooks.

* U.S. crude oil stocks plunged unexpectedly last week, tumbling by more than 6 million barrels, as refiners ramped up production rates to pre-pandemic levels in March

Nat.Gas     

Nat.Gas yesterday settled down by -0.99% at 209.2 on a smaller-than-expected storage draw last week and forecasts for less cold weather and heating demand next week than previously expected. The price decline came even though the arctic freeze blanketing much of the country cut output by freezing wells and was expected to erase the long-standing gas storage surplus by the end of the month. The U.S. Energy Information Administration (EIA) forecast U.S. utilities pulled 171 billion cubic feet (bcf) of gas from storage during the week ended Feb. 5. That was lower than the 181-bcf draw analysts forecast in a Reuters poll and compares with a decrease of 121 bcf in the same week last year and a five-year (2016-2020) average withdrawal of 125 bcf. Last week's decrease cut stockpiles to 2.518 trillion cubic feet (tcf), or 6.4% above the five-year average of 2.366 tcf for this time of year. Stockpiles have remained above the five-year (2016-2020) average since the start of 2020, but analysts say massive heating demand and liquefied natural gas exports this month should erase that surplus by the end of February. U.S. natural gas storage is expected to end the November-March withdrawal season at 1.650 trillion cubic feet (tcf) on March 31, the lowest since 2019. Technically market is under fresh selling as market has witnessed gain in open interest by 17.11% to settled at 8034 while prices down -2.1 rupees, now Natural gas is getting support at 203.7 and below same could see a test of 198.3 levels, and resistance is now likely to be seen at 218, a move above could see prices testing 226.9.  

Trading Ideas:            

* Natural gas trading range for the day is 198.3-226.9.

* Natural gas erased earlier gains on a smaller-than-expected storage draw last week and forecasts for less cold weather and heating demand next week.

* The price decline came even though the arctic freeze blanketing much of the country cut output by freezing wells

* The U.S. EIA forecast U.S. utilities pulled 171 bcf of gas from storage during the week ended Feb. 5.

Copper       

Copper yesterday settled down by -0.08% at 636.85 slipping from an all-time high hit in the previous session, as data showed soft U.S. inflation while trading was tepid during a major holiday in top consumer China. U.S. consumer prices rose moderately in January, tempering expectations for a sustained acceleration in inflation this year. Meanwhile, trading was subdued as the Shanghai Futures Exchange is shut during Feb. 11-17 for the Lunar New Year holidays. Rough seas and a shortage of containers have bogged down shipments of copper cathodes from top copper producer Chile, and may continue to slow exports. China's major copper smelters cut output by 10.5% month-on-month in January after racing to meet annual targets in December, while Daye Nonferrous carried out maintenance. Daye's maintenance has just ended, a company official said, and most smelters have no maintenance plans for February, which nonetheless sees output falling to around 725,000 tonnes in this shorter month. According to smelters’ production schedules, China’s copper cathode output to increase 1.71% on the month and 18.86% on the year to 812,000 mt in February, as several smelters recover from maintenance. For the first two months of 2021, output is likely to total 1.61 million mt, up 14.28% from the same period last year. Technically market is under long liquidation as market has witnessed drop in open interest by -6.79% to settled at 4116 while prices down -0.5 rupees, now Copper is getting support at 633.9 and below same could see a test of 630.9 levels, and resistance is now likely to be seen at 639.3, a move above could see prices testing 641.7.

Trading Ideas:            

* Copper trading range for the day is 630.9-641.7.

* Copper prices fell as data showed soft U.S. inflation while trading was tepid during a major holiday in top consumer China.

* U.S. consumer prices rose moderately in January, tempering expectations for a sustained acceleration in inflation this year.

* China's major copper smelters cut output by 10.5% month-on-month in January after racing to meet annual targets in December

Zinc      

Zinc yesterday settled up by 2.28% at 221.85 as Chinese zinc smelters boosted output by 5.9% year-on-year to 484,000 tonnes in January, as it predicted zinc treatment charges languishing at two-year lows would soon bottom out. The enlarged survey of 51 zinc smelters was released on the same day China's industry ministry vowed to continue cracking down on "disorderly" smelting capacity expansion in lead and zinc after record output in 2020. Daily zinc output in January fell 0.3% from December and will drop another 2.3% in February, as some smelters run maintenance or reduce operations over the Lunar New Year holiday starting this week. Spot charges paid to smelters to process zinc concentrate plunged more than 70% in 2020 as coronavirus curbs tightened mine supply, although Antaike said they were already rising slightly in parts of southern China. China’s factory gate prices rose in annual terms in January for the first time in 12 months and at the fastest rate since May 2019, suggesting gathering growth momentum for the world’s second-largest economy. The Chinese economy is expected to grow 8.4% this year, following a 2.3% rise in 2020 in the wake of the COVID-19 pandemic that forced the country to shut down for much of the March quarter last year. Technically market is under fresh buying as market has witnessed gain in open interest by 21.21% to settled at 1920 while prices up 4.95 rupees, now Zinc is getting support at 218.1 and below same could see a test of 214.2 levels, and resistance is now likely to be seen at 224, a move above could see prices testing 226.     

Trading Ideas:            

*  Zinc trading range for the day is 214.2-226.

* Zinc gained as Chinese zinc smelters boosted output by 5.9% year-on-year to 484,000 tonnes in January

* Spot charges paid to smelters to process zinc concentrate plunged more than 70% in 2020 as coronavirus curbs tightened mine supply

* China’s factory gate prices rose in annual terms in January for the first time in 12 months and at the fastest rate since May 2019

Nickel     

Nickel yesterday settled down by -0.58% at 1350.6 as prices pared gains as investors kept tapping the brakes on runs in prices after taking in tepid U.S. inflation data and comments from the Federal Reserve chief affirming the outlook for a slow recovery. The January volume was also down 7.9% from December, adding it sees February output dipping slightly due to the Lunar New Year holiday and noting Jien Nickel did not plan to resume production until April. China's output of stainless steel raw material nickel pig iron (NPI) meanwhile rose 4.8% in January from the previous month to 39,300 tonnes on a nickel content basis, which was still down 12.7% year-on-year. Stainless steel production in China rose 3% to 30.43 million tonnes last year, which sees output climbing another 4.5% in 2021 to 31.8 million tonnes. China's refined nickel cathode output fell 7.8% year-on-year to 12,981 tonnes in January, as maintenance and suspensions meant only Jinchuan and one other smelter were producing. Producers of nickel pig iron in Indonesia are looking at converting their material into an intermediate product that can be turned into nickel chemicals for the lucrative electric vehicle market. Goldman Sachs raised the expected size of the US stimulus bill to US$ 1.5 trillion, and raised the expected growth rate of US GDP to 6.8% and 4.5% this year and next respectively. Technically market is under long liquidation as market has witnessed drop in open interest by -5.48% to settled at 2209 while prices down -7.9 rupees, now Nickel is getting support at 1345.9 and below same could see a test of 1341.3 levels, and resistance is now likely to be seen at 1357.8, a move above could see prices testing 1365.1.        

Trading Ideas:            

* Nickel trading range for the day is 1341.3-1365.1.

* Nickel prices pared gains as investors kept tapping the brakes on runs in prices after taking in tepid U.S. inflation data

* China's refined nickel cathode output fell 7.8% year-on-year to 12,981 tonnes in January

* China’s refined nickel output to fall to 12,000 mt in February 2021 due to shorter operating days of the month.

Aluminium      

Aluminium yesterday settled up by 0.15% at 167.7 as consumption shrank, and the demand for capital hedging should continue to be monitored. China’s factory gate prices rose in annual terms in January for the first time in 12 months and at the fastest rate since May 2019, suggesting gathering growth momentum for the world’s second-largest economy. The producer price index (PPI) rose 0.3% from a year earlier, the National Bureau of Statistics said in a statement. PPI declined 0.4% in December. The Chinese economy is expected to grow 8.4% this year, following a 2.3% rise in 2020 in the wake of the COVID-19 pandemic that forced the country to shut down for much of the March quarter last year. But a resurgence of the virus last month, though mostly isolated to the northeastern provinces, raised concerns about temporary disruptions to production. China’s primary aluminium output rose 8.14% year on year to 3.32 million mt in January (31 production days), showed survey. As of early February, there was 39.55 million mt among 43.2 million mt per year of existing primary aluminium capacity in operation, while operating rates across Chinese primary aluminium producers stood at 91.6%. The daily average primary aluminium output rose 1,400 mt from December to 107,200 mt in January as Yunnan Shenhuo and Inner Mongolia Chuangyuan continued to release output. Technically market is under short covering as market has witnessed drop in open interest by -1.93% to settled at 811 while prices up 0.25 rupees, now Aluminium is getting support at 167.1 and below same could see a test of 166.3 levels, and resistance is now likely to be seen at 168.3, a move above could see prices testing 168.7.        

Trading Ideas:            

*  Aluminium trading range for the day is 166.3-168.7.

*  Aluminium prices remained supported as consumption shrank, and the demand for capital hedging should continue to be monitored.

* China’s factory gate prices rose in annual terms in January for the first time in 12 months and at the fastest rate since May 2019.

* The producer price index (PPI) rose 0.3% from a year earlier, the National Bureau of Statistics said in a statement

Mentha oil​​​​​​​      

Mentha oil yesterday settled up by 0.22% at 962.1 on low level buying after prices dropped due to weak demand from cosmetics and toiletries sector 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 1097.3 Rupees per 360 kgs. Technically market is under fresh buying as market has witnessed gain in open interest by 3.12% to settled at 66 while prices up 2.1 rupees, now Mentha oil is getting support at 956.3 and below same could see a test of 950.4 levels, and resistance is now likely to be seen at 967.8, a move above could see prices testing 973.4.           

Trading Ideas:            

* Mentha oil trading range for the day is 950.4-973.4.

* In Sambhal spot market, Mentha oil dropped  by -1.9 Rupees to end at 1097.3 Rupees per 360 kgs.

* Mentha oil gained on low level buying after prices dropped due to weak demand from cosmetics and toiletries sector 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 up by 0.5% at 4785 after the U.S. Department of Agriculture cut its end-of-season U.S. supply outlook while raising exports in a monthly report. The USDA, in its monthly World Agricultural Supply and Demand Estimates report, projected soybean ending stocks for the 2020/21 marketing year at 120 million bushels, down from its January outlook for 140 million bushels. Analysts, on average, had expected soy ending stocks of 123 million. The USDA also boosted its outlook for soybean exports by 20 million bushels to 2.250 billion but left its crush forecast unchanged at 2.200 billion bushels. The U.S. soybean stocks-to-use ratio for the 2020/21 season fell to 2.61%, the lowest on record going back to the 1964/65 season, according to USDA data. For Argentina, the USDA pegged its soybean output at 48.0 mmt. vs. and the USDA’s January estimate of 48.0 mmt. Soybean world ending stocks have been cut to 83.36Mt from 84.31Mt, and the estimate for China’s soybean imports was unchanged at 100Mt. USDA’s forecast for soybean imports to Europe including the United Kingdom has been cut by 250,000t to 15.15Mt. The country was expected to produce 120 million metric tons of soybeans but 80 lakh metric tons was produced. At the Indore spot market in top producer MP, soybean gained 32 Rupees to 4848 Rupees per 100 kgs. Technically market is under fresh buying as market has witnessed gain in open interest by 2.82% to settled at 225095 while prices up 24 rupees, now Soyabean is getting support at 4698 and below same could see a test of 4610 levels, and resistance is now likely to be seen at 4837, a move above could see prices testing 4888.          

Trading Ideas:            

*  Soyabean trading range for the day is 4610-4888.

* Soyabean gains after the U.S. Department of Agriculture cut its end-of-season U.S. supply outlook while raising exports in a monthly report.

* Support also seen due to lower production and stock on both domestic and international.

* USDA projected soybean ending stocks for the 2020/21 marketing year at 120 million bushels

*  At the Indore spot market in top producer MP, soybean gained  32 Rupees to 4848 Rupees per 100 kgs.

Ref.Soyaoil​​​​​​​      

Ref.Soyaoil yesterday settled up by 0.77% at 1118.7 on short covering after pressure seen on prices as India's edible oil consumption is expected to contract for the second straight year in 2020/21 as a rally in vegetable oil prices to multi-year highs curbs retail buying, industry officials told. Edible oil consumption could fall to 21 million tonnes in 2019/20 marketing year ending on Oct. 31 from 22 million a year earlier, he said. In 2018/19 demand was around 23 million tonnes. India's edible oil consumption usually rises by 2-3% per annum because of rising population and prosperity, but this year it will likely fall by around 5%, he said. Lower consumption would reduce imports as India fulfils more than 70% of its demand through imports. "Imports fell last year due to lockdown. This year a combination of very high prices and increased availability of oilseeds would bring down imports," said Atul Chaturvedi, president of the Solvent Extractors Association of India. India's edible oil imports could fall to 12.5 million tonnes in 2020/21 from last year's 13.2 million, the lowest in six years, Chaturvedi said. The country imports palm oil mainly from Indonesia and Malaysia, and other oils such as soy and sunflower oil from Argentina, Brazil, Ukraine and Russia. At the Indore spot market in Madhya Pradesh, soyoil was steady at 1115 Rupees per 10 kgs. Technically market is under fresh buying as market has witnessed gain in open interest by 4.12% to settled at 36610 while prices up 8.6 rupees, now Ref.Soya oil is getting support at 1105 and below same could see a test of 1090 levels, and resistance is now likely to be seen at 1128, a move above could see prices testing 1136.     

Trading Ideas:            

* Ref.Soya oil trading range for the day is 1090-1136.

* Ref soyoil gained on short covering after seen pressure as India's edible oil consumption is expected to contract in 2020/21

* Edible oil consumption could fall to 21 million tonnes in 2019/20 marketing year ending on Oct. 31 from 22 million a year earlier

* Soyoil imports could drop marginally from last year's 3.4 million tonnes

*  At the Indore spot market in Madhya Pradesh, soyoil was steady at 1115 Rupees per 10 kgs.

Crude palm Oil​​​​​​​      

Crude palm Oil yesterday settled up by 1.02% at 1012.1 lifted by a jump in exports during Feb. 1-10 despite higher than expected end-January inventories. Malaysia's palm oil inventories rose more than expected in January as exports plunged to a near 14-year low while output continued to decline, data from the Malaysian Palm Oil Board (MPOB) showed. Stockpile in the world's second largest producer increased 4.7% to reach 1.32 million tonnes at the end of January from the month prior, rising for the first time in four months. January inventories were expected to rise 1.8% to 1.29 million tonnes. Crude palm oil production fell more than expected to its lowest since February 2016. It slumped 15.5% in January to 1.13 million tonnes, falling for a fourth straight month due to rainy weather and a pandemic-induced labour crunch, and against expectations for smaller 13% fall. Palm oil exports also slumped more than expected to their lowest since February 2007. Exports plunged 42.3% to 947,395 tonnes, data from the industry regulator showed, against expectations for a 35% fall. Exports from Malaysia during Feb. 1-10 rose between 47% to 54% from the same period in January, cargo surveyors said. February's exports were seen recovering sharply over a very weak base of Jan. 1-10's exports, however, the rise is primarily due to a delay in January shipments which sailed in February. In spot market, Crude palm oil dropped by -4.7 Rupees to end at 1012.3 Rupees. Technically market is under fresh buying as market has witnessed gain in open interest by 1.66% to settled at 5331 while prices up 10.2 rupees, now CPO is getting support at 997.3 and below same could see a test of 982.5 levels, and resistance is now likely to be seen at 1020.1, a move above could see prices testing 1028.1.         

Trading Ideas:            

* CPO trading range for the day is 982.5-1028.1.

* Crude palm oil gains lifted by a jump in exports during Feb. 1-10 despite higher than expected end-January inventories.

* Malaysia's palm oil inventories rose more than expected in January as exports plunged to a near 14-year low while output continued to decline

* Stockpile in the world's second largest producer increased 4.7% to reach 1.32 million tonnes at the end of January from the month prior

* In spot market, Crude palm oil dropped  by -4.7 Rupees to end at 1012.3 Rupees.

Mustard Seed      

Mustard Seed yesterday settled up by 0.15% at 5261 amid crop damage in north due to cold waves. Year on year, the planted area of mustard has increased by 6.7 percent approximately. The latest Government data shows that the planted area in Mustard or RM seed has so far reached 73.25 Lakh hectares as against 68.64 Lakh hectares during last year’s corresponding period. The government aims to take the area under mustard to around 80 lakh hectares this year, under the Oilseeds Mission program. The mustard crop continues providing better prices to farmers than the MSP till now. India’s 2020-21 mustard crop may touch 100 lakh ton-level due to higher sowing and conducive weather. 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, 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. In Alwar spot market in Rajasthan the prices gained 52.15 Rupees to end at 6510.25 Rupees per 100 kg. Technically market is under fresh buying as market has witnessed gain in open interest by 5.57% to settled at 26350 while prices up 8 rupees, now Rmseed is getting support at 5202 and below same could see a test of 5142 levels, and resistance is now likely to be seen at 5301, a move above could see prices testing 5340.

Trading Ideas:            

* Rmseed trading range for the day is 5142-5340.

* Mustard seed prices gained amid crop damage in north due to cold waves. 

* New mustard arrivals will start in Uttar Pradesh's mandis.

* Production area of the Rabi season has reached a height of 73.94 lakh hectare

* In Alwar spot market in Rajasthan the prices gained 52.15 Rupees to end at 6510.25 Rupees per 100 kg.

Turmeric      

Turmeric yesterday settled down by -0.53% at 7540 on profit booking after prices rallied due to the possibility of 25 percent crop loss in Telangana and Andhra Pradesh. Even in Sangli district of Maharashtra, the crop has been affected. There are expectation of decrease in Turmeric sown area in the kharif sowing season 2020 across Nizamabad and Marathwada regions. 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 7100 Rupees gained 3.55 Rupees. Technically market is under long liquidation as market has witnessed drop in open interest by -4.22% to settled at 7950 while prices down -40 rupees, now Turmeric is getting support at 7412 and below same could see a test of 7282 levels, and resistance is now likely to be seen at 7696, a move above could see prices testing 7850.  

Trading Ideas:            

* Turmeric trading range for the day is 7282-7850.

* Turmeric dropped on profit booking after prices rallied  due to the possibility of 25 percent crop loss in Telangana and Andhra Pradesh.

* Even in Sangli district of Maharashtra, the crop has been affected.

* Covid-19 raised expectations regarding the consumption of turmeric as a body immune enhancer, but it did not last long

* In Nizamabad, a major spot market in AP, the price ended at 7100 Rupees gained 3.55 Rupees.

Jeera​​​​​​​      

Jeera yesterday settled up by 0.45% at 13405 due to constraints in supply as the end of season approaches. Support was also seen from the export side as exporters switched to Indian cumin seed this time. Weather conditions remain supportive and traders are avoiding buying large quantities in the wholesale markets before the new arrivals from next month. Demand for Indian Cumin has improved from UAE and Vietnam in recent months. Acreage under Jeera in leading producing state of Gujarat was at 4.64 lakh hectares (lh), marking a jump of around 11% compared to the same time last year which may not allow any significant price appreciation of cumin in coming weeks. Some support seen as a statement from the Spices Board said the export of spices, which had fetched ₹12,273.81 crores 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. As India going to start it vaccination in the whole country from 16th January onwards it is raising the expectation of trader regarding the boost in demand of Jeera from export as well as from domestic which was dropped in 2020 due to Covid. In Unjha, a key spot market in Gujarat, jeera edged down by -40.6 Rupees to end at 13010.55 Rupees per 100 kg. Technically market is under short covering as market has witnessed remain unchanged in open interest by 0% to settled at 1164 while prices up 60 rupees, now Jeera is getting support at 13300 and below same could see a test of 13200 levels, and resistance is now likely to be seen at 13470, a move above could see prices testing 13540. 

Trading Ideas:            

* Jeera trading range for the day is 13200-13540.

* Jeera prices gained due to constraints in supply as the end of season approaches.

* Support was also seen from the export side as exporters switched to Indian cumin seed this time.

* Demand for Indian Cumin has improved from UAE and Vietnam in recent months.

* In Unjha, a key spot market in Gujarat, jeera edged down by -40.6 Rupees to end at 13010.55 Rupees per 100 kg.

Cotton      

Cotton yesterday settled up by 0.23% at 21450 as prices settled flat after the Union Ministry of Textiles’ Committee on Cotton Production and Consumption (COCPC) has projected a higher crop at 371 lakh bales (each of 170 kg) for the year 2020-21. Cotton trade had estimated the crop size at 358.50 lakh bales. In its meeting, the Committee, estimated the average cotton yield of 486.76 kg per hectare, up from 463.99 kg reported in the previous year. For the previous year, projected cotton crop size of 365 lakh bales in the country. As per the latest projections, Gujarat will be the largest cotton-growing State with 90.5 lakh bales and one of the highest yields at 676.86 kg per hectare. Rajasthan, with 27 lakh bales, is expected to have highest cotton yield at 683.04 kg. Besides Gujarat, the top three cotton growing states include Maharashtra with 86 lakh bales with 349.43 kg yield and Telangana with 60 lakh bales and 429.84 kg of cotton yield. Commenting on the cotton crop projections, J Thulasidharan, Chairman of Indian Cotton Federation, said that a higher crop would pose a serious challenge for India to clear huge stocks of the fibre crop. As per the government estimate, closing stock for 2020-21 is likely to be 97.95 lakh bales, as comapred to 120.95 lakh bales recorded last year. In spot market, Cotton dropped by -20 Rupees to end at 21280 Rupees. Technically market is under short covering as market has witnessed drop in open interest by -1.31% to settled at 5744 while prices up 50 rupees, now Cotton is getting support at 21360 and below same could see a test of 21280 levels, and resistance is now likely to be seen at 21510, a move above could see prices testing 21580.           

Trading Ideas:            

* Cotton trading range for the day is 21280-21580.

* Cotton prices traded in range after COCPC estimate is higher by 12.5 lakh bales over trade projections

* The Committee, estimated the average cotton yield of 486.76 kg per hectare, up from 463.99 kg reported in the previous year.

* For the previous year, projected cotton crop size of 365 lakh bales in the country.

* In spot market, Cotton dropped  by -20 Rupees to end at 21280 Rupees.

Chana     

Chana yesterday settled down by -0.04% at 4609 as the arrival of new gram is increasing gradually in the producing states. Old gram selling remains normal, keeping prices under pressure. In absence for the new crop, millers are buying gram as per need. During the Rabi season this year, about 112 lakh hectare area has been sown in the gram producing states, which was in 107.30 lakh hectare last year. Weather friendly is likely to increase productivity. Prices are running lower than MSP. The challenge of buying gram will be in front of the government. Selling of chana at the port was seen better. Chana arrivals are increasing in the mandis of Maharashtra. The pressure of new crop arrivals was seen on the markets. From next month, arrival of gram will also start in Rajasthan. In Australia due to the growth in the sowing area and favorable conditions of weather and rainfall, during the current marketing season of 2020-21, there are signs of a significant increase in the production of all the major pulses including gram, lentils, peas and faba beans etc. This time harvesting and preparation of the crop started a little late. As per sources except for parts of Queensland, all other major pulses growing areas of the country received good rainfall at the right time. In Delhi spot market, chana dropped by -35.4 Rupees to end at 4586.25 Rupees per 100 kgs. Technically market is under fresh selling as market has witnessed gain in open interest by 0.32% to settled at 31060 while prices down -2 rupees, now Chana is getting support at 4577 and below same could see a test of 4546 levels, and resistance is now likely to be seen at 4637, a move above could see prices testing 4666. 

Trading Ideas:            

* Chana trading range for the day is 4546-4666.

* Chana prices dropped as the arrival of new gram is increasing gradually in the producing states. 

* Old gram selling remains normal, keeping prices under pressure.

* In absence for the new crop, millers are buying gram as per need.

* In Delhi spot market, chana dropped  by -35.4 Rupees to end at 4586.25 Rupees per 100 kgs.

-www.kediaadvisory.com