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Gold

Gold yesterday settled up by 0.28% at 50904 as investors awaited fresh cues from the Federal Reserve on the likely direction of US monetary policy. Market participants are now eyeing Fed Chair Jerome Powell’s appearance before Congress for fresh insight on the central bank’s policy plans. 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 -0.61% to settled at 12448 while prices up 144 rupees, now Gold is getting support at 50568 and below same could see a test of 50233 levels, and resistance is now likely to be seen at 51192, a move above could see prices testing 51481.

Trading Ideas:
* Gold trading range for the day is 50233-51481.
* Gold gained as investors awaited fresh cues from the Federal Reserve on the likely direction of US monetary policy.
* Market participants are now eyeing Fed Chair Jerome Powell’s appearance before Congress for fresh insight on the central bank’s policy plans.
* The yield on the benchmark 10-year Treasury note was almost 3 basis points higher at 3.269 percent

Silver

Silver yesterday settled down by -1.02% at 60648 as the dollar pushed higher as inflation and interest-rate worries returned to haunt investors. Risk-off sentiment prevailed in financial markets ahead of speeches by a couple of European Central Bank policy-makers and U.S. Federal Reserve Chair Jerome Powell later in the day. Investors will closely watch his comments for clues on the aggressiveness of the tightening cycle in the light of high inflation. Markets are assigning a 90 percent probability of a 75-basis point rate hike next month, according to the CME FedWatch tool. Fed Bank of Richmond President Thomas Barkin said the central bank should hike interest rates as fast as it can without causing undue harm to financial markets or the economy. The consumer confidence indicator in the Euro Area fell by 2.4 points from the previous month to -23.6 in June of 2022, the lowest since the record low hit in April 2020, at the beginning of the COVID-19 pandemic. It compares with market expectations of -20.5 and its long-term average of -11.0, a preliminary estimate showed. In the European Union as a whole, consumer sentiment decreased by 1.9 points to -24. Consumer prices in the UK surged 9.1% from a year earlier in May, the highest since 1982, as skyrocketing food and energy prices continue to deepen the country’s cost of living crisis. Technically market is under fresh selling as market has witnessed gain in open interest by 3.06% to settled at 9787 while prices down -623 rupees, now Silver is getting support at 60141 and below same could see a test of 59633 levels, and resistance is now likely to be seen at 61129, a move above could see prices testing 61609.

Trading Ideas:
* Silver trading range for the day is 59633-61609.
* Silver dropped as the dollar pushed higher as inflation and interest-rate worries returned to haunt investors.
* Risk-off sentiment prevailed in financial markets ahead of speeches by a couple of European Central Bank policy-makers and U.S. Fed Chair Powell
* Fed Barkin said the central bank should hike interest rates as fast as it can without causing undue harm to financial markets or the economy.

Crude oil

Crude oil yesterday settled down by -2.4% at 8351 on news of a plan by U.S. President Joe Biden to cut fuel costs for drivers and amid concerns over a potential economic recession after recent central bank rate hikes, which also weighed on equities. Oil output in the Permian in Texas and New Mexico, the biggest U.S. shale oil basin, is due to rise 84,000 barrels per day (bpd) to a record 5.316 million bpd in July, the U.S. Energy Information Administration (EIA) said in its productivity report. Capacity for U.S. oil refiners fell in 2021 for the second year in a row, the most recent government data showed on Tuesday, as plant shutdowns kept whittling away on their ability to produce gasoline and diesel. Pump prices are near $5 a gallon nationwide as soaring demand for motor fuels collides with the loss of about 1 million barrels of processing capacity in the last three years due largely to closings to plants that were unprofitable when fuel demand cratered at the height of the COVID-19 pandemic. Libya’s oil production has risen in the past week to around 700,000 to 800,000 barrels a day, according to Energy Minister Mohamed Oun. Oun, said on June 13 that the OPEC member’s output was down to 100,000-200,000 barrels a day. Production in Libya, has been volatile since mid-April amid an increase in political tension and protests at energy fields and ports. Technically market is under long liquidation as market has witnessed drop in open interest by -6.68% to settled at 4108 while prices down -205 rupees, now Crude oil is getting support at 8044 and below same could see a test of 7737 levels, and resistance is now likely to be seen at 8580, a move above could see prices testing 8809.

Trading Ideas:
* Crude oil trading range for the day is 7737-8809.
* Crude oil prices tumbled on news of a plan by U.S. President Joe Biden to cut fuel costs for drivers and amid concerns over a potential economic recession
* Permian oil output forecast to hit record high in June – EIA
* U.S. oil refining capacity down in 2021 for second year –EIA

Natural Gas

Nat.Gas yesterday settled down by -0.09% at 538.3 on forecasts for less demand over the next two weeks than previously projected and a drop in liquefied natural gas (LNG) exports with the Texas Freeport plant shut down. That price decline came despite record power demand in Texas and a slow slide in daily gas output. 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 in February. 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 92.8 bcfd this week to 95.5 bcfd next week. Those forecasts were lower than Refinitiv's outlook on Tuesday. 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. That compares with a monthly record of 12.9 bcfd in March. Technically market is under long liquidation as market has witnessed drop in open interest by -19.62% to settled at 2839 while prices down -0.5 rupees, now Natural gas is getting support at 521.6 and below same could see a test of 504.8 levels, and resistance is now likely to be seen at 548.8, a move above could see prices testing 559.2.

Trading Ideas:
* Natural gas trading range for the day is 504.8-559.2.
* Natural gas eased on forecasts for less demand and a drop in liquefied natural gas (LNG) exports with the Texas Freeport plant shut down.
* That price decline came despite record power demand in Texas and a slow slide in daily gas output.
* On a daily basis, output was on track to drop to 10.3 bcfd on Wednesday, the lowest since November 2021.

Copper

Copper yesterday settled down by -1.61% at 730.4 after the world refined copper market showed a 3,000 tonne surplus in April, compared with a 22,000 tonne deficit in March, the International Copper Study Group (ICSG) said in its latest monthly bulletin. World refined copper output in April was 2.155 million tonnes while consumption was 2.152 million tonnes, the ICSG said. Pressure also seen 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. On the supply side, 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. Meanwhile, copper stocks held by LME were at 117,025 tonnes, down 35% since mid-May. 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. 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 long liquidation as market has witnessed drop in open interest by -29.13% to settled at 2285 while prices down -11.95 rupees, now Copper is getting support at 724 and below same could see a test of 717.6 levels, and resistance is now likely to be seen at 738.4, a move above could see prices testing 746.4.

Trading Ideas:
* Copper trading range for the day is 717.6-746.4.
* Copper dropped after the world refined copper market showed a 3,000 tonne surplus in April, compared with a 22,000 tonne deficit in March
* World refined copper output in April was 2.155 million tonnes while consumption was 2.152 million tonnes, the ICSG said.
* Pressure also seen on mounting fears that a global economic slowdown and persistent coronavirus outbreaks in China would dampen demand.
 

Zinc

Zinc yesterday settled up by 0.21% at 316.8 as Chinese refined zinc output will decline by 6% MoM and 4.6% YoY to 484.5kt in June, as flooding has disrupted power supplies to smelters located in the southern province of Guangxi. Smelters in the region hold about 550ktpa capacity, which is roughly 8% of total Chinese capacity. China reported 126 new coronavirus cases for June 21. China's strict "zero-COVID" policy to prevent the spread of the coronavirus has battered the country's economy and manufacturing sector. However, downside seen limited amid by a robust U.S. dollar and weaker financial markets as fears over a global economic slowdown dented investor sentiment. 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. Reinforcing these concerns was a cut in Russian gas deliveries on the Nord Stream 1 pipeline into Germany. Higher energy prices and June's pullback in zinc prices may squeeze margins and further constrain regional zinc smelter output. Technically market is under short covering as market has witnessed drop in open interest by -15.61% to settled at 573 while prices up 0.65 rupees, now Zinc is getting support at 312.1 and below same could see a test of 307.4 levels, and resistance is now likely to be seen at 320.2, a move above could see prices testing 323.6.

Trading Ideas:
* Zinc trading range for the day is 307.4-323.6.
* Zinc gains as Chinese refined zinc output will decline by 6% MoM and 4.6% YoY to 484.5kt in June
* Zinc stocks slide as shortages in Europe persist
* However, downside seen limited amid by a robust U.S. dollar and weaker financial markets as fears over a global economic slowdown dented investor sentiment.

Aluminium

Aluminium yesterday settled up by 0.23% at 217.1 as 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. Monthly aluminium imports into China, the world's biggest producer and consumer of the metal, have been below 200,000 tonnes so far this year as an arbitrage window for cheaper overseas metal shut and downstream demand weakened due to COVID-19 induced lockdowns. China produced a record 3.42 million tonnes of primary aluminium in May as the country's smelters continue to ramp up run-rates. The country's annualised production has surged by 3.66 million tonnes over the first five months of the year culminating in last month's highest ever operating rate of 40.27 million tonnes, according to the International Aluminium Institute (IAI). Chinese smelters are resurgent thanks to an easing of the power crunch that constrained production for much of last year. 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. Technically market is under short covering as market has witnessed drop in open interest by -23.21% to settled at 1502 while prices up 0.5 rupees, now Aluminium is getting support at 214.4 and below same could see a test of 211.7 levels, and resistance is now likely to be seen at 218.7, a move above could see prices testing 220.3.

Trading Ideas:
* Aluminium trading range for the day is 211.7-220.3.
* Aluminium gains as China's aluminium imports in May fell 16.4% from the same month a year earlier
* However, upside seen limited as persistent worries about interest rates and inflation remained a key focus for investors.
* Global primary aluminium output in May rose 0.43% year on year to 5.805 million tonnes

Mentha oil

Mentha oil yesterday settled down by -1.67% at 1018.3 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. However downside seen limited amid low production this season and improving demand post-pandemic. 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 2.1 Rupees to end at 1177 Rupees per 360 kgs.Technically market is under long liquidation as market has witnessed drop in open interest by -18.13% to settled at 474 while prices down -17.3 rupees, now Mentha oil is getting support at 1010 and below same could see a test of 1001.7 levels, and resistance is now likely to be seen at 1030.8, a move above could see prices testing 1043.3.

Trading Ideas:
* Mentha oil trading range for the day is 1001.7-1043.3.
* In Sambhal spot market, Mentha oil gained  by 2.1 Rupees to end at 1177 Rupees per 360 kgs.
* Mentha oil dropped 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.
* However donwside seen limited amid low production this season and improving demand post-pandemic.

Turmeric

Turmeric yesterday settled up by 1.45% at 7848 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 8142.1 Rupees gained 38.9 Rupees.Technically market is under short covering as market has witnessed drop in open interest by -2.74% to settled at 15780 while prices up 112 rupees, now Turmeric is getting support at 7742 and below same could see a test of 7636 levels, and resistance is now likely to be seen at 7922, a move above could see prices testing 7996.

Trading Ideas:
* Turmeric trading range for the day is 7636-7996.
* 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 8142.1 Rupees gained 38.9 Rupees.

Jeera

Jeera yesterday settled down by -0.17% at 20750 as 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. However downside limited because of lower production of the spice in the country, partly because many farmers shifted to more lucrative commodities. 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 down by -36.35 Rupees to end at 21235.65 Rupees per 100 kg.Technically market is under long liquidation as market has witnessed drop in open interest by -2.19% to settled at 13401 while prices down -35 rupees, now Jeera is getting support at 20670 and below same could see a test of 20585 levels, and resistance is now likely to be seen at 20845, a move above could see prices testing 20935.

Trading Ideas:
* Jeera trading range for the day is 20585-20935.
* Jeera dropped as cumin exports dropped by 60.58% in March 2022 to around 13406.43 tonnes as against 33203.08 tonnes in March 2021.
* 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 down by -36.35 Rupees to end at 21235.65 Rupees per 100 kg.

Cotton

Cotton yesterday settled down by -2.8% at 45430 as the Cotton Association of India (CAI), is bullish about the sowing prospects this kharif season. “Sowing will increase by 12 per cent and go up to 133-135 lakh hectares from last year’s 120 lakh,” said Atul Ganatra, President, CAI. Ganatra further said the increase in acreage expansion will be the highest in Gujarat, the largest producer of the fibre, at around 20-25 per cent. In Karnataka, the cotton area till June 10, had doubled to over 1.21 lh compared with 0.59 lh in the previous year. Karnataka has set a target of 7.28 lh this year. Andhra Pradesh has also sharply raised the cotton acreage target to 6.11 lh for the current year over last year’s cropped area of 5.33 lh. Though the acreage under the fibre crop in Rajasthan, which stood at 4.72 lh till recently, is seen catching up, the overall area would be around 7 lh — lower than last year’s 7.66 lh. Rajasthan had set a target of 8 lh for the current year. 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 spot market, Cotton dropped by -430 Rupees to end at 46980 Rupees.Technically market is under long liquidation as market has witnessed drop in open interest by -36.05% to settled at 1089 while prices down -1310 rupees, now Cotton is getting support at 44990 and below same could see a test of 44550 levels, and resistance is now likely to be seen at 46220, a move above could see prices testing 47010.

Trading Ideas:
* Cotton trading range for the day is 44550-47010.
* Cotton dropped as Cotton acreage seen rising 12 per cent to 135 lakh ha despite drop in North
* 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 -430 Rupees to end at 46980 Rupees.

-www.kediaadvisory.com

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