Daily Fundamental Friday, December 04, 2009 Market at a Glance Top Gainers Exchange Commodity Price Chg % NCDEX STEEL LONG Dec09 21560 1.26 NCDEX WHEAT FUTURE Dec09 1411.4 0.95 NCDEX RAPESEED MUSTARD Jan10 633.2 0.26 NCDEX GUR FUTURE Dec09 1091.2 0.01 Top Losers Exchange Commodity Price Chg % NCDEX JEERA UNJHA FUT Jan10 15530 -4.00 NCDEX GUAR GUM JDHPR FT Jan10 5853 -3.00 MCX LEAD FUTURE Dec09 110.95 -2.63 NCDEX GUARSEED JODPR FT Jan10 2804 -2.40 MCX NICKEL FUT (MCX) Dec09 744.3 -2.39
Transcript
Daily Fundamental
Friday, December 04,
2009
Market at a Glance
Top Gainers
Exchange Commodity Price Chg %
NCDEX STEEL LONG Dec09 21560 1.26
NCDEX WHEAT FUTURE Dec09 1411.4 0.95
NCDEX RAPESEED MUSTARD Jan10 633.2 0.26
NCDEX GUR FUTURE Dec09 1091.2 0.01
Top Losers
Exchange Commodity Price Chg %
NCDEX JEERA UNJHA FUT Jan10 15530 -4.00
NCDEX GUAR GUM JDHPR FT Jan10 5853 -3.00
MCX LEAD FUTURE Dec09 110.95 -2.63
NCDEX GUARSEED JODPR FT Jan10 2804 -2.40
MCX NICKEL FUT (MCX) Dec09 744.3 -2.39
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bank also lifted its economic growth forecast for 2010. The euro neared a 16-month high around $1.5140 and rose against the yen, but it gave up some gains when Trichet said plans to wind down some emer-gency programs were not a signal that interest rates are about to change.
The euro got a modest boost when Bank of America said it would repay bailout funds to the U.S. govern-ment. That increased risk appetite as it reflected an improving outlook for the banking sector. But some of the euro's gains came off after data showing that the vast U.S. services sector contracted in November. Also on Thursday, U.S. Treasury secretary Timothy Geithner reiter-ated the importance of a strong dollar and said the United States must persuade the world it will be more fiscally responsible.
An index of the U.S. services sector shrank in November to its lowest since July, according to a report released on Thursday that shocked
economists who had forecast a recovery from recession was picking up steam. The Institute for Supply Manage-ment said its services index shrank to 48.7 from 50.6 in October, well below the 51.5 median forecast.
Looking at today’s data, Un-employment rate will be a crucial data to look at. Unem-ployment rate is expected to remain unchanged while non farm payrolls is expected to go down. For Gold $1195/ounce is expected to act as a key support below which $1180 will be the next sup-port level.
ISM Non Manufacturing Falls
The U.S. services sector unexpectedly contracted in November, with an index measuring ac-tivity falling to its lowest reading since July, according to an industry report released on Thurs-day. The Institute for Supply Management said its services index shrank to 48.7 in November from 50.6 in October. That was below the 51.5 median forecast of 62 economists surveyed.
Precious Metals
Events
Economic Calendar
Page 2 Dai ly Fundamenta l
Fall in ISM Non
Manufacturing is a
concern for U.S
Gold inched down on Friday after topping $1,220 per ounce the pre-vious day to mark a record high for the third straight day. U.S. gold futures for February delivery fell 0.9 percent to $1,207.10 per ounce.
The euro firmed against the dollar on Thursday after comments by the European Central Bank sug-gested it would gradually withdraw emergency liquidity from the sys-tem. ECB President Jean-Claude Trichet laid out a package of deci-sions on ending and tightening up the measures it has taken to boost liquidity to the banking sector.
The euro firmed against the U.S. dollar on Thursday after com-ments from the European Central Bank suggested that it would gradually withdraw emergency liquidity from the system. Though the ECB at a meeting left interest rates at record lows, President Jean-Claude Trichet said the next 12-month refinancing operation for banks would be the last. The
Date Time Event Survey Prior
12/4/2009 19:00 US Change in Nonfarm Payrolls -125K -190K
12/4/2009 19:00 US Unemployment Rate 10.20% 10.20%
12/4/2009 19:00 US Change in Manufact. Payrolls -45K -61K
12/4/2009 19:00 US Average Hourly Earnings MoM 0.20% 0.30%
12/4/2009 19:00 US Average Weekly Hours 33.1 33
12/4/2009 20:30 US Factory Orders 0.00% 0.90%
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Base Metals
Energy
Copper fell from the highest price in 14 months after a re-port showed U.S. service indus-tries unexpectedly contracted last month, spurring specula-tion that the global economy will be slow to rebound. An index of non-manufacturing businesses, which make up almost 90% of the U.S. economy, fell to 48.7, indicating a contraction in No-vember. Economists had fore-cast expansion. The copper price is far outpac-ing where demand really is. I wouldn’t be surprised to see it continue to drop. Inventories in warehouses monitored by the LME in-creased for a 23rd day, reaching the largest amount since April. Shipments into China, the world’s biggest copper user, declined in October for the third time in four months.
We’re seeing real consumption growth in China. That gives us confidence about the market. Copper in Shanghai fell for the first time in five days, par-ing the week’s gains, as some investors deemed the rally to a 15-month high unjustified after a report showed an unex-pected contraction in U.S. service industries. Copper and zinc will be the hardest hit by the index funds reweighting in January follow-ing their meteoric price rise this year. Of the base metals in the DJ-UBS commodity index, copper traded on Comex will see the biggest change, with the weight given to the red metal falling to 7.6% from 11.1% this year. The large change in the com-position together with the lower market volume makes copper stand out. The ex-pected net sales over the five days when the rebalancing will
take place would correspond to almost 20% of current aggre-gate open interest in copper. Some $1.3 billion of copper will be sold in the rebalancing, JP Morgan analysts estimated. This equates to almost 200,000 tonnes of copper based on a copper price of $7,100 per tonne.
But copper demand in
Japan, which is less than
one-fifth of China's, is
likely to be slow to
recover.
Page 3 Dai ly Fundamenta l
U.S. crude futures fell for a third day to below $76 a barrel on Friday pressured by weak U.S. service sector data, as trad-ers remained cautious ahead of a U.S. unemployment report later in the day. NYMEX crude for January delivery was down 51 cents at $75.95 a bar-rel. Thursday's loss, which came on top of Wednesday's $1.77 fall, came after data showed the U.S. services sector unexpectedly contracted in November. The White House said on Thursday a private-sector payroll report had sig-nalled that November's unem-ployment level may tick up from 10.2 percent in October, but stressed it was not predict-ing the outcome of the govern-ment's monthly payroll data.
Kuwaiti Oil Minister Sheikh Ahmad al-Abdullah al-Sabah told reporters the OPEC na-tion preferred oil prices to remain in the $70-80 a barrel range, adding that he sup-ported leaving crude output targets unchanged when the producer group meets on Dec. 22 in Angola.
After some mild midweek weather, AccuWeather.com expects temperatures in the Northeast United States to cool to below normal later this week and next week, as day-time highs slip into the 30s and low-40s Fahrenheit area (-1 to 6.7 C).
U.S. stocks fell on Thursday after data showed the vast U.S. services sector unexpect-
edly shrank in November and investors worried that Friday's non-farm payrolls report may show the recovery is sluggish.
The euro firmed against the dollar on Thursday after com-ments by the European Central Bank suggested it would gradu-ally withdraw emergency liquid-ity from the system. The yen, on the other hand, fell broadly for a second straight session, as wor-ries persisted Japan may move to weaken its currency. One can expect Crude oil to be range bound to bearish. A breach be-low $75/barrel will trigger a drift towards $72/barrel.
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Page 4 Dai ly Fundamenta l
Palm Oil & Mustard / RM Seed Palmoil prices traded on a
weaker note during yesterday’s
trading session on the back of
taking cues from crude prices
and soybean prices.
Indonesian palm oil exports are
estimated to have risen 16 per-
cent in October to 1.35 million
tonnes from the same month a
year ago, data from the Indone-
sian Palm Oil Producers Asso-
ciation (GAPKI). October ex-
ports, however, were slightly
below the 1.36million tonnes
Soy Bean
sharply, or 3.9 percent, to 990
pesos ($260) mirroring losses
in the benchmark CBOT after
local prices reached a five-month
high of 1,030 pesos ($270) per
tonne on Tuesday. In Argentina,
Rosario soy for delivery in May
2 0 1 0 , w h i c h
is quoted in U.S. dollars, fell $9
to $236 per tonne.
Soybean futures ended flat on
Wednesday as pressure from
weak global leads was offset by
firm domestic demand and
lower arrivals. The December
soybean closed 0.04 percent
lower at 2452.5.
On Cbot soybean futures fell
2 percent on Wednesday, pres-
sured by a rebound in the dollar
and weak cash soy markets.
Traders were also taking profits
after soybeans rallied to the
highest spot price in three
months earlier this week. Wet
weather to slow final soy har-
vest in the U.S. southern, Delta
and eastern crop region at mid-
week, but extended forecasts
indicate better harvest weather.
Spot basis bids for soybeans
rose in the eastern U.S. Mid-
west and declined in the west-
ern part of the region on
Wednesday, while bids for corn
were steady to slightly lower.
Argentina’s main grains market
of Rosario, soy prices fell
shipped in September, the data
s h o w e d .
Palm oil exports in the first ten
months rose 16 percent to
12.76 million tonnes from 11
million tonnes in the same pe-
riod of last year.
Market witness some sell-off
on the back of profit booking
weak crude prices and weak
bean prices..
Taking cues from soy and palm
oil prices mustard seed traded
on a mix note as output con-
cern still lingers.
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Pepper
Chilli & Turmeric
Jeera (Cumin)
Pepper futures on Wednesday witnessed high volatility and closed marginally below the previous close on selling pres-sure. Investors were selling validity expired stock at Rs 250 below the December price and buying December fresh pepper at Rs 100 below the December price.
Thus, there was a selling pres-sure pushing the prices down after moving up significantly till the afternoon trading.
A total of 75-80 tonnes of MG1, validity expired and farm grade pepper were traded. Total
turnover increased by 2,130 tonne to 17,183 tonnes. Total open inter-est increased by 364 tonnes to 13,964 tonnes. December open interest dropped by 912 tonnes to 4,889 tonnes. January open interest increased by 1,220 tonnes indicat-ing switching over.
Spot prices ruled steady at previous levels of Rs 14,800 (un-garbled) and Rs 15,300 (MG 1) a quintal.
Indian parity in the international market continued to remain out-priced at $3,525 - $3,550 a tonne (c&f).
Chilli prices traded on a weaker note during yesterday’s trad-ing session. Market opened on a steady note with some upside but after which prices slumped and closed in negative trajec-tory.
This was nothing to do with physical buying activity but was primarily influenced by profit booking and expectation of normal output in Guntur re-gion. Going further markets will be taking cues from the development of new crop i8n major producing centre in Guntur.
Turmeric futures edged down in a volatile trade on Tuesday as hopes recent rains in growing areas would improve yields outweighed depleting stockpile. Major turmeric producing states like Andhra Pradesh, Maharash-tra, Karnataka and Tamil Nadu received rains earlier
Carry-forward stocks were low as output had fallen sharply last year due to low acreage and bad weather.
The supply crunch is support-ing the upside and it will remain till fresh arrivals hit the market. Turmeric arrivals usually start in mid-January in small quantities
“Jeera prices rises
a s i t l a c k s
fundamental (spot)
support ”
Page 5 Dai ly Fundamenta l
and gain momentum from March.
The peak season runs till June. Nizamabad, a major spot mar-ket in Andhra Pradesh, was closed on Monday for a local festival.
Slump in prices was also on the back of profit booking.
Jeera futures ended down yes-terday on profit-taking after prices rose more than 10 per-cent in the last six sessions. Fundamentals, however, re-mained firm on dipping acreage that sparked worries of lower crop and firm export demand.
In the international market In-dia is still quoting less than other origins so exports are
good and weather problems have already delayed sowing, so the output this season can be lower.
A prolonged hot and dry spell has delayed the sowing of cumin, or jeera, slashing acreage 25-30 percent from last year, but deficit could narrow if condi-tions improve.
Spot market in Unjha is close
from 26th Nov’09 to 2nd Dec’09 and or that reason mar-ket will lack cues from the fun-damentals.
Prices are expected to continue its uptrend as it lacks funda-mental cues and will be driven by sentiment and speculation..
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Weather - Update
♦ Maximum temperatures are below normal by 5-8°C over
parts of northwest India, west Madhya Pradesh, Gujarat
and Maharashtra, by 2-4°C over west Uttar Pradesh and
north interior Karnataka. They are above normal by 2-
4°C over east India and parts of extreme south peninsula
and near normal over rest of the country.
♦ Fairly wide spread rainfall occurred over Madhya Ma-
harashtra and Konkan & Goa. The significant amount of
rainfall (in cm) recorded at 1730 hours IST of today are:
Honaver-9, Mahabaleswar-7, Nedumbassery, Nasik, Pune
and Mumbai-4 each, Satara and Mangalore-3 each.
♦ Heavy to very heavy rainfall at a few places over Konkan,
Madhya Maharashtra and south Gujarat during next 24
hours.
♦ Squally winds speed reaching 50-55 kmph gusting to 65
kmph are likely along and off Maharashtra coast during
next 06 hours.
♦ Sea condition will be rough along and off Maharashtra
