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Soybeans may rise 6.2 percent to $15 a bushel in Chicago, peaking before the USDA issues its acreage report at the end of March, Blooberg quoting Bill Biedermann, a senior vice president at Allendale said.
Indian pulses market witnessed an uptrend due to delayed arrivals on adverse weather conditions in growing regions and stocking by traders ahead of the marriage season beginning February to March. This led chana futures at National Commodity and Derivatives Exchange to touch record high.
COMMODITY ANALYSIS
Pepper
Pepper futures in India fell this week on the back sluggish overseas demand and fresh arrivals from the crops. Reasons attributed to the drop were that demand was not forthcoming and, therefore buyers could hold back, low domestic demand, as it was being met directly from the primary markets, and delivery was limited.
Arrivals from the new crop have started in some of the interior markets of Kerala but in very small quantities. In India the crop is harvested from December to February but this year was delayed due to unseasonal rains.
Overseas buyers are on a wait-and-watch mode hoping the prices would decline when the new crop in Vietnam arrived in the market. Indian parity is currently at $5,225-$5,225 a tonne (c&f) and remained above other origins.
In Kochi, Spot prices ruled steady on Friday on limited activities in thin trade and closed at previous levels of Rs 21,500 (ungarbled) and Rs 22,300 (MG 1) a quintal.
In futures market at NCDEX Pepper February contract opened this week at Rs.22945 and closed slightly up at 22956 while March contract rose from 23337 to Rs 23339 after hitting a high of 23610.
Chana
India chana futures rose at the end of the week due to weak arrivals and firm seasonal demand in the physical market, rising prices of substitutes such as urad and tur also supported the rise.
Government has extended the ban on the export of pulses (except Kabuli Chana) till 31 March, 2011 and also permitted import of pulses at zero duty up to 01 Apr, 2011 to curtail the spiraling prices of food articles. Even though the country had a good Kharif crop this year and expectation of rabi crop are also bright, the country has to import pulses to fulfill the domestic demand. India's pulses production this year is expected to rise by 2 million tonnes from last year's level.
For 2011, Government has set production target for Chana at 75.8 lakh tonnes. According to the Ministry report, total Chana production in 2010 stood at 73.6 lakh tonnes against 70.6 lakh tonnes in 2009.
On Friday, in Indore spot prices of chana closed up 102.5 rupees to end at 2,592.5 rupees per 100 kg. NCDEX February delivery contract opened at Rs 2648 and rose to 2734 before closing at Rs 2728 whereas Chana March rose from Rs 2639 to Rs 2764 and market uptrend is likely to continue on marriage season demand and arrival delays due to adverse weather.
Rubber
Rubber futures in India gained this week tracking firm global market. This week there were no quantity sellers or profit booking at higher levels and the prices ruled firm on fresh buying and short covering.
In global markets, rubber futures in Tokyo and Shanghai reached records on concern that supply from Thailand may decline, worsening a supply shortage, after the government issued a flood warning.
The June-delivery contract climbed as high as 478.4 yen a kilogram ($5,769 a metric ton) on the Tokyo Commodity Exchange. The most-active contract climbed 5.1 percent this week as demand expands on rising car sales led by China and India, outpacing weather-constrained supply. The May-delivery contract in Shanghai advanced as much as 2.1 percent to 40,985 yuan ($6,224) a ton.
Natural-rubber inventories in China declined for a second week, losing 3,143 tons to 65,532 tons the Shanghai Futures Exchange said. That’s 57 percent lower than last year’s peak of 151,832 tons. At NMCE, February contract gained 3.21% at Rs 23790 whereas February contract rose 3.17% to 24373 per quintal. Spot rates of rubber on Friday were (Rs/kg): RSS-4: 235; RSS-5: 225; ungraded: 220; ISNR 20: 226.
Soybean
India soybean rose this week due to firm demand in the physical market and strong global market.
Argentina's drought-hit 2011 soybean crop could fall to or below 46 million tonnes from 54.5 million tonnes in 2010 unless much more rain falls, oilseeds analysts Oil World said.
In futures market, NCDEX February soybean prices rose to Rs.2517, up by 0.88% per cent while March Soybean prices fell from Rs 2568.50 to Rs.2258.50, lower by 0.31% per cent. Feb soyoil prices rose by 2.07% to 660.35.
India's oil meal export jumped 94 percent in December from a year earlier, its sixth straight monthly rise, on robust demand from traditional buyers in Japan, Vietnam and Indonesia, data from a leading trade body showed.
The Supply/Demand report showed US ending stocks were pegged at 140 million bushels, down 25 million from last month. World ending stocks were pegged at 58.28 million tonnes as compared with 60.12 million tonnes last month.
Precious Metals
Precious metals dropped this week end on speculation that borrowing costs will rise as the economy recovers, eroding the metal’s appeal as an alternative investment. The Federal Reserve has kept the benchmark interest rate at zero percent to 0.25 percent since December 2008 to bolster the economy. U.S. equities have been rising on optimism for the U.S. recovery.
On Friday, gold futures for February delivery fell $3.80, or 0.3 percent, to $1,342.70 an ounce on the Comex in New York. The metal is down 1.3 percent for the week.
Gold may rise next week after prices dropped, making the precious metal more attractive to investors, according to a Bloomberg News survey.
Silver futures for March delivery fell 27.3 cents, or 1 percent, to $27.20 an ounce on the Comex. The metal is set for a third weekly drop, the longest losing run since March.
Platinum futures for April delivery climbed $8.40, or 0.5 percent, to $1,827 an ounce on the New York Mercantile Exchange. Palladium for March delivery fell $5.85, or 0.7 percent, to $810 an ounce.
MCX February Gold Futures opened in the week at 20,285, started declining and closed at Rs 20,069 in the weekend, lower by 1.064%. MCX Silver March tumbled by 2.66% to Rs 42708.
| Major Indices |
| Closing Data for Friday, 21st January 2011 |
| Percentage Change |
| Dow Jones |
| 11871.84 |
| 0.71 |
| MCX COMDEX |
| 3276.70 |
| 1.26 |
| BSE Sensex |
| 19,007.53 |
| 0.50 |
| NSE |
| 5,696.50 |
| 0.73 |
| Continuous Commodity Index (CCI) |
| 639.06 |
| 1.46 |
| Reuters Jeffrey/CRB Index |
| 333.99 |
| 0.27 |
Crude Oil
On Friday, Crude for March delivery slipped 48 cents to settle at $89.11 a barrel on the New York Mercantile Exchange. The March contract in New York declined 3.7 percent this week. The February contract expired yesterday after dropping 2.2 percent to $88.86, the lowest settlement since Jan. 7.
Brent crude oil for March settlement climbed $1.02, or 1.1 percent, to end the session at $97.60 a barrel on the London- based ICE Futures Europe exchange.
At MCX, Crude oil February contract fell from Rs.4230 to Rs.4099, lower by 3.096 per cent whereas the March contract declined by 2.45 per cent to Rs.4191.
OPEC raised its forecast for 2011 crude production from outside the group on increases from Russia and China. Non-OPEC supply will climb by 410,000 barrels to 52.62 million barrels a day next year, OPEC said in its monthly.
Base Metals
In global market, Copper rebounded this week end on signs that the global economic recovery will strengthen, boosting demand for the metal used in buildings and electricity-transmission grids. India copper also gained this weekend tracking overseas market.
On Friday, Copper futures for March delivery rose 3.70 cents, or 0.9 percent, to close at $4.309 a pound on the Comex in New York. The metal slid 2.3 percent this week.
On the London Metal Exchange, copper for delivery in three months added $86, or 0.9 percent, to $9,441 a metric ton ($4.28 a pound).
Also on the LME, tin climbed 2.9 percent to $27,745 a ton after reaching an all-time high of $27,750, on speculation that a shortfall of the metal used to make solders may worsen.
At MCX, Copper February contract declined from Rs 445.85 to Rs 437 levels, lower by 2.02 per cent. Other metals such as aluminium, tin, and nickel prices also gained on the LME, while lead and zinc declined.
Major Headlines
RBI pushes foreign banks to go local
The Reserve Bank of India has said that it will encourage large foreign banks-the likes of Citi, Standard Chartered and HSBC -to set up Indian subsidiaries which would enable them to open more branches across the country.FMC autonomy: Markets fear delay in bill passage
BSE Sensex to tread water; Anil Ambani firms eyed
The BSE Sensex is set to start flat to lower on Monday after sliding 4.2 percent last week, with companies controlled by Anil Ambani on the radar after the market regulator barred the billionaire from investing in publicly listed securities until the year end.
25% of India Inc reports flat or drop in real wages
Almost one-fourth of the companies surveyed in India have opined that real wages to their managerial-level employees have either been flat or declined over the last five years, a study has said.
The Forward Contracts Regulation Act (FCRA) Amendment Bill of 2010 has been referred to the department-related standing committee, raising concern among some market stakeholders whether it would be passed in the budget session.
Food inflation puts squeeze on RBI
Last year, lentils and sugar pushed up food prices in India. Now the surging cost of onions, tomatoes and edible oils is driving broader inflation.
FMC unlikely to extend paid up capital deadline
The Forward Markets Commission (FMC) is unlikely to extend the March 2011 deadline for existing exchanges to raise their minimum paid-up capital requirement to `50 crore.
Commodity futures market may stagnate soon: Experts
If there was no further policy reform, India’s commodity exchange sector might stagnate soon, said a majority of participants at the third annual Leadership Summit on The Future of Financial Markets (FOFM) 2011 organised by the Financial Technologies Group.
Ace sets settlement price for 5 farm commodities
Kotak Group-promoted Ace Derivatives and Commodity Exchange has announced the final settlement price of five agriculture commodity futures contracts which expired on Thursday. This is the first settlement price for the newly launched sugar contract.
Tyre makers to raise prices again
Tyre manufactures may increase prices again due to the sharp rise in natural rubber (NR) prices. It will be the fourth increase in the current financial year. The quantum may vary from company to company but the range may be two-five per cent.
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